While the costs of payroll services differ by company, each provider uses a similar cost structure. There is typically a base fee and a per-employee charge. Our best picks charge base fees of $29 to $150 and per-employee fees of $2 to $12.
How often you are charged also varies by provider. Some charge monthly, while others charge each time you run payroll. The providers that charge monthly allow unlimited payroll runs each month.
While some providers offer just one package that includes all their services, others offer several plans at various price points with different levels of service. For example, the cheapest plan may include payroll processing only, with the most expensive plan handling all payroll tax filing and payment responsibilities.
Besides the monthly or per-pay-run costs, some providers charge for services like setting up the system and completing year-end tax filings.
Costs of Payroll Implementation
Many payroll services don't charge any implementation or setup fees. For the most part, getting set up in the software is an easy process that employees can even do on their own. Some companies may charge a one-time fee to transfer over all of your previous payroll and employee data; while this isn't hard to do on your own, the transfer fee might be worth it to save you some time.
When determining the true cost of payroll services for your small business, you need to factor in any taxes and implementation or other fees. Be sure to inquire about fees when discussing prices with vendors.
Before signing up with a payroll service provider, ask the company these questions to get the best deal possible:
- Does it offer a discount for agreeing to a long-term contract?
- Does it offer discounts for businesses with a large number of employees (if you're a larger company)?
- Would it be willing to match the price of one of its cheaper competitors?
It is critical to review the contract thoroughly before you sign anything. Make sure the contract includes everything you have agreed to and doesn't have any built-in price increases after a certain time period.
Also, ask about the process for canceling service. Find out if there are any costs associated with that and how much notice you need to give.
Online Payroll Free Trial
Many payroll providers offer first-time customers a 30-day free trial. This gives you the chance to run payroll at least once to determine how you like the service. In addition, many payroll providers don't require long-term commitments, so if you test it out for a few months and decide the program you selected doesn't fit your needs, you can easily cancel your service and find a better match elsewhere.