Cheap Payroll Outsourcing – How Affordable is Office / Online Payroll Service Pricing in 2020
Payroll services cost between $45 – $112 per month for up to 5 employees, and typically require no contracts.
Payroll can be one of the most time-consuming and frustrating tasks for a small business owner to tackle, making it an ideal candidate for outsourcing to a third-party provider. Luckily, there are cheap payroll services available that can make this an extremely inexpensive proposition.
Usually, you will have to pay a basic account fee each month, which can cost as little as $20-100 depending on the services included in your package. Then, you will pay an additional fee for every employee you need payroll processed for each pay period. This can be as affordable as $0.80 for a basic check, or as much as $9.00 for options including tax processing and direct deposit to your staff’s bank accounts.
Complexity of the payroll that needs to be handled accounts for most of the increases in price of a payroll service. For instance:
- Direct deposit
- Overtime hour calculations
- Irregular or casual hours
- Tax filings
- Specialized requests
- Reimbursement payments combined with payroll
- Commission calculation
Could all cause your fees per payment to go up somewhat. On the other hand, if you have several employees contracted for regular hours on salary, and who prefer to get paid via a check handed to them in person, then you’re going to be able to find a real bargain when pricing out your payroll services.
The base-level fee that you pay often depends on the size of your organization and the value-added services the payroll firm offers. If you’re looking for the best, low-priced options available, look for a stripped-down service that just focuses on the basics.
What is a Payroll Service? Are Online Payroll Services Good?
A payroll service can be outsourced or done online, and is a third-party provider that handles all elements of payroll for their clients. In a traditional business arrangement, you either have to have a payroll department or have an office manager or yourself handle it in the case of smaller organizations. In many cases, the cost of a payroll professional is much higher than that of a payroll service.
A payroll service will take all the information that you provide them regarding your employee’s salaries and process their payments on a schedule in accordance with your payment policies. If you have employees who work hourly, most payroll services will have some sort of system in place so you can update them with the number of hours each employee has worked so they can process payments automatically.
A payroll service, even a low-cost one, may offer a number of added services to help completely take the place of an internal payroll department. For instance, they can address all of the tax reporting requirements associated with paying your employees. They may also handle specialized payments, such as those that are required when providing severance packages to employees who are no longer with the company.
What to Look for in Low Cost Payroll Services?
If you’re looking for the biggest discount when it comes to payroll services, then you’re going to want a company that doesn’t automatically complete all your tax filings on your employee payments. Now, obviously this is something that still needs to be taken care of, but there are some scenarios where you could save money by opting out of this service with your payroll firm, such as if you handle it in-house, or if you are only issuing payments to independent contractors, which would require much different tax reporting. Whichever route you take, consider these items before hiring a payroll service:
- Reporting: What reporting details do you require for payroll?
- Tax Filing and Withholding: Do you want your payroll service to make tax payments to the IRS and local/state requirements?
- Payroll Deductions: Will you be withholding loans, insurance fees, wage garnishments etc?
- PTO Accrual: Will you offer paid time off, vacation, and sick time accrual?
- W-2 and 1099: Will you use the payroll service to produce year end W-2s and 1099’s?
- Payment Options: Will you pay hourly or salary? Do you require direct deposit, or print checks onsite?
Ideally, you want to look for a company that doesn’t package elements of their service together in any compulsory way. You want to be able to pick and choose which elements of their service that you want. That way, if you want to keep costs as low as possible by simply looking for a company to issue checks on your behalf, then you maintain that option.
Another feature that you should look for is the ability for employees to access any information they might need directly from the payroll company. Many companies maintain an online portal or software that employees can login to in order to obtain any information that they need for their own taxation or records keeping purposes. This cuts out the middle man and allows them to get the information they need quickly and automatically.
Reporting features are also important to look into before you hire a payroll service. Good reporting is at the heart of keeping a business running smoothly, so having the ability to generate custom reports that summarize the payroll data that you need is very convenient. Much like the employee services, in the best case scenario this information should be accessible through some type of automated portal.
Bargain Payroll Service Companies with Discounted Prices
Keeping in mind all the factors that have been highlighted above, the two options below provide a good blend of a useful mix of services along with affordable prices. Compared to most of the other options on the market, either one should be available at a bargain.
Best Value Per Dollar Invested:
Our team reviewed 25 payroll service companies across the US and found two companies that really stood out offering the best service for your money. In this review we looked at monthly base cost, reporting & features, and tax filing solutions. While we suggest getting at least 4 quotes to compare, here are two the best payroll service companies you should consider in your search for a value based solution:
Intuit: Intuit is a great company to choose for inexpensive payroll services for a number of reasons. First, the service is offered by a giant in the financial software industry, meaning that you have the expertise of a very experienced team standing behind your product. Second, they have among the lowest fees you will find. With three basic tiers of service, you can choose the one that fits your budget and your needs the best.
Gusto: Gusto offers several things that should be appealing to the budget-conscious manager looking for a payroll service. First, you can try a one-month free trial of the service to see how well it integrates with your business. Second, the base fee is currently only $39 per month with a $6 per employee charge. The company is up front about their pricing and allows you to try before you buy, making it a highly recommended option.
Get Started with a Cheap Payroll Service
The main reason to get started with an economical payroll service is because it can save you money. These services are largely automated, using software to do in minutes what a paid employee might take hours to accomplish. With these tips, you can get your employees paid, your reporting obligations met, and save money all at the same time.
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