Payroll services costs vary depending on the company you use and the features you take advantage of. Most companies have a “per check” cost for check processing, which includes basic tax calculations, check processing, and payroll cost reports. The more features you add, the higher the cost will be. The most basic payroll packages usually include the following, and can cost anywhere from a few cents to a few dollars per “check:”
Again, the actual cost will depend on the number of employees you have, how long pay periods are, and which state tax laws apply. All of these considerations will all have a significant impact on the amount you pay for payroll services.
Payroll service costs for a medium sized business can run anywhere from $25 to as $200 each month. Smaller businesses, such as those with less than 10 employees, often end up paying more per-employee, because they are ineligible for volume discounts that are often given to large businesses. Payroll outsourcing services usually also offer options like end of the year reporting features, generating W-2 forms, and job cost reporting for additional charges. Features like online access, emailed pay stubs, and savings accounts contributions, can cost as much as $50 per employee, depending on the complexity of the transactions. Payroll processing companies charge small fees for adding “new hires” or for changing employee pay information (such as when an employee amends a W-4). These fees are generally small, but can add up quickly.
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Frequency of pay periods is also an important cost consideration. Businesses that pay employees weekly or bi-weekly will be charged more than those that pay only monthly. The more work the payroll service performs (such as more frequent deposits) the more expensive the service total will be. An easy way to save is to lengthen pay periods and to use direct deposit, which is usually less expensive than writing paper checks.
It’s always a good idea to get as many quotes as possible before deciding on a vendor. Most vendors offer free trials, which can be a great way to take advantage of reporting features for free and assess their usefulness before committing to buying them as part of a payroll package. Costs vary from company to company, so shop around and ask for itemized quotes to make sure you get the services you need at a cost that is within your budget.
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