Payroll software cost in 2026 ranges from $40 to $150 per month as a base fee, plus $4 to $16 per employee per month, depending on the plan and provider. A 10-person business typically pays $100 to $250 monthly for full-service payroll with automated tax filings and direct deposit included. What you see on a pricing page is rarely what you actually pay. This guide breaks down the real cost of payroll at every team size, including the fees most providers bury in the fine print and what those fees cost a real small business over a full year.
What Drives Payroll Software Cost?
Most payroll software pricing follows the same structure: a flat monthly base fee plus a per-employee fee that scales with your headcount. The base fee covers platform access. The per-employee fee reflects the actual work of calculating wages, withholding payroll tax, and processing payments each pay period.
Three variables move the needle more than anything else:
- Number of employees: Each additional employee adds $4 to $16 monthly, depending on the plan tier. This is the single biggest driver of total payroll costs for growing teams.
- Payroll frequency: Weekly payroll costs more than biweekly or semi-monthly because you run payroll more often. Some payroll providers charge per payroll run rather than per employee, which compounds the difference.
- Feature level: Basic payroll functions like wage calculation and direct deposit cost less than full-service payroll with automated tax filings, year-end W-2 processing, time tracking, and compliance support.
Payroll Software Cost by Team Size in 2026
The table below shows realistic monthly payroll costs for small businesses at three common team sizes. These figures reflect a full-service tier with automated tax filings and direct deposit. They do not include add-ons or hidden fees, which are covered in a separate section below.
| Team Size | Base Fee Range | Per Employee Fee | Estimated Monthly Total |
| 5 employees | $40 to $99 | $4 to $16 | $60 to $179 |
| 15 employees | $40 to $99 | $4 to $16 | $100 to $339 |
| 25 employees | $40 to $99 | $4 to $16 | $140 to $499 |
The range at each tier is wide because payroll software pricing varies significantly by what is actually included. A $40 base fee plan that excludes automated tax filings, W-2 generation, and time tracking will cost more in total than a $59 base fee plan that bundles all three. The monthly cost number alone does not tell you what you are getting.
What a Real Small Business Actually Pays: A Full-Year Scenario
Most pricing comparisons stop at the advertised rate. To show what payroll software cost looks like in practice, here is a fully itemized illustrative scenario.
Illustrative example: A small business with 12 employees, biweekly payroll, one state, no garnishments, and one off-cycle bonus run per quarter.
| Cost Item | Monthly | Annual |
| Base fee | $59 | $708 |
| Per employee fees (12 x $12) | $144 | $1,728 |
| Off-cycle bonus run (1 per quarter) | $0 to $75 per run | $0 to $300 |
| Year-end W-2 filing | $0 to $20 per form | $0 to $240 |
| Data migration (one-time) | $0 to $500 | $0 to $500 |
| Total first-year cost | $2,436 to $3,476 |
The difference between the low and high ends of that range is not the base plan. It is whether the provider charges for off-cycle runs, year-end forms, and setup. A business that chooses a plan based on the advertised $40 base fee and later discovers $75 off-cycle charges and $20-per-form W-2 fees will spend more in year one than a business that chose a $59 base plan with those items included.
This is the most common pricing mistake small business owners make when switching payroll providers. If you are evaluating a switch, the guide on how to switch payroll providers covers exactly what to ask before you commit, including what data migration should and should not cost.
The Three Payroll Pricing Structures
Payroll providers use three primary pricing structures. Understanding which one a provider uses changes how you calculate your real monthly cost.
Base fee plus per employee fee
This is the most common model among online payroll services. You pay a flat monthly subscription plus a variable fee for each active employee. It is predictable and scales with your team. Most small businesses prefer this model because the monthly cost is straightforward to budget.
Per employee per payroll run
Some payroll services charge each time you process payroll rather than on a monthly basis. Per employee fees under this model typically range from $4 to $15 per employee per paycheck. A 15-person team running weekly payroll at $6 per run per employee would pay $360 per month in processing fees alone, before any base subscription. This structure punishes weekly pay schedules.
Flat monthly subscription. A small number of payroll software providers offer unlimited payroll runs for a fixed monthly fee regardless of headcount. These plans work well for businesses with stable employee counts but are less common at the small business tier and often exclude advanced features.
