Payroll for One Employee: 10 Services Compared
What payroll costs for exactly one employee, from $36 a month. Compare 10 services, plus how to set up payroll for your first hire or an S-corp salary.
Payroll for One Employee
What ten services actually cost when you have exactly one person on payroll, whether that person is your first hire or yourself, plus the setup steps nobody lists in order
Every payroll comparison quotes a base fee and a per-employee fee and leaves you to do the arithmetic. At one employee that arithmetic produces a specific and useful number that almost nobody publishes: the monthly cost ranges from $36 to $57 for full-service payroll, and the entire spread is driven by the base fee rather than the per-employee charge.
That is the defining economics of one-employee payroll. When the per-employee fee is $5 to $7 and the base is $29 to $50, roughly 81 to 89 percent of your bill is the base. The provider that looks cheap at fifty employees because of a low per-employee rate is often the expensive one at a single person.
This page gives the total cost at exactly one employee for ten services, the same figures at five and ten so you can see how the ranking shifts, and the setup sequence in the order it actually has to happen. It covers both reasons people land here: hiring a first employee, and putting yourself on payroll as an S-corp owner.
What payroll actually costs at exactly one employee
Almost every provider prices as a monthly base plus a per-employee fee. At one employee that structure produces a result worth understanding before comparing anything else.
| Provider | Base fee | Per employee | Total at one | Base as share of bill |
|---|---|---|---|---|
| SurePayroll | $29 | $7 | $36 | 81% |
| Square | $35 | $6 | $41 | 85% |
| Patriot Full Service | $37 | $5 | $42 | 88% |
| Roll by ADP | $39 | $5 | $44 | 89% |
| Wave | $40 | $6 | $46 | 87% |
| Gusto Simple | $49 | $6 | $55 | 89% |
| OnPay | $49 | $6 | $55 | 89% |
| QuickBooks | $50 | $6.50 | $56.50 | 88% |
The last column is the point. At one employee you are almost entirely buying a base subscription, so the per-employee rate that dominates comparisons written for larger teams is close to irrelevant here.
That inverts some familiar rankings. ADP RUN has one of the lowest per-employee rates in the industry at an estimated $4, which makes it competitive at fifty employees and roughly the most expensive option at one, because its base is estimated near $79.
Two different reasons people need this
The phrase one employee covers two situations with different requirements, and knowing which one you are in changes what matters.
| Dimension | Hiring your first employee | Paying yourself as an S-corp owner |
|---|---|---|
| Who is on payroll | Someone you hired | You, as a shareholder-employee |
| Why payroll is needed | Legal requirement for W-2 wages | IRS reasonable compensation requirement |
| Paperwork burden | I-9, W-4, offer letter, new hire report | W-4 and payroll setup only |
| What decides the salary | The market and your budget | Reasonable compensation standard |
| Frequency flexibility | Constrained by state pay frequency law | More flexible, often quarterly |
| Main risk | Misclassification and late filings | Salary set too low, reclassification |
The first case brings paperwork the second does not: an I-9 completed within three business days of the start date, a signed offer letter, a new hire report to the state, and somewhere durable to keep all of it.
The second case brings a tax judgement the first does not. An S-corp owner has to decide what salary is defensible, and that decision carries audit exposure the first situation does not. Both are covered below.
10 payroll services at a glance
Sorted by total monthly cost at exactly one employee. Every provider shown is a full-service tier that files your federal and state taxes.
| Provider | Base + per employee | Total at 1 | Tax filing | 1099 support | Benefits | Trial |
|---|---|---|---|---|---|---|
| SurePayroll | $29 + $7 | $36 | 1 month | |||
| Square | $35 + $6 | $41 | Free trial | |||
| Patriot | $37 + $5 | $42 | 30 days | |||
| Roll by ADP | $39 + $5 | $44 | 3 months | |||
| Homebase | $39 + $6 | $45 | 14 days | |||
| Wave | $40 + $6 | $46 | 30 days | |||
| QuickBooks | $50 + $6.50 | $56.50 | 30 days | |||
| OnPay | $49 + $6 | $55 | 1 month | |||
| Gusto | $49 + $6 | $55 | Until 1st run | |||
| ADP RUN | Quote | ~$83 | 3 months |
The services reviewed
Owned by Paychex and built deliberately for the smallest employers, which is exactly the segment this page is about. The lowest base fee among full-service options at $29 makes it the cheapest at one employee even though its $7 per-employee rate is the highest among budget providers.
It also offers a No Tax Filing tier at $20 plus $4, and maintains a dedicated household employer product for families paying a nanny or caregiver, which is a common one-employee situation.
