How Much Will Payroll Cost Your Company?
Get informed about payroll processing fees
Written by Steve Thompson
When you outsource your payroll department to another company or when you use a Web-based program for calculations and management, payroll processing fees will be charged on a specific schedule. Some will involve a monthly fee regardless of the number of pay periods, while others will charge a specific amount based on the number of employees, the number of checks processed or some other factor.
Basics of Payroll Processing Fees
Payroll services pricing will depend on a number of factors, and can change depending on the size and location of your business and the number of employees on your staff. Additionally, the pricing schedules will be different if you use a Web-based service or a third-party outsourced company for your payroll.
For example, the payroll processing fees for a Web-based service provider can cost anywhere from $9.99 per month to more than $100 per month. There might be several "package" options available where you can pick and choose the precise services you need.
By contrast, third-party companies that manage your payroll are usually far more expensive, but they can often handle more complex issues and processing requirements. For instance, a payroll management company might be able to better handle paycheck garnishments, employee expenses (such as uniforms) and insurance and retirement changes.
If payment is made per employee or per check processed, the rates generally range from 50 cents to $3 each. The price usually goes down if you have more employees, so you might want to ask about tiers used.
Setting Price Structure
In most cases, payroll processing fees include a base rate for a certain number of services, then add on fees for any additional services you request. For example, if you want your payroll service to handle workers' compensation, you might pay an extra $75 to $150 per year, depending on the number of employees.
Companies might also charge higher fees if they offer consultation or support as part of their services. This can be valuable because you'll be able to call representatives to ask how you can save money on payroll or handle a specific issue.
A payroll company that conducts most of its processing online or through an installed software program will need to charge enough to cover its costs of operation. If the company does those things manually, it has to pay for the employees it hires as your HR managers.
Factors Impacting Fees
Payroll processing fees are based on your business' specific information. The number of employees, frequency of pay and other factors can increase or decrease payroll services pricing accordingly.
For example, if you offer insurance and retirement benefits to your employees, those costs will need to be deducted from every paycheck. It will cost extra for your payroll manager to calculate those differences so they reflect accurately in checks.
Are you ready to review payroll processing fees for your business? Submit a free request for price quotes and get matched to multiple dealers who will try to get you the best deal.