Small business owner paying for payroll service

How Much Do Payroll Services Cost?

Once you hire your first employee, you’ll be required by law to process payroll. That means giving your worker(s) a paycheck where state and federal taxes and insurance benefits are deducted and all other Department of Labor requirements are met. It can be a time-consuming procedure!

That’s why hundreds of payroll processing solutions, offering varying levels of service and features, have been introduced to the marketplace.

Payroll, which includes wages paid to an employee plus payroll taxes, is usually a company’s biggest expense. The cost to actually process payroll is sometimes left out of that mix, whether it’s done by hand via an employee or with a payroll processing software from a third party.

So how much do payroll processing services actually cost?

Standard Costs and Fees

Certain costs are associated with just about any payroll solution. There’s usually a base fee that can range from $25 to $85-plus per month. The number of employees on an account can add anywhere from $5 to $15-plus per person per month. Be mindful that some providers will set a minimum per-month cost no matter how few employees you have. Using those prices, a small business with 10 employees could pay standard fees between $50 and $100-plus per month, depending on the provider.

It will be important to inquire if there is a cost associated per payroll run on top of those per-person fees. For instance, if you decide to pay your 10 employees twice a month, you could be racking up an additional $20 to $60-plus per month to run that second payroll. You’d then be at a standard per monthly fee of $70 to $150-plus, depending on the provider.

Choosing a software option that allows you to run an off-cycle payroll means you can offer pay advances, bonuses and multiple pay cycles per month without costing your small business additional fees.

As previously mentioned, these are just the standard costs for a payroll processing service. Some providers may also charge you additional fees based on the features you decide you need for your small business.

Additional Fees

All payroll processing services will calculate earnings and generate paychecks. Additional fees may apply if a provider offers features such as:

  • Direct deposit
  • Generating tax forms such as W-2 and 1099
  • Employee access portal
  • Paper check printing
  • Filing and paying state and federal taxes

Workful actually includes direct deposit, W-2 and 1099 forms, and employee portal access as part of its standard price. Keep in mind that some features may not be available with every provider, so be diligent and ask questions to make the right decision as your small business grows.

Many providers will offer a free trial period so your business can explore their software and experiment with all of its features. This will help you decide which services work for you and which ones don’t.

Run Payroll with Workful

Beyond the cost of setting up and distributing paychecks, the time spent managing your payroll can be substantial. Workful can help you avoid the penalties associated with running a payroll incorrectly while keeping you current on any changes to labor laws. Whether you do a run once or several times a month, our solution allows you to process payroll with four clicks. We feature reporting and analytics capabilities to give you full visibility into your payroll process. We’ll even prepare your necessary state and federal tax forms for you so you can review and file them on or before the deadline. Try our payroll software now for your small business and enjoy a free 30-day trial.