How Much Does It Cost to Run Payroll for a Small Business?

The Milestone Team November 16, 2022
How much does it cost to run payroll for small business

The amount it costs to run payroll for a small business can range anywhere from $30 to $200 per month for a base monthly cost. When using a payroll service, there are typically two costs: base monthly costs and costs per employee per month. Payroll processing costs per employee per month average $10 to $25 per month. A one-time setup fee is usually charged as well. Additional costs will vary, depending on whether you use basic payroll services or a full-service payroll provider. 

Payroll Services Cost Comparison

Cost can be a major factor when deciding what payroll service is right for your small business. As a small business owner, you want a service that won’t break the bank but also performs the way you need it to. Luckily, Milestone has the experience to lead you in the right direction for your small business and your bank account.

Wave

Wave offers the cheapest payroll service. There are many features in this service that make it one of the best payroll softwares on the market at the moment, including unlimited income and expense tracking and accounting reports for past due invoices, cash flow, and profits and losses. 

The price breakdown is $35 monthly & $6 per active employee. It includes:

  • Direct deposit, T4s, and full tax remittances.
  • Guaranteed accurate results.
  • An easy-to-follow step-by-step guide to help you set it up.
  • Easily accessible forms and documents.

Using inexpensive payroll software, however, comes with significant risks. With payroll software, you typically get what you pay for, and while you don’t want your payroll software to drain your bank account, you do want to make sure you’re eliminating risks for your company. The role of payroll in business compliance and decision-making is crucial. It is worthwhile to invest in systems that will work long-term and can scale with your company as you grow. If affordability is a concern, Gusto – our simple small business recommendation – provides an inexpensive starter tiers for small businesses.

Quickbooks Online

QuickBooks Online is an accounting software subscription service. First-time QuickBooks Online users typically receive a free trial or discount for the first few months. For small-business owners, the company offers four tiers of accounting software plans:

  • Simple Start 

Basic accounting tools on a single-user license for $30 per month.

  • Essentials 

All Simple Start features for up to three users, plus bill management and time tracking for $55 per month.

  • Plus 

All Essentials features for up to five users, plus project tracking and inventory tracking for $85 per month.

  • Advanced 

All Plus features for up to 25 users, plus a dedicated account team, advanced business analytics, employee expenses, batch invoicing, workflow automation, and more for $200 per month.

QuickBooks Online is the world’s most widely used accounting software due to its global brand recognition. While Milestone uses it for general accounting, for payroll there are significant services that function better than Quickbooks Online. The payroll function of Quickbooks Online is not recommended by Milestone. Milestone recommends Gusto or Rippling as the industry standard for payroll.

Gusto

As a human resources tool, Gusto offers options besides great payroll solutions, such as onboarding and hiring, benefits administration, and management resources in one convenient location. Gusto is the perfect solution when you need a simple answer. Their automated payroll tools will simplify your payroll process. Payroll is as easy as clicking a button with Gusto.

Gusto payroll is split into three subscription tiers: Simple, Plus & Premium:

  • Simple 
  • A streamlined set of automatic payroll features and benefits integrations priced at $40 per month + $6 per month per person.
  •  
  • Plus 
  • Comprehensive payroll, benefits, and HR tools for employers building a great place to work priced at $80 per month + $12 per month per person.
  •  
  • Premium 
  • Scalable payroll and benefits, expert HR, and dedicated support for the complex needs of growing teams priced individually per business. 

Rippling

Rippling provides a comprehensive platform for managing payroll, benefits, HR, and IT. You can automate a lot of your busy work by bringing all your employee information and systems together. Rippling integrates with more than 400 apps, making it the most technologically advanced and modern solution on the market today. You and your employees can easily set up and use this remote team collaboration software to manage inventory and devices. When Milestone works with business owners who have many remote employees, we have found Rippling to be the best option.

The core platform of Rippling’s payroll cost calculator starts at $35 per month. This includes features like employee onboarding and offboarding, document management, workflow automation, policy and permission management, and access to more than 500 app integrations. It costs an additional $8 per employee per month for payroll services. Rippling pricing is created for each business individually based on the number of products and employees.

How do you decide what platform is best for you? Let Milestone take the guesswork out of payroll. 

High Quality and Affordable Payroll with Milestone

At Milestone, we are payroll experts. With deep payroll processing and optimization experience, we can help companies of all sizes. Get your time back with our payroll administration services. Milestone can help you navigate the maze of federal, state, and local tax requirements and give you peace of mind if you manage employees in various locations. Be confident you are capable of onboarding, paying, and working with employees around the country with Milestone.

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