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You're an employee and your employer wants you to pay a fee to pay your salary?
Time to get a new job.
As a rule, deductions from salary require your express consent, so your employer would need to consent. If they are insisting - eg making it a condition of employment, it's almost certainly unlawful.
You should think about taking a claim to an industrial tribunal for unauthorised deductions from wages. The downside is that unless you have worked there for more than a year, they can fire you without excuse.
For more advice on this, I recommend citizensadvice.org.uk and acas.
Are you employed "company I work for" or self employed ?
If the former they shouldn't charge
if the latter they are providing an accountancy service so yes they can charge
You are confusing in your post by saying " payroll service " and "raising an invoice"
Which is it payroll or invoice ??
Yes it is legal because they are not deducting it from you it should be part of your pay. Do you work for an agency, it's quite common in that industry.
Speak to the company and get them to explain your rate of pay and how this deduction was included.
Yes it is legal because they are not deducting it from you it should be part of your pay.
Perhaps you could rephrase that.
The fee for the payroll process is included in the gross pay that is negotiated with the payer.
As I said, you should be checking that this is the case.
I'm not going to guess the scenario.
Tell us more of your story and I'll give you an answer.