In a recent survey of small business owners, 65% of business owners want to completely outsource payroll. The rest of the respondents said that they’re uncomfortable processing payroll
It’s no wonder when you realize how much time and energy payroll takes. Business owners spend about 21 days a year processing payroll.
If you’re thinking about outsourcing payroll, you’re going to need to know how much payroll services cost.
Types of Payroll Services
The cost of payroll services depends on the type of provider you choose. There are payroll software companies, that do most of the work for you. You just have to enter the data and print checks.
Most of these software packages have a monthly fee and charge on a per-user basis. They may charge you depending on the number of employees that you have.
You can use a payroll service company, which does all of the work for you. A company may charge you a flat rate or charge you depending on the number of employees.
If you’re charged a flat rate, take the time to understand what that flat rate includes. There might be some services that aren’t included in the package that you’ll have to pay for later.
You can have a CPA process payroll for you as well. This is likely to be the most expensive option since most CPAs charge by the hour for this service.
Additional Payroll Costs
When you work with a payroll service company, you want to know their full fee schedule. That’s because there may be other costs that you’re not aware of.
For example, you might automatically assume that they’ll take care of direct deposits since that seems to be a workplace standard. That’s not always the case. Some payroll companies will charge extra for direct deposit or charge a setup fee.
Do the providers have additional charges for taxes? They may prepare your tax filings, but they may not do any payroll taxes on your behalf.
You should also see if they print out W-2 forms at the end of the year and distribute pay stubs to employees.
The Average Cost of Payroll
How much do payroll services cost? On average, companies can spend between $150-$250 per employee each year to outsource payroll.
How much you spend depends on your needs and the payroll company. Your company could benefit from human resources help along with payroll processing. Your company may pay employees each week.
You should expect to pay more for HR assistance and if you pay employees more frequently than twice a month.
Know How Much Payroll Services Cost
How much do payroll services cost? It depends on the type of payroll service provider you choose and what type of services you need.
You should get a clear understanding of what you need and what the companies provide before you hire them. You’ll avoid any surprise charges later on.
For more posts to help you run your business, check out the other articles on this site.