Payroll is one of the most compliance-sensitive and time-consuming responsibilities for any business. Mistakes can lead to penalties, employee dissatisfaction, and serious legal issues. That’s why many business owners ask the same critical question: how much do accountants charge for payroll services?
This in-depth guide provides a clear, realistic breakdown of payroll pricing, what influences costs, and how to decide whether accountant-managed payroll is worth it for your business. The goal is simple: give you the most complete, trustworthy answer available online.
Short Answer: How Much Do Accountants Charge for Payroll Services?
On average, accountants charge $100 to $500+ per month for payroll services, depending on the number of employees, payroll frequency, and service scope. Some charge a base fee plus $5–$15 per employee per pay run, while others offer flat monthly pricing for full-service payroll. But these quotations are totally assumptions and not confirmed.
How Payroll Services Pricing Works
Payroll pricing is not one-size-fits-all. Accountants price payroll services based on workload, risk, and compliance responsibility.
What Payroll Services Typically Include
- Payroll processing and calculations
- Direct deposits and pay stubs
- Payroll tax withholding and filings
- Year-end W-2 and 1099 preparation
- Compliance with federal, state, and local laws
Why Accountant Pricing Varies Widely
Accountants at Jm Elite Books take on legal and compliance liability, which is why pricing varies more than DIY payroll software. Costs increase with complexity, risk, and customization.
Basic Payroll vs Full-Service Payroll
- Basic payroll: Processing only
- Full-service payroll: Processing, tax filings, notices, amendments, and compliance support
Understanding these models helps you avoid underestimating true payroll costs.
How Much Do Accountants Charge for Payroll Services for Small Businesses
Typical Monthly Payroll Costs
Most accountants use one of three pricing structures:
- Base monthly fee: $50–$200
- Per-employee pricing: $5–$15 per employee per pay run
- Per-pay-run pricing: $25–$100 per payroll run
Many small businesses pay a combined total of $150–$400 per month.
Average Cost Ranges by Business Size
- Sole proprietors (1–2 employees): $50–$150/month
- Small businesses (1–10 employees): $150–$350/month
- Growing businesses (11–50 employees): $300–$800/month
- Mid-size companies (50+ employees): $800–$2,000+/month
The more employees and states involved, the higher the cost.
Factors That Affect How Much Accountants Charge for Payroll Services
Number of Employees on Payroll
Most accountants price payroll to scale with headcount. More employees mean:
- More tax calculations
- More filings
- More compliance risk
Per-employee pricing is common for this reason.
Payroll Frequency
- Weekly payroll: Highest cost
- Biweekly payroll: Moderate cost
- Monthly payroll: Lowest cost
Each pay run requires processing, validation, and reporting.
Level of Service Provided
- Payroll processing only
- Payroll + tax filings
- Payroll + compliance notices + HR coordination
More responsibility equals higher fees.
Tax Filings and Compliance Complexity
Costs increase if you have:
- Multi-state employees
- Local payroll taxes
- Garnishments or special withholdings
Industry-Specific Payroll Requirements
Industries like construction, healthcare, and hospitality often require:
- Certified payroll
- Union reporting
- Overtime and shift differentials
These add cost but reduce compliance risk.
How to Estimate Payroll Costs From an Accountant
Step 1: Identify Your Employee Count
Separate:
- Full-time employees
- Part-time employees
- Contractors (1099)
Each category impacts pricing.
Step 2: Determine Payroll Frequency
Decide whether payroll runs weekly, biweekly, or monthly.
Step 3: Decide What Payroll Services You Need
Clarify if you need:
- Processing only
- Tax filings
- Compliance management
Step 4: Ask About Pricing Structure
Confirm whether pricing is:
- Flat monthly
- Per employee
- Per pay run
Step 5: Request a Detailed Quote
Always ask:
- What’s included
- What costs extra
Step 6: Compare Cost vs Risk Reduction
Accountant-managed payroll often saves money by avoiding:
- IRS penalties
- Late filing fees
- Costly payroll corrections
Payroll Service Pricing Options
How Much Do Accountants Charge for Payroll Services Compared to Other Options
| Provider Type | Best For | Typical Cost | Services Included | Pros | Cons |
|---|---|---|---|---|---|
| Accountant Payroll Services | Small–mid businesses | $100–$500+/month | Payroll + taxes | Personalized, compliant | Higher cost |
| Payroll Software (DIY) | Very small teams | $30–$150/month | Automation tools | Low cost | DIY compliance risk |
| Online Payroll Providers | Growing businesses | $50–$300/month | Payroll + filings | Scalable | Less customization |
| In-House Payroll Staff | Large companies | High | Full control | Internal expertise | Very expensive |
How Much Do Accountants Charge for Payroll Services vs Payroll Software
Accountants are worth the higher cost when payroll is complex, multi-state, or compliance-heavy. Payroll software works well for very small, stable teams. Many businesses use a hybrid model, combining software with accountant oversight for cost-effective compliance.
Hidden Costs to Watch For in Payroll Pricing
- Initial setup fees
- Year-end W-2 and 1099 fees
- Payroll corrections and amendments
- Multi-state filing charges
- Employee onboarding or termination fees
Always ask for a full fee schedule upfront.
Common Mistakes Businesses Make When Comparing Payroll Costs
- Choosing the cheapest option without compliance support
- Ignoring future growth
- Not confirming what’s included
- Overlooking the cost of payroll errors and penalties
Frequently Asked Questions About Payroll Service Costs
How much do accountants charge for payroll services per employee?
Typically $5–$15 per employee per pay run, depending on complexity.
Is it cheaper to use an accountant or payroll software?
Software is cheaper upfront, but accountants reduce compliance risk.
Do payroll accountants charge extra for tax filings?
Some include filings; others charge separately. Always confirm.
How much does payroll cost for a small business with 5 employees?
Usually $150–$300 per month for full-service payroll.
Are payroll services tax-deductible?
Yes, payroll service fees are generally deductible business expenses.
Do accountants handle payroll tax penalties if mistakes happen?
Policies vary. Some provide penalty protection; others do not.
How often do payroll service costs increase?
Costs usually increase with employee count or added services.
Is outsourcing payroll worth the cost?
For most businesses, yes especially when compliance matters.
Who Should Use Accountant-Managed Payroll Services
- Small businesses without HR staff
- Companies operating in multiple states
- Regulated industries
- Owners who want compliance peace of mind
Final Thoughts: How Much Do Accountants Charge for Payroll Services
So, how much do accountants charge for payroll services? The realistic answer is that most businesses spend $100–$500+ per month, depending on complexity. While this may seem higher than software, the value lies in accuracy, compliance, and reduced risk.
The smartest approach is to compare providers based on service scope, accountability, and long-term cost not just price. Done right, accountant-managed payroll pays for itself in time saved and penalties avoided.