The second lowest base fee at $35, and billing follows people actually paid in a given month rather than people on file. For a business that pays its single employee irregularly, that structure costs less than a flat monthly charge.
The argument sharpens considerably if you already run Square: timecards flow from the point of sale into payroll without an integration step, and tips are handled automatically.
Third cheapest at one employee and the cheapest of any provider here at ten, which makes it the choice if you expect the headcount to grow. Full Service is $37 plus $5; Basic at $17 plus $4 leaves the tax filing to you.
Patriot also sells its own accounting product, and the base fee is charged in months with no payroll while the per-worker fee is not, which suits an owner taking salary on an irregular schedule.
ADP built Roll as a chat interface: you type that you want to run payroll and it asks what it needs. For a solo owner paying themselves or a single employee, completing the run in under a minute is a genuine advantage over configuring a dashboard.
It covers all 50 states with unlimited runs, next-day and same-day deposit options, and the ADP tax engine behind a simple front end. Three months free is the longest promotional trial here.
More expensive at one employee than the budget options, and the difference buys the strongest onboarding tooling in the category: offer letters, electronic signature, document collection, and I-9 and W-4 handling built into the hiring flow rather than left to you.
For someone hiring a first employee rather than paying themselves, that matters more than the $13 monthly gap against SurePayroll. Gusto also runs a Solo plan aimed specifically at S-corp owners with compliance tooling for that case.
Same headline price as Gusto with a different structure: one plan, every feature, all 50 states included with no surcharge and no tier to be upgraded into. For a business whose next hire could be anywhere, that removes the most common billing surprise in payroll.
Year-end W-2 and 1099 filing sits in the base price, and OnPay handles agricultural, clergy, and tipped payroll without a specialist tier, which covers several common single-employee situations.
The most expensive published option at one employee, and the reason to choose it is narrow and real: payroll entries reach the general ledger without an export step if your accounting already lives in QuickBooks Online.
Intuit raised prices in 2026 and renamed the product to QuickBooks Workforce, so older guides quote both a different name and a lower figure. If you do not use QuickBooks accounting, there is little here the cheaper options do not do.
Wave's accounting product is genuinely free, which is the whole argument for its payroll. For a one-employee business wanting books and payroll from one vendor at the lowest combined cost, the pairing is difficult to beat.
Since April 2025 a single US tier covers automatic tax filing in all 50 states, replacing the older split between service and self-service states. Support is chat and email only.
Homebase is scheduling and time tracking with payroll attached, which suits a business where the daily problem is shifts rather than tax filing. Hours flow into payroll with no reconciliation.
Two constraints matter at one employee. Payroll is an add-on requiring a paid Homebase subscription underneath, so the true cost is higher than the figure shown. And it does not support 1099 contractors, which rules it out if your one worker is not a W-2 employee.
ADP markets RUN for One specifically at S-corp owners and solo businesses, and the compliance engine behind it is the deepest in the category. For an owner in a jurisdiction with local taxes or unusual filing requirements, that depth has value.
The economics are poor at one employee. ADP's low per-employee rate is what makes it competitive at scale, and at a single person you pay a high base for a rate advantage you cannot use. Pricing is quote-only, so you cannot compare it without a sales conversation.
How the ranking changes as you grow
Worth knowing before you commit, because a one-employee business frequently becomes a three or five employee business, and switching payroll mid-year is more painful than choosing well the first time.
| Provider | 1 employee | 5 employees | 10 employees | Notes |
|---|---|---|---|---|
| Patriot Basic | $21 | $37 | $57 | You file the taxes yourself |
| SurePayroll | $36 | $64 | $99 | Cheapest full-service at one |
| Square | $41 | $65 | $95 | Billed per person actually paid |
| Patriot Full Service | $42 | $62 | $87 | Cheapest of the three at ten |
| Roll by ADP | $44 | $64 | $89 | Chat interface, three months free |
| Wave | $46 | $70 | $100 | Pairs with free Wave accounting |
| OnPay | $55 | $79 | $109 | All 50 states included |
| Gusto Simple | $55 | $79 | $109 | Single state only on this tier |
| QuickBooks | $56.50 | $82 | $115 | Posts straight into QuickBooks Online |
Two reversals stand out. SurePayroll is cheapest at one employee and third cheapest at five, because its $7 per-employee rate is the highest among the budget providers. Patriot goes the other way: third at one employee and cheapest at ten.
The practical implication is that if you genuinely expect to stay at one employee, optimise for the base fee. If you expect three or more within eighteen months, the per-employee rate starts to matter and Patriot pulls ahead.
