Last Updated: February 08, 2023

How Much Does an Online Payroll Service Cost? message: Let us do the work for you. Answer a few short questions & get cost estimates for your needs from trusted payroll services companies who service your area. Our service is 100% free!

Summary: Payroll Services Pricing

Most payroll services charge a monthly base fee as low as $40 to as high as $160 as well as a per employee fee of $2 to $15 per payroll cycle. Yearly costs range from $1,000 to $6,000. Prices will vary depending on the level of service needed, number of employees and how often payroll is run.

Payroll Service Prices

Running a business can be tricky. Managing finances and payroll can be an administrative pain that takes you away from doing the things you love about your company. On top of the headache that payroll management brings, if you fail to do it correctly, you could be fined by the IRS and get stuck with unhappy employees stuck with incorrect paychecks.

Using a payroll service can help. They generally only cost around $1-$2 per check plus a base accounting fee. Payroll services also provide a variety of other features for varying costs such as direct deposit management and tax assistance.

Ultimately, the number of employees you have will play a role in how much the service costs. Typically, the larger your business, the less you’ll be paying on a per employee basis as some of the base service fees remain the same no matter how many people are on your payroll. For most small to medium sized businesses, expect to pay a minimum of $100 per employee per year if you want the full range of benefits that a payroll service provides.

That’s a pretty reasonable price to pay for peace of mind, one less headache on your to-do list, and comfort in knowing a professional is handling the finances to avoid IRS fines.

How Payroll Services Work

Payroll services can come in different forms and flavors. You could pay a full service payroll provider to manage it for you, you could use a local bookkeeper or accountant, an online service, or even use a software based solution. We’ll discuss the differences between those different services a little later but, regardless of who and what you choose, a payroll service should be able to do any and all of the following tasks for you:

Payroll Mistakes

  • Wage and salary calculation
  • Tax withholding
  • Managing direct deposits and/or sending checks out to your employees
  • Reporting wages to your State and Federal government

In short, a payroll service should handle any financial issues related to paying wages to your employees as well as any tax issues related to payroll. A good payroll service will have finance and tax professionals who can dedicate their full time and attention to your accounts so you can rest easy knowing that a specialist is taking care of the money instead of figuring it out yourself. After all, you have enough work on your plate to keep your business moving forward.

Payroll Penalty Stats

In 2016 alone the IRS issued 5.9 million penalties related to payroll taxes totaling over $6 billion dollars in fines. Failure to pay payroll taxes on time can result in fines of up to 15%!

Another positive aspect of using a payroll service is that they are not an “all-or-nothing” service. If you only want to outsource basic payroll actions such as direct deposit, but want to calculate wages and tax withholding yourself, most payroll services will let you pick and choose what you want them to handle and want you want to accomplish in house.

Of course, not all payroll services are created equal and, just like with anything, you get what you pay for. When shopping for a payroll service, make sure they truly are professionals who know what they are doing because, come tax time, you are the one who will be held responsible. Some payroll services are willing to pay the cost of errors and penalties, others may absolve themselves from mistakes. When using a payroll service, make sure you understand what will happen if things go south.

Payroll Software vs Professional Organization and Everything In-Between

Once you decide to have someone else handle payroll for you, there are several different methods you can choose from to get it done. You can hire a bookkeeper online, locally, or internal to your business, you can use a professional organization or online service, or you can run payroll software.

Cost to Hire a Bookkeeper

A good bookkeeper will typically cost $4,000-$6,000 per year for basic payroll services. Expect to pay $25 to $50 an hour for an outside bookkeeping service. This can be a great option if you already use a bookkeeper for other, non-payroll related finance tasks. Keep in mind that this cost is different if you are thinking of hiring an employee to handle payroll internally, as you’ll have to consider all the other costs of having an additional employee.

Whether it’s online, locally, or internal to your business, hiring a bookkeeper is often a simple way to get tailored payroll services. Bookkeepers are typically able to tailor their services to exactly what you need, and for a reasonable cost. Additionally, if your bookkeeper is local, they may have intimate knowledge of your state’s tax laws and personalized advice that you won’t get from other services. Plus, it’s hard to beat the benefits of personal human interaction as opposed to working with software or a large organization.

Tell us some details about your needs and get connected to pre-screened payroll companies. Compare free price quotes from multiple companies and save time and money instantly! No obligations to hire or purchase ever!

Payroll Software Prices

Payroll software helps you automate many payroll processes in-house and is usually the cheapest payroll option, but will often be limited in capability compared to fully outsourcing to a bookkeeper or organization. If you currently do your own payroll, odds are that you are using some form of payroll software already. If you are looking to upgrade your software to a more robust system, most quality payroll software platforms run from $2,000-$4,000 per year depending on what additional features you need.

