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CostHelper > Small Business  > Payroll Service

Payroll Service Cost


How Much Does Payroll Service Cost?

 
 average costAverage: $15-$80 a month 
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  Typical costs:
  • A basic payroll service averages $0.80-$2.00 per check, plus a base account fee which varies depending on the frequency of payroll periods, while options such as tax filing and direct deposit can add $4-$9 per payroll period, according to Entrepreneur.com[1] . For example, a Northern California retail store with two locations and 12 employees pays about $80 a month to a CompuPay[2] franchisee for issuing twice-monthly paychecks as well as calculating and filing all monthly, quarterly and annual state and federal payroll tax forms.
  • For $14.95-$59 a month (some subscriptions must be paid a year at a time), Intuit provides online payroll services with updated tax tables that work with its QuickBooks accounting software.
  • Bank of America's Business 24/7[3] program provides free online payroll services if all payments go into BOA accounts.
Related articles: Business Tax Preparation, Accounting Software, Bookkeeper, Accountant

What should be included:
  • The trickiest part of issuing paychecks is determining the correct tax deductions. Payroll services take data on the hours worked by each employee to calculate all relevant deductions and tax withholding, then issue paychecks. Employees hours' worked can usually be submitted by phone, fax or e-mail. Payroll companies will sign checks, then mail them to you, or send them electronically so you can print them out. A service will also deposit paychecks electronically into employees' accounts, as well as calculating and filing all required tax forms. < www.allbusiness.com/human-resources/compensation-payroll/413-1.html>AllBusiness.com outlines the benefits of using a payroll service.
  • Your independent accountant or bookkeeper might be willing to also handle your payroll needs, but most won't take on this highly detailed and time-consuming task because payroll services are usually faster and cheaper.
Additional costs:
  • Be sure you're clear on the costs of additional services. There can be fees for adding or dropping employees, adjusting employee information or setting up your account, and these vary widely between payroll services.
Shopping for payroll service:
  • The market is highly competitive; pricing should be relatively negotiable. To avoid unnecessary charges, figure out in advance which features you really need.
  • BusinessWeek.com[4] offers tips for choosing a service.
  • Two of the major companies are ADP[5] and PayChex[6] .
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What People Are Paying - Recent Comments
5 Businesses one owner
Amount: $500.00 per month
Posted by: a user in Augusta, GA.Posted: December 12th, 2014 03:12AM
Services Included: state taxes
I'm about to take over the accounting and payroll services for a business owner that owns 5 restaurants. I'm trying to get a fair amount to charge him. What would you charge if you live in the Augusta Ga area?
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Payroll Company
Amount: $132.64 per month
Posted by: LucyB in Plymouth, MA.Posted: May 17th, 2012 06:05AM
Which Company: BizChecks Payroll ServicesNumber of Employees: 5
Services Included: Payroll, taxes, direct deposit
Great local payroll provider! Attention to details, they called me when the Mass DUA rates were issued and told me the impact on my company's contribution. Fabulous!
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Outside Service
Amount: $120.00 per month
Posted by: a user in Oxnard, CA.Posted: March 13th, 2012 08:03PM
Which Company: Outside Service ProviderNumber of Employees: 12
Services Included: Checks, taxes and forms
We use an outside service provider. We e-mail the hours worked and receive the checks and a payroll summary report, The service pays the payroll taxes online for us as well as processing the quarterly reports.
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One employee payroll
Amount: $60.00 per month
Posted by: Charles L in Cincinnati, OH.Posted: January 2nd, 2012 02:01PM
Which Company: PaychexNumber of Employees: 1
Services Included: All
I get one paycheck per month and it costs about $60. They always do it accurately and I never have to pay penalties.
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ADP vrs Paychex
Amount: $250.00 per month
Posted by: Kerrie Tucker in Dallas, OR.Posted: January 7th, 2011 11:01AM
Which Company: ADP/PaychexNumber of Employees: 30
Services Included: Payroll,401k,HR,the works!
We started out doing payroll ourselves, but once we added employee benefits it was much easier to have a payroll service handle it. We were with Paychex for 3yrs & customer service was great, but once they went thru a system change there were lots of errors & we ended up paying tax penalties to the state for Paychexs' error. In the end we were paying up to $1400/mo for our services. We changed over to ADP, and they were MUCH less expensive, around $250/month - but terrible customer service, training, sales & much less options that Paychex. No matter who you choose, this is payroll & taxes and you HAVE to keep double check it. In the end with the economy the way it is we opted to go with the less expesive option.
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Doing it in QB took me a long time to figure out!
Amount: $20.00 per month
Posted by: small_biz_owner in San Jose, CA.Posted: April 11th, 2009 02:04AM
Which Company: QBNumber of Employees: 1
I decided to go the DIY path using the enhanced payroll inside QB. Wow, learning payroll for the first time is such a pain. The whole federal+state processes are paper oriented. It took about 3 billed hours of my acct's time (about $450) to get his help with the setup, then it was still a mess. I threw away my PIN for federal e-file, so I had to pay federal taxes by paper, which they make excruciatingly difficult (to "encourage you" to e-file). I didn't realize when the state withholding deadline was, so I got hit by another fee $250 fee. So now I'm at $450 acct+$250fees+250 software. Now that i've finally gotten it figured out, it feels pretty straightforward, so someday I'll get the savings. My advice to you: if you are planning on doing payroll, get stuff figured out 2 months in advance -- get all our e-file accounts set up, try to pay withholdings *right away*, don't wait, because if you're missing something, they have to *mail it to you*. And have an entrepreneur friend in the same state who's done it recently run it through with you. If you get the latest executive summary for your state, you realize how easy it should have been.
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Use accountant in Central Washington State
Amount: $250.00 per month
Posted by: bar and grill owner in Kelso, WA.Posted: April 11th, 2009 02:04AM
Which Company: AccountantNumber of Employees: 10
We run a medium-sized restaurant and bar in central Washington state. We don't feel comfortable figuring out all the taxes ourselves, so have our accountant do it by hand. We give him the hours worked by employees, and twice a month he figures out the paychecks/withholdings for our 10 employees. He charges $250 a month for this. We checked out the QuicKBooks price calculator -- they said their service will cost us about $80 a month with 10 employees, but still, we're worried that will be too complicated for us.
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External Resources:
  1.  www.entrepreneur.com/article/47340
  2.  www.compupay.com/
  3.  /www.bankofamerica.com/smallbusiness/
  4.  www.businessweek.com/#missing-article
  5.  www.adp.com/solutions/employer-services/payroll.aspx
  6.  www.paychex.com/payroll-taxes/small-business-payroll-services/
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