Global Payroll
Mins Approx

Payroll Outsourcing Cost

Payroll Outsourcing Cost

Let’s not beat around the bush. Payroll processing is hard. Factors such as time, costs and compliance drive both the big and the basic towards payroll outsourcing. 

Smaller companies, with small goals and tiny teams, may not find payroll processing to be a pain in the a-! 

However, as they grow, expand, and scale, payroll outsourcing and the costs associated with it may become inevitable.

Let us examine the gems and the ruins of payroll outsourcing costs.

Payroll Outsourcing Costs: A Breakdown

Several factors have an impact on payroll outsourcing costs but they are usually 3-fold: basic payroll outsourcing costs, frequency pay periods, payroll tax assistance. 

Basic Payroll Outsourcing Costs

Payroll outsourcing costs include direct deposits, paycheck processing, standard tax filing, etc. Like Multiplier, an online portal that can disburse salaries to employees is also a must. 

Several companies spend $20 to $250 per month as a basic payroll outsourcing cost. While covering basic payroll processes, the vendor company charges based on:

  • ~Company’s details
  • ~State of residence
  • ~Legal laws depending on the federal laws
  • ~Pay period frequency 
  • ~Number of employees 

Frequency of Pay Periods

To save payroll outsourcing costs, companies tend to change their pay period. 

It is important for companies to be timely when it comes to paying employees. It is natural for employees to bite off their nails to the curb in anxiety when facing delays in salaries. Employees have it even worse when they have to face irregularities in receiving their salaries.

It is important to choose a payroll vendor who will not err on paying your employees. The questions now are : 

How frequently should I pay my employees? Does my payroll outsourcing cost per employee increase if I increase the frequency of pay periods?


Suppose you subscribe with your payroll vendor to disburse salaries every week. You incur a payroll processing fee every time your vendor makes disbursements. Consequently, you’d be billed higher processing fees than when you pay employees every month.

Apart from the fact that changing your pay frequency negatively affects the morale of employees, it also leads to employees considering leaving their companies. Employees trust employers to send their paychecks on a predictable schedule.

Payroll Tax Assistance

As a business owner, you should be aware of the fact that you will incur a separate payroll outsourcing cost pertaining to tax assistance as well. 

This may vary based on the various states where your company is located. Depending on the jurisdiction your company is based out of, your payroll outsourcing costs may vary. 

Moreover, it also costs an additional $25 to $75 per employee to print, mail, and report tax-related documents.

Hence, before choosing your payroll vendor, make sure you clearly speak to your payroll vendor and check for hidden fees or clandestine costs that may burden your budget from nowhere.  

Also, did you know? Multiplier users do not incur any hidden payroll outsourcing costs related to taxes, paperwork, and printing. Our fees for payroll management start from $20 per employee. Even if you account for various parameters, your payroll fee will not go more than $200 per employee. Our SaaS-based solution makes sure fees are charged upfront and that no nasty costly surprises spring up.

What Factors Shoot up Payroll Outsourcing Costs?

Payroll outsourcing costs vary according to various circumstances. Generally, you can expect to pay about $150 to $200/year.

Aside from the aforementioned costs, you should also understand other components that can contribute to an increase in payroll outsourcing costs. 

Some common services business opt to include with payroll include: 

  • ~Tax filing (the price of which can increase based on the number of states you’re operating in)
  • ~General ledger interface
  • ~Employee pay options like direct deposit, pay cards, and paper checks
  • ~Courier and delivery charges 
  • ~Check stuffing and sealing
  • ~Customized file transfers for 401(k) and workers’ compensation reporting
  • ~Quarterly and year-end reporting
  • ~W-2/1099 and 1095 processing 
  • ~Affordable Care Act (ACA) reporting

Payroll outsourcing costs can also increase if your company outsources HR functions to your payroll vendor.

This can include: 

  • ~Time and attendance
  • ~HRIS
  • ~Applicant tracking and recruitment
  • ~Benefit enrollment
  • ~Performance management
  • ~Onboarding

Benefits of Payroll Outsourcing 

There are several cost-based benefits to relish by outsourcing your payroll. Read more about the benefits of payroll outsourcing here.

  1. More opportunities to save money and time

Outsourcing payroll processing means that responsibilities pertaining to your payroll are passed onto a specialist who is well-versed in handling this function. The purpose of hiring a specialist in any field is to amp up speed and quality. 

  1. Enhanced Process

Another benefit of outsourcing payroll is that you can tap expert advice and the latest technologies. 

One risk through which you will end up increasing your payroll outsourcing cost is when you run into compliance and legal issues. By outsourcing your payroll you acquire expert advice which allows you to overcome ever-changing compliance and regulatory issues.

This aside, outsourcing payroll also helps you save on technological costs. Technologies like the cloud and AI have simply revolutionized the payroll industry. 

Setting up the infrastructure and the human resources to manage these technologies requires tons of time and money. By increasing your payroll outsourcing costs, you can evade these hurdles.

  1. Avoid legal, tax, & compliance risks

Another benefit emanating from expert advice and technology is that you need not totally worry about legal and security risks. 

Your payroll vendor, local or global, is someone who keeps tabs on local labor laws and regulations. This wary cognizance is difficult to keep up with.

For example, Multiplier can deliver flawless global payroll management at fair costs thanks to its slew of legal partners and local entities. Multiplier’s SaaS-based platform is super-secure as well. 

How Multiplier Can Help You Save on Payroll Outsourcing Costs?

Multiplier offers an EOR solution that encompasses services such as global payroll management and global hiring. 

Our payroll solution offers payroll management starting from $20/employee based on the local laws in your employee’s location.

Book a call with us to learn more.

Enjoyed reading this? Save it for future reference

E-Mail Address
Oops! Something went wrong while submitting the form.
No items found.
Jump to Section
The preferred choice of leading Global Organizations

You may also like

View all blogs
Legal Experts
Want to explore ?