Online Payroll Service Prices

An online payroll service works pretty similarly to hiring a bookkeeper, but with slightly less tailored control. With an online service such as Gusto and SurePayroll, you can outsource all your payroll needs in a pretty simple fashion and you can trust these companies to know exactly what they’re doing. While working online can be easier, you do have extra communication barriers to overcome as opposed to working with a local bookkeeper. Additionally, an online service likely won’t be able to tailor to your needs as well. That being said, an online service is less expensive ($1,000 - $3,000 per year) and can be considered the “easy button” of payroll outsourcing. If you want ease and reliability without too much hassle, then an online service might be for you.

Here are some online payroll prices from top-rated companies:

  • Gusto Online Payroll: $39 to $149 per month base fee plus $6 to $12 per month per employee.
  • OnPay: $36 per month base fee plus $4 per month per employee
  • SurePayroll: $29.99 per month base fee plus $4 to $5 per month per employee
  • Quickbooks: $45 to $125 per month base fee plus $4 to $10 per month per employee

Online Payroll Service Prices

Professional Employer Organizations Pricing

If you are a company looking to fully outsource every part of your employee management beyond payroll, than a Professional Employer Organization (PEO) is an expensive, but robust, option. Some popular examples are Paychex and ADP Payroll. These organizations can do much more than payroll. A PEO can often handle the full spectrum of employee management to include retirement funds, HR, health insurance, and other benefits.

PEOs are great if you want to fully outsource every aspect of employee management to include payroll, but they often cost over $12,000 per year, which may make it prohibitive for smaller businesses. If your business has a complex payroll system that includes retirement, insurance, and other options, a PEO may be useful. However, if you only want to outsource standard payroll and tax tasks, consider some other less expensive options that can still get the job done well.

Here are some minimum base rates for PEOs for a business with around 30 employees:

  • ADP: $85/month
  • Coastal HR: $84/month
  • Paychex: $88/month

Remember, these are the base rates for a small business (less than 30 employees). You can expect this rate to up to $1,000 per month depending on your company’s size and the services you need.

Full Service Payroll Provider Pricing

Finally, a full service payroll provider can be a good balance between a PEO and personal bookkeeper. Full service providers can offer the full spectrum of payroll services and features that you would get from an organization, but without the cost of a PEO and the extra benefits they offer. Some options a full service provider could offer that a bookkeeper might not is 24/7 customer support and consultation, redundancy that helps keep mistakes to a minimum, and a wide breadth of knowledge on both state and federal tax laws. Some popular payroll providers are Intuit and Payficiency and they typically cost anywhere from $3,000-$7,000 per year depending on what services and features you need.

Here are some of the base rates offered by popular payroll providers:

  • Intuit: $20/month
  • Payficiency: $35/month
  • Complete Payroll Solutions: $69/month
  • SurePayroll: $80/month

Payroll Pricing Factors

While the approximate price that a small business can expect to pay is $100 per employee per year for the most basic services, there are plenty of factors that you should consider when looking at how much payroll services will cost for you.

What services do you need?

For many employers, the tax aspect is the most challenging and complicated part of payroll, so they outsource the tax filing work while keeping the rest of the payroll duties in-house. This saves on the cost of the payroll service. On the other hand, some companies may have a more complicated pay system that requires them to outsource calculations and payments for retirement funds, extra employee benefits and bonuses, or other advanced bookkeeping processes more robust payroll services can offer.

Before you begin shopping for payroll services, decide on what tasks you definitely want to outsource and what duties (if any) you are still willing to do on your own. Knowing specifically what services you need help with can assist in keeping costs low. Since payroll services pricing is determined by how many additional features you use, you don’t want to end up paying for services you don’t need.

How many employees are in your company?

Depending on the service you use, the base accounting cost may stay the same while you pay a “per check” cost for each employee on the payroll. Some services may also charge a fee for adding or removing employees from the payroll. While you will likely have to pay fees for each employee, many companies find that the cost of scaling is pretty easy. The more employees you have, the less it will cost on a per employee basis because you can divide up the base costs and fees among all your members.

What state do you live in?

Lastly, the cost of payroll services will depend on where your business is located. No two state tax systems are alike. In a state with extremely difficult and complex tax laws, expect to pay a little more because your payroll service will be doing more work to keep everything above board. In a state where the tax laws are relatively simple, a payroll service may not charge as much.

Finding the Right Payroll Service

No matter what your needs are, there is a payroll provider out there that can help. The key is knowing what you need and asking the right questions to the service you are considering.

Questions to Ask Internally

Before you begin shopping around, the first step is to ask yourself some internal questions. Your answers will help refine your search and save some time:

  • What services do you want to outsource?
  • Which tasks do you want to keep in-house and how do you accomplish them?
  • Can you use a blend of internal software services and external help to accomplish your payroll needs?
  • How much is your business willing to spend on payroll services?
  • Are you comfortable working and communicating with a remote bookkeeper or do you want to work in-person to eliminate communication breakdowns?
  • Are you expecting your employee numbers to grow or subtract significantly any time soon?

