What is the Average Cost of a Payroll Company?
So, you’ve realized that in-house payroll processing requires you to hire an onsite payroll staff, buy and maintain payroll software, oversee the payroll department and ensure your business stays up to date with the ever-changing details surrounding payroll compliance. Ouch! How much is it to “hand that headache off to someone else?”
If you’re wondering what the average cost of a payroll company is, unfortunately there is no easy answer. It’s going to depend on a lot of details specific to your company. To give you an idea, here is how that number is often determined by a service provider:
Basic Costs
Basic services of payroll usually include calculating payroll and tax obligations for each employee, printing checks, depositing into employees’ accounts, project management and reporting.
The frequency of payroll each month and the number of employees is the largest factor in determining the basic cost of services. Paychecks can be issued on a weekly, bi-weekly, or monthly basis and weekly payroll distribution will often cost more than monthly (because the payroll tasks outlined above need to be performed 4-5 times per month versus 1). You can pay as little as $25/month for basic costs if you have a small number of employees and as much as $150.00/month if you have a larger company, depending on your basic needs and frequency.
Tax filing assistance is usually offered at little to no charge at the year’s end, too.
Delivery Method & Additional Costs
The delivery method each pay cycle also plays a significant role in cost, especially if you have a lot of employees. Will paychecks be mailed to you at the end of each pay cycle, to distribute on site? Or will you need each check mailed to each individual employee? If your service provider has a special program that permits you to print and distribute checks internally, you can eliminate postage and handling costs all together.
Also, adding new employees may come with administrative fees per employee, or put your business into a new bracket for basic services. Basic services usually cover a certain number of employees, as there is a big difference between processing payroll for 5 employees each month and processing 25 employees each month.
Keep in mind that a payroll service provider will be an expert in payroll and will likely get the job done a lot more effectively and efficiently than you can each pay period. If you only have one employee, outsourcing could still be the better option. Getting fined for a missed payment or reporting error could end up costing more than the fees incurred by hiring someone else to handle it – and in most instances the payroll company will take full responsibility for errors!
Employer Solutions Plus represents a number of payroll companies in order to find the perfect fit for each of our clients. Call us at 727-698-6207 to learn more.