Salary is not the full cost of a bookkeeper. An experienced bookkeeper earns about £35,000 in the UK. Employer National Insurance and pension push the real cost past £40,000.
An outsourced fixed fee for the same work runs £200 to £700 a month. That’s £2,400 to £8,400 a year. For most small businesses, that gap decides it.
This guide prices both routes properly and shows where hiring in house still makes sense.
Quick answer
Outsource if the bookkeeping takes less than a day a week. A fixed fee will usually cost less than employing someone. Hire in house once the work fills most of a role, or when you need someone on site every day.
What does an in-house bookkeeper really cost?
Start with salary, then add the on-costs. A UK bookkeeper earns £24,000 as a starter and £35,000 with experience. Employer National Insurance runs at 15% above the secondary threshold. Pension adds at least 3%. Software, desk space and cover sit on top of all of it.
The National Careers Service lists the bookkeeper salary range at £24,000 to £35,000. Working hours run 37 to 40 a week.
Then add the employer costs.
National Insurance. Employer National Insurance is 15% for 2026 to 2027. It applies to earnings above the secondary threshold of £96 a week. On a £35,000 salary that’s about £4,500 a year.
Employment Allowance. Employment Allowance cuts your annual National Insurance bill by up to £10,500. Eligible employers can wipe out that £4,500, but not every employer qualifies, so check before you budget for it.
Pension. Auto enrolment sets minimum workplace pension contributions at 8% in total. At least 3% comes from you.
Everything else. A desk, a laptop, a software licence and recruitment costs. Then holiday and sick cover, which nobody prices until the week it’s needed.
What does outsourced bookkeeping cost?
Outsourced bookkeeping is a monthly fixed fee, not a salary. Most small businesses pay between £100 and £700 a month. Where you land in that range depends on transaction count, VAT status and payroll. There are no employment on-costs on top of the fee.
That’s the whole invoice. No National Insurance, no pension, no holiday cover, no recruitment fee.
Software is usually included too. Most providers work inside a cloud package they already pay for.
We break bookkeeping costs in the UK down by transaction count. Bring your monthly bank line count to any quote conversation.
Side by side: the full annual cost
Here is the comparison using real numbers. The in-house column assumes one experienced bookkeeper on £35,000.
| Cost line | In-house (full time) | Outsourced (fixed fee) |
|---|---|---|
| Salary or fee | £35,000 | £2,400 to £8,400 |
| Employer National Insurance at 15% | About £4,500 | £0 |
| Employment Allowance offset | Up to £10,500, if eligible | Not applicable |
| Pension at 3% minimum | About £1,000 | £0 |
| Software licence | £150 to £400 | Usually included |
| Holiday and sick cover | Your problem | Their problem |
| Recruitment | One off cost | £0 |
A part-time hire changes the salary line, not the rest. Two days a week at £35,000 pro rata is £14,000, plus pension, plus cover.
You can outsource your bookkeeping for less than the on-costs of a single hire.
When does hiring in house actually win?
Hire when the work fills a real role. Daily cash handling and stock counts need someone on site. So do trade counter invoicing and walk-in queries. High-volume businesses also benefit from same-day answers. Once the job takes more than three days a week, employing usually costs less per hour.
Volume is the honest test. A business posting 800 transactions a month already pays near the top range.
Control matters too. An employee can reshuffle their day when you ask. An outsourced provider works to the agreed scope.
Proximity matters too. Retail and trade businesses often want one person on the till and the ledger.
None of those apply to a service business with 60 bank lines a month.
What are the risks on each side?
In-house risk is concentration. One person holds the knowledge, and holiday or resignation stops the work. Outsourced risk is scope. Anything outside the agreed list does not get done unless you ask. Both risks are manageable once you write them down up front.
Concentration risk is the one owners underestimate. A bookkeeper leaving in December leaves a January mess.
Scope risk is easier to control. Ask for an itemised list and check it against what you actually need.
Either route fails the same way if the work slips. Late books mean missed claims, wrong VAT figures and rushed year ends. We set out the cost of poor bookkeeping in full elsewhere.
What about a hybrid?
Many small businesses split the work. Someone in the office raises invoices and files receipts. An outsourced provider does the coding, bank matching, VAT and reports. That keeps day to day control in house without paying for a full finance role.
The split works when the boundary is clear. Write down who raises invoices and who codes them.
It fails when both sides assume the other handled bank matching. Naming one owner for reconciliation fixes that.
How do you hand the work over without losing a month?
Set a cut-off date and stick to it. Keep everything up to that date with the old owner of the task. Move everything after it. Give software access before the date, not on it. Then run one overlap month where both sides check the same numbers.
Handovers fail on three things. Access, the cut-off, and who owns the bank matching in month one.
A clean handover needs:
- Set a cut-off date, usually the end of a month and ideally the end of a VAT quarter.
- Set up the new user a week early and test the login.
- Check that bank feeds still pull after the user change.
- Agree the closing bank balance before the cut-off.
- List the unpaid sales invoices and unpaid supplier bills at the cut-off.
- Confirm which payroll and VAT returns are filed and which are still open.
- Keep the software account in the company’s name, not the bookkeeper’s.
That last point matters more than it sounds. A subscription in a leaver’s name is a real problem.
Run one month where both sides look at the same figures. It costs a little and it catches the gaps early.
Making the call
Start with three numbers. Monthly transactions, whether you’re VAT registered, and how many people you pay.
Then compare like for like. Put the full employment cost against the fixed fee, not salary against fee.
Under a day a week, outsourcing wins on cost almost every time. If it’s more than three days, run the numbers again.
DASA’s outsourced bookkeeping service covers coding, bank matching, VAT figures and monthly reports. Tell us your transaction volume and payroll size. Get a quote and we’ll send you our current pricing.
This article gives general information about UK bookkeeping and employment costs. It’s not financial, tax or legal advice. Employment costs vary by employer. Speak to a qualified accountant about your own situation.
Frequently asked questions
Is outsourced bookkeeping cheaper than hiring in-house?
For most small businesses, yes. A bookkeeper earns £24,000 to £35,000 in the UK. Employer National Insurance at 15% and a 3% pension push the real cost higher. Outsourced fixed fees run £2,400 to £8,400 a year.
How much does an in-house bookkeeper cost in total?
Take the salary, then add employer National Insurance at 15% above £96 a week, and at least 3% pension. On a £35,000 salary that’s about £5,500 of on-costs before software, desk space and cover.
When should you hire a bookkeeper in-house?
Hire when the work fills a real role. Daily cash handling and stock counts need someone on site. Once the job passes three days a week, employing usually costs less per hour than outsourcing.
What are the risks of outsourced bookkeeping?
The main risk is scope. Anything outside the agreed list will not be done unless you ask for it. Get an itemised scope in writing and check it against what your business actually needs each month.
Can you split bookkeeping between in-house and outsourced?
Yes, and many small businesses do. Someone in the office raises invoices and files receipts. An outsourced provider handles coding, bank matching, VAT and reports. Name one owner for bank matching in writing.