Questions to Ask the Payroll Provider

Once you have an accurate idea of what your business needs are, here are some questions to ask the payroll provider:

  • What is included in your basic services and what will require an extra fee?
  • What extra fees exist after the base accounting cost? Fees for adding or removing employees? One time fees? Recurring fees?
  • What will the total anticipated bill be each month or pay period and can you provide a detailed cost breakdown?
  • How long is the rate offered good for? Is it a 12 month contract? Will the rate change in the future?
  • How quickly can you correct payroll mistakes after they are made?
  • Do you take responsibility for fines incurred from tax and accounting errors?
  • Can you accomplish both state and federal taxes? How familiar are you with the tax laws in the state my business is in?
  • (If your business is run out of multiple states) Are you capable of filing multi-state taxes and what extra fees will that incur?

Frequently Asked Payroll Questions

Here are some answers to the most common questions asked regarding payroll services:

Is Online Payroll Secure?

Yes, online payroll services are generally very secure. But all systems are different, and it’s up to you to research the security features before making a purchase. Otherwise, you risk compromising sensitive data such as wage reports and employee social security numbers.

Any reputable online payroll vendor has a number of security measures in place. Popular measures include:

  • EV certificates - Many vendors require their customers to obtain what’s known as an Extended Validation (EV) Certificate. This goes beyond the standard encrypting that comes with an SSL certificate. The certificate requires extensive verification of your company’s identity when requesting payroll information.
  • Security images - Much like banking institutions, many online payroll providers require approval of a security image you choose before access is allowed. If the image is not correct, you should assume security has been compromised. Do not login to the payroll website and contact your vendor immediately.
  • Password-protected pay stubs - A password must be entered before pay stubs can be downloaded, even after you’ve already logged on to the site.
  • Distorted images - We’ve all seen (and likely been frustrated by) websites that require the user to retype a distorted image of a word or phrase. But these promote security by making sure the person logging in is actually a person, not an automated computer attacker.
  • Account lock-outs - After a certain number of failed login attempts, most online payroll systems will lock out the user until he or she contacts customer service and answers security questions or successfully resets the password.

Don’t just take a vendor’s word for it that the payroll service is secure. Ask about specific security features before switching. Again, most services are highly secure. But you never want to be the company that falls victim to a data breach.

Can I Print My Own Checks with a Payroll Solution?

Many payroll services allow you to print your own checks. Rather than waiting for checks to arrive by mail, you can print checks as you need them. The process is faster, more efficient and more convenient.

Printed Payroll Checks

If you want to print your own checks, the key is to find an online payroll service, rather than a traditional payroll service that mails or hand-delivers your paychecks. Online services allow you to print checks using your own printer and preprinted or blank check stock. Just like checks from traditional payroll services, these self-printed checks include a pay stub that shows details such as gross earnings, taxes withheld and deductions.

Most online payroll systems can automatically create checks when you enter employee hours and approve salaries. The checks can be printed and distributed as you need them. When there are bonus or special checks to print, you can have them immediately. Online payroll services also facilitate direct deposit for employees who are interested. They are capable of calculating taxes and reminding you when to pay. They allow you to print and export payroll reports, as well as allow employees online access to personal wage reports.

The cost of an online payroll service depends on a number of factors, including the type of system and your location (complex tax laws in some states lead to higher pricing). Small businesses can expect to pay a monthly fee of anywhere from $25 to $150, depending on features. A basic check-creation system falls on the low end of that range, while a complete service with tax features falls on the high end.

Can I Transfer My Payroll Data from an Old Solution to a New One?

Unfortunately, there’s no easy answer to this question. It depends on the features of the old system and the new system, and they’re compatibility. As a general rule, data transfer tends to be fairly simple when switching from one online payroll service to another. The process tend to be trickier when switching from a traditional service that mails or hand-delivers checks.

If your old system has a feature that allows you to easily export data and the new system has a feature that allows for easy importing, you’re in good shape. With the best systems, this process is intuitive. But if you can’t figure it out, contact customer support for guidance or read the frequently asked questions on the vendor’s website.

If the old system doesn’t allow for exporting, there’s not much you can do, even if the new system does allow importing. In that case you’ll have to manually input data such as employee names, wages and withholdings. This process can be long and painful, but most companies find that the long-term benefits of switching to a more advanced or online system make it worthwhile.

For many companies, the ease of transferring data plays a major role in their choice of a new system. Be sure to ask detailed questions about the process before switching. In some cases, it’s simply a matter of compatibility. However, keep in mind that even if the data transfer process is seamless, you’ll need to go through and manually check the data for accuracy.

Ask for References

Finally, never be afraid to ask around to other businesses who have used the payroll service or bookkeeper you are considering. Ask them what their experience was like, how the service helped with mistakes and errors and how easy or difficult they were to use. Check online review sites such as


Find the Best Payroll Service Companies Who Will Compete for Your Business

Compare Payroll Services Rates

Fill out our 30 second free form to receive competitive pricing from pre-screened payroll service companies. No commitments. Our service is always free!