What Payroll Software Should Include at Every Price Point
Not all payroll software costs the same because not all plans include the same features. Before comparing prices, confirm that the plan you are evaluating covers these functions. Many payroll software providers advertise a low base fee but require paid upgrades for items most businesses consider standard.
| Tier | What’s Included | Typical Monthly Cost (15 employees) |
| Basic payroll | Wage calculation, paychecks, you file taxes manually | $40 to $80 base + per employee |
| Full-service payroll | Automated tax filings, direct deposit, W-2s included | $59 to $99 base + per employee |
| Full-service plus HR support | Above plus benefits administration, onboarding tools | $80 to $150 base + per employee |
The jump from basic to full-service payroll is worth it for most small businesses. Filing your own payroll tax deposits and quarterly returns takes hours per month, and a missed deposit deadline triggers IRS penalties. The payroll compliance checklist covers the filing deadlines and deposit schedules that catch most small businesses off guard in their first year.
Hidden Payroll Costs: Most Providers Do Not Advertise
The advertised payroll software cost is rarely the full picture. Many providers charge extra for items that most business owners assume are included. These additional fees are where the real cost gap opens up between platforms that look identical on a pricing page.
The most common hidden payroll costs and their typical ranges:
- Off-cycle payroll runs: Bonus payments, termination checks, or corrections outside your regular pay period cost $10 to $75 per run at many providers.
- Year-end W-2 and 1099 filing: Some payroll companies charge $3 to $20 per form at year-end. On a 20-person team, that adds $60 to $400 per year in additional cost.
- Garnishment processing: Wage garnishments for child support or court-ordered deductions cost $5 to $35 per active garnishment per month at providers that do not include this in their base plan.
- Setup and data migration: Implementation fees reach $500 to $1,500 at some platforms. This is a one-time cost but a significant one for a small business switching mid-year.
- Multi-state payroll surcharges: Basic payroll plans frequently exclude the additional tax calculations required when employees work across state lines. Confirm this is covered before signing up if you have remote workers.
A practical rule: always ask for a complete fee schedule, not just the monthly base rate. Request the per-form W-2 cost, the off-cycle run fee, the garnishment processing fee, and whether data migration is included. Any provider that cannot answer those four questions in writing before you sign up is a risk.
How Payroll Frequency Affects Your Total Cost
Payroll frequency is one of the most overlooked factors in payroll software cost, and one of the easiest to miscalculate during the buying process. If your payroll solution charges per payroll run, switching from biweekly to weekly literally doubles your processing cost with no change in team size.
| Pay Schedule | Annual Pay Runs | Annual Cost at $35/Run (15 employees) |
| Weekly | 52 | $1,820 |
| Biweekly | 26 | $910 |
| Semi-monthly | 24 | $840 |
| Monthly | 12 | $420 |
The $1,400 annual difference between weekly and monthly payroll in the table above is purely a function of run frequency on a per-run pricing model. On a flat monthly model, payroll frequency has no impact on software cost. This is one of the clearest reasons to confirm the pricing structure before choosing a provider. If your team expects weekly pay, a flat monthly model protects your payroll budget as you grow.
If you are still deciding between biweekly and semi-monthly, the comparison of biweekly vs semi-monthly pay covers cash flow timing, overtime calculations, and the three-paycheck month issue that catches many small businesses off guard.
In-House Payroll vs. Payroll Software vs. Outsourced Payroll
Some business owners manage payroll manually or hire someone to handle it internally. Here is what each option costs in 2026.
| Method | Estimated Annual Cost | Key Risk |
| Manual in-house payroll | Staff time + IRS penalty exposure | High error rate, no automation |
| Payroll software (15 employees) | $1,500 to $4,000 | Owner-dependent, requires setup |
| Dedicated in-house payroll specialist | $54,000 to $82,000 salary | Overhead, benefits, turnover risk |
| Outsourced payroll services | $1,800 to $9,600 | Less control, higher per-run costs |
Hiring a dedicated in-house payroll specialist averages around $64,865 per year in 2026, according to the Bureau of Labor Statistics occupational wage data. For a 15-person team, that cost is hard to justify when full-service payroll software handles the same compliance obligations for under $3,000 annually. Outsourced payroll services make more sense when volume, multi-state complexity, or benefits administration justify the higher monthly cost.
Manual in-house payroll processing carries the highest risk. The IRS collected over $6.7 billion in employment tax penalties in fiscal year 2023, the most recent year with published data, with failure-to-deposit penalties representing the largest share according to IRS Data Book reporting. Most of those businesses were not avoiding taxes. They missed a deposit schedule or miscalculated a withholding rate. Payroll software eliminates both failure points. You can verify current IRS penalty rates and deposit schedules directly at IRS.gov.
