How much does a payroll service cost per month?

Most payroll services charge a base fee of $20 to $150 per month plus a per-employee fee of $2 to $12 per employee per month. A 10-person business using a mid-tier full-service payroll provider typically pays $80 to $180 per month all-in.

What is included in a basic payroll service?

A basic payroll service typically includes payroll calculation and direct deposit, federal and state payroll tax calculation, employee self-service portals, and year-end W-2 and 1099 preparation. HR tools, time tracking, benefits administration, and automatic tax filing require upgrading to a full-service tier.

What hidden fees do payroll services charge?

Common hidden payroll fees include W-2 and 1099 processing fees ($3-7 per form at year-end), off-cycle payroll run fees ($15-50 per run), new hire reporting fees, state tax registration fees, and cancellation or data export fees when switching providers.

Is it cheaper to do payroll yourself?

For 1-3 employees, DIY payroll software can cost $0-$30/month versus $50-$80 for a full-service provider. However, the real cost of DIY payroll includes your time, risk of tax penalties for late or incorrect deposits, and cost of staying current with changing tax rules. Most advisors recommend a service once you have more than 3-5 employees.

What is a PEO and how does it differ from a payroll service?

A Professional Employer Organisation (PEO) is a co-employer arrangement where the PEO becomes the employer of record, handling payroll, benefits, HR compliance, and workers' compensation. PEOs typically cost 2-12% of total payroll or $80-200+ per employee per month, significantly more than a standard payroll service.

Can I switch payroll providers mid-year?

Yes, you can switch payroll providers at any point, though it is administratively simpler to switch at the start of a new calendar year or quarter. The main complexity is transferring year-to-date payroll data and tax deposit history so that year-end W-2s are accurate.

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How Much Does a Payroll Service Cost?

Updated 26 March 2026

Payroll services typically cost $20 to $150 per month base plus $2 to $12 per employee. Use our free calculator to compare costs across six generic provider tiers based on your team size and features needed.

✓Compare 6 provider tiers

✓Instant monthly cost breakdown

✓Includes hidden fee warnings

Payroll Service Cost Calculator

Compare monthly costs across six generic provider tiers based on your team size

Number of Employees

staff

Pay Frequency

Costs shown are illustrative monthly estimates. Actual pricing varies by provider.

Service Tier	Monthly Cost	Annual Cost	Per Employee/mo
Basic Self-Service Payroll calculation only, manual tax deposits	$40/mo	$480/yr	$2
Essential Auto tax filing included, basic reporting	$80/mo	$960/yr	$4
Full-ServicePopular Full automation, HR support, time tracking	$120/mo	$1,440/yr	$6
Premium Full-service plus dedicated support team	$190/mo	$2,280/yr	$9
Enterprise Large business, custom pricing, advanced compliance	$250/mo	$3,000/yr	$10
PEO (Co-employment) Employer of record, group health insurance access	$1,200/mo	$14,400/yr	~$120

What drives payroll costs: Pay frequency is a key factor as weekly payroll runs cost more than monthly. The number of states you operate in adds compliance complexity and cost. Features like HR tools, time tracking, and benefits administration raise the per-employee fee. Always request a full itemised quote including W-2 fees, off-cycle run fees, and year-end charges before signing up.

What Drives Payroll Service Costs?

Number of Employees

The per-employee fee is the biggest cost variable. At $4/employee/month, the difference between 5 and 50 employees is $180/month. Choose a provider that charges a lower per-employee rate if you plan to grow, even if the base fee is slightly higher.

Features You Need

Basic payroll-only services start around $20/month. Adding automatic tax filing, HR tools, time and attendance tracking, benefits administration, and dedicated support can push costs to $100-$150/month base before the per-employee add-on. Only pay for features you use.

Pay Frequency

Weekly payroll runs cost more than monthly because each run requires processing, compliance checks, and tax deposits. Switching from weekly to bi-weekly payroll typically saves 10-20% on payroll service fees while still meeting most employee payment preferences.

How Much Does a Payroll Service Cost?

Payroll Service Cost Calculator

What Drives Payroll Service Costs?

Number of Employees

Features You Need

Pay Frequency

Frequently Asked Questions