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Managed Payroll Cost for Startups and New Businesses
Understanding payroll outsourcing cost is the first step to deciding whether managed payroll is right for your business. Most cost comparisons leave out the most significant expense: the fully loaded cost of an in-house hire.
This guide covers the real cost of managed payroll at different employee counts, what is included, and how it compares to the alternatives.
What Is PEPM Pricing?
Most managed payroll providers price on a per-employee-per-month (PEPM) basis. BEG charges $25-$45 PEPM, all-inclusive. For a 20-employee company, that is $500-$900 per month.
PEPM pricing scales linearly with your headcount. Adding employees increases cost predictably. Seasonally shedding employees reduces cost the same month. You never pay for headcount you do not have.
BEG Managed Payroll Cost by Headcount
| Employees | Monthly at $25 PEPM | Monthly at $45 PEPM | Annual Range |
|---|---|---|---|
| 10 employees | $250 | $450 | $3,000-$5,400 |
| 25 employees | $625 | $1,125 | $7,500-$13,500 |
| 50 employees | $1,250 | $2,250 | $15,000-$27,000 |
| 100 employees | $2,500 | $4,500 | $30,000-$54,000 |
| 200 employees | $5,000 | $9,000 | $60,000-$108,000 |
What Is Included at $25-$45 PEPM
- Payroll processing on your chosen frequency (weekly, bi-weekly, semi-monthly)
- Federal and state tax deposits made on your filing schedule
- Quarterly Form 941 and annual Form 940 filing
- State income tax and unemployment filings in all applicable states
- New hire reporting and direct deposit setup
- Year-end W-2 and 1099 production for all employees and contractors
- Compliance monitoring and automatic rule updates
- Off-cycle payroll runs for bonuses and final paychecks at no add-on charge
The Real Alternative: In-House Payroll
The in-house alternative is not free payroll software. It is a payroll coordinator or HR generalist earning $45,000-$80,000 in base salary, plus benefits, employer taxes, software, training, and the cost of replacing them when they leave. Fully loaded, an in-house hire costs $60,000-$110,000+ per year.
At 25 employees, managed payroll at $45 PEPM costs $13,500/year. An in-house hire costs $60,000-$110,000. The savings over 5 years fund significant business investment.
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
What does managed payroll cost?
BEG managed payroll runs at $25-$45 per employee per month, all-inclusive. For a 25-employee company, that is $625-$1,125 per month.
How quickly can you set up managed payroll?
Setup takes 3-5 business days from contract signing to first live payroll run. We handle the configuration, data migration, and tax account setup.
What is included at $25-$45 PEPM?
Payroll processing, federal and state tax deposits and filings, new hire reporting, direct deposit, year-end W-2s and 1099s, compliance monitoring, and off-cycle runs. All included.
Can you handle payroll in multiple states?
Yes. Multi-state payroll is a standard service. We register in each state where you have employees and handle state withholding and unemployment filing in all applicable states.
What happens if there is a payroll error?
If an error occurs due to our processing, we correct it at our cost. This includes amended returns, corrected W-2s, and penalty abatement where applicable.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries. 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. Bureau of Labor Statistics: Occupational Employment and Wage Statistics
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