How much does it cost to have a payroll service?
When it comes to frequently asked questions, in-house HR professionals and office managers agree that the question "how much does it cost to have a payroll service" is at the top of their list. After all, ensuring accurate payroll is a complex and time consuming task, and the consequences of errors and omissions can be expensive.
The good news is that business payroll services offer a solid return on investment. Most charge a base fee — perhaps $25 to $150 per month — along with a fee for each employee that is issued a check. The per-employee fee is usually $3 to $5 each, and it is assessed every pay period. Of course, the final cost depends on the specific needs of the business.
What are business payroll services?
What is payroll services? Business payroll services handle payroll for companies of all sizes. They support small business owners and large organizations with features that are customized for each company’s unique needs.
They start with basic payroll, which includes collecting employees' hours and rates of pay. They also manage payroll processes like calculating and withholding taxes, pre-tax benefit premiums, and after-tax benefit contributions. They ensure that paid time off is included as needed. Then they run payroll in a timely manner to get checks and direct deposits out according to your payroll schedule.
How do payroll services work?
Choosing the right firm for outsourcing your payroll comes down to balancing features with average costs to ensure maximum value. Some of the key features to look for in employee payroll services include the following:
Advanced Payroll Software. Choose a platform that can handle the complexities of payroll processes behind the scenes while keeping the user interface simple and intuitive.
Payroll Tax Expertise. Your business payroll service provider should always be up-to-date on the most recent changes to local, state, and federal tax regulations. You and your employees don’t want any surprises when tax filing season comes around.
Compliance Support. It is far too easy to run afoul of labor and employment laws. The best payroll services offer guidance on staying in compliance with applicable regulations.
Automated Data Entry. If you have a large number of employees, manually entering employee data and updating records by hand is simply not practical. Ensure your paycheck services provider offers automated employee data syncing.
In case you are wondering how much does it cost to have a payroll service, then you should note that it will depend on the features or plans you're willing to purchase. These are basic features that any high-quality business payroll service should provide.
However, you may wish to add additional services depending on the needs of your business. For example, time and attendance tracking, recruiting and applicant tracking, onboarding, benefits enrollment, performance management, and HRIS systems may be available. Generally, such services cost less when bundled together under a single provider.
How much do payroll services cost?
The cost of payroll depends on the type of service or structure you choose. Common options include the following:
Base Fee. A flat monthly charge or a flat fee assessed for each pay period that is the same no matter how many employees you have. These typically range between $30 and $150, depending on the provider and the services you choose.
Number of Employees. A charge assessed for each employee included in the payroll cycle that generally ranges between $2 and $12 per employee.
Subscription Plan. An option that charges a periodic subscription fee (e.g., monthly, quarterly, or annually) for all payroll processes regardless of the number of employees.
Payroll Software. A specialized platform that is designed to simplify payroll processes with costs customized to your business needs.
So, how much does it cost to have a payroll service? There are a lot of variables. However, in most cases, you can be sure of one thing. The average business owner realizes a return on investment by saving on in-house payroll processing and any additional fees, fines, penalties, and bad press that come with payroll errors.
When should I look for payroll services for my business?
If you prefer to outsource these tasks from the start, you can engage a payroll services provider as soon as you launch your company. However, if you have kept management payroll in-house so far, these are five signs that it is time to reconsider:
Time. Your HR Manager or Office Manager spends an excessive amount of time on payroll.
Engagement. Employees are increasingly frustrated by missing or incorrect pay.
Tax Filing. You don’t have the information you need to file your taxes correctly, or your payroll manager missed something along the way.
Compliance. You received notification from a regulatory agency that your payroll was mismanaged.
Cost. The expense associated with handling payroll processes in-house exceeds the cost of outsourcing these tasks.
Outsourcing your payroll frees up HR staff to spend their time on activities that add value to the business. Better still, it reduces the likelihood of incurring the fines, fees, and reputational harm that can be assessed if you fail to pay your employees accurately and on time.
How To Get Started
The first step is to determine which features you want from a business payroll service. Then, review potential providers to determine which can meet your needs. Spend some time reading reviews and checking references to ensure that the company has a reputation for experience and expertise. Finally, compare costs to find the paycheck services that fit your budget.
Visit Teamworks Group to learn more.