Expert: Ed McFarland - 6/1/2005

Question
I am doing payroll for a contractor and hope to soon get more clients out of my home. Currently the contractor has 4 employees, paid weekly. What would you charge for this doing the weekly calcs, plus quarterly reports and end of the year W2's etc.
Thanks

Answer
What type of time is involved?

Most payroll services charge a set up fee, then it is a function of time. When I was a CFO, I recall that for 25 employees, I was paying under $30 a pay period.

Payroll processing is a commodity. I would recommend that you offer other value added services. The time to market yourself and get enough clients to be a payroll service could be difficult. Look to add basic bookkeeping and bill paying.


Good luck