If you're like many business owners, you don't have time to dig into every aspect of payroll. After all, that's why you hire a service, right? But without a basic understanding of the elements of a payroll service, it's not possible to know whether or not you have the right service for you… or if you're being overcharged.
Having worked with small businesses for more than 50 years - and having opened a division devoted exclusively to payroll over a decade ago - we know exactly how to break down the cost of a payroll service.
Different businesses have different payroll needs - and therefore add on different features, require different work per pay period or quarter, or have different influences that are out of their control, such as employee paycheck garnishments. We’ll break down both the common factors and the heavily-weighted miscellaneous factors for you here.
Because payroll includes a mix of factors that are beyond your control and customizable options that are fully in your control, we’re going to focus more on what the controllable options will cost you.
When we price our payroll services, we consider common factors, such as the number of states you will pay taxes to, your pay frequency, and the number of employees on payroll, as well as other miscellaneous factors. Plus, there are fees that can fall outside of your pay frequency. An example would be the annual W2 fees at the end of each year.
Out of our current payroll-only client base, an average month of payroll fees can range from a little under $100 to $500+. The average payroll client sits at a fee of around $225 per month.
Common Factors that Impact Payroll Service Costs
As we mentioned above, common factors can include:
The number of states you will pay taxes to
Fees will be added per state that we need to process per pay period. If your employees all live in the same state, you will only need to pay taxes to one state.
Your pay frequency
The more often you pay your employees, the more often we need to process your payroll. This will result in higher fees per pay period. Our offered pay frequencies include weekly, bi-weekly, semi-monthly, and monthly.
The number of employees on payroll
Payroll fees are heavily influenced by the number of employees on payroll. There will typically be a small fee per employee per pay period.
Miscellaneous Payroll Service Fees
Aside from the factors that most commonly influence payroll fees, there are fees for:
Add-ons, such as:
Showing PTO on paystubs
Printing and delivering paper checks and reports
Situational factors, such as:
Child support and other garnishments
New hire reporting
Amending W2s or quarterly payment tax returns (on behalf of a previous provider, not our error)
Retirement plan reporting
Rush fee for late changes to payroll details
Bounced direct deposits
Keeping Your Fee Lower While Using a Quality Service
When it comes to payroll features, you get what you pay for. While CSI Accounting & Payroll prices are usually similar to national payroll providers’ fees for many small business payroll situations, we won’t always be the lower-priced option in every circumstance.
Rather than moving away from a quality service in favor of a lower-priced (and generally lower-quality) service, consider what you can do to minimize your fees with the quality service first.
For example, at CSI Accounting & Payroll, businesses with the lowest fees have opted for some (or all) of the following:
Not using timekeeping (have only salaried employees) OR doing their own timekeeping (more effort on their part & they are held responsible for getting the reports to us on time)
Using direct deposit and electronic reports (rather than paper)
Not using delivery for paper materials (if applicable, see point above) by picking them up yourself
Not signing on for extra features (such as tracking PTO directly on employees’ paystubs, having an HR service, etc.)
Not hiring new employees often (and therefore don’t need to do new hire reporting often)
When you book a payroll consultation with us, we can help break down what you’re currently paying, as well as the different factors that would make up your payroll cost with CSI Accounting & Payroll. For many small business payroll situations, CSI has similar prices to large, national providers. Why is that? It all depends on the factors that make up a payroll fee.
Find out what your payroll would cost with CSI by clicking the button below.
If you want to see if we can be a match for your business, schedule a free consultation by clicking the button below:
This article was composed by a member of our staff who interviewed our experts to get the facts straight. Any uncited information found here came straight from a knowledgeable accountant or payroll specialist.