Free Payroll Tool
See what your payroll provider really charges
Most providers hide per-run and add-on fees. Audit your real cost per employee in about 30 seconds, free.
Run the Payroll Fee Auditor →Blog · Payroll Management · Cannabis
Cannabis Businesses: Payroll Software vs. Managed Payroll Service (2026)
Cannabis businesses evaluating payroll options typically compare managed payroll service against payroll software. Here is the honest comparison.
Managed payroll service (like BEG) means a provider processes payroll for you. You submit hours and changes; they handle the rest including tax deposits, compliance, and year-end forms.
Payroll software (Gusto, ADP Run, Paychex Flex) means you run payroll yourself using a platform. You are responsible for configuring it correctly and keeping up with compliance changes.
Side-by-Side Comparison for Cannabis Businesses
| Payroll Task | Managed Payroll | DIY Software |
|---|---|---|
| 280E tax code payroll deductions setup | Configured for you | You configure |
| Tax deposits | Handled | You are responsible |
| Compliance updates | Applied automatically | Your responsibility |
| Multi-state filing | Included | Varies by plan |
| Year-end W-2s | Included | Included or add-on |
| Payroll errors | Provider corrects at cost | Your cost to fix |
| New hire onboarding | Handled | You set up |
Which Is Right for Cannabis Businesses?
For most cannabis businesses under 100 employees, managed payroll wins on total cost and compliance coverage. The tradeoff -- giving up direct software access -- is outweighed by removing the compliance risk that comes with self-managing 280E tax code payroll deductions, cash payroll documentation, state cannabis board reporting, banking restrictions.
Payroll software makes sense if you have dedicated in-house HR staff with genuine expertise in Cannabis Businesses payroll compliance, prefer hands-on control, and have a low tolerance for vendor dependency. These are real advantages, but they come with real responsibility.
Managed Payroll, Handled.
BEG manages payroll at $25-$45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
How do you handle 280E payroll cost allocation?
We work with your CPA to allocate payroll costs between COGS (cultivation, production, direct handling) and non-COGS (retail, admin, marketing) to capture the maximum allowable deduction under Section 280E.
Can you handle cash payroll for dispensary employees?
We process payroll calculations and tax withholding digitally regardless of how employees are ultimately paid, and produce detailed payment records and tax documentation for audit readiness.
How do you handle state cannabis board payroll reporting?
We maintain the required records and produce reports in the format required by your state's cannabis control board upon request.
What does BEG charge for cannabis business payroll?
Cannabis payroll runs at $25-$45 per employee per month, including 280E-aware payroll allocation support and state licensing recordkeeping. For a single dispensary with 15 employees, that is $375-$675 per month.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Cannabis Businesses. BEG manages payroll at $25-$45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
From the blog