Are you a small business owner who hates processing payroll? You’re not alone. Fifty-eight percent of surveyed business owners reported payroll and bookkeeping as the most draining part of running their business.
If you’re sick and tired of spending your valuable time wading through the sometimes frustrating and always tedious waters of payroll processing, it might be time to invest in a payroll service. But how much is a payroll service? Can you afford to partner with a service that provides the features and support you need for your business?
This post will walk you through the factors impacting payroll service costs. After reading, you’ll understand what you need to spend to get the necessary functionality.
How Much is a Payroll Service? Baseline Costs
Before we discuss the factors that impact payroll costs in more detail, let’s explore payroll services more broadly. What does a payroll service do? Your payroll service provider is a third party who assists you in payroll process management.
Services vary based on your provider, but your provider may assist you with anything from time-clocking to payroll taxes and everything in between. Some payroll services can appear pricey at first glance. However, the assistance you receive from your provider can save you money and headaches in the long run.
Mistakes in your payroll, tax, or Workers’ Compensation processes can result in consequences ranging from an overpayment on premiums to fines and penalties. You can avoid these challenges when you partner with the right payroll service provider.
So, how much is a payroll service? We’ll discuss some factors that may impact your exact pricing, but the average cost is around $200-250 per employee per year.
Let’s look at some factors that can make this figure higher or lower for your business.
1. Number of Employees
The first factor that impacts pricing is the number of employees in your organization and on your payroll. Many payroll services charge per employee in addition to a baseline monthly service fee. The price per employee is generally fairly low, ranging between four and twelve dollars per employee.
Some payroll service providers will also charge a higher fee per employee if you have fewer employees, decreasing the per-employee price as your headcount increases.
The size of your business also impacts the type of payroll service you need to explore. You may consider an enterprise solution like ADP if your business is large. However, if you operate a small business, you will want to partner with a provider specializing in small business payroll, like ConnectPay.
Related: The Best Payroll Service Providers for Any Size Business: 5 Top Options
2. How Often You Process Payroll
Your payroll service pricing also depends on how frequently you need to process payroll. The price per employee discussed in the previous section is not a “one-and-done” payment. Sometimes, this price is per employee per month, but often it’s per employee per payroll.
If your organization is on a weekly pay schedule, you should expect to pay more than you would were you on a biweekly or monthly payment schedule.
You should note, however, that the frequency of your payroll processing will impact your payroll investment regardless of whether you hire a payroll service or process it yourself in-house. Processing payroll weekly is a bigger drain on time and employee resources than doingit monthly. Similarly, a provider will charge you more funds for more frequent processing.
3. Quality of Service
Quality always impacts price.
This chestnut is true across industries, products, and services. It is possible to find inexpensive payroll service providers! However, if you simply choose the cheapest option without examining other factors, you may end up with a solution that causes you more headaches than you need.
Ensure you consider payrolling services that offer personalized support, giving you the assistance you need to complete your payroll processes accurately and efficiently. ConnectPay connects our partners to top experts in Workers’ Comp, payroll taxes, and more. Moreover, our Connected Service Representatives ensure you can always reach a real person during business hours to answer your questions quickly and correctly.
4. Features Included
The last factor that will impact how much payroll services will cost for your business is your required features list. What features do you require from your payroll solution? Predictably, more robust feature packages generally cost more than more basic packages.
Some features you may want to consider include:
- Simplified reporting
- Workers’ Comp
- Automated compliance updates
- Intuitive time and attendance
- Benefits and retirement options
- Personalized support
The cheapest solution for your business will be the wrong solution if it does not offer the features you need to run your payroll smoothly.
How Much is a Payroll Service? Getting the Best Value
This guide should help you estimate the cost of partnering with a payroll service for your business. After considering the four elements above, you’ll be able to budget accurately for your new payroll solution.
To get the best value from your payroll service, you need to partner with a payroll provider that offers more than just a software solution and a generic customer service line with an automated answering service.
ConnectPay offers top-tier payroll services for small businesses. We connect you with the tax, workers’ comp, and payroll specialists you need to keep your payroll running smoothly. To see how we can help you make your payroll processing smoother and save you time and headaches, schedule a call with us today!