Payroll Outsourcing Services Procurement Intelligence

In this Payroll Outsourcing Services procurement intelligence report, we have estimated the pricing of the key cost components which include setup costs (infrastructure, transition, and migration), labor, software licensing fee for service provider, rent & utilities, maintenance & upgradation, and other costs. Other costs are further bifurcated into insurance expenses, legal & consulting costs, security, change management costs, and exit costs.

Generally, the following standard components are included in the price of managed payrolls, however, this depends on the type of services that is selected:

a) Elementary fee: It covers basic services including paychecks, account deposits, normal taxes, and a portal for easy access to information. The annual primary costs for each employee typically range between USD 19 to USD 245.

b) Tax assistance: In contrast to regular taxation, preparing taxes at year-end necessitates a substantial amount of additional reporting and mailing. Tax filing is made more difficult by payouts in several states with different regulations. In these circumstances, managed payrolls may incur an extra USD 24 to USD 74 per worker.

c) One time charge: In-house payroll as well as managed payrolls have one-time expenses. These cover, among other things, the cost of installing time trackers to keep tabs on workers' work hours.

d) Additional fee: Additional services including payroll adjustments, emergency payouts, and employee reports are included in payroll Solutions. These services come at a significant additional price.

The average price of outsourcing payroll services globally is USD 199 - USD 249 per employee per year, depending on the scope of engagement. In certain instances, payroll service providers charge a base fee in the range of USD 19 - USD 119 per month for payroll services, and additional monthly fee in the range of USD 0.9 - USD 4.9 per employee. 

Order your copy of the Payroll Outsourcing Services category procurement intelligence report 2023-2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Operational Capabilities - Payroll Outsourcing Services

  • Industries Served - 25%
  • Years in Service - 20%
  • Geographical Service Provision - 15%
  • Revenue Generated - 15%
  • Employee Strength - 15%
  • Clientele - 10%

Functional Capabilities - Payroll Outsourcing Services

  • Payroll Processing (Salary / Wage) - 23%
  • Time & Attendance Management - 20%
  • Tax Management - 17%
  • Self-Service Porta - l14%
  • Recordkeeping & Reporting - 14%
  • Regulatory Compliance - 7%
  • Others - 5%

Rate Benchmarking

Gusto, a prominent payroll outsourcing service provider, charges a base price of USD 39.5 per month, and an additional monthly fee of USD 5.9 per employee. Paychex, another leading payroll outsourcing service provider, charges a base price of USD 38.5 per month, and a variable additional fee based on size and needs of the buyer.

In another instance, Rippling, a leading payroll outsourcing service provider, charges a base monthly fee of USD 34.5, and an additional monthly fee of USD 7.9 per employee. Justworks, a prominent payroll solutions provider for small businesses, charges a fixed fee of up to USD 98.5 per month for up to 48 employees, and a fixed fee of up to USD 88.5 per month for over 49 employees.

Supplier Newsletter

In November 2023, RSM CZ a.s. announced the acquisition of Alfa Software. This acquisition will provide RSM with Alfa’s extensive client base of over 1,999 clients and will support it in entering new segments. In addition, the acquisition will turn RSM a stronger player in HR & payroll management space, serving the Czech’s market and expanding its portfolio covering public authorities, hospitals, preschools, and schools.

In August 2023, ADP, Inc. announced acquisition of Honu HR, Inc. DBA Sora (Sora). The acquisition is helping ADP in automating complex HR processes and turning it simpler. ADP can now help its clients in decreasing the amount of time they spend on manual processes and give them insights that will drive business outcomes and give their workers meaningful experiences by combining Sora's user-friendly platform with ADP's complete HCM solutions and data expertise.  

In April 2023, Payroll Software & Services Group Limited (PSSG) announced the acquisition of direct payroll business of Essential Payroll. With this acquisition, PSSG can now expand its outsourcing services and serve a larger market while also improving its product offering. In addition, the company has effectively increased the size of its clientele as well.

List of Key Suppliers

  • ADP, Inc.
  • Ceridian HCM, Inc.
  • CGI Inc.
  • CloudPay Inc.
  • Deloitte Touche Tohmatsu Limited
  • Infosys Limited
  • Intuit Inc.
  • KPMG International Limited
  • Paychex Inc.
  • Ramco Systems Ltd.
  • Workday, Inc.
  • ZenPayroll, Inc. (d.b.a. Gusto) 

Browse through Grand View Research’s collection of procurement intelligence studies: 

Payroll Outsourcing Services Procurement Intelligence Report Scope 

  • Payroll Outsourcing Services Category Growth Rate : CAGR of 7.32% from 2023 to 2030 
  • Pricing Growth Outlook : 5% - 10% increase (Annually) 
  • Pricing Models : Fixed pricing, per frequency pricing 
  • Supplier Selection Scope : Cost and pricing, past engagements, productivity, geographical presence 
  • Supplier Selection Criteria : Type, technical expertise, security measures, cost and value, support and maintenance, regulatory compliance, and others 
  • Report Coverage : Industries served, years in service, geographic service provision, revenue generated, employee strength, payroll processing (salary / wage), time & attendance management, tax management, self-service portal, recordkeeping & reporting, regulatory compliance, and others 

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions. 

Our services include (not limited to): 

  • Market Intelligence involving – market size and forecast, growth factors, and driving trends
  • Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
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