Published · 7 min read
Short answer: low cost payroll services usually charge a monthly base fee plus a few dollars per employee or per paycheck. Budget payroll software starts around $40 a month, and full-service plans that make your tax deposits and file your returns cost more. The cheapest payroll is the one that never misses a deposit: the IRS penalty for a late payroll tax deposit starts at 2% and climbs to 15%.
When you search for low cost payroll services, you will find a lot of headline prices and very little about what they include. A monthly fee only tells you half the story. The other half is who makes the tax deposits, who files the quarterly returns, and who is on the hook when something is late.
We run payroll for small businesses across North Carolina, and our resolution division handles the payroll tax cases that start when payroll goes wrong. This guide covers how payroll services are priced, what a cheap plan tends to leave out, and what payroll mistakes actually cost. If you want us to quote yours, our payroll services page explains how it works.
How much does payroll processing cost?
Most payroll providers price the same way: a monthly base fee for the account, plus a charge for each employee or each paycheck. A 2026 guide from Intuit QuickBooks says budget options start around $40 a month, while premium all-in-one platforms can pass $150 a month before you add a single employee.
Pay frequency changes the bill when the fee is per paycheck. The same guide gives an example of a $3 fee per pay period: paying an employee every two weeks costs about $6 a month for that worker, and paying weekly doubles it to about $12.
The fee is the easy part to compare. What it buys is where the plans differ.
Software, full service or an accounting firm
There are three common ways to get payroll done, and the price tracks how much of the work you keep for yourself.
| Option | What you still do | Best fit |
|---|---|---|
| Do-it-yourself payroll software | Enter hours, check every deposit and filing, answer employee questions, fix mistakes | Owners with time and a simple payroll |
| Full-service payroll provider | Send hours, approve each run, watch that deposits post | Businesses that want filings handled but keep their own books |
| Accounting firm that runs payroll | Send hours and approve the summary | Owners who want payroll, books and taxes in one place |
Hiring in-house is the fourth option. The Intuit guide cites Glassdoor salaries of $54,000 to $82,000 a year for a payroll specialist, before benefits and taxes.
What a low headline price can leave out
The lowest advertised plan is often a starting point. Before you compare prices, check whether the plan includes:
- Tax deposits. Does the provider withhold and deposit federal and North Carolina taxes for you, or only calculate them?
- Quarterly and annual filings. Form 941, Form 940, the North Carolina NC-5 and NC-3, and state unemployment returns.
- Year-end forms. W-2s for employees and 1099s for contractors. Some plans charge extra for year-end processing and tax filing.
- New-hire reporting. I-9s, W-4s and the state new-hire report.
- Off-cycle runs. A bonus check or a final paycheck outside the normal schedule.
- A person to call. When an employee has a question about withholding, who answers it, and in what language?
A plan that leaves out deposits or filings is cheaper because you are doing that part of the job yourself.
What payroll mistakes really cost
This is where low cost can get expensive. The IRS charges a failure-to-deposit penalty on payroll taxes that are deposited late, figured as a share of the unpaid deposit:
| How late the deposit is | Penalty on the unpaid deposit |
|---|---|
| 1 to 5 calendar days | 2% |
| 6 to 15 calendar days | 5% |
| More than 15 calendar days | 10% |
| More than 10 days after the first IRS notice | 15% |
Interest runs on top of that. Withheld income tax and the employee’s share of Social Security and Medicare are trust fund taxes, held for the government. When they go unpaid, the IRS can assess the Trust Fund Recovery Penalty, equal to the unpaid trust fund tax, against the people responsible for paying it. That can include the owner personally.
Hiring a payroll company does not move that responsibility. The IRS page on outsourcing payroll duties says the employer is ultimately responsible for the deposit and payment of federal tax liabilities. It recommends enrolling in EFTPS with your own PIN so you can check that deposits are actually being made, and treating a provider’s first missed or late payment as a red flag.
Our resolution division handles 941 cases, the payroll tax problems that build up when deposits fall behind. If you are already there, start with our page on payroll tax (941) problems before you change providers.
How to pick a payroll company
Rather than ranking brands, here are the questions that separate a good payroll service from a cheap one:
- Do you make the federal and North Carolina tax deposits, on the schedule that applies to my business?
- Do you file every quarterly and annual return, including the state forms?
- Can I see my deposits myself in EFTPS?
- What does a bonus run, a final check or a W-2 correction cost?
- Who do my employees call with a pay stub question, and can they ask in Spanish?
- Does payroll post into my books, or will I reconcile two systems at year-end?
- Will you tell me if a worker I pay on a 1099 should really be an employee?
That last one matters more than it sounds. Whether a worker is an employee depends on control, not on the form you file, and getting it wrong creates back payroll taxes and penalties.
Payroll for a one-person S corporation
Payroll is not only for businesses with staff. An S corporation owner has to take a reasonable salary through payroll, and a single-person payroll done correctly is what keeps that election safe. It is one of our most common payroll engagements.
How we price payroll
Our payroll service is a base monthly fee plus a small amount per employee per cycle. That covers processing, tax deposits and all the quarterly and annual filings. We quote it in writing from two things: your headcount and your pay frequency. Bookkeeping clients get a combined rate, because payroll posts straight into the books when we run both.
What comes with it:
- Weekly, biweekly or monthly pay cycles, by direct deposit or printed check
- Federal and North Carolina withholding set aside each payroll and deposited on schedule
- Form 941, 940, NC-5, NC-3, state unemployment, W-2s and 1099s
- New-hire reporting and onboarding forms in English or Spanish
- Pay stubs in English or Spanish, per employee
- Year-to-date history loaded if you switch in the middle of the year
We work with small businesses from our office in Matthews, serving the Charlotte area, and with owners across North Carolina. Headcount and pay frequency are all we need to quote. See our payroll services page or book a free consultation.
Payroll cost questions
Most providers charge a monthly base fee plus a per-employee or per-paycheck fee. A 2026 Intuit QuickBooks guide puts budget plans at around $40 a month to start, and shows how a $3 per-paycheck fee comes to about $6 a month per employee paid every two weeks, or $12 paid weekly. Full-service plans that make deposits and file returns cost more.
Yes. The IRS says the employer is ultimately responsible for depositing and paying federal payroll taxes, even when a payroll service provider handles them. Enroll in EFTPS with your own PIN and check periodically that your deposits are being made.
The IRS charges a failure-to-deposit penalty of 2% of the unpaid deposit if it is 1 to 5 days late, 5% at 6 to 15 days, 10% after 15 days, and 15% if it is still unpaid more than 10 days after the first IRS notice. Interest is added on top.
The software is cheaper than a full-service plan, but you take on the deposits, the quarterly and annual filings and any corrections yourself. A missed or late deposit brings IRS penalties and interest, so count your own time and that risk in the comparison.
Yes. The year-to-date wages and taxes from your previous provider are loaded so W-2s are correct at year-end. The start of a quarter is the cleanest time to switch, but any pay period works.
If your business is taxed as an S corporation, yes. An S corporation owner has to take a reasonable salary through payroll, with the withholding deposited and filed like any other employer. A sole proprietor with no employees generally does not run payroll.
Sources
IRS, “Failure to deposit penalty” (reviewed October 26, 2026), “Employment taxes and the Trust Fund Recovery Penalty” (reviewed October 11, 2026) and “Outsourcing payroll duties” (reviewed March 4, 2026); Intuit QuickBooks, “The real cost of payroll: a small business guide for 2026,” distributed by Stacker, September 2026. Checked November 2, 2026.