Payroll software cost often comes down to a monthly base fee plus a charge per employee. Some providers charge per payroll run instead, so paying weekly can raise the bill. For example, FRIDAY’s Startup plan is $59 a month plus $12 per employee, so a 12-person team pays $203 a month with unlimited payroll runs.
The real cost of payroll also depends on how often you pay, how many states you pay in, and what the plan leaves out. For help choosing features, see what payroll software should handle.
What drives payroll software cost?
Three things move the price more than anything else: how many people you pay, how often you pay them, and which features the plan includes. Headcount matters most on per-employee plans, while pay frequency matters most on per-run plans. Features decide whether tax filings come included.
Here is how each factor shows up on a bill:
- Headcount. Most plans charge by the number of employees you pay each month. A team that grows from 5 to 15 people pays for 10 more seats.
- Payroll frequency. If a provider charges for each payroll run, a weekly schedule means 52 runs a year instead of 26.
- Features. Some plans file tax payments and year-end forms for you. Others only calculate pay, which leaves the filing work with you.
- States. Paying employees in a second state can push you onto a higher plan.
The three payroll software pricing models
Payroll software pricing generally follows one of three models. Small businesses see a monthly fee plus a per-employee charge, a charge per paycheck, or a flat subscription. The model matters as much as the price, because it decides how your bill changes when you grow.
Base fee plus per employee
This is a common pricing structure. You pay a fixed monthly charge, then a set amount for each employee you pay. The total is easy to predict, and it grows in a straight line as you hire.
FRIDAY uses this model, and its pricing page lists the base price and per-employee rate for each plan. Because runs are unlimited on the payroll plans, your pay schedule does not change the bill.
Per employee per payroll run
Here, the provider charges for each paycheck you process. That sounds cheap at first glance. However, the cost doubles when you move from biweekly to weekly pay, since you run payroll twice as often.
This model also makes off-cycle runs expensive. A bonus run, a correction, or a final paycheck each counts as an extra run. Ask any provider using this model to show you a full year of costs at your real pay schedule.
Flat monthly subscription with unlimited runs
A flat subscription charges one monthly price no matter how often you run payroll. It is simple to budget. Still, check what the flat price covers, because some flat plans leave out tax filings or extra states.
Whatever the model, the question to ask is the same. What will I pay over 12 months at my real headcount, pay schedule, and number of states?
FRIDAY payroll costs by team size
The table below shows what FRIDAY’s plans cost each month at common team sizes, using monthly billing from the pricing page. Startup covers payroll in one state. Small Biz Pro adds multi-state payroll and multiple pay schedules. Just Time is time tracking only and does not include payroll.
| Team size | Startup ($59 + $12 per user) | Small Biz Pro ($99 + $16 per user) |
| 2 employees | $83/month | $131/month |
| 5 employees | $119/month | $179/month |
| 10 employees | $179/month | $259/month |
| 12 employees | $203/month | $291/month |
| 15 employees | $239/month | $339/month |
| 25 employees | $359/month | $499/month |
Both payroll plans include unlimited payrolls, direct deposit, tax filing, and W-2s and 1099s. There is no setup fee, transfer fee, contract, or cancellation fee. Migration from your old provider is free.
What a 12-person business pays in a full year
Here is an illustrative example. A 12-person cleaning company pays its team biweekly in one state on FRIDAY’s Startup plan. The monthly cost of payroll is $59 plus 12 x $12, which comes to $203. Over 12 months, the business spends $2,436 on payroll software.
| Cost item | Startup, 12 employees, one state |
| Monthly subscription | $203 |
| 26 biweekly runs (payrolls are unlimited) | Included |
| Year-end W-2s and 1099s | Included |
| Setup and data migration | $0 |
| Total for 12 months | $2,436 |
The total cost of the software stays flat because nothing in this scenario adds a fee, even in a month with an extra payday. FRIDAY also syncs with QuickBooks Online and Desktop if you keep your books in accounting software. If you are setting up payroll for the first time, the one-time work is registration and paperwork, not software fees. The first-time employer checklist covers those steps.
