When evaluating payroll services, the numerous options can be overwhelming. Ultimately, the price you pay will depend on your company’s specific needs. To get a better understanding of what to expect before contacting providers, let’s examine some typical services and fees associated with the cost of payroll.

Some common factors that can affect payroll cost include:

  • How often employees are paid
  • The total number of employees
  • Whether or not you require direct deposit
  • How many employees reside in more than one state
  • The need for additional tax filing services

The market for payroll services is very competitive, with many providers offering packages geared specifically toward small or mid-sized companies. On average, basic payroll processing has a per-employee or per-check fee, in addition to the base account fee. While base account fees vary widely from one provider to the next, you can expect to pay anywhere from177087251 $20 to $100 per month, plus an additional $1.50-$5.00 per payroll run for each employee. For an example just check out our payroll pricing page.

Add-ons and additional fees

When utilizing a payroll service, you’ll be charged a fee to set up your account, and again whenever you add or drop an employee. In addition, there are many payroll-related services that may warrant separate fees, including:

  • Automatic check signatures
  • Direct deposit
  • State and federal tax filing
  • Printing and check delivery
  • W2 and 1099 processing

To keep expenses under control, it’s best to define your needs ahead of time and search for a provider with an-all inclusive package that will address your requirements. Otherwise, adding a la carte options can quickly send the payroll costs skyrocketing.

It’s common practice for payroll service providers to offer low introductory pricing for the first six months and then to increase rates substantially, so be sure that you’re aware of any pre-scheduled rate increases before you commit.

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Michael Alter is the former president and CEO of SurePayroll, a wholly owned subsidiary of Paychex®. Alter joined SurePayroll in 2000 after more than five years with McKinsey and Company, where he was a founder and leader of its Service Operations Practice. Prior to receiving his MBA from the Harvard Business School, Alter worked in various sales positions at IBM. He is currently CEO at The Tie Bar. He holds a bachelor’s degree in economics from Northwestern University.