Outsourced payroll for a small business typically runs between $50 and $200 per month, depending on how many employees you have and how often you run payroll.

Most payroll providers charge using one of two models. The first is a base fee plus per-employee pricing. You might pay $40 to $80 monthly as a base, then $4 to $12 per employee on top of that. A business with five employees could expect to pay $60 to $140 per month. The second model is a flat monthly rate based on employee count tiers. Either way, the more employees you have, the more you pay.

What’s included varies by provider. Basic packages typically cover payroll processing, direct deposit, tax calculations, and quarterly and annual filings. Some providers charge extra for new hire reporting, year-end W-2 preparation, state unemployment filings, or workers’ comp administration. Ask what’s included before you sign anything.

Payroll frequency affects cost too. Running payroll weekly costs more than biweekly because there are more processing events. Some providers charge per payroll run rather than a flat monthly rate, which can add up fast if you’re paying employees weekly.

Multi-state payroll increases complexity and cost. If you have employees working in multiple states, expect to pay more for each additional state’s tax filings and compliance requirements. Massachusetts alone has its own reporting obligations and paid family leave contributions that need to be handled correctly.

Compare these numbers to DIY software. Tools like Gusto or QuickBooks Payroll start around $40 per month plus $6 per employee. You’re doing more of the work yourself, but the cost is lower. The tradeoff is your time and the risk of missing a filing or making an error that triggers penalties.

The real cost of payroll isn’t just the service fee. It’s the penalties for late filings, incorrect tax deposits, or missed deadlines. A single penalty from the IRS or Massachusetts DOR can wipe out a year’s worth of savings from trying to do it cheaper. Working with an Andover, MA bookkeeper who understands payroll compliance means those risks are handled by someone who knows what’s at stake.

For most small businesses, managed payroll services pay for themselves in time saved and mistakes avoided. Budget $100 to $150 per month as a starting point for a business with under ten employees, and get quotes from a few providers to compare what’s actually included before making a decision.