How Much Do Payroll Services Cost for a Small Business?

The three pricing models

Almost every payroll provider prices on one of three models: a base-plus-per-employee subscription, a full-service payroll company with add-on tax filing, or a PEO that co-employs your staff.

• Base subscription: $40–$180/month flat, regardless of headcount
• Per-employee: $6–$25/employee/month on top of the base
• Per-contractor: $5–$15/contractor/month, often only when actually paid
• PEO co-employment: $150–$200/employee/month, all-in with benefits

What drives the price up

• Multi-state payroll — each additional state can add $0–$20/month
• Year-end W-2/1099 production — usually bundled, sometimes $0–$8 per form standalone
• Benefits administration — health, 401(k), and HSA integrations add cost on most platforms
• Same-day or next-day direct deposit — faster funding speeds cost more on some providers
• Certified payroll or prevailing-wage reporting for government contractors

Payroll + bookkeeping bundles

For a 1–25 employee business, bundling payroll with monthly bookkeeping through a CPA-led provider typically runs $300–$1,500/month all-in — often less than paying for a standalone payroll company and a separate bookkeeper, because wage and tax data flows straight to the general ledger without manual journal entries.

How to compare quotes apples-to-apples

• Ask what's included in the base price vs. billed as an add-on
• Confirm whether the quote includes multi-state filing if you have remote employees
• Check for a tax-penalty guarantee on filings — reputable providers offer this in writing
• Get the effective monthly cost at your actual headcount, not the marketing rate for 1 employee