M”How much does payroll cost?” usually gets a frustrating answer: it depends. It does depend on a few things — but you can still get real 2026 numbers instead of a shrug. Below is what payroll actually costs for a small business in Texas, broken down by how many employees you have and what’s included, plus the fees that don’t show up in the advertised price. We work with small businesses across Allen, Fairview, McKinney, Plano, and Frisco, so we’ve written this the way we’d explain it to a client sitting across the desk.
What this guide covers: this is about the cost of payroll software and payroll services — the fees to process payroll and file payroll taxes. Employee wages, employer payroll taxes (Social Security and Medicare, federal unemployment, and Texas unemployment tax), benefits, and workers’ compensation are separate business costs and are not included in the prices below.
Short answer: For most Texas small businesses in 2026, entry-level payroll software runs about a $17–$50 monthly base fee plus roughly $4–$7 per worker, so a five-person team on published entry plans lands around $37 to $83 a month before add-ons. Basic plans that leave tax filing to you cost least; full-tax-filing software costs a bit more; and a managed service that runs payroll for you is priced separately, often a flat fee or a custom quote. ADP prices only by custom quote.
Quick estimate: Monthly payroll-service cost = base subscription + per-worker fees + any add-ons + optional accounting or HR services. Employee wages and employer payroll taxes are separate.
What drives the cost of payroll
Almost every payroll option is priced the same way: a monthly base fee plus a per-employee fee. Among the entry-level plans compared in this guide, published base prices range from about $17 to $50 per month, plus roughly $4 to $7 per worker; higher-tier plans cost more. A few factors move your total up or down:
- Number of employees or contractors: the per-person fee is charged for everyone you pay, so cost rises as you grow.
- Pay frequency: running weekly payroll means more processing than monthly, and some providers charge per run.
- Number of states: payroll in more than one state can bump you to a higher plan or add a per-state fee. If all your employees work in Texas, you usually avoid that.
- Add-ons: time tracking, benefits administration, workers’ compensation, and HR support are typically priced on top of the base plan.
- How it’s filed: full-tax-filing plans file your federal, state, and local payroll taxes for you; the cheapest basic plans leave those filings to you.
A Texas note: Texas does not impose an individual state income tax, so employers generally do not withhold Texas individual income tax from wages. Federal payroll taxes, Texas unemployment tax, and new-hire reporting still apply, and a Texas business can still have other state tax obligations.
Payroll cost by employee count (2026)
Here’s roughly what payroll costs per month at different team sizes. These are software subscription costs only; they exclude add-ons, multi-state fees, and the value of your own time.
| Employees | Basic payroll software (you file your own taxes) | Full-tax-filing payroll software (range) | Managed payroll service |
|---|---|---|---|
| 1 | ~$21/mo | ~$42–$57/mo | From ~$189 (verify) |
| 5 | ~$37/mo | ~$62–$83/mo | Custom quote |
| 10 | ~$57/mo | ~$87–$115/mo | Custom quote |
| 25 | ~$117/mo | ~$162–$213/mo | Custom quote |
How to read this: Basic payroll software uses Patriot Basic ($17/mo + $4 per worker), where you run payroll but file your own payroll taxes. Full-tax-filing software shows a range across plans that file taxes for you — for example Patriot Full Service ($37/mo + $5), Roll by ADP ($39/mo + $5), Gusto Simple ($49/mo + $6), and QuickBooks Workforce ($50/mo + $6.50 per employee). Managed payroll service is a firm running payroll for you; ADP is quote-based and isn’t shown. Figures are 2026 estimates and exclude add-ons.
Note on the managed column: the local managed price (Tax by Lonestar, from ~$189/mo) is not a payroll-only subscription — it bundles bookkeeping, sales-tax filing, and monthly reports, and covers payroll for up to two employees. Larger teams are a custom quote, so it should not be compared directly with the software-only columns.
What’s included at each price level
A lower price usually means you do more of the work. Here’s the trade-off at each level. (For a closer look at specific providers, read our full ADP vs Gusto vs local payroll comparison.)
Basic payroll software (lowest cost, you file your own taxes)
You run payroll yourself, and you submit your own payroll-tax deposits and filings. The software calculates pay, runs direct deposit, prints checks, and produces reports, but leaves the tax filing to you. Example: Patriot Basic at $17/month plus $4 per worker. Good for a confident owner with a very small team who wants the lowest sticker price.
Full-tax-filing payroll software (files taxes for you, you operate it)
You still operate the software, but it automatically files your federal, state, and local payroll taxes, runs unlimited payrolls, and produces year-end W-2s and 1099s. Examples include Patriot Full Service ($37/mo + $5), Roll by ADP ($39/mo + $5), Gusto Simple ($49/mo + $6), and QuickBooks Workforce ($50/mo + $6.50 per employee). QuickBooks can be bought on its own or bundled with QuickBooks accounting, so confirm which you’re quoted.
