How much payroll services cost: Find out with us


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The cost of Outsourcing Payroll Services largely depends on your business’s specific needs and requirements, and how much time you’re willing to spend managing it yourself or outsource this responsibility altogether. So, you may be wondering how much payroll services cost?

How is payroll pricing structured?


Payroll is a crucial part of running any business, but it can be challenging to keep track. Thankfully, payroll companies charge their customers for services in three common ways.

Per Frequency

The most common way payroll companies charge for their services is through a per-pay frequency. This means whenever you pay your employees (weekly, bi-monthly, or monthly), there will be an additional fee based on how often they work and the type of payment method used.

This approach may be for you if you have a reasonably stable payroll, with little change or extra work involved in each pay period. You can see individual employee charges running from $1.50-$5 per person and base fees between 20-70 dollars monthly based on an average price of 3 bucks every time someone gets paid.

Per Employee Per Month (PEPM)

PEPM offers a new way to save on payroll by allowing employers to pay one monthly base fee and then adding specific rates for each employee. This pricing structure has been proven more affordable than traditional methods as it often results in substantial savings.

Many companies find that PEPM is a good choice for additional payroll runs. For those with predictable numbers of employees, this pricing solution makes budgeting easy and efficient because you don’t have to worry about all those pesky variable costs.

Fixed Pricing

When you work with a payroll company that provides Do-It-Yourself (DIY) online solutions, they might charge an annual flat rate per month for the number of employees in your business or range.

When you outsource your payroll, the only fee is a flat rate based on how many employees are processed each month. This can make it cheaper than other options for businesses with small employee counts since they don’t need as much processing power or services from an external company.

How Much Payroll Services Cost? An Average Cost for a Payroll Company

The cost of in-house payroll processing is expensive and time-consuming. Outsourcing your company’s need for this service to a professional provider can save you money. The average price depends on what kind of work they do but will always be cheaper than if done internally.

Basic Cost to Outsource Payroll

Payroll companies often charge a basic package fee. The cost may range from as small as $25 per month up to high, costing over 200 dollars for one payroll service with all the perks that come along with it, such as online access and direct deposit capability. Your cost will largely depend on the pay frequency, the number of employees, and your state.

The payroll companies will offer different discounts to various types and sizes of businesses. This means that small businesses with a maximum of ten employees pay more than more prominent companies because they have fewer people on their staff, so it’s up to the company whether or not these individuals receive benefits like health care coverage from work.

Extra Charges for Tax Assistance

You may have to pay an extra fee if you want the services of a professional tax preparer. Your introductory package fee might not cover all their payroll taxes so they might charge more than your contract for year-end reporting.

Factoring Pay Frequency

When you have many employees, the monthly payroll can become quite expensive. You might be paying out more per week or biweekly than with fewer weekly transactions, and it’s important to consider how often each payment will come for cost calculations on your end.

The payroll service price will vary depending on your chosen company – pay as low as $25 and as high as $159.57 monthly for an online company. Some online companies offer paychecks that can be printed at your printer. In contrast, others require them to print it and send it by payday for delivery in advance or upon request after receiving notice from an employee’s direct deposit account.

Paycheck Delivery Service

Paycheck delivery services can be helpful for employers who want to ensure their employees receive their paychecks on time. The rate depends upon what state you live in. This depends entirely on your chosen shipping company and whether it offers discounted rates specifically designed around international business transactions like these.

Additional Payroll Costs

Some additional fees you may encounter are a charge for checking, per-check stuffing, and direct deposit. You’ll also have to pay more if your base fee doesn’t cover all employees; in this case, it’s called an “additional payroll.” Some companies require these extra payments because they must make adjustments on behalf of their clients (such as issuing emergency checks).

Sample Payroll Services Costs

  • In the world of payroll, there’s a lot to consider. According to Entrepreneur.com, basic service costs between $0,8 -$2 per check in addition to an initial base fee; while advanced services can cost anywhere from $4-9 depending on how many things you need to do at once like direct deposit and tax filing.
  • Companies such as ADP and Paychex might charge around $3 per check for essential services.
  • Small companies relying on ADP or Paychex to handle their payroll can expect a monthly bill between $250 and $ 1500.
  • The idea of paying an accountant $250 per month to do payroll is rather intriguing. This would be cheaper than hiring a full-time employee and may save time because you don’t have the hassle of processing paychecks.
  • Massachusetts retailer, the average cost of paying an employee’s total payroll is $25 per bi-monthly pay period and 35 dollars for year-end filings.
  • The payroll cost for one employee in Colorado was only $13 per month.
  • With four employees, the Michigan-based company saves $45 per month on payroll by paying for small business services, including biweekly paychecks and signed checks.
  • The payroll services provided by this California-based company, which has fewer than ten employees and outsourced all of its needs to an outside firm for $31 per month, include total wages collection, tax payments, and W2s or 1099s. The year-end reports are also prepared on time.

