What is cloud based payroll? 

Cloud payroll – or online payroll – is when your payroll solution is web-based.
This is sometimes referred to as being “in the cloud”. 

Cloud software is accessible from anywhere with an internet connection. Whether you’re on your laptop or phone, at work or on the move, you can access and make changes any time. 

Your payroll data is always up-to-the-minute, and you don’t need to wait until you’re sat at the PC your payroll software is installed on to make changes. 

cloud technology

How can cloud-based payroll help your business? 

By choosing a cloud-based payroll solution over a traditional “on-site” system, you and your business stand to enjoy a range of added benefits. 

  • Cloud-based systems are hosted online; as long as you have a digital device with an internet connection, you can access it from anywhere 
  • Cloud payroll systems offer greater scope for collaboration since everyone is accessing one reliable centralised data source 
  • Thanks to its unique functionality, cloud payroll solutions include employee “self-service” portals, so staff can access and control their data. 
Understanding Cloud Payroll: A Guide to Online Payroll Software thumbnail image

Featured Guide

Understanding Cloud Payroll: A Guide to Online Payroll Software

Interested in learning how a cloud-based payroll system could transform how you pay your people? Download this exclusive guide to cloud payroll for employers, including: 

  • Cloud payroll 101 
  • Breaking down your payroll obligations 
  • The future of cloud payroll 
  • Choosing a cloud payroll provider 
  • Cloud payroll software solutions. 

Your payroll obligations as an employer 

To give you greater insight into how cloud payroll can kick your payment processes up a notch, let’s review your payroll obligations as an employer. 

  1. Register with and report to HMRC 
  2. Update employee information
  3. Calculate pay and deductions 
  4. Pay employees and HMRC 
  5. Maintain records
  6. Handle pensions and auto-enrolment 
  7. Stay compliant (e.g. IR35 responsibilities)

That’s no small amount of responsibility; so it’s good to know cloud-based payroll solutions can make it easier to pay your people properly. 

An employer using cloud payroll

Benefits of Cloud Payroll 

Cloud-based payroll can make paying your people easier, faster, and more efficient. 

Here are just some of the benefits of having a cloud payroll solution in place. 

  • Access payroll from anywhere

    Unlike standard payroll solutions, online payroll is hosted by cloud servers – that means you and your staff can log in, access and amend your payroll system from anywhere with an internet connection.  

    Whether you’re a manager checking the payroll progress from your home office or you’re an employee logging your call-out hours from your car, a cloud-based system allows you to log-on when it’s convenient for you. 

  • Real-time updates

    When your payroll is hosted in the cloud, every piece of data is up to date. That’s because whenever one person makes a change to the system, it updates everyone else’s in real time. 

    This allows you or your payroll team to collaborate with greater efficiency. When one employee uploads data to the cloud payroll system for approval, the colleague responsible can take action immediately.  

  • Cost-effective and scalable

    Cloud payroll solutions typically operate on a subscription model, which can significantly reduce initial capital expenditure. 

    Because of the way it functions, cloud payroll also tends to be a scalable solution Staffology HR, for example, can easily scale up or down depending on your business needs, making it an ideal solution for growing companies.

  • Ensure compliancy

    By running your payroll on the cloud, you can be confident that your payroll processes reflect the latest UK tax laws and regulations.  

    Because cloud-based systems are based online, any updates or changes to legislation are automatically incorporated into your payroll system. This ensures your payroll functions are always legally compliant.  

  • Secure and reliable

    Payroll involves highly sensitive personal data, so reputable cloud payroll providers like Staffology Payroll invest heavily in advanced security measures. With cloud-based systems, your business remains safe and compliant without you having to action anything. 

    Alongside protecting payroll data from cyber threats and data breaches, the best cloud-based systems will typically have failsafe business continuity processes in place.  

  • Self-service features

    Because people can access cloud-based payroll services from anywhere, it’s possible to provide your employees with a self-service portal. This allows your staff to: 

    • view payslips and other pay documentation 
    • submit timesheets 
    • update personal information.  

    This reduction in employee requests saves your payroll team time, as all data on the cloud-based system is up to speed and immediately accessible.  

  • Integration friendly

    Because it’s hosted on the cloud, cloud payroll systems can integrate easily with other business management tools, such as HR software and accounting systems. This helps to: 

    • streamline business functions 
    • improve data accuracy 
    • facilitate inter-departmental cooperation 
    • reduce time spent chasing data. 

Frequently asked questions

Learn more about cloud-based payroll software and how it can support your business. 

Employers from almost any sector can and do use cloud-based payroll software to help them run their payroll. 

Payroll software is suitable for businesses of all sizes, although it’s particularly popular with small to medium-sized organisations. Staffology Payroll , for example, is designed to support employers whether they have five or 5,000 employees. 

While some companies choose to outsource their payroll – using services like IRIS Fully Managed Payroll – these service-providers will still use cloud software like Staffology Payroll to support their clients. 

Cloud payroll solutions are often scalable, which means the level of service – and its subsequent cost – can be adjusted to suit your business needs.  

Actual costings will depend on the provider. Staffology Payroll, for example, charges based on the number of payslips created each month, with cost per payslip reducing as you add more employees.  

Cloud payroll can be used by accountants or payroll providers to improve their efficiency and offer a greater level of service to their clients.  

Staffology Payroll also has a version for Accountants and payroll bureaus. 


Like any payroll solution, cloud-based payroll services still need to be recognised by HMRC.  

HMRC provides a list of recognised payroll providers, including cloud-based payroll service providers, all of which allow employers to report PAYE information online. 

Because your payroll is hosted in the cloud, you can be sure it is always up to date and reflects the latest legislation, e.g. Changes to the National Minimum Wage or incoming IR35 measures. You don’t need to do anything – the cloud-based system takes care of it automatically. 

API – meaning application programming interface — is a feature that allows one piece of software to integrate and communicate with another. 

Cloud payroll software that comes with APIs can interact with other systems in the business, such as existing HR management software.  

Ideally, you’ll be looking for payroll software with open APIs, meaning they can speak to any kind of software, as opposed to APIs that only work with certain providers or types of software.  

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