How Much Payroll Services Cost in 2022 for New York Businesses

As a small business owner in New York, you need to make decisions about payroll based on cost and time. We break down the pricing models, costs, and benefits of your New York payroll service options.

By Larry Kagan, Founder & CEO, Baron Payroll

As a business owner in New York, you wear 20 different hats every day. It's grueling and exhausting, and you don't have the energy to add more tasks to your already-packed days.

You don't want to spend precious time thinking about payroll, but you also want to make sure you're not overpaying for it.

Maybe you tried to do payroll on your own and found it took too long and resulted in mistakes. Or perhaps you use a national payroll company and keep getting phone calls trying to sell you more services that you don't want or need.

We at Baron Payroll know New York and all the intricacies that come along with employing people here. We also work at the same pace you do – none of us waste a single minute. You can reach us by phone without navigating through a phone tree. You know us, and we know you.

We understand that you don't want to waste a single dollar either. So here's what you need to know about how much payroll services cost in New York and the various ways companies get charged, sometimes without realizing it.

You can do it yourself, but we provide full service

You may have QuickBooks and think you can manage payroll runs on your own. Or you may have seen ads on social media for low-end services where you essentially manage payroll on your own.

These do-it-yourself options only really work if you already possess expertise in employment law and payroll in New York. If that's the case, all you need is a tool like these software programs, and you're off to the races. It's sort of like renting a car – if you already know how to drive and where to go, you can figure it out on your own. But otherwise, it takes some serious training to be confident with do-it-yourself payroll options.

New York employment laws and regulations change frequently and are highly complex. Your payroll service should manage these complexities for you, saving you time and a headache.

Full-service payroll offers hands-on support, runs your payroll with you, and provides additional services that keep your business on the up and up, like timekeeping and human resources technology.

When seeking out a full-service payroll company, you can choose from national providers or local businesses. Local payroll companies like Baron provide boutique services that meet your exact needs, include updated local laws with all their complexities, and answer the phone when you call with questions.

For pricing, beware of unnecessary costs for inactive employees

There are two major pricing models for full-service payroll: rates based on the number of employees in your system or based on the number of transactions you run.

The transactional method of pricing is fairer. For example, you may have active employees in your system because of temporary or seasonal work. Under the payment structure by employee, you're paying for people you don't need to be.

Instead, paying per-transaction means each time you are running payroll, you are only charged for people who got paid.

If you process payroll every two weeks, paying per-transaction usually costs between $100 to $150 per employee per year. It increases slightly if you process payroll weekly, which New York law requires for some occupations, mainly manual labor workers. Weekly payroll typically costs between $150 to $200 per employee per year.

There are some additional services that you may need that could affect the cost of your payroll runs. These include:

• Direct deposit for employee pay
• New York Sick Time tracking and accruals
• Quarterly and year-end payroll tax reporting and filing
• Workers' compensation and New York State disability reporting
• Paperless, electronic onboarding for new employees
• Customized file transfers for retirement plans
• New hire reporting
• Courier delivery or mailing fees
• Affordable Care Act reporting

Some of the giant national payroll services advertise unlimited payroll runs. This may sound like a great deal, but the truth is you don't need unlimited runs. In fact, running random payrolls outside of your normal frequency can be a dangerous business practice. It means you're creating additional tax liabilities and due dates when you don't need to be and weaving a complicated financial web. If you need to pay someone immediately and write a manual check between your payroll runs, we can easily record it in the next payroll.

Should you bundle services or pay for modules you need?

You're familiar with bundled services: Tons of businesses, like cable companies, use them to sell products that customers may not use.

For your business, services like payroll, timekeeping, and human resources technology may be offered as a bundle by payroll companies.

If you do use all the items in a bundle, chances are you're saving some money. But if you don't, you're spending on something you didn't need.

Some companies offer modules instead. In these formats, you can elect to add services based on what your company needs.

Baron Payroll unbundled our services and offers individual modules so that you can select precisely what services you want and pay for only what you use.

Keep upfront costs in mind

Either way, starting payroll from scratch or switching payroll companies can be daunting. Most payroll companies charge an upfront cost when you start using their services, often called an implementation or setup fee. This fee can range from a few hundred dollars to more than $1,000.

But the cost is only one factor. Some companies hand a small business owner blank spreadsheets and require them to fill in the information for every payroll check they've written, including tax withholding amounts, paid leave requirements, and personal information.

Completing multiple spreadsheets is a Herculean task for someone who's already swamped running a business. Not only that: Gathering payroll numbers and data which you are not fluent with can lend itself to tax and compliance errors you may be on the hook for legally. We recommend business owners look for a full-service conversion solution that doesn't require a ton of their time.

At Baron, we use your login and password for your current payroll provider, access all your records online, verify the accuracy, and load them into our system for you. You don't have to lift a finger yourself. We charge a $300 one-time fee upfront and about $6 per employee to set it all up. It's affordable, and most importantly, it gets done right, saving you time and headaches.

We know that switching payroll companies can sound like a rush-hour traffic jam you don't want to get stuck in right now. But Baron will make it easy and foolproof for you. If you're not happy with your payroll company, whether it's because of cost, time, or the absence of service, we will do the driving and navigate the rush-hour traffic for you. We call it our complete Uber solution to switching payroll systems.