What Factors Drive Up the Price?


When considering the payroll outsourcing cost your business may incur, it’s important to understand exactly what’s included. This allows you to make accurate comparisons between companies and clearly see how much money will be going out for things like employee benefits or other expenses.

The cost of payroll alone is enough to make anyone’s head spin. But when you add in all other ancillary products and services, things can get out of control quickly.

Some services that businesses may include or perhaps consider “extras” with payroll are:

  • Tax filing (the price of which can increase based on the number of states you’re operating in)
  • General ledger interface
  • Employee pay options like direct deposit, pay cards, and paper checks
  • Courier and delivery charges
  • Check stuffing and sealing
  • Quarterly and year-end reporting
  • Form W-2/Form 1099 and Form 1095 processing
  • Affordable Care Act (ACA) reporting

Payroll services are included in most base fees, but you’ll have to pay extra for popular add-ons. For example, Complete Payroll Solutions offer per payroll period and quarterly tax filing as part of standard package prices. However, if you want other features like employee pays options or check to stuff & sealing, that cost an additional fee on top of what’s already being charged upfront when buying the plan that best suits your needs.

You might be surprised by the costs of outsourcing payroll services. Extra features and upgrades can add up, so it’s important to ask what is not included in your quote before making any decisions.

You may also pay more if you choose to add other solutions that payroll companies often provide to increase the efficiency of your HR functions like:

Usually, each of these solutions will have a unique and separate fee structure that you’ll pay in addition to your payroll processing fees.

See more» HR outsourcing services: Get what fits your business 

What Percentage of the Budget Should Be Spent on Payroll?

The payroll cost is usually 50% or more for many service industry businesses. If you spend between 15 and 30 percent on your gross revenue, then it’s likely that the business is in solid standing.

Employee Payments

Paying employees can be a significant expense for businesses. These additional expenses include piece rate or per-job compensation that could increase your payroll costs even further depending on your company.

Whether you’re paying base wages and salaries or additional costs, such as overtime pay, commissions, bonuses, awards, prizes, gifts, pay increases, severance benefits, business expenses reimburse sick time. The best way to manage these is by keeping track of your budget. If something isn’t worth spending money on, don’t offer it.

Employee Benefits

Your real payroll cost is much more than just wages and salary payments. If you provide benefits, such as health insurance, those costs should be included in the equation when considering how much it will take to run your business.

Employer Taxes and Insurances

Payroll services costs can vary depending on the company and its services. Generally, payroll services will include employer taxes and insurance, which can account for a significant portion of the budget.

Small businesses typically recommend that payroll services account for no more than 10% of the budget. However, this percentage can vary depending on the size and needs of the business. Larger businesses may need to allocate a more significant portion of their budget to payroll to cover all of their employees. Ultimately, each company will need to decide what percentage of their budget to allocate to payroll based on their specific needs.

To stay within your desired percentage for payroll, figure the real cost of each employee beyond their base wages and salaries. If you exceed this amount by too much or there’s no way to cut costs in other areas, look at eliminating bonuses and anything else that might be offered through an incentive program such as small gifts instead. So they don’t get paid more than necessary while still providing benefits like health insurance were available without breaking any rules.

Ways to Save on the Payroll Outsourcing Cost


You may be wondering if there are ways you can save on payroll costs. The quest for less expensive options has fueled the rise in popularity of Do-It-Yourself (DIY) online payroll software and these solutions typically cost up to 50% less than traditional methods based on a PEPM basis.

You may want to consider switching your payroll service provider. Not only will this save time, but it also reduces costs for paper-based processes in an office environment.

For many businesses, the DIY option can be an excellent way to save as long as you’re comfortable with web- or mobile-based systems and limited interaction from your provider.

It’s also convenient if their payroll hours of operation make it challenging for them during normal business days. In this case, handling all those payments could work better to handle payroll before or after they are open.

But there are some trade-offs to using this approach. For example, if you want assistance from your vendor or need a relationship with them for things like call-ins/call-outs, then many software solutions won’t offer these features as part of the service. So it may be best to go through a payroll company that will take care of reporting employees’ hours and handle everything else.

One way to save on your overall payroll costs is by seeing if a provider offers bundled options or packages. As we discussed, many vendors provide complementary solutions to help you manage the workforce, such as benefits, HR consulting services, and wages. When implementing multiple service agreements with one company, discounts will often be offered.

The total cost of payroll processing is affected by many factors. The general rule-of-thumb says it will run approximately $200-$250 per employee, but this can vary based on the scope and size of your engagement to a vendor. Contact us today for a free consultation, and we will work with you to find the best solution for your business.

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