Payroll Services Cost: Average Prices for Outsourcing Payroll

Payroll service costs anywhere from $20 to $149 for a base fee, with a monthly fee of $4 to $12 per employee on top of that. 

Running your payroll yourself is clunky, time-consuming and inefficient. Outsourcing this activity and signing up with the best payroll software for small businesses can help you streamline your operation, increase productivity, save time and resources and ensure your business stays tax compliant. 

Businesses of all sizes benefit from outsourcing payroll services, including smaller operations. You may be tempted to avoid the cost of payroll outsourcing, especially when running a small business. But when you consider the potential errors and penalties that can occur from not running payroll correctly, it’s worth every cent. 

How Much Does Payroll Outsourcing Cost?

Typically, payroll services cost anywhere from $20 to $149, plus a fee per employee of around $4 to $12. These costs are monthly, and the per employee fee means your monthly costs can fluctuate. 

Costs tend to rise when you choose platforms that bundle payroll with HR tools such as benefits administration, hiring, or industry-specific systems like payroll solution designed for hotels, restaurants, hospitality, or retail. These systems are more expensive, but they allow you to manage multiple back-office processes from one place.

Most providers let you outsource as much — or as little — of your payroll as you prefer. You can choose full-service payroll or select individual tasks for outsourcing, and you can scale your plan up or down as your business grows.

Some providers do not publish their pricing, so you’ll need to request a custom quote. This is usually based on your team size and the level of support you require.

To help you understand pricing variability among payroll providers more, here are some key elements that determine total costs.

What factors affect payroll outsourcing costs?

• Number of employees – More employees increase your per-employee fee.
• Pay frequency – Weekly or bi-weekly pay runs tend to cost more than monthly or semi-monthly runs.
• Number of states – Multi-state payroll requires additional tax filings and compliance, so it often costs more to reflect this.
• Tax filing and year-end requirements – W-2 and 1099 preparation often incur extra fees as they require additional administration and end-of-year processing.
• Benefit and HR integrations – Adding PTO tracking, onboarding, timekeeping, or benefits raises the monthly cost.
• Industry-specific needs – Hospitality, construction, and healthcare payroll often require more advanced, sector-specific features like regulatory tracking, which tend to come at a higher price.

How Much Does Full-Service Payroll Cost?

Full-service payroll base fees range from $39 to $149 per month, plus a fee per employee, which is about $4 to $12 per month. Some providers don’t advertise their pricing, though, so you’ll need to contact them directly to find out what they charge. 

Many full-service providers are fairly affordable considering how comprehensive their platforms are. They’re often much cheaper than other options such as keeping payroll in-house. Many providers will offer various packages at different prices, with the more expensive options offering a lot more features. 

Since most providers charge per employee on top of their monthly base fee, you’ll only have to pay for the amount of services you need.

How Much Does Self-Service Payroll Cost?

Self-service payroll typically costs around $20 per month, offering a cost-effective alternative to full-service options. Wave, for example, provides full-service payroll and tax services in 14 states, priced at $35 per month, whereas the self-service option is priced at $20 per month. 

Many providers that offer full-service payroll also offer self-service. With self-service, the provider will take on many of the more complex and time-consuming tasks while your in-house team deals with the simpler admin. 

Self-service payroll is great for businesses that have a payroll team but need to outsource some tasks to ease their workload, or that want to downsize their current team. You may find it a more efficient way to outsource certain tasks while also keeping control over other aspects. 

Can I Manage Payroll In-House?

You certainly can, however you might find it to be a hassle. If you do go for this option, you’ll need dedicated staff with experience in payroll, or you’ll need to have the expertise yourself. 

Outsourcing payroll is much more reliable than managing it in-house. If your payroll head calls in sick or has to run out for an emergency, your business could be left without anyone to run things. Using a payroll provider guarantees that you’ll always have payroll services on hand. 

Plus, as your business grows, you’d have to grow an in-house payroll team alongside it – which means paying more wages, offering more benefits, and managing more people. This can be an overwhelming task compared to just using a payroll provider that will carry out all your payroll needs. 

