Switching payroll providers sounds like a bigger job than it actually is. Most employers who make the move wish they’d done it sooner. The process is straightforward as long as you have the right data, pick the right timing, and communicate clearly with your employees. The disruption is minimal when it’s handled properly.
This guide covers the practical steps for moving from one payroll provider to another, including what data you need, when to make the switch, and what Purely Payroll needs from you to get started.
Why employers switch
The most common reasons are errors, cost, and poor support. If your current provider regularly makes mistakes, takes too long to respond, or charges more than the service justifies, it’s time to move. Some employers also outgrow their provider, particularly if they started with basic DIY software and now need a proper bureau service. Others switch because their provider can’t handle something specific, like CIS returns, auto enrolment, or payrolling benefits in kind.
When to switch
The cleanest time to switch is at the start of a new tax year (6 April). You close the old year with your existing provider, they issue P60s and handle the final FPS, and your new provider starts fresh with zero year to date figures. No data migration headaches. If you’re considering a move, our switching payroll providers page explains how we handle the transition.
If you can’t wait until April, the next best option is the start of a tax quarter (6 July, 6 October, or 6 January). This gives a cleaner data cut off point. A mid month switch is possible but adds complexity because year to date figures need to be transferred mid period.
Don’t let timing be an excuse to stay with a bad provider. A mid year switch done properly is far better than another six months of errors and stress.
What data your new provider needs
To set up your payroll, your new provider will need the following from your existing provider or your own records.
Employee details: Full names, addresses, dates of birth, National Insurance numbers, tax codes, start dates, and pay rates for every employee.
Year to date figures (if switching mid year): Total gross pay, total tax deducted, total employee NIC, total employer NIC, and total pension contributions for each employee from 6 April to the date of the switch. These figures must match the last FPS submitted to HMRC by your old provider.
Pension data: Pension provider name, scheme reference, contribution rates (employee and employer), and each employee’s enrolment status and opt out dates if applicable.
HMRC credentials: Your employer PAYE reference and Accounts Office reference. These don’t change when you switch provider. They stay with your business.
Outstanding deductions: Student loan plan types, attachment of earnings orders, and any other ongoing deductions that need to carry over.
The parallel run
For the first pay period with your new provider, many bureaus recommend running a parallel payroll. This means processing the pay run on both the old and new systems and comparing the outputs to make sure they match. It catches any data entry errors or calculation differences before they affect your employees’ pay. At Purely Payroll, we handle this as part of our standard onboarding. Read what our clients say about the transition experience.
What your employees need to know
Your employees don’t need to do anything when you switch provider. Their pay, tax codes, deductions, and pension contributions all carry over. The only thing that might change is the format of their payslip or how they access it (for example, moving from paper payslips to an online portal).
A brief email or notice explaining the change is good practice. Let them know who the new provider is, when the switch happens, and reassure them that their pay won’t be affected. If payslip access is changing, give them login details in advance. For full details on our service and what’s included, visit our payroll services page or check our pricing.
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