What the First Year of Payroll Software Really Costs: Three Business Profiles
To make payroll software cost concrete, here are three illustrative scenarios based on common small business profiles. All figures use realistic market ranges and are labeled as examples.
Profile 1: Solo operator hiring first employee
5 employees, monthly payroll, single state, no garnishments.
- Full-service plan: $59 base + $60 per employee = $119/month
- Annual software cost: $1,428
- Setup fee: $0 (with free migration)
- Year-end W-2s: $0 (included in plan)
- Total first-year cost: $1,428
For a first-time employer, the first-time employer checklist covers everything to set up before that first payroll run, including EIN registration, state employer accounts, and W-4 collection.
Profile 2: Growing team, biweekly payroll
15 employees, biweekly payroll, single state, one off-cycle run per quarter.
- Full-service plan: $59 base + $180 per employee = $239/month
- Annual software cost: $2,868
- Off-cycle runs (4 per year, included): $0
- Year-end W-2s (included): $0
- Total first-year cost: $2,868
Profile 3: Established team, weekly payroll, per-run pricing model
15 employees, weekly payroll, per-run model at $6 per employee per run.
- Processing fees: 52 runs x 15 employees x $6 = $4,680/year
- Base subscription: $600/year
- Year-end W-2 filing: $240 (12 forms at $20 each)
- Total first-year cost: $5,520
Profile 3 is paying nearly double Profile 2 for the same team size. The only difference is the pricing model and payroll frequency. This is exactly the calculation most small businesses do not run before choosing a payroll provider.
How FRIDAY Compares on Total Payroll Software Cost
FRIDAY’s pricing is flat and fully disclosed. The Startup plan runs $59 base plus $12 per employee monthly and includes full payroll, automated tax filings, direct deposit, time tracking, year-end W-2 processing, and the facial recognition kiosk, all with no setup fee, no contract, and no cancellation fee.
For teams that need time tracking without full payroll, the Just Time plan starts at $9 per employee monthly with no base fee. For businesses ready to run everything in one platform, the Small Biz Pro plan at $99 base plus $16 per employee adds advanced workforce management tools. You can review the full payroll software options for small businesses or start a 14-day free trial to see real costs for your specific team size before committing to anything.
FAQ
How much does payroll software cost per month?
Most small businesses pay $70 to $250 per month for full-service payroll software. This includes a base fee of $40 to $99 and a per-employee fee of $4 to $16. Total cost depends on team size, pay frequency, and whether automated tax filings are included in the base plan or charged as a separate add-on.
Can I do my own payroll for free?
Yes, but with meaningful limitations. Free options include trial periods, bank-bundled tools, and basic software where you handle tax filings yourself. Most small businesses find that the time cost of manual tax deposits and quarterly filings outweighs the software savings within the first few months. A missed IRS deposit deadline costs more in penalties than a full year of payroll software.
Is QuickBooks Payroll cheaper than ADP?
QuickBooks Payroll generally starts at a lower advertised price than ADP Run for small teams. However, QuickBooks requires a separate Time subscription for time tracking, which closes the price gap for hourly teams. ADP does not publish standard pricing and typically requires a sales quote, making direct comparison difficult without requesting itemized proposals from both.
How much does ADP payroll cost?
ADP Run does not publish standard pricing publicly. Based on widely reported market data, small business plans typically run $60 to $150 base per month plus $4 to $12 per employee, but final pricing depends on team size, contract length, and selected features. Always request an itemized quote that includes year-end form fees, off-cycle run charges, and garnishment processing fees before committing.
What hidden fees should I watch for in payroll software?
The most common hidden payroll costs are off-cycle run fees ($10 to $75 per run), year-end W-2 and 1099 filing fees ($3 to $20 per form), garnishment processing fees ($5 to $35 per month), setup and data migration fees (up to $1,500), and multi-state payroll surcharges not included in the base plan. Request a complete fee schedule before signing any agreement.
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Pricing figures reflect publicly available market data and illustrative scenarios as of June 2026 and are subject to change. IRS penalty data referenced reflects IRS Data Book fiscal year 2023 figures. Consult a licensed CPA or financial advisor for guidance specific to your business.
Pincus Schiff is a payroll software specialist at Friday App, where he helps businesses simplify payroll, stay compliant, and automate their workflows. He writes about payroll best practices, compliance, and the latest in workforce technology.