Let’s take a look at the pros and cons of in-house payroll management:

Who Is In-House Payroll Management For?

Super small businesses, with less than four or five employees, generally run payroll in-house. But, payroll providers can still be used by businesses of this size, and in fact it’s probably a good idea because they guarantee compliance and accuracy. 

Larger businesses sometimes choose to run payroll in-house because they have the resources to do so, and may want to keep a close eye on the process. 

If your business is in between these two sizes, we’d also recommend outsourcing payroll, although outsourcing works for businesses of any size. 

How Much Does In-House Payroll Management Cost?

In-house payroll management costs are high, with the average payroll specialist salary in the US sitting at around $46,816 a year. This can all rack up depending on how many specialists or administrators you need, and it’s less reliable than using a provider because your payroll team may call in sick or have to be downsized due to budget reasons. 

Is In-House Payroll Management Worth It?

In short, no. In-house payroll management is expensive, complex, and time-consuming. Outsourcing payroll makes it easier to ensure the accuracy and efficiency of running payroll and is much less risky when it comes to taxes. Larger businesses may find it worthwhile to run payroll in-house, but for small to medium-sized businesses, outsourcing is often a better option. 

Managing payroll in-house makes you more vulnerable to penalties and fines, while some providers offer a tax penalty protection – meaning they’ll take care of any penalties if the system messes up. 

Payroll Provider Pricing Compared 

Every payroll provider prices their services slightly differently. To gain a more specific understanding of how much you can expect to pay for software, here’s a side-by-side pricing comparison of the best payroll providers.

As the table shows, many providers like Paychex, Rippling, and ADP operate on a pricing custom model. To help you better estimate costs, we’ve included information about their most recent public pricing. However, for more exact quotes tailored to your business size and needs, you can use our quote comparison tool.

Pricing example: How much could payroll cost for a team of 10?

To provide you with a ballpark of how much you might expect to spend on payroll for a year, we’ve calculated the cost for a standard 10-person team, using Gusto as an example.

Gusto’s 2025 payroll plans range from $49–$180 per month in base fees, plus $6–$22 per employee. If you chose its mid-range Plus plan, which costs $80 as a base rate, plus $12 per employee, you would end up paying:

• $80/month for its base fee
• $120/month for per-employee fees (10 x $12)

This brings the monthly total up to $200, making the annual cost of using Gusto $2,400 per year ($200 x 12).

This would cover full-service payroll for a 10-person US team, plus tools like time-off tracking and onboarding.

Data Sourcing & Methodology

We reviewed the publicly listed pricing of major US payroll providers, including Gusto, Paychex, Rippling, ADP, Wave, and Deel. This analysis covered base fees, per-employee pricing, feature tiers, and any additional charges such as year-end filings or multi-state processing.

Many providers—particularly Paychex, Rippling, and ADP—do not display fixed prices on their websites. For these platforms, our team contacted sales representatives directly, and we regularly refresh this data to reflect the most recent ranges they are willing to share.

What Hidden Payroll Costs Should I Be Aware Of?

While many payroll providers advertise a clear monthly base fee and per-employee rate, several extra costs may appear once you begin running payroll. These fees vary from provider to provider, but it’s important to factor them into your budgeting to avoid unexpected charges.

• Setup and implementation fees – Some providers charge a one-time setup fee to configure your payroll account, migrate data, connect bank accounts, or onboard staff.
• Year-end processing charges – Many platforms charge extra for generating and filing W-2 and 1099 forms, processing year-end adjustments, or issuing additional employee tax forms.
• Third-party add-ons – Integrations such as time-tracking, HR tools, benefits administration, or accounting software may come with additional monthly fees or require upgrading to a higher-tier plan.
• Multi-state payroll charges – Employers operating in more than one state may incur extra fees because each state requires separate tax registrations, filings, and compliance checks.
• Global payroll charges – Paying international workers or contractors typically adds costs for currency conversion, compliance support, and country-specific tax handling, especially when using Employer of Record (EOR) services.
• Off-cycle payroll – Running bonus payments, corrections, or special payroll cycles outside your regular schedule can result in additional per-run charges with some providers.