HR Software in the UK: Complete Guide (Types, Rules, Prices)

Table of contents

HR software in the UK covers employee records, holiday and sickness tracking, payroll links, recruitment, performance and engagement. This guide explains the types, where a performance platform such as Teamflect fits next to your HR system, the UK rules your system must support, GBP prices for common tools and how to choose by company size.

Types of HR Software for UK Businesses

UK businesses buy HR software in six types, and most small firms start with core HR and add the others as they grow.

Some suites combine several types in one product, and others sell each one as a separate module. The table names the job each type does; our guide to the types of HRIS systems goes deeper on the core HR category.

Types of HR Software and What Each One Does

Type	What it does	Example tools named by UK sources
Core HR (HRIS)	Employee records, contracts, documents, holiday and sickness	Breathe HR, Sage HR, Personio, BambooHR, CharlieHR
Payroll	Pay runs and HMRC reporting	Sage Payroll, ADP, Xero Payroll
Time and attendance	Timesheets, rotas, shift scheduling	Sage HR (timesheets and shift scheduling modules)
Recruitment (ATS)	Job posts, applicants, hiring workflow	Workable, Hireful, Sage HR recruitment module
Performance management	Reviews, goals, 1:1s and feedback	Teamflect, Lattice, Sage HR performance module
Employee engagement	Surveys, recognition, pulse checks	Teamflect, Culture Amp, HiBob

If you are unsure about the terms, read our guide to HRIS, HRMS and HCM.

Where Performance and Engagement Software Fits Next to Your HR System

A UK HR system holds records, absence and payroll data, and a performance and engagement platform such as Teamflect runs reviews, goals, 1:1s and surveys inside Microsoft Teams on top of that data.

The HR system stays the system of record. The performance layer reads people and reporting lines from it, so there's one version of who reports to whom.

Core HR System vs Performance and Engagement Software

Need	Core HR system (Breathe HR, Sage HR, Personio and similar)	Performance and engagement platform (Teamflect)
Employee records, contracts, holiday, sickness, payroll	Yes	No. Teamflect does not run payroll or UK compliance.
Performance reviews with reminders and reports	Basic in some systems, a paid module in others (Sage HR Performance is £2.50 per employee a month)	Teamflect runs reviews, goals and 1:1s in Microsoft Teams, with reports
Goals and OKRs with check-ins	Rarely	Teamflect sends check-in cards in Teams chat and email
Anonymous engagement surveys	Sometimes an add-on	Teamflect sends surveys in Teams and shows results by team
Employee data source	Holds the master record	Teamflect syncs users and managers from Microsoft Entra ID, and from your HRIS on the Professional plan
Security and data protection	Varies by vendor, so ask for the hosting region	Teamflect is GDPR-compliant and SOC 2 certified

For a Microsoft 365 organization, the case for an extra layer depends on the workflow gap. If the existing review module already covers the process, another purchase may be unnecessary. Where goals and manager follow-up are scattered across tools, a dedicated performance platform usually does more than replacing the whole HRIS would.

Teamflect is built for companies of 50 or more people that run on Microsoft 365. It is free for up to 10 users, paid plans start at $9 per user per month (or $7 billed annually), and every paid plan has an assigned Customer Success Manager. See the list of HR systems it connects to.

Best HR Software for UK Businesses by Company Size

The right UK HR system depends first on headcount: under 10 people you need records and holiday tracking, from 50 people you need performance, reporting and integrations.

Most UK employers sit at the small end. The government's business population estimates show about 1.15 million of the country's 1.42 million private sector employers had 1 to 9 employees at the start of 2025. Shift work and hiring volume still matter, so a ten-person business with shift workers may need reliable payroll before anything else. Use the bands below to structure a shortlist.