All-in software cost for 12 hourly employees, weekly pay, two states
Now take a harder illustrative case. A 12-person HVAC crew is paid weekly, tracks hours on a phone app, and has workers in two states. Multi-state payroll requires Small Biz Pro, so the bill is $99 plus 12 x $16, or $291 a month and $3,492 a year.
| Item | Amount |
| Plan needed | Small Biz Pro (multi-state is a Pro feature) |
| Monthly cost | $99 + (12 x $16) = $291 |
| Yearly spend | $291 x 12 = $3,492 |
| Time tracking | Included |
| Weekly runs per year | 52, included |
| Cost per weekly run | $3,492 / 52 = about $67.15 |
This is the software subscription only. It excludes payroll taxes and any state registration fees. Before you add that second state, read up on multi-state payroll rules. Each state generally has its own registration, withholding, and unemployment tax account.
Why weekly pay does not double the bill here
On a plan with unlimited runs, weekly pay costs the same subscription as biweekly pay. The crew pays about $67.15 per weekly run. If they switched to biweekly, the yearly spend would stay $3,492, so each of the 26 runs would cost about $134.31.
Per-run pricing works the other way. Every extra run adds to the bill. If you are weighing schedules, biweekly pay explained covers how biweekly pay works and how it compares with weekly and semi-monthly schedules.
Time tracking priced with payroll
Hourly teams need hours before they need paychecks. On FRIDAY’s payroll plans, the hours tools come included: geofencing, a clock-in kiosk, PTO requests, and the mobile app. Just Time sells those tools alone at $9 per user, with no payroll.
Some providers sell clock-in tools as a separate add-on. I’ve seen a business owner compare two payroll quotes without noticing that only one included hour tracking. When you are choosing time tracking software, price it together with payroll so the comparison is fair.
Three first-year business profiles
These three illustrative profiles show how team size, pay schedule, and plan choice change the first-year bill. Each one uses FRIDAY’s monthly prices with no setup fee. The numbers are plain arithmetic from the pricing page, not averages from other small businesses.
Profile 1: 5 employees, monthly pay, one state
A small bookkeeping firm pays five salaried employees once a month. Startup costs $59 plus 5 x $12, which is $119 a month. The first-year total is $1,428.
Profile 2: 15 employees, biweekly pay, one state
A growing landscaping company pays 15 hourly workers every two weeks. Startup costs $59 plus 15 x $12, or $239 a month. The first-year total is $2,868.
Profile 3: 25 employees, two pay schedules
A home care agency pays office staff semi-monthly and caregivers weekly. Multiple pay schedules need Small Biz Pro, so the cost is $99 plus 25 x $16, or $499 a month. The first-year total is $5,988, with every run included.
Additional fees to ask about before you sign
A quote may show only the monthly price. Extra charges can appear later for year-end forms, off-cycle runs, setup, or extra states. Ask every provider for a written fee schedule, then check it against the questions below before you commit.
- Are there setup fees or a data migration fee?
- Are off-cycle and correction runs included?
- Do W-2s and 1099s cost extra at year-end?
- Are federal, state, and local payroll taxes filed for me?
- Does paying in a second state need a higher plan or a fee?
- Are clock-in tools included, or sold as an add-on?
- Is there a contract or a cancellation fee?
My advice is to get the answers in writing before you change your payroll process. Then build a 12-month payroll budget at your real headcount. If you are leaving your current provider, our guide to switching payroll providers covers when to switch and the records to gather.
What payroll mistakes can cost?
A late deposit adds a penalty on top of the tax you already owe. The IRS charges it when federal payroll tax deposits are late, and the rate climbs the longer you wait. Owners also generally stay responsible for their taxes even when someone else runs payroll for them.
