Why payroll costs more than the advertised $6 per employee

Six dollars per employee per month reads like a unit price. Six US vendors in this dataset — Gusto, Homebase, OnPay, Square Payroll, Wave Payroll and Zoho Payroll — advertise exactly $6.00 per employee per month, and at five of the six there is no $6.00 plan without a monthly base fee attached (checked 2026-08-20). Ten people costs exactly sixty dollars at one of them: Square Payroll's Contractor Only Payroll, published at $0 base plus $6.00 per person paid.

Why is the advertised per-employee fee not the price you pay?

Because a fixed monthly account fee sits above the per-person fee, and that account fee is divided among however many people you have. The advertised per-employee fee is one component of the monthly bill. The fixed account fee is the other, so the effective cost per employee depends on headcount.

The whole calculation is two lines, and it has no adjustment, no weighting and no assumption in it:

The table below lists the 17 plans in this dataset that are US domestic payroll, priced in US dollars, and publish both a base fee above $0 and a per-employee fee, with the effective figure at three employees and how many times the advertised rate that is.

Not one of those 17 plans costs its advertised rate at three employees, and the median costs 3.31 times it (checked 2026-09-06). The two best-known names in the table make the point on their own: QuickBooks Payroll's Workforce Payroll + Simple Start advertises $7.00 and Gusto's Simple plan advertises $6.00 — a dollar apart — yet at three employees they work out at $36.33 and $22.33, a difference of sixty-three percent.

One row carries a condition worth naming. Homebase sells payroll only as an add-on, so the row is its free Basic plan plus that add-on — the only combination that costs the $19.00 shown. Basic is limited to one location and ten employees; above ten the paid plans at $30, $70 and $120 a month per location apply, and the payroll add-on sits on top of those instead (checked 2026-09-06).

Every figure above is the standard monthly-billing price. Five of these vendors were showing a promotional price on the same pages on the same day, covering eight of the 17 rows — Patriot Software at 30 days free plus 50% off for six months, QuickBooks Payroll at 50% off for three months, Roll by ADP and Justworks at three months free, and SurePayroll with every alternating month free (terms apply, checked 2026-08-20). Zoho Payroll also publishes a lower annual-billing price: its Standard plan is $29 base plus $5.00 per employee when billed annually, an effective $14.67 at three employees rather than the $19.00 above. A promotional or annual price makes the bill lower than this arithmetic says, and neither is in the figures here.

Is "per employee per month" the same as your cost per employee?

No. Effective per-employee-per-month (PEPM) is the whole monthly bill divided by the number of people on the pay run, and the advertised per-employee fee is only one of its two components. The distinction matters because the base fee does not shrink when your team is small — QuickBooks Payroll's $88 base fee adds $29.33 to each of three people and $1.76 to each of fifty (checked 2026-09-06).

Does the gap close as the team grows?

Yes, though less than the first drop suggests. Across the same 17 US plans the median costs 3.31 times its advertised rate at three employees and 1.69 times at ten, but it is still 1.30 times at twenty-five and does not fall to 1.15 times until fifty (checked 2026-09-06). Above ten employees the Homebase row is a different combination: its free Basic plan stops at ten, so the cheapest combination that can be bought becomes Essentials plus the payroll add-on. The table below follows four named plans as headcount rises.

The advertised rate is the figure a plan converges toward as the team grows: Patriot Software's Basic Payroll is still $4.34 against an advertised $4.00 at fifty employees (checked 2026-08-20). No team reaches it.

The divergence is largest for the smallest teams. That is a consequence of the fixed-fee structure, not evidence of vendor intent. At larger headcounts the base fee is spread more widely, so the effective figure moves closer to the published per-person rate — which is also why a business of three and a business of fifty can read the same pricing page and be reading two different products.

Which plan is cheapest at your headcount?

It depends on the headcount, and in this dataset the crossovers fall inside the range small teams actually sit in. SurePayroll's Small Business Payroll ($29 base plus $7.00 per employee) is cheaper than Roll by ADP ($39 plus $5.00) below five employees, level with it at five, and more expensive above five. Against Zoho Payroll's Standard plan ($39 plus $6.00) the crossover is ten. Against Homebase's payroll add-on it is ten only for a customer on Homebase's free Basic tier — on Essentials, Plus and All-in-One the plan fee is charged as well, and SurePayroll stays the cheaper of the two until 40, 80 and 130 employees. Against Gusto's Simple plan and OnPay (both $49 plus $6.00) it is twenty (checked 2026-08-20).

