How Much Does Payroll Service Cost for Small Businesses? As a small business, you certainly need a payroll service to attend to the payment of workers and every other related issue.
One of the major benefits of employing a payroll service is the fact that it gives you room to focus your energy on all the parts of a business. This is why it is important to have a reputable system for processing payroll, taxes, and other important items.
How Much Does Payroll Service Cost for Small Businesses?
That being said, the only problem now remains: how much does payroll service cost for small businesses? So in this article today, you are going to find out exactly how much a payroll service costs for small businesses. If you are interested in this, then let’s go ahead and jump in.
What is Payroll for Small Businesses?
When we talk about payroll for small businesses, it is simply the process of paying an employee their monthly or weekly wages. It is the payment process of an employee that is what we call payroll for small businesses. You need to know that payroll does not only include issuing paychecks; it also includes calculation of tax and removal, adding up gross pay, and so on.
Payroll is quite a time-consuming activity, which is one of the reasons why many businesses and companies like to outsource it. Having a small business does not afford you the opportunity to go with any payroll company you like. As a small business owner, you only need to go for the ones that have the important functions that you want so that you don’t spend unnecessary money.
How is the Payroll Price determined?
Different payroll companies have different ways of determining the price of payroll service for companies or businesses. However, there are basically three determinants that constitute the price that a company or business pays for a payroll service. Although these are the basic determinants or factors, they do not cover additional services and expenses.
Below are the factors that determine the price of a payroll service:
- Payment frequency-the payment frequency is one of the factors that determine the cost of payroll service for your business or company. This is basically how often you pay your employees, whether weekly, bi-weekly, semi-monthly, or monthly.
- Individual employee fee-the individual employee fee is the amount a payroll company charges for each employee during payments.
- The last thing that determines the amount of a payroll company’s service for a business or company is the monthly fees the company charges. This and every other fee are added together to give you the cost of payroll service for your small business.
Factors that can increase the cost of a Payroll Service
When it comes to payroll services, before you select one for your small business, you should consider what is included and what is not. The estimate the payroll company will give you includes only the main factors; extra expenses are not included. When these extra expenses come in, they are definitely going to drive up the price of the payroll service.
Below are some of the factors that can drive up or increase the cost of a payroll service:
- Tax filing
- Interface to the general ledger
- Employee pay options such as direct deposit pay cards and so on.
- Courier and delivery services
- Check stuffing and sealing.
- Quarterly and year-end reporting
These are not all the extra expenses or factors that can drive up the price of a payroll service.
How much does Payroll Service Cost for Small Businesses?
In this article, we have seen some of the factors that determine the extra cost of your payroll service. We have also seen how a payroll service cost is determined by payroll services for small businesses. That being said it is now time for us to get the actual figures on how much a payroll service costs for small businesses.
But before we go ahead and start quoting numbers, you should know that there is no standard payroll service cost. Because payroll services vary from one payroll company to another, With that in mind, below is how much a payroll service costs for small businesses:
- 13% of companies spend $1 to $50 a month.
- 22% of small businesses spend $51 to $100 a month.
- 42% of small businesses spend $101 to $500.
- 11% spend $501 to $1000 a month.
- 8% spend between $1001 and $5000 per month.
- And finally, 3% of small businesses spend more than 5000 dollars in a month.
If you are wondering how we got this figure, these figures were gotten from research or surveys carried out by the association of small business taxation.
How do you save money on the Payroll?
One thing that you should know is the fact that if you decide not to go for a payroll service, this means you are going to be doing it yourself or employing an accountant or human resource department to do so. The same time that the human resource department or the accountant spends on doing your payroll could now be better spent elsewhere.
So it is very important to simply outsource your payroll service to a full-service payroll provider or payroll system and automate it. You can also decide to choose from one of the best online payroll services that are available on the internet for you to do so. so that your company and its employees can have the necessary time to invest in growing the business.
Small business Payroll Service Cost FAQs
How much does payroll cost per employee?
When it comes to a small business, most payroll service providers simply charge a fee between $30 and $150 per month for an employee. However, there are additional costs that might be added to this figure that will cause it to increase depending on how regularly you make payments. These extra costs also depend on whether you are using a basic payroll service or a full-scale type.
What costs are included in the payroll?
There are various costs that are included in a payroll that is charged by payroll companies. The costs are wages, payroll tax, bonuses, and paid leave. However, there might be some extra costs that might occur depending on the type of business you run.
Can you do the payroll yourself?
The answer is yes, you can basically do the payroll yourself. However, it is going to be time-consuming. The time you will spend on doing your payroll should be better spent on running your business to grow and make more profit. This is one of the reasons why it is important to outsource your payroll unless you have very few employees.
