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I have just started my bookkeeping business and finding it very hard to work out a price for payroll services.
The sort of clients I am taking on need a complete payroll service as they are typicaly less than 10 employees or just started taking on employees.
I see on teh interenet that people are charging £2-3 per payslip. However this price surely can not cover all the queries ect I am likely to get from the employer ect. For these small business should I charge a higer rate for each payslip (Say £5) to cover the cost of queries ect. What does everyone else do when it come to small business payroll?
Many Thanks
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I don't offer payroll so this is really off the top of my head. Why not do a stepped method so for up to 2 employees it's £15, for up to 5 it's £25 for up to 10 it's £35 and anything over that is £1-2 per employee?
Or you could say £2 per employee with a minimum charge of £10.
Kris
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In my experience payroll is hugely competitive and there isn't an awful lot of money to be made in offering the service. I, pretty much, offer payroll as a courtesy to clients.
Believe it or not, I think £2-3 a payslips is on the expensive side, especially when you get to 10 employeed. I know a local company who charges less than £1 a payslip for 10 employees.
I agree with Kris that offering a banded fee is the way to try to go.
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- Member PM.Dip
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Hi. I charge all my clients by the hr for both bookkeeping & payroll. The time taken to do payroll can vary greatly. If you are just producing the payslips from hrs provided by your clients it will be much quicker than if you have to calculate hrs from timesheets. All my payroll clients pay weekly by the hr but I can understand the sense of charging per slip if all staff were salaried & paid monthly.
Hope this helps.
Lol
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- Fellow PM.Dip
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Hi Aaron
At the business where I work part-time our accountants do our payroll for £1 per employee per week (5 employees). But one of my clients is charged £2.65 per employee per month for 4 employees. So for me, in this area, I would pitch my fees somewhere in between. But what you can safely charge all depends what is charged locally to you. Perhaps you have to go in with a moderate fee with the option to increase it next year?
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Is there really any money in payroll? It seems from this thread so many people are chasing tiny amounts of money.
Kris
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I know some accountants who charge an absolute fortune for payroll, but I don't think they get much business.
Without exception, all of my payroll clients are also bookkeeping clients and so I either charge them per hour or a set fee. To give you an idea, one company has three employees, all salaried, so it takes about 5-7 minutes a week to process the payroll, email the payslips and then once a month advise the amount to be paid to HMRC. There was the initial set up, probably 15 minutes, and there will of course be the end of year, with the possibility of P45s and new starters if anyone leaves. But I charge the client £5 per week and will then charge £20 for the end of year.
I have another client who has about 10-15 part time employees working at any time and they submit timesheets from which the payroll is done. Obviously this takes quite a bit more time so although I charge a fixed fee, I charged it according to how long it takes.
I have a couple of other clients who use Clearbooks and since this has integrated payroll, it's very quick to do (the clients also hapen to be one man band companies with one director earning just below tax/NI threshold). Although there is a fee per payslip (I believe it's £1 to normal users or 50p to accountanting partners), I end up charging about £5 for payroll per month. So it's a good earner but only for a few minutes work and I don't imagine ever getting to the point of having enough payroll work charged at this rate for it to be a big part of my income.
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- Fellow PM.Dip
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There's not much in it, however every little bit helps, and it's another service to offer, and from small acorns grow big oaks (she says hopefully!)
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- Member PM.Dip
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kjmccullochsaid:
“Is there really any money in payroll? It seems from this thread so many people are chasing tiny amounts of money.
Kris ”
Probably not - but if someone is looking for a bookkeeper and for their payroll to be done then they are more likely to go to a bookkeeper offering payroll.
I had considered a pricing scheme of £1.50 per employee for weekly paid and £2.50 per employee per monthly.
There would then be a percentage discount based on the number of employees (5, 10, 20).
There would be a minimum charge per payroll run.
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Many thanks to everyone for your input. It has been very helpfull.