Managed payroll service (a professional runs it for you)
A professional runs payroll for you, files the taxes, handles year-end forms, and — in a bundle — keeps your books and prepares your tax return. You hand over the work instead of operating software. This is usually a flat monthly fee or a custom quote based on your team size, and it costs more than software alone.
DIY software vs a managed service: the real cost
The subscription price is only part of what payroll costs. With DIY software, add the value of the time you or a staff member spend running payroll, keeping up with rules, and fixing mistakes. Payroll errors can also carry tax penalties, which is a real cost even if it’s not on an invoice.
Doing payroll fully in-house with a dedicated employee usually costs far more than a monthly software subscription or an outsourced service once you add wages, payroll taxes, benefits, and training — which is why most small Texas businesses either run affordable software themselves or pay a service a flat fee to handle it. The right answer depends on how much time you have and how comfortable you are owning the compliance.
Hidden payroll fees to watch for
The advertised base-plus-per-employee price often isn’t the final number. Ask about these before you sign up:
- Setup or implementation fees charged when you first onboard.
- Per-run or off-cycle fees for extra payrolls outside your normal schedule.
- Year-end fees for filing and mailing W-2s and 1099s.
- Multi-state charges: adding a second state can force a plan upgrade or add a per-state fee (around $12/month per extra state on some providers).
- Optional accounting subscription: QuickBooks lets businesses add accounting software to payroll. Confirm whether a quoted package includes accounting or is payroll only.
- Add-on modules for time tracking, benefits, workers’ comp, or priority support.
- Future price changes: providers may change plan prices, per-employee fees, features, or promotional discounts. Confirm the regular, non-promotional price before signing up.
Our pricing approach at Tax by Lonestar
We keep payroll pricing simple and predictable. Instead of a base fee plus surprises, we quote a flat monthly amount so you know the number up front.
- Flat monthly fee for managed payroll, with the tax filings handled for you.
- Bundled with your books and taxes: our All-in-One monthly service starts at $189/mo and includes bookkeeping, sales tax filing, payroll for up to two employees, and monthly reports. Larger teams get a custom quote.
- No guesswork: we tell you what’s included and what a larger team would cost before you commit.
Book a free payroll consultation and we’ll give you a clear, itemized quote for your team size — with no obligation.
Frequently asked questions
How much does payroll cost per employee in Texas?
Most payroll software charges roughly $4–$7 per employee per month on top of a monthly base fee. For example, a common full-tax-filing plan is about $49–$50/month plus $6–$6.50 per employee, while a basic plan can be around $17/month plus $4 per employee (you file your own taxes). Managed services usually charge a flat monthly fee or a custom quote rather than a strict per-employee rate.
What is the cheapest way to run payroll for a small business?
The lowest sticker price is basic payroll software — for example around $17/month plus $4 per worker — but those plans leave your payroll-tax filings to you. The cheapest option overall depends on the value of your time: if payroll takes you hours each pay period, a full-tax-filing plan or a flat-fee service can cost less in practice.
Does Texas have extra payroll taxes or fees?
Texas does not impose an individual state income tax, so there is no state income tax withholding on wages. Employers still pay Texas state unemployment tax through the Texas Workforce Commission and federal payroll taxes, and must report new hires to the Texas Office of the Attorney General within 20 calendar days. Other state tax obligations may still apply to the business.
Why is ADP’s price not listed here?
ADP uses custom, quote-based pricing and does not publish rates, so a fixed number would be misleading. If you’re considering ADP, ask for a written quote that separates setup, per-run, year-end, and add-on charges.
Is it cheaper to do payroll myself or use a managed service?
Software alone is cheaper on paper. A managed service costs more per month but can handle payroll processing and required filings, while you remain responsible for providing complete and accurate information. The better value depends on your team size, how often you run payroll, and how much time you want to spend on it.
The bottom line on payroll cost in Texas
Payroll for a Texas small business in 2026 usually comes down to a monthly base fee plus a per-employee charge — often about $37 to $83 a month for a five-person team on entry-level software, less for basic plans where you file your own taxes, and a flat fee or custom quote for a managed service. Texas has no individual state income tax, so there’s no state income tax withholding, but the unemployment tax and new-hire reporting still apply.
Want an exact number for your team? Tax by Lonestar is based at 825 Watters Creek Blvd, Building M, Suite 250, Allen, TX 75013, and we serve Allen, Fairview, McKinney, Plano, and Frisco. Call +1 469-888-8492 or book a free payroll consultation for a clear, itemized quote.
