Payroll services run payroll for small businesses: calculating wages, withholding taxes, issuing paychecks or direct deposits, and filing payroll tax returns. Owners of these businesses, including solo payroll specialists and small firms, invoice clients each pay cycle or each month for processing, tax filing, and add-on work such as new hire setup or year-end forms.
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Invoice_1001_Client_2026-10-14.pdf
Most payroll services charge a recurring base fee per payroll run or per month, plus a per-employee fee. A typical structure is a base of $25-75 per pay run and $4-12 per employee per run. Independent bookkeepers and payroll specialists often charge a flat monthly fee instead, tiered by employee count and pay frequency. Quarterly and annual filings (Form 941, state unemployment returns, W-2s, 1099-NECs) are either bundled into the monthly fee or billed separately as flat fees. One-time work such as setup, migrating from another provider, or fixing prior-period errors is billed as a setup fee or hourly. Extras like off-cycle checks, manual check printing, garnishment administration, and multi-state registration are usually itemized. Pass-through costs, such as software subscriptions or state filing fees, should be listed separately from your service fees. Many firms bill in advance for the coming month so the invoice is paid before payroll funds are debited.
| Service | Priced | Typical range |
|---|---|---|
| Payroll processing base fee (weekly, biweekly, or semi-monthly run) | per pay run | $25-75 |
| Per-employee processing fee | per employee per run | $4-12 |
| Flat monthly payroll package (up to 10 employees, biweekly) | per month | $200-500 |
| New client setup and employee data entry | flat fee | $150-500 |
| Quarterly payroll tax filing (Form 941 and state returns) | per quarter | $75-200 |
| Year-end W-2 and 1099-NEC preparation and filing | per form | $10-30 |
| Off-cycle or manual check run | per run | $25-75 |
| Payroll cleanup, correction, or consulting | per hour | $65-150 |
Typical US ranges. Rates vary by region, experience, and job size.
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Biweekly payroll processing, base fee (pay dates 3/7 and 3/21) | 2 pay run | $50.00 | $100.00 |
| Per-employee processing, 12 employees | 24 employee-run | $6.00 | $144.00 |
| Off-cycle bonus check run (3/14) | 1 run | $45.00 | $45.00 |
| New hire setup and onboarding entry | 2 employee | $35.00 | $70.00 |
| Q1 Form 941 and state unemployment return preparation and filing | 1 quarter | $125.00 | $125.00 |
| Total | $484.00 | ||
Notes: Payment due 5 business days before the next pay date so funds clear before payroll is submitted. Payroll tax deposits are debited separately and are not included on this invoice. Late payments may delay payroll processing and are subject to a $25 late fee. ACH preferred.
Clients often have several runs in a month, and tying each charge to a specific pay date prevents confusion and duplicate-charge disputes.
Per-employee fees depend on headcount, which changes with hires and terminations. Showing the count lets the client verify the math.
Your fees are different from the client's payroll liabilities. Keeping them apart avoids the client thinking tax money is part of your bill.
These are out-of-scope extras for most flat packages, and listing them shows why the total changed from the usual amount.
Clients need to match charges to compliance deliverables, and it gives a record of what you filed and when.
Payroll accounts are tied to the legal entity. Using the correct name avoids mix-ups when a client owns several businesses.
If payroll depends on the invoice being paid first, the due date should state that and be earlier than the submission deadline.
Payroll services commonly bill monthly in advance or per run, with due dates set before the payroll submission deadline, often 3 to 5 business days before the pay date. Many firms collect fees by ACH debit authorized in the service agreement, which reduces late payments. Setup fees are usually due upfront or at signing. Late fees of $25-50 or 1.5% per month are common, and many agreements allow the firm to pause processing if fees are unpaid. Keep the fee invoice separate from any funding or tax liability debits, and check your state's rules and your contract on how client funds are held and how you may handle them.
An invoice due in 30 days does nothing for you if payroll runs in 5. Set terms so payment lands before you submit the run, and state in your agreement that unpaid fees can delay processing.
Getting a signed ACH authorization at onboarding removes most chasing. Make sure the agreement spells out the amount, timing, and how clients can update bank details.
Spell out the number of runs, employees, and filings included. Charge extra for off-cycle runs, retroactive corrections, multi-state filings, and notices from tax agencies, which are common sources of unpaid work.
Responding to IRS or state notices, fixing prior provider errors, and reconciling quarterly filings can take hours. Quote an hourly rate or minimum in advance and log time by task.
Clients grow and add employees. Check headcount quarterly and adjust the monthly tier or per-employee charges so your fee keeps pace with the work.
Generally no. Tax deposits and net pay funding are the client's liabilities and are usually handled through separate debits or transfers. Your invoice should cover only your fees and any approved pass-through costs, so the two amounts are not confused.
Both are common. Per-employee pricing scales with headcount and suits larger or changing teams. Flat monthly packages are easier for small clients with stable staff. Whichever you use, define the headcount limit and what happens when the client exceeds it.
Many firms charge a per-form fee, such as $10-30 per form, or include year-end filing in an annual package. Show the form type, tax year, and number of forms on the invoice, and add any e-filing or mailing costs as a separate line.
Usually yes, if it is in your signed service agreement and allowed in your state. Put the late fee on the invoice terms, and consider also stating that processing may be paused until fees are paid.
Treat it as separate project work. Quote an hourly rate or a flat fee after reviewing the records, and list it as its own line item with the periods corrected, so it is not mistaken for regular processing.
Send a Payroll Service estimate for approval, then turn it into an invoice when the work is done.
Payroll Service estimate template