Many Thanks
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- Member PM.Dip
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I charge from £6 - £12 per payslip and I really do not have any problem with clients. I do just monthly payroll. When I was cheaper I spent hours working for small money and in the evening I didn't have any mood to talk to my children. Now I have good portfolio of clients and time to live.
Edited at 07 Dec 2011 05:05 PM GMT
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- Member PM.Dip
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I have been doing bookkeeping work for an accountant for some years and he contracted out his payroll work for which he just paid an hourly rate.
I recently I have taken over his payroll work on a monthly basis. I have always included my payroll services in the hours charged to my bookkeeping clients. I don't really know what charging strategy to use. If I continue to charge by time- there isn't much in it as I only charge him £14.00 ph.
Any ideas please??
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- Fellow PM.Dip
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I do the payroll for a number of clients, most of which I already do the bookkeeping for so the payroll is just a supplementary service. PAyslips are charged (based on local comparison of rates) of £1.65 per week to £2.50 per month. However anything other than production of payslips is charged at my usual hourly rate.
I have another payroll client, taken on recently, for whom everything is charged at hourly rate as I am on his premises and the production of the payslips depends on a huge amount of work on Sageline 100 beforehand.
So I don't think you can dictate one rate for all, you have to see what suits the client and yourself each time.
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Hi everyone,
I find payroll to be more profitable than the bookkeeping considering the small amount of time it takes to process.
I don't believe in emailing payslips and my clients like the personal touch of actually receiving the payslips in the envelopes.
I also set up a standing order for payroll so I know I am getting paid on time every month.
Don't forget the opportunities for payroll when the RTI starts for real next year. I am getting clients now because they are panicking about doing it in real time. I have been taking part in a pilot for this and it is the best idea HMRC have come up with for a long long time! Even more opportunity to increase the fee for doing payroll.
Bring it on I say!
Marilyn
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- Member PM.Dip
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Thanks everyone. It's difficult but I will have a word with him and see what we can agree. The problem is that he also has to pass the charge on to his client so my fee can't be too high.
As you say Marilyn, I also post out payslips and stamps alone are not cheap! You didn't say what you charge?
Ruth
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Hi Ruth,
My charges for payroll vary according to client and other work I do for them.
I would say allowing for stationery and postage an average of £2.50 per employee per payslip for weekly is the net figure I receive.
Although having said that I have clients who just have monthly wages and for example the ones with 4 or less employees I have a minimum charge of £22.50 per month.
I don't charge extra for year-end or any in-year P45 starters or leavers.
I will be looking to increase the fees when RTI comes on board and pensions etc but will deal with that when the time comes.
Hope this helps you.
Up to now I have never had a problem with the fees I charge for payroll as clients are only too pleased not to have to deal with it personally. I also don't have any problem doing weekly payroll - probably because I do it all from my home office.
Marilyn
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Hi
My charges are straight forward and easy for clients to understand and pay (upfront or monthly S/order)
£10 set up charge per new employee - Online and QuickBooks (I normally discount this - it depends on employee turnover)
£360 per year (all inclusive) for weekly payroll up to 10 employees
£240 per year (all inclusive) for monthly payroll up to 10 employees
If I do the bookkeeping for the client, I will discount if they ask. Normally they are happy for a good, timely and efficient service. The potential for RTI is enormous.
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- Companion Member PM.Dip
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Hi
I took the payroll exams earlier this year with a view to expanding as existing clients wanted me to do the payroll. I had been using the HMRC software which was OK but after doing the summit Nov'11 I was inspired by Moneysoft Payroll Manager and it's brilliant.
I am actually a pilot for the RTI trial and the software copes admirably - I only have simple companies so far to try it on.
I agree with the others - I just charge my usual rate and include it as part of the normal charges - most of the time it's not much but it's more of a reminder service to make sure that the CIS and HMRC returns are done on time. Hassling clients to give you necessary info.
I am hoping to get more payroll work but I need to work out a marketing or advertising strategy locally. I follow a local businesswoman on twitter and I am hoping that exposure with help.
Any suggestions welcome.
thanks
Kirsty
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