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How Much Does a Direct Deposit Payroll Service Cost?

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A direct deposit payroll service offers organizations a convenient way to automatically deposit their employees' paychecks directly into whatever account the employee chooses, eliminating the need for live, paper checks.

Many organizations have replaced live checks entirely as a way to cut costs and reduce fraud. Direct deposit is the most popular option, but some organizations also offer their employees a direct deposit card (necessary since not everyone has a bank account). You can use the same provider that handles all of your payroll services, making it even easier for you.

Pros of Direct Deposit Payroll Service

Companies and other organizations choose to outsource their payroll services for the same reasons they make most business decisions: to save time and money. Hiring professionals to handle your payroll ensures you meet all federal and local regulations around payroll and direct deposit. The direct deposit service typically creates tax forms and other relevant documentation, often providing these items electronically as well.

Once you enroll with one of these providers, you can eliminate live checks for everything from paychecks to pension and annuity payouts. This is far more cost-effective and convenient. What's more, you reduce the likelihood of fraud, since there is no way to forge or duplicate paychecks. Most employees also prefer direct deposit, as it eliminates one more errand they must complete every week.

Points to Consider before Choosing a Direct Deposit Payroll Service

  • Control and Security procedures help reduce the risk of third-party fraud, so make sure any provider you sign with can explain how they handle security. In addition, look at online reviews, talk to past clients, and perform a background check on the provider.
  • Initiation options include your choices for submitting payment information, such as via Internet portal or transmitting files directly. Preferably, the provider offers multiple alternatives.
  • Value added services include fax and electronic delivery, security control options, and notifications that the provider received and processed your files.
  • Payment schedules and updates let you know that the service provides payments on time. You need to know how often the provider updates data as this lets you know how quickly employees can expect to see changes, such as pay raises, reflected in their paychecks. Ideally, the payroll service performs updates regularly.

Sample Prices of Direct Deposit Payroll Service

Direct deposit is a feature offered by most payroll service providers. For some, the cost is part of their overall rate. Most, however, charge extra. Costs vary depending on a variety of factors, including:

  • The type of business you have
  • The number of employees
  • The services or benefits that you offer your employees, such as health insurance or 401(k) plans
  • Your geographic location

With costs varying so much, accurate estimates are impossible without knowing your unique needs. However, cost averages and ranges help give you an idea about what you can expect to pay, and whether a proposal seems valid.

  • Payroll service costs range between $2 and $10 per check. Adding a direct deposit feature typically raises this to around $5 to $15 per check.
  • Expect to pay a one-time setup fee of around $100.
  • Monthly charges vary but average around $15.
  • Bill pay costs vary considerably, from around $0.50 to $5 per transaction. However, running multiple transactions in a single session typically drops that rate to around $0.10 to $1 per transaction.
  • Expect to pay between $5 and $15 per file for up to 33 transactions.
  • Resetting your password costs between $25 and $50.
  • Payment tracing costs between $20 and $40.

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