HR and payroll services
Source: gov.uk (2025-02-25)

How to buy HR and payroll services and use a DfE approved framework to get good value.

Before you start

Assess your school’s needs

Before you start, assess what your school needs. Consider:
- how many staff are under your school’s remit
- what percentage of staff are teachers compared to other roles such as administration or maintenance
- whether your school has any extra HR requirements like looking after pensions or publishing gender pay gap reports
Find out the costs

Decide if it’s commercially viable to outsource your HR and payroll services by finding out:
- the total cost of your school’s HR department over a year including costs like administrative staff and software
- what services you need and their likely total cost over the calendar or academic year
- whether your current outsourced service (if you have one) would be better for your school than finding a new supplier to outsource the same service
- if using an outsourced service would be cheaper or better quality than keeping the department in-house
End an existing contract

Review your school’s existing contract and confirm the:
- end date
- notice period
- termination costs (if there are any)
This will help you to plan any changes if you decide to switch contract. If there’s a financial cost to ending a contract, you’ll need to include this in your overall costs.

Choosing a service

Decide what your school needs. This could be:
- an outsourced HR service
- an outsourced payroll service
- both - an outsourced HR and payroll service
- a combination - one service delivered in-house and one outsourced
HR service

You may need an HR service for:
- interview shortlisting, negotiating offers and preparing inductions
- consultancy services like capability management, suspension management and dealing with grievances, harassment and bullying
- an advisor-led advice line, full case management, tracking and escalation
- new employee starters and leavers, pay conditions and consulting with trade unions
- training including HR management, leadership, coaching and mentoring
- business and administration support including policies, policy review and self-service management information
- expanding an HR strategy
- overseeing performance management and absence management – some services may also offer a management support helpline
- employee support providing advice and guidance on employment – this may include a counselling service by email, phone or online
Payroll service

You may need a payroll service for:
- paying salaries by BACS or other methods including third party payments
- dealing with new starters, leavers and salary changes
- providing a monthly and cumulative analysis of hours and work and rates of pay
- producing pay slips – physical, online or both
- providing management information and reporting including payroll cycle (weekly, monthly, lunar) reports, gender pay gap reporting and pension reports
- keeping personal records up to date including bank details
- producing HMRC documentation such as P45 and P60
- a payroll query helpline
- an employee helpline for payroll system queries
You may also need it for setting up and processing pensions, including:
- complying with auto-enrolment schemes
- keeping pensions records up to date including service history information
- providing pension guidance
It could help with tax, National Insurance and related calculations and queries such as:
- holiday calculations
- sickness, paternity, and maternity calculations
- processing expenses and benefits
Assess the level of service you need

Before you switch or onboard to a new supplier, think about what level of service you will need.

Your supplier should have experience within the education sector and your circumstances.

Most suppliers will offer 3 levels of service such as:
- bureau
- part-managed
- managed
When deciding on the level of service, you need to think about:
- whether your school has enough resources to manually input its payroll data – if the school is finding it difficult to do this, then it may be better to use a managed service
- how much control you want over the payroll process – does your school require control on services like salary analysis or is it willing to give control to the supplier
- how to meet your staff needs – for example, do your staff require a payroll query line where they can dispute any issues
Bureau services

This is a basic level of service and the cheapest option. Your school will need to update its own data. A bureau service works for schools who need a less hands-on service. If your school needs a managed pension service or help with payroll queries, then a part-managed or managed service might be better.

Part-managed services

Pension scheme enrolment and guidance and payroll queries are usually covered under these services. Decide if your school needs this level of service and whether it provides value for money.

Managed services

A managed service will keep all your school’s personal records like bank details up to date and will also usually include an employee helpline for your staff. This is the most expensive level of service, so you need to decide if your school has enough budget to cover it.

Find the right way to buy

See if you can buy through a DfE-approved HR and payroll framework. Get more information on how to find an approved framework agreement (https://www.gov.uk/guidance/find-a-dfe-approved-framework-for-your-school).

The framework offers a wide range of managed HR and payroll service providers tailored to meet your school’s needs. Benefits of using the framework include:
- pre-arranged terms and conditions – no need for you to set up terms as they have already been set up by the existing framework
- a fast and simple route to market
- compliance with UK laws and local authority regulations
- checks on suppliers through public sector buying organisations (PSBO’s)
- discounted goods and services compared to a school going to the marketplace directly
The Procurement Act 2023

Under the Procurement Act 2023 you will need to understand your obligations with regards to contract management and the publishing of appropriate notices.

The section Get training on the Procurement Act 2023 (https://www.gov.uk/guidance/buying-for-schools-things-to-consider-before-you-start/get-training-on-the-procurement-act-2023) has information on how to:
- get free, approved DfE training on the Procurement Act 2023
- register on the central digital platform
Find out more from the update for schools and trusts on Procurement Act 2023 (https://buyingforschools.blog.gov.uk/2024/11/19/update-for-schools-and-trusts-on-procurement-act-2023-are-you-ready/).