How Much Does Payroll Cost for a Small Business? (2026)

By Kyle Shields, CPA · Acction Advisors · August 4, 2026

Bottom line: Small-business payroll typically costs $150–$500+ per month. A company with five salaried employees averages about $350/month, before tax filings and year-end forms.

Payroll looks simple until you factor in tax deposits, tracking benefits, and required compliance forms — items that carry penalties if they are late or even misrepresented. Here is what payroll actually costs in 2026, and what you are really paying for.

How payroll is priced (for most online payroll software)

Almost every provider uses the same structure: a flat monthly base fee plus a per-employee fee. The per-employee charge is where costs add up as you hire.

Base fee: $30 to $50/month for most small-business platforms.
Per employee: $4 to $12 per person, per pay run.
Contractors (1099): often the same per-person fee, billed only in months you pay them.

Other factors that drive your price

Number of people — the main driver; every employee adds a per-run fee.
Pay frequency — with a provider that charges per run, the fees for weekly payroll start to add up.
Number of states — multi-state payroll means more tax registrations and filings.
Software vs. full-service — self-run software is cheaper, but adding a payroll service to your monthly accounting fee handles the complexity and makes sure payroll runs on time.
Year-end forms — W-2s and 1099s may be an annual add-on, often a few dollars per form.

Is a monthly payroll service the right fit for you?

Managed payroll makes sense the moment you have W-2 employees, pay across more than one state, or have ever filed a payroll form late. If you pay one or two contractors a few times a year, online software or a simple contractor-payment tool may be all you need for now.

What is included when Acction Advisors handles your payroll

Payroll processed on your schedule, with direct deposit
Federal, state, and local payroll tax deposits and filings, handled on time
Year-end W-2s and 1099s
New-hire reporting and employee self-service access
Payroll that flows straight into your books, so nothing is entered twice

Frequently asked questions

Is payroll included in bookkeeping or accounting?

No — payroll is a separate add-on. But when we run it alongside your books, the payroll data flows straight into your financials, which saves time and prevents mismatched numbers.

What happens if a payroll tax filing is late?

The IRS and state agencies charge penalties and interest on late deposits and returns. Peace of mind is the main reason business owners move payroll off their own desk.

Can you handle employees in multiple states?

Yes. Multi-state payroll adds registrations and filings in each state, which is reflected in the price.

Add our payroll services to your estimate with our pricing estimator. Prefer to talk to a person? Email [email protected] and we will work with you on an affordable way to run payroll. No pressure at all on our end.