How to set up payroll for one employee
Seven steps in the order they have to happen. The software is the sixth of these, which is why choosing a provider first and then discovering you cannot run payroll for three weeks is a common sequence error.
| Step | What it involves | Typical time |
|---|---|---|
| 1. Federal EIN | Apply through the IRS website, free | Immediate online |
| 2. State tax accounts | Withholding and unemployment, usually separate | Same day to several weeks |
| 3. Confirm classification | Employee or independent contractor | A judgement, not a filing |
| 4. Collect documents | W-4, I-9 within three business days, state forms | Depends on the employee |
| 5. Set pay frequency | Must satisfy your state's frequency law | A decision |
| 6. Choose and configure payroll | Enter accounts, bank details, employee data | Hours |
| 7. Run payroll and report | First run plus new hire report, often within 20 days | Same week |
Step two is what sets the calendar. The federal EIN arrives during the online session, but state withholding and unemployment registrations range from same-day to several weeks depending on the state, and they are usually two separate applications with two separate agencies.
A practical planning figure: allow three to four weeks between deciding to hire and the first pay date. Our guide to running payroll covers the mechanics of the first cycle in more detail.
Should you just do it yourself?
A legitimate question at one employee, where the fixed cost of software is at its least efficient. The honest answer depends on how you value your time against penalty risk.
| Approach | Monthly cost | What you handle | Annual saving vs full service |
|---|---|---|---|
| Fully manual | $0 | Calculations, deposits, all filings | About $432 |
| Self-filing software | $21 to $24 | Deposits and filings only | About $150 to $180 |
| Full service | $36 to $57 | Approving the run | Baseline |
Doing it manually saves roughly $432 a year against the cheapest full-service option. Against that, federal failure-to-deposit penalties are tiered by days late and run from 2 percent up to 15 percent of the deposit amount, with a separate late-filing penalty on top. A single missed deposit on a modest payroll can exceed the annual saving.
The self-filing middle option makes sense in one specific case: you already have a bookkeeper or CPA filing your returns, and the software exists to hand them clean numbers. Outside that, the $15 monthly gap between self-filing and full service is thin against the administrative work it buys back.
If the one employee is you: S-corp salary rules
The largest single group searching for one-employee payroll is S-corp owners, and the requirement they are meeting is worth stating precisely.
An S-corp shareholder who performs services for the corporation must receive reasonable compensation as W-2 wages before taking distributions. This is a requirement rather than a planning option, and it is why an owner with no other staff still needs functioning payroll with withholding, deposits, quarterly Form 941 filings, and a year-end W-2.
| Payment type | Subject to payroll tax | How it is reported |
|---|---|---|
| W-2 salary | Yes, 15.3 percent split between employer and employee | Form W-2, quarterly Form 941 |
| Distributions | No | Schedule K-1 |
| Sole proprietor draw | Yes, full self-employment tax on net profit | Schedule C and Schedule SE |
The tax advantage sits in the gap between the first two rows: only the salary carries the 15.3 percent payroll tax, so distributions above a reasonable salary avoid it. That is the entire reason the structure attracts owners, and the entire reason the IRS scrutinises it.
What reasonable compensation actually means
What you would pay someone else to do your job, assessed on facts and circumstances rather than a fixed percentage. The IRS weighs your duties, hours, experience, comparable pay in your industry and region, and what the business can support. Widely circulated percentage rules of thumb are not safe harbours.
The downside of setting it too low is documented in case law. In Watson, a CPA paying himself $24,000 while taking over $200,000 in distributions had the salary ruled unreasonable. In Radtke, an attorney paying himself nothing owed employment taxes on the full distribution amount. Reclassification produces back payroll taxes on both sides plus interest and penalties.
For 2026, the Social Security portion of payroll tax applies to wages up to $184,500, with Medicare applying to all wages without a cap.
Which service fits your situation
| If this is you | Start with | Because |
|---|---|---|
| One employee, staying at one, cheapest option | SurePayroll | $36 a month is the lowest full-service cost |
| Expecting to add employees within a year | Patriot Full Service | Third at one employee and cheapest at ten |
| Already running Square point of sale | Square Payroll | Timecards and tips flow in with no integration |
| Hiring your first W-2 employee | Gusto | Onboarding, offer letters, and e-signature built in |
| Next hire could be in another state | OnPay | All states included with no tier upgrade |
| Books already in QuickBooks Online | QuickBooks Payroll | Posts to the ledger with no export step |
| Want payroll done from a phone in a minute | Roll by ADP | Chat interface with three months free |
| Want free accounting alongside | Wave | Free books plus paid payroll from one vendor |
| One hourly worker, scheduling is the pain | Homebase | Scheduling first, though payroll is an add-on |
| Your accountant already files your returns | Patriot Basic at $21 | Self-filing tier hands them clean numbers |
The last row routes away from full service deliberately. If someone competent is already handling your filings, the $15 monthly gap buys you very little, and the self-filing tier is the honest recommendation.