The IRS sets the failure-to-deposit penalty in tiers. The tiers do not add up. Only one rate applies.
| Timing | Penalty | Illustrative: $10,000 deposit |
| 1 to 5 calendar days | 2% | $200 |
| 6 to 15 calendar days | 5% | $500 |
| More than 15 days | 10% | $1,000 |
| More than 10 days after the first IRS notice, or on an immediate-payment notice | 15% | $1,500 |
Other IRS rules that raise the stakes
- FUTA deposits. Under IRS rules for federal unemployment tax, you must make a quarterly deposit once FUTA liability is more than $500 for the year. At the 0.6% net rate after the full 5.4% credit, FUTA on the first $7,000 is $42 per employee. A 12-person team where everyone earns at least $7,000 generally reaches $504.
- Form 940. The annual FUTA return is due January 31, or the next business day when that date falls on a weekend.
- Trust fund recovery penalty. Some people have a duty to collect and pay withheld taxes. If one of them willfully fails to do it, the IRS can charge a penalty equal to the unpaid trust fund tax.
- Outsourcing. The IRS says the employer generally remains responsible if a third-party payroll service fails to deposit. Certain CPEO customers are an exception.
In the accounts I’ve worked on, costly mistakes usually trace back to manual payroll during a busy week, when a deposit date slips. Our payroll compliance checklist lists the deadlines to put on your calendar so payroll errors do not turn into penalties.
In-house payroll vs software vs outsourced payroll
You have three ways to handle payroll: do it yourself in-house, use payroll software, or hand it to an outsourced payroll service. Each one trades money for time and control. The right fit depends on your team size and how much payroll work a business owner wants to keep.
| Approach | What you pay for | What you still own |
| In-house payroll by hand | Your time or a staff member’s salary | Every calculation, deposit, and filing |
| Payroll software | A monthly subscription | Approving payroll and keeping records |
| Outsourced payroll | A service fee set by the provider | Liability (generally) if deposits are missed |
For small businesses, hiring a payroll clerk adds a salary, plus payroll taxes and benefits, to your costs. On the other hand, outsourced service pricing varies by provider, so ask for a written quote.
How FRIDAY keeps payroll costs predictable
FRIDAY prices payroll as a monthly charge plus a per-employee rate, with unlimited runs on both payroll plans. A 12-person team in one state pays $203 a month on Startup. The same team paying in two states pays $291 a month on Small Biz Pro.
Time tracking, direct deposit, tax filings, and year-end forms come with both payroll plans. You can try FRIDAY with a 14-day free trial, with no setup fee and no cancellation fee. Run one real pay period and compare the result to your current bill.
FAQs
Does weekly payroll cost double?
It depends on the pricing model. With per-run pricing, weekly pay means 52 runs instead of 26, so that part of the bill doubles. FRIDAY’s payroll plans include unlimited payrolls, so weekly and biweekly pay cost the same subscription.
Do payroll providers charge extra for W-2s and 1099s?
Some providers charge for year-end forms, and others include them. Ask for a written fee schedule before you sign. FRIDAY includes W-2s and 1099s on its Startup and Small Biz Pro plans.
What is the all-in software cost for 12 hourly employees in two states?
On FRIDAY, multi-state payroll needs the Small Biz Pro plan. That works out to $99 plus 12 x $16, or $291 a month and $3,492 a year. Time tracking and weekly runs are included in that price.
Can I do my own payroll for free?
Yes, you can run payroll by hand without software. You still owe federal tax deposits, quarterly Form 941 filings, an annual Form 940, and W-2s by January 31. Late deposits generally carry IRS penalties of 2% to 15%, depending on timing and any IRS notices.
How much does payroll cost for two employees?
On Friday’s Startup plan, two employees cost the $59 base fee plus 2 x $12, or $83 a month. That price includes direct deposit, tax filing, and year-end forms. You can run payroll as often as you need.
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Consult a licensed professional for guidance specific to your situation.
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.
