When owners ask what payroll costs, they usually mean the software fee. That is the smaller number. The employer's share of payroll taxes is set by law and is the same whichever provider you use; the service fee is the part you can shop for. This post puts both together, with list prices read from each provider's own pricing page on 4 October 2026.
Payroll service fees, compared
| Square Payroll | Patriot Full Service | Gusto Simple | QuickBooks (Workforce Payroll + Simple Start) | Paychex Flex Essentials | RUN Powered by ADP | |
|---|---|---|---|---|---|---|
| Monthly base | $35 | $37 | $49 | $88 (includes accounting) | $44.00 listed | Not published |
| Per employee, per month | $6 per person paid | $5 per worker paid | $6 per person | $7 | Not shown in the listing | Not published |
| Offer shown on the day | Not noted | Half price shown | Not noted | 50% off the base for 3 months | Pay nothing until first payroll | Quote only |
| Extra fees mentioned | $3 a year per mailed W-2/1099 | $12 a month per additional state | State tax registration add-on | Not noted | "Additional fees may apply" | W-2 and 1099 forms: additional fee |
Checked October 4, 2026. From each provider's pricing page: squareup.com, patriotsoftware.com, gusto.com, quickbooks.intuit.com, get.paychex.com, adp.com. Introductory offers change often; plan on paying the full price.
Patriot also sells a Basic Payroll plan at $17 a month plus $4 per worker, which calculates payroll but leaves tax deposits and filings to you. Square has a contractor-only plan at $6 per person paid. Gusto charges for US contractors only in months you pay them.
What the service costs for 1, 3 and 5 employees
| Employees | Square ($35 + $6) | Patriot ($37 + $5) | Gusto ($49 + $6) | QuickBooks bundle ($88 + $7) |
|---|---|---|---|---|
| 1 | $41 | $42 | $55 | $95 |
| 3 | $53 | $52 | $67 | $109 |
| 5 | $65 | $62 | $79 | $123 |
Over a year, one employee costs roughly $490 to $1,140 in service fees at these list prices, before offers or add-ons. The QuickBooks figure includes accounting software that the others don't, so it is only comparable if you need that too.
Employer payroll taxes: the bigger number
| Tax | Employer rate | On which wages |
|---|---|---|
| Social Security | 6.2% | Up to $184,500 per employee |
| Medicare | 1.45% | All wages |
| Federal unemployment (FUTA) | 6.0%, usually 0.6% after the state credit of up to 5.4% | First $7,000 per employee per year |
| State unemployment (SUI) | Set by your state; new employers get a starting rate | Up to your state's wage base |
The employee's matching 7.65% of Social Security and Medicare, and their income tax, come out of their pay. You send it in, but it isn't your cost. Some states and cities add employer taxes or employee programs of their own, such as disability or paid leave contributions.
Worked example: three employees
Three employees each paid $40,000 a year, $120,000 in total, in a state with a 2.7% new-employer unemployment rate on the first $7,000 per employee (rates and wage bases vary widely, so substitute your own).
| Line | Calculation | Yearly amount |
|---|---|---|
| Employer Social Security and Medicare | 7.65% × $120,000 | $9,180 |
| FUTA after full state credit | 0.6% × $7,000 × 3 | $126 |
| State unemployment (example rate) | 2.7% × $7,000 × 3 | $567 |
| Employer taxes, total | $9,873 | |
| Payroll service at $52 to $109 a month | × 12 | $624 to $1,308 |
| Total cost of payroll beyond wages | $10,497 to $11,181 |
The service fee is about 6% to 12% of the total. Choosing a cheaper provider saves a few hundred dollars a year; getting a tax deposit wrong can cost more than that in penalties, which is the real argument for full service.
Costs that don't show in the headline price
List prices cover the monthly base and per-person fee. Before you compare totals, ask each provider about the items below; several of them appear in the fee notes on the pricing pages above.
- Year-end forms: whether W-2s and 1099s, and mailing paper copies, cost extra.
- More than one state: some providers charge per additional state filed.
- State tax registration: setting up your state withholding and unemployment accounts may be an add-on.
- Contractors: whether they count as a person each month or only in months you pay them.
- Off-cycle runs, such as a bonus or a final paycheck, and corrections after a payroll is sent.
- Introductory discounts: how long they last and the price afterwards.
- Leaving: whether there is a minimum term, and how you get your payroll records out.
Doing payroll yourself
The cheapest option on service fees is to run payroll yourself: calculate each paycheck, make the federal tax deposits through the IRS's Electronic Federal Tax Payment System, file Form 941 each quarter, Form 940 and W-2s each year, and handle the state returns. It costs time, and the risk of a missed deadline is yours. It suits employers with one or two people on fixed pay, and household employers, who pay federal employment taxes once a year on Schedule H.
Whichever way you go, each employee needs a pay stub each payday, and many states require one by law.
Where PayDocs fits
PayDocs covers the documents if you run payroll yourself: a pay stub per pay period, and W-2 and 1099 recipient copies at year end. PayDocs works out federal income tax, Social Security, Medicare and supported state taxes for 2026 pay dates (see what we calculate), and every line stays editable. There is no monthly fee: you preview free and pay per document, with packs for regular paydays.
PayDocs isn't payroll software. It doesn't pay employees, deposit or file taxes, or file anything with the IRS, SSA or your state.
Questions
How much does a payroll service cost per employee?
Among providers that publish prices, entry full-service plans charged $5 to $7 per employee a month on top of a $35 to $88 monthly base on 4 October 2026. ADP quotes individually, and Paychex lists its Essentials plan at $44.00 with additional fees possible.
What percentage of payroll goes to employer taxes?
At least 7.65% of wages for Social Security and Medicare, plus federal unemployment (usually 0.6% of the first $7,000 per employee) and state unemployment, which varies by state.
Is it cheaper to do payroll yourself?
In fees, yes; employer taxes are the same either way. You take on the calculations, deposits and filings, and the penalties if something is late.
Sources
- Square: Payroll pricing (checked 4 October 2026)
- Patriot Software: Pricing (checked 4 October 2026)
- Gusto: Pricing (checked 4 October 2026)
- QuickBooks: Payroll pricing (checked 4 October 2026)
- Paychex: Paychex Flex Essentials listing (checked 4 October 2026)
- ADP: RUN payroll packages (checked 4 October 2026)
- IRS: Publication 15 (2026), Employer's Tax Guide
- IRS: Publication 926 (2026), Household Employer's Tax Guide
Sources checked October 4, 2026. This article explains how pay documents work; it is not tax or legal advice.
