Outsourcing payroll services helps companies meet tax-filing deadlines and deposit requirements. It also helps streamline business operations—professional payroll service companies are just more efficient when it comes to handling all the data entry, documents and paycheck deliveries associated with a business. Payroll services typically include issuing payments to employees (via direct deposit, checks or check cards), reports and documentation of employee wages and taxes, and payment of payroll taxes for both the employer and employees. Bookkeeping and accounting are often offered in bundled packages along with payroll services. While related, these separate services have to do with tracking earnings and spending and reporting on a company’s financial health.
Paying a pro to handle payroll services comes with distinct perks, such as more productive work time—business owners can run their business instead of dealing with administrative tasks. Outsourcing these services also means less likelihood of tax-filing errors, no more data entry, professionally produced payroll reports, all taxes (federal, state and local) filed on time and more. Professional payroll firms service any size business, from small companies of under 10 employees to larger organizations of 50 or more workers. Many pros work remotely online and others can work on-site full or part time. Several factors affect the cost of payroll services.
Payroll services are typically provided on an ongoing basis to the client—or business paying for the services—as opposed to being offered as a one-time service. The payroll provider has access to employee time records and company tax information for processing paychecks, accounting for upcoming quarterly taxes and keeping company records up to date. Because of the ongoing nature of this relationship, many payroll providers offer monthly rates—some with tiered pricing for tiered service levels—that reflect the level of work provided each month. Pricing varies depending on services provided, the payroll company’s experience and other factors. Here are three examples of monthly rates for payroll services.
Tax N Book in Charlotte, North Carolina: $35 per month per company
$4 per employee per month
This online service provider uses Intuit accounting software. Clients enter employee hours and the payroll company does the rest of the work. Services include direct deposits and electronic filing for federal and state taxes.
- Base price includes all employee W-2s; 1099s are $20 each per year.
Summit Business Team in Lakewood, Washington: $150 per month for full-service payroll for 15 employees
$2 per each employee over 15
- Monthly price includes all federal and state tax filings, direct deposit, an employee portal for online paystub and W-2 access, and payroll processing.
Crystal Scanlan in Huntingtown, Maryland
Payroll Life: $50 per month
$2 per month per employee/contractor
- This service includes unlimited payroll processing, direct deposit, online employee portal, online employer portal, payroll reports (on tax payment, vacation, benefits, contractor payments, tax payments, etc.), and federal and state tax filings.
Payroll Pro: $60 per month
$4 per month per employee/contractor
- This service includes Payroll Lite plus payroll taxes, emailed reports for each pay period and consulting on human resources decisions with guidance from payroll data analysis.
Consulting or hourly rate
Some businesses simply need external support to get a new payroll system up and running or to revamp an inefficient system. Some payroll services charge by the hour for consulting, which is a more cost-effective strategy for these clients. Tax N Book in Charlotte, North Carolina, Charges $35 per hour for consulting.
Some payroll professionals can also handle workers compensation and unemployment claims also. Be sure to make sure an organization is equipped to handle these tasks.