What does a payroll bureau need in place before it runs payroll for clients?
Summary
An IRS role first, then software that fits it. A payroll service provider or reporting agent files a separate return under each client's EIN and the client stays liable, while a Section 3504 agent files one aggregate return under its own EIN and shares the liability. Gusto, QuickBooks, and Patriot all run accountant programs with one login across clients and a choice of billing the firm or the client, but their discounts are built differently enough that the saving per client moves with headcount.
The IRS role decides who files and who is liable
- Payroll service provider (PSP): prepares a separate return for each client using the client's EIN. The client remains liable for timely filing and deposits.
- Reporting agent, authorized on Form 8655: a company, not an individual. It signs and generally files electronically a separate return for each client under the client's EIN, and can make deposits, including through EFTPS, and receive copies of IRS notices. The client still carries the liability.
- Section 3504 agent, appointed on Form 2678: files one aggregate return for all clients under the agent's EIN. The IRS chart makes the client and the agent both liable.
- Certified PEO (CPEO): also files in aggregate under its own EIN and is generally solely liable for the customer's employment taxes.
The IRS puts the first two bluntly: "These types of third party payers do not assume any of the employer's employment tax liability."
For reporting agents, Publication 1474 sets the order of steps. The first Reporting Agent's List and the clients' Forms 8655 go in before or with the application to join IRS e-file, federal tax deposits go through EFTPS or the Federal Tax Application, and returns are filed electronically except where Rev. Proc. 2012-32 allows otherwise. The IRS says it will validate the list. None of the IRS pages or Publication 1474 say how long that takes.
Accountant programs from the payroll vendors
| Program | Price to the firm | Billing choices |
|---|---|---|
| Gusto Pro | Free to join. The firm's own Gusto Plus is free if it onboards at least one client a year | Client billed with up to 20% revenue share to the firm; client billed with a partner discount; or firm billed, with the firm setting the client's rate |
| QuickBooks for ProAdvisors | Workforce Payroll $35 + $5.95 per employee (public price $50 + $7). Workforce Elite $93.80 + $14.45 (public $134 + $17) | Firm billing keeps the discount for the life of the client's subscription; client billing gets it for the first 12 months; 30% revenue share; split billing |
| Patriot Software | 5% off at 1 to 5 clients, 10% at 6 to 20, 15% at 21 to 50, 20% at 51 to 99, 30% at 100 or more | Consolidated billing to the firm at reduced rates, so the firm invoices clients at its own fees |
Patriot also offers free co-branding (the firm's logo inside Patriot) and makes the firm's own accounting and payroll software free once it has six active clients. Nothing on its page describes a full white label. Payroll Relief from AccountantsWorld and isolved's network partner program, both aimed at bureaus, publish no prices.
Where the QuickBooks discount actually lands
Only the base fee drops by 30%. The per-employee fee goes from $7 to $5.95, a 15% cut, so the effective discount shrinks as the client grows:
- 3 employees: $71 public, $52.85 through the firm, about 26% off.
- 10 employees: $120 public, $94.50 through the firm, about 21% off.
- 25 employees: $225 public, $183.75 through the firm, about 18% off.
A firm billing twenty 10-employee clients itself pays $510 a month less than those clients would pay at public prices, or $6,120 a year.
Sources
- https://www.irs.gov/businesses/small-businesses-self-employed/third-party-arrangement-chart
- https://www.irs.gov/government-entities/third-party-payer-arrangements-payroll-service-providers-and-reporting-agents
- https://www.irs.gov/businesses/small-businesses-self-employed/reporting-agents-file-raf
- https://www.irs.gov/forms-pubs/about-form-8655
- https://www.irs.gov/pub/irs-pdf/p1474.pdf
- https://www.irs.gov/forms-pubs/about-form-2678
- https://gusto.com/partners/accountants
- https://quickbooks.intuit.com/accountants/products-solutions/payroll/
- https://quickbooks.intuit.com/payroll/pricing/
- https://www.patriotsoftware.com/accountants/
- https://www.accountantsworld.com/payroll-relief/
- https://www.isolvedhcm.com/partner/network
Related on this site
- If you outsource payroll, what is still your responsibility?
- Does a full-service payroll plan really take every payroll tax task off your hands?
- Which payroll records do you have to keep, and what do you do when a filed Form 941 turns out to be wrong?
Written by Kaz, independent publisher. No commercial relationship with the companies named unless it is listed on the disclosure page.
Published September 27, 2026. The figures above come from the government and vendor pages listed under Sources.
I have not used these products. Nothing here is a personal test result.
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