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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More Questions
How much should I budget for a bookkeeper?
Small business bookkeeping typically costs $200 to $600 monthly for basic services. The actual price depends on transaction volume, industry complexity, and whether you need additional services like payroll and sales tax filing.
Read answerWhat is considered a full charge bookkeeper?
A full charge bookkeeper handles the complete accounting cycle independently. This includes transaction recording, accounts receivable, accounts payable, payroll, bank reconciliation, and producing monthly financial statements.
Read answerCan a small business do their own bookkeeping?
Yes, many small businesses successfully manage their own bookkeeping. Whether it makes sense depends on your business complexity, available time, and willingness to learn the fundamentals. The key is staying consistent and knowing when the work has outgrown your capacity.
Read answerHow to catch up on bookkeeping?
Start by gathering bank and credit card statements for the entire period you're behind. Work through reconciliations month by month, categorizing as you go. The timeline depends on how far behind you are and whether the books were correct before the backlog started.
Read answerDoes my small business need a business license in Boone County, MO?
It depends on where in Boone County you operate. Columbia requires a business license for most commercial activity. Unincorporated Boone County areas don't have a general county license, but state registrations may still apply.
Read answerHow do I set up payroll in Missouri?
Setting up Missouri payroll requires an EIN, state tax registration, withholding setup, and local earnings tax registration for Kansas City or St. Louis employees. Most small businesses use payroll software or outsource it entirely.
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