Save money on small business payroll processing by removing bundled fees

A no-load approach to small business payroll

In the “old days”, small business payroll services were priced based on a formula that was a bit complex. Factors like frequency of payroll, number of employees, type of pay, benefits, and local taxes all factored into the cost. Year-end ad ancillary services were typically priced separately. To me, this always seemed like businesses were “nickeled and dimed” and did not have an easy way to compare costs and services between providers.

Today’s online payroll services use a lower flat “all-inclusive” monthly fee that is based only on the number of employees. This pricing formula represents most other online hosted services and is significantly less than the fees of the older providers. For example, I just quoted a 31 employee business at $225 per month. One or two employee businesses cost under $50 per month. I’ve been using these online payroll service providers for about two years and find this approach to be flawless.

There is one catch however: the online services do not include a local accountant’s help. I am pleased to provide that setup and support help separately as needed. In most cases I don’t think it needs to be a built-in fee as the earlier payroll services.

Other things to consider:

  • online providers work best when employees use direct deposit
  • employees have full-time access to their payroll information via mobile phone or other device.
  • employees need to be a bit tech savvy; if your employees don’t have an email address or a cell phone this method will not work. (Believe it or not, some businesses have employees with no online presence).
  • any employee benefit can be integrated
  • “pay as yo go” worker’s compensation can be integrated to save time and avoid surprises at the policy’s year-end reconciliation.


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