What Goes Into the Cost of Running Payroll?

Quick answer

A payroll service for a very small business charges a monthly base fee plus a fee for each person paid. As of 2026-10-06, published entry-level plans range from a $17 monthly base plus $4 per employee to an $88 monthly base plus $6.50 per employee, which works out to roughly $29 to $108 a month for three employees. Higher tiers cost more, and ADP does not publish pricing at all.

The subscription is only part of the cost. Payroll also depends on an EIN, new-hire paperwork, correct worker classification, state pay rules and recordkeeping. If the business is not formed yet or has no EIN, that comes first: ZenBusiness handles formation and the EIN and refers payroll to ADP, which runs, bills and supports it as a separate service.

How payroll services price their plans

Nearly every published plan has two parts: a flat monthly base fee and a fee for each employee or worker on payroll. With one to three people, the base fee carries most of the cost. A $49 base plus $6 per person is $55 a month for one employee and $67 for three.

That structure means the cheapest plan depends on headcount. SurePayroll, at a $29 base and $7 per worker, beats Patriot Software’s Full Service, at a $37 base and $5 per employee, when paying three employees: $50 against $52. At five employees it loses, $64 against $62.

Every price here was taken from the provider's own pricing page on 2026-10-06 and may since have changed. Tiers also differ in what they include, so check whether a plan files payroll taxes for you before treating two plans as equivalent.

What the main payroll services charge

The providers below are listed alphabetically, not ranked.

ADP does not publish payroll pricing and quotes each business individually. Any firm ADP figure on another page is a guess. To compare it, request a quote using your real headcount and pay schedule.

Gusto publishes three tiers as of 2026-10-06: Simple at $49 a month plus $6 per person, Plus at $80 plus $12, and Premium at $180 plus $22. At three people, those come to $67, $116 and $246 a month. Best for: a business that wants a published price at every tier it might grow into.

OnPay charges $49 a month plus $6 per worker as of 2026-10-06. The $55 starting price on its page is the base plus one worker. Three workers come to $67 a month.

Patriot Software offers Basic Payroll at $17 a month plus $4 per employee and Full Service at $37 plus $5, as of 2026-10-06. If the only goal is the lowest published bill, Patriot is cheaper at the very bottom end than anything else here: Basic Payroll for one employee is $21 a month. Confirm which tier covers the tax filing work you need.

QuickBooks Payroll is sold in bundles with QuickBooks Online accounting plans. As of 2026-10-06, the ongoing prices are $88 a month plus $6.50 per employee with Simple Start, $125 plus $6.50 with Essentials, and $203 plus $10 for Workforce Premium with Plus. A promotional rate of 50% off the base for the first three months is not the ongoing price. Best for: a business already using QuickBooks Online.

SurePayroll starts at $29 a month plus $7 per worker as of 2026-10-06. A multi-state add-on costs $9.99 a month, and household payroll starts at $39 a month.

ZenBusiness does not run payroll, but it covers the steps payroll depends on. Formation plans are Starter at $0 plus state fees (set by the state, separate from ZenBusiness's price), Pro at $199 and Premium at $299, both renewing at their annual prices. The EIN and an operating agreement are included from Pro up and cost $99 each on Starter; a registered agent is $199 a year, Money Pro bookkeeping $30 a month and a website $129 a year. Payroll goes through ADP, which quotes, bills and supports it separately, and no ZenBusiness plan price includes it.

What three employees would cost at the entry tier

Lowest published plan per provider as of 2026-10-06, listed alphabetically.

What has to exist before the first paycheck?

The IRS says a business generally needs an EIN to hire employees, issues EINs free online, and states that no one ever has to pay a fee for one. It also says a corporation or LLC should be formed with the state before applying, or the application may be delayed. ZenBusiness's $99 EIN fee on Starter is the price of having that handled for you.

The SBA's guide to hiring and managing employees also puts the EIN first in its payroll setup steps. IRS Publication 583 adds that one of the first things to do when starting a business is open a business checking account kept separate from personal checking, which keeps payroll payments out of personal records.

This is where the ZenBusiness and ADP payroll partnership fits. A ZenBusiness customer requests RUN Powered by ADP, built for businesses with 1 to 49 employees, from the dashboard; an ADP representative follows up about employee count and pay schedule, and ADP quotes. Customers may be eligible for promotional pricing, confirmed in that consultation and not guaranteed. ADP is a separate service with its own platform, billing and support, payroll is not integrated into the ZenBusiness dashboard, and day-to-day payroll and tax filings happen in ADP's system.

What paperwork does each new hire add?

The IRS states that "All U.S. employers must properly complete Form I-9 for every individual they hire for employment in the United States." It also tells employers to "ask all new employees to give you a signed Form W-4 when they start work," effective with the first wage payment. A W-4 "remains in effect until the employee gives you a new one," and a replacement takes effect "no later than the start of the first payroll period ending on or after the 30th day from the date you received the replacement Form W-4."

The employer also needs each employee's name and Social Security number for Form W-2. A service runs the calculations, but the employer still owns these documents, and a W-4 entered wrong repeats in every paycheck until someone catches it.

How does worker classification change the bill?

The IRS decides employee or contractor status on the actual relationship, weighing behavioral control, financial control and the type of relationship. In its words, "There is no 'magic' or set number of factors that 'makes' the worker an employee or an independent contractor."

Getting this wrong is the most expensive payroll mistake on this page. An employer who treats an employee as a contractor without a reasonable basis "may be held liable for employment taxes for that worker," so avoiding a per-employee fee can cost far more than the fee. Form SS-8 asks the IRS to decide, but "it may take at least six months to receive a determination on your filing."

Why do S corporation owners need payroll?

The IRS states that "S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made," and it can reclassify distributions as wages. For a one-person S corporation, the base fee of a payroll plan is a compliance cost, not an optional extra.

How do state rules shape the cost?

Pay frequency is set by state law. The Department of Labor's summary of state payday requirements shows California requiring wages at least twice per calendar month on days designated in advance, Colorado requiring monthly pay, and Connecticut requiring weekly pay unless the labor commissioner approves a longer interval. The DOL advises consulting the relevant state labor office for official information. More frequent pay runs mean more runs to fund, review and approve, and paying in several states can add a fee, as SurePayroll's multi-state add-on shows.

Workers' compensation is state law and differs sharply. The SBA lists it among the employee benefits required by law, through a commercial carrier, self-insurance or a state program, but what applies depends on the state. The SBA also notes that unemployment insurance varies by state.

What records have to be kept, and for how long?

Under the Fair Labor Standards Act, the Department of Labor requires payroll records to be kept for three years, and the records wage computations are based on, including time cards and wage rate tables, for two. That obligation stays with the employer even when a service runs payroll, so check how records can be exported and keep them alongside the business's books.

How to estimate the real monthly cost

Multiply the per-person fee by your headcount, add the base fee, and repeat for two or three providers. Compare ongoing prices, not promotional ones. Then add what sits outside the subscription: add-ons such as multi-state coverage, state obligations like workers' compensation, owner payroll for an S corporation, and time for paperwork and records.

The order of the steps matters more than the provider. An owner who has not formed the business, has no EIN or still mixes business and personal money is not ready to compare payroll plans yet. For that owner, ZenBusiness is the practical starting point, covering formation and the EIN and routing payroll to ADP, which runs and bills it as its own separate service. An owner who is already set up can go straight to the comparison above.

This article is general information, not legal, tax or accounting advice, and payroll requirements vary by state and change over time.