How much should I pay someone to do payroll?
Payroll processing typically costs between $40 and $200 per month for small businesses, depending on which option you choose and how many employees you have. The range is wide because there are fundamentally different ways to handle payroll, and each comes with tradeoffs between cost, convenience, and risk.
DIY payroll software like Gusto, QuickBooks Payroll, or OnPay usually charges a base fee of $40 to $80 per month plus $4 to $10 per employee. A five-person business might pay $70 to $130 monthly. You handle the setup, enter hours, and run payroll yourself. The software calculates taxes and files them for you. This works if you have time to manage it and someone who understands the basics.
Full-service payroll companies like ADP or Paychex often charge more, sometimes $100 to $200 monthly for small businesses, but they handle everything and provide dedicated support. The pricing models vary and contracts can be complex, so get clear quotes before committing.
Having a bookkeeper handle payroll processing typically falls somewhere in between. Many charge $50 to $150 per pay run, though some include payroll in a monthly bookkeeping package. The advantage is that payroll integrates with your books automatically, and you have someone who knows your business reviewing each run.
The factors that drive cost higher include more employees, weekly pay instead of biweekly, multiple pay rates or locations, benefits deductions, garnishments, and contractor payments. Year-end work like W-2s and 1099s may cost extra or be included depending on your provider.
The real question isn’t just what payroll costs but what getting it wrong costs. Late payroll tax deposits trigger penalties. Incorrect withholding creates problems at tax time. Mistakes with overtime or classification can lead to back wages and fines. Missouri has specific withholding requirements, and the state doesn’t give grace periods for missed deposits.
For most small businesses in Mid-Missouri, working with a local bookkeeper for payroll makes sense when you’re already partnering on monthly books. It keeps everything in one place and ensures your labor costs show up accurately in your financial reports.
If you’re paying someone just for payroll and nothing else, expect to spend $50 to $150 per pay period depending on complexity. If payroll is part of a broader bookkeeping relationship, ask how it’s priced within the package. It often makes the per-payroll cost more reasonable than handling it separately.
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