Patriot Software's Basic Payroll has the lowest base fee and the lowest per-employee fee of the 17, at $17 plus $4.00, so it is the cheapest of them at every headcount: $57 a month at ten employees against $158 for QuickBooks Payroll's Workforce Payroll + Simple Start, 2.8 times as much (checked 2026-09-06). Both advertise between $4.00 and $7.00 per employee, and nothing in those numbers tells you that one is nearly three times the other.

That is why the vendor pages on this site — QuickBooks Payroll's and Patriot Software's among them — show a row of effective figures at 1, 5, 10, 25, 50, 100 and 250 employees rather than a single number, and why the calculator asks for your actual headcount rather than a band.

What to do with this

Three steps, in order.

1. Count the people you actually run payroll for. Not the headcount on your org chart — the number of individuals who will appear on a pay run. Part-time staff usually count as one each. Contractors are often counted separately or charged at a different rate, and Gusto, Square Payroll and Deel each publish a contractor-only plan — excluded from the table above — on which contractors are the only people the plan pays.
2. Put that number, not a round one, into the arithmetic above. The distance between 8 and 10 employees is small. The distance between 3 and 10 is not.
3. Compare total monthly cost, never the per-employee figure. A per-employee figure is a ratio, and ratios from different vendors are not comparable until you have applied them to the same headcount.

Three questions this leaves open

Is the advertised fee ever the price you pay?

Yes, on a plan with no base fee. Square Payroll's Contractor Only Payroll is published at $0 base plus $6.00 per person paid, so its effective figure is $6.00 at any headcount (checked 2026-08-20).

At what headcount does the advertised figure become roughly right?

50 rather than 25. The median costs 1.69 times its advertised rate at ten employees, 1.30 times at twenty-five and 1.15 times at fifty (checked 2026-09-06). Gusto's Simple plan is $7.96 against an advertised $6.00 at twenty-five employees and $6.98 at fifty; QuickBooks Payroll's Workforce Payroll + Simple Start is $10.52 against an advertised $7.00 at twenty-five and $8.76 at fifty.

Does a $0 base fee make a vendor cheap?

Not on its own — and a $0 base fee on an international product is not the same product at all.

Within US domestic payroll, a base fee of $0 does not appear at all in this dataset outside contractor-only plans. Every domestic plan that publishes both numbers charges something for the account.

Who this is not for

This arithmetic is not the right tool if price is not what you are deciding on. Two products at the same monthly cost are not the same product, and this site has nothing to say about which of them files your taxes correctly, answers the phone, or survives an audit. Nobody here has run payroll on any of these products, and no product on this site is rated.

It also has three limits worth stating before you use it. It covers list prices only, so a negotiated price is outside it. It stops where vendors stop publishing: eleven of the 35 vendors in this dataset publish no figure at all, and four more publish only a starting price or a calculator, and several of them are the largest names in the US market. And it is missing fees that no vendor publishes as a monthly rate — this dataset records at least one unconfirmed field for every plan in the first table, most often the setup fee and the minimum contract length (checked 2026-08-20).

For the parts this arithmetic does not reach, the article on fees that sit outside the per-employee rate lists what is published and what is not, the article on which vendors publish prices covers the quote-only half of the market, and the method page states what is deliberately excluded from every figure here.

Sources

Every figure above comes from the named vendor's own published pricing page, read on 2026-08-20 and, for Gusto, Homebase, Patriot Software, QuickBooks Payroll, Papaya Global and Deel, re-read on 2026-09-06: Gusto, Patriot Software, OnPay, QuickBooks Payroll, Square Payroll, Wave Payroll, SurePayroll, Zoho Payroll, Homebase, Roll by ADP, Justworks and Deel.

The full dataset, including the source URL and check date for every figure, is published at /data.json under CC BY 4.0. The arithmetic is set out in full on the method page.