HR Software for UK Businesses by Company Size

Company size	What you need first	Tools UK sources recommend	Check before you buy
1 to 10 people	Records, holiday and sickness, simple setup	Breathe HR (built for 1 to 250 employees, from £24 a month for 1 to 10 people), CharlieHR	Whether payroll connects (for example Xero)
11 to 50 people	Absence, onboarding, documents, basic performance	Breathe HR, Sage HR (modules from £5.00 per employee a month), BambooHR	Cost per employee as you add modules
51 to 250 people	Reporting, performance reviews, integrations. A performance platform such as Teamflect adds reviews, goals and surveys in Microsoft Teams	Personio, HiBob, BambooHR, Employment Hero, with Teamflect for performance and engagement	Payroll link, API and Microsoft 365 integration
Above 250 people	Global data, workflow, analytics, support	Workday, SAP SuccessFactors, ADP, with Teamflect for performance and engagement	Implementation time and total cost of ownership

Breathe's core package lists performance management, so test how deep that workflow goes before you add another tool.

Prices change often, so confirm every figure on the vendor page before you sign. From about 50 people, add a performance layer on top of your HR system instead of waiting for a basic review module.

UK HR Compliance Checklist: What Your HR Software Should Handle

Your HR system should help you meet UK rules on holiday, sick pay, right to work checks, pensions and data protection, but it does not replace legal advice.

A generic "UK compliant" label tells you little. Ask vendors to run the calculations and records for your actual worker types, then check the results against current official guidance.

UK HR Compliance Checklist for HR Software

Requirement	UK rule	What the software should do
Holiday entitlement	Workers get 5.6 weeks of paid holiday a year, at least 28 days for a full-time worker, and statutory entitlement is capped at 28 days (gov.uk)	Calculate entitlement for part-time and irregular hours, track balances and carry-over
Statutory Sick Pay	For 2026/27, the lower of £123.25 a week or 80% of average weekly earnings, paid from the first day of sickness for up to 28 weeks	Record sickness, show how many days have been paid and export for payroll
Right to work checks	Employers must check that a person can work in the UK before they start, following the Home Office right to work checklist, and keep the evidence during employment and for two years after	Store the check date and the document copy, and remind you of follow-up checks
Pension auto enrolment	Employers must enrol eligible workers in a workplace pension; for 2026/27 the earnings trigger is £10,000 a year	Pass the pay data to your payroll or pension provider
UK GDPR and employee data	Employee data is personal data under UK GDPR, with rules on access, storage and deletion (ICO guidance)	Role-based access, audit trail, deletion and export on request, UK or EU data hosting stated by the vendor

Sick pay changed on 6 April 2026. The three waiting days and the lower earnings limit no longer apply, so a low earner who falls ill on a Monday is paid from that day, at 80% of average weekly earnings if that's lower than the flat rate. GOV.UK has separate guidance for absences that span the change. Ask any vendor to show the calculation for a low earner in the demo.

Pension software has to keep two thresholds apart. The Pensions Regulator's thresholds set £10,000 as the automatic enrolment trigger and £6,240 as the lower limit of qualifying earnings for 2026/27, and the two do different jobs.

Ask every vendor to show how it handles each row in a demo, and keep a record of the answers. The same questions apply to a performance platform, because reviews and feedback are also employee data.

HR Software Prices in the UK (GBP)

UK HR software is priced per employee per month or by company size band, with prices from about £5 per employee a month for core HR to custom quotes for larger systems.

Compare prices for the same scope. A core HR subscription and an enterprise suite are different purchases, so the lower figure isn't automatically the better value.

HR Software Prices in the UK (GBP, 2026)

Tool or plan	What the price covers	Published monthly price	Source and check date
Breathe Micro, 1 to 10 people	Core HR; optional add-ons separate	£24 per business	breathehr.com/en-gb, checked October 2026
Breathe Starter, 11 to 20 people	Core HR	£44 per business	breathehr.com/en-gb, checked October 2026
Breathe Regular, 21 to 50 people	Core HR	£99 per business	breathehr.com/en-gb, checked October 2026
Breathe Pro, 51 to 100 people	Core HR	£175 per business	breathehr.com/en-gb, checked October 2026
Breathe Premium, 101 to 150 people	Core HR	£419 per business	breathehr.com/en-gb, checked October 2026
Breathe Plus, 151 to 200 people	Core HR	£579 per business	breathehr.com/en-gb, checked October 2026
Sage HR	Core HR and Leave Management	£5.00 per employee a month	sage.com/en-gb, checked October 2026
Sage HR add-ons	Performance, Timesheets and Shift Scheduling	£2.50 per employee a month	sage.com/en-gb, checked October 2026

Breathe's listed prices exclude VAT and optional modules, and its current pricing page explains annual-payment discounts and which features depend on the band. Sage HR's UK calculator prices the selected modules against your employee count, so use its output or a written quote for your business case.

What to Add to the Headline Price

Add each of these costs to your comparison, and compare vendors on the total.

Payroll or outsourced payroll-service fees, which are usually billed separately from the HR subscription and depend on how many people you pay each month.
Optional modules, such as recruitment or performance, which are often priced per employee on top of the core plan and can change the total quickly.
Data migration and implementation support, including the time your own team spends cleaning records before they're loaded and checked.
Training and internal administration time, because managers and employees need to learn the system and someone on your team maintains it every month.
Integration fees, support tier and renewal terms, since a low first-year price can rise at renewal or when you move into the next headcount band.
VAT treatment and currency exposure, because many UK prices exclude VAT and some vendors, including Teamflect, bill in US dollars.

Add the cost of payroll, setup and extra modules, because the headline price rarely covers the whole system. Performance software is priced separately in most cases: see Teamflect pricing.

How to Choose HR Software in the UK

Choose UK HR software by testing eight things: payroll link, UK compliance, fit for your size, integrations, performance tools, data protection, support and total cost.

Payroll link: Does it connect to your payroll (HMRC reporting) or include it?
UK compliance: Can it handle the rows in the checklist above?
Fit for your size: Is the price and setup right for your headcount today and in two years?
Integrations: Does it connect to Microsoft 365, Xero or your accounting tool?
Performance tools: Does it run reviews, goals and surveys inside Microsoft Teams, or do you need a platform such as Teamflect next to it?
Data protection: Where is employee data stored, and who can see it?
Support: Is support available in UK hours, and what does onboarding cost?
Total cost: What do payroll, setup, extra modules and per-employee fees add up to?

Run real employee scenarios in each demo. The ones below test the checklist rows that most often go wrong.

Demo scenario	Evidence to request
A part-time employee changes working days	Correct entitlement adjustment and approved audit history
A low-earning employee becomes sick	2026/27 SSP calculation and payroll handoff
A manager changes department	Updated access and reporting relationships
An employee leaves	Account removal, archive rules and record retention
A review cycle closes	Approved results, employee visibility and a usable export

For a longer evaluation process and demo questions, see our guide on how to choose HR software and our list of HR platform demo questions.

HR Software UK FAQs

What is the best HR software in the UK?

It depends on your size. For 1 to 10 people, a simple system such as Breathe HR is built for UK small businesses. For growing teams, compare Personio, HiBob, BambooHR and Sage HR on payroll link, price and reporting. Test two or three in a demo.

How much does HR software cost in the UK?

Prices start at about £5.00 per employee a month for core HR on Sage HR, or from £24 a month for 1 to 10 people on Breathe HR. Larger systems quote on request. Add payroll, setup and extra modules to the total.

Do I need HR software with payroll?

Not always. Many UK firms keep payroll separate and connect it to the HR system. Choose built-in payroll if you want one system and one supplier, and a connection if you already have a payroll provider.

Does HR software replace an HR adviser?

No. The software holds records and automates routine steps, but it does not give legal advice. Check holiday, sick pay, right to work and pension rules on gov.uk or with an adviser.

Can HR software work with Microsoft Teams?

Yes, some tools run inside Microsoft Teams. Teamflect runs performance reviews, goals, 1:1s and surveys in Teams and Outlook and connects to your HR system for employee data.

Do I need performance software if my HR system has a review module?

Not always. A basic review module is enough for a simple yearly review. If you want reminders, goals with check-ins, 1:1s and surveys inside Microsoft Teams, a platform such as Teamflect adds them on top of your HR system and syncs people from it.