Before you choose
FirstHR does not process payroll or file payroll taxes. Every service above does something we do not, and if paying one person correctly is the problem in front of you, one of them is the answer and this page is the honest version of that recommendation.
The reason this section exists is specific to a first hire rather than to an S-corp owner. Payroll handles the paycheck and the filings. It generally does not handle the offer letter and getting it signed, the I-9 completed within three business days, the W-4 filed somewhere you can find it, or the record of what a person agreed to and when. With one employee those can live in a folder, and most businesses manage exactly that way.
Where it stops working is a question of count rather than complexity. The layer we handle is onboarding workflows, e-signature on offer letters and I-9s, employee records, document management, and training with completion tracking, for US teams of 5 to 50 at a flat $98 to $198 per month. At one employee that is more than the situation requires. If you are reading this because the first hire is about to become the fifth, it is worth knowing where the paperwork stops fitting in a folder.
Frequently Asked Questions
How much does payroll for one employee cost?
Between $36 and $57 a month for full service at July 2026 rates. SurePayroll is $36, Square $41, Patriot $42, Roll by ADP $44, Wave $46, and Gusto and OnPay both $55. Almost all of the cost at one employee is the base fee, since the per-employee charge is only $5 to $7. Self-filing tiers drop to about $21.
Can I run payroll myself for one employee?
Legally yes, and for one salaried employee in one state it is manageable: Publication 15 withholding tables, FICA, state rules, deposits on schedule, quarterly Form 941, annual Form 940, and a W-2 by January 31. It saves roughly $432 a year against penalty exposure running from 2 to 15 percent of a late deposit.
Do I need payroll if I am an S-corp owner paying myself?
Yes, if you perform services for the corporation. The IRS requires reasonable W-2 compensation before distributions, which means real payroll with withholding, deposits, quarterly filings, and a year-end W-2. Courts have repeatedly reclassified distributions as wages where owners paid themselves nothing or an implausibly small salary.
What is the cheapest payroll service for one employee?
SurePayroll Full Service at $36 a month is the cheapest full-service option at exactly one employee, followed by Square at $41 and Patriot at $42. If you file your own returns, Patriot Basic is $21 and SurePayroll No Tax Filing is $24, saving about $15 a month against real administrative work.
How do I set up payroll for one employee?
Get a federal EIN, register for state withholding and unemployment accounts, confirm the worker is an employee rather than a contractor, collect a W-4 and an I-9 within three business days, set a compliant pay frequency, configure a payroll service, then run payroll and file the new hire report. Allow three to four weeks, mostly for state registrations.
Do I need an EIN to run payroll for one employee?
Yes, including a single-member LLC or an S-corp with only its owner on payroll. Apply free through the IRS website, which issues the number immediately during the session. Avoid third-party sites charging for it. You also need separate state withholding and unemployment account numbers where the employee works.
Is it better to pay myself a salary or take an owner draw?
It depends on structure. A sole proprietor takes draws and pays self-employment tax on all net profit. An S-corp shareholder working in the business must take reasonable W-2 salary, and only that portion carries payroll tax while distributions do not. S-corp election typically starts paying off above roughly $50,000 to $60,000 in net profit.
What is reasonable compensation for an S-corp owner?
What you would pay someone else to do your job, assessed on facts and circumstances rather than a fixed percentage. The IRS weighs duties, hours, experience, comparable industry pay, and what the business can support. Percentage rules of thumb are not safe harbours, and documenting how you reached the figure matters as much as the figure.
What payroll taxes do I owe for one employee?
Federal income tax withholding, Social Security at 6.2 percent up to the $184,500 wage base for 2026, Medicare at 1.45 percent uncapped, a matching employer 7.65 percent, plus federal and state unemployment tax and state or local income tax withholding. Filings are Form 941 quarterly, Form 940 annually, and a W-2 by January 31.
Do I need HR software if I only have one employee?
Usually not. Payroll handles the paycheck and filings; the offer letter, I-9, W-4, and records can live in a folder at one employee. The calculus changes when you cannot readily answer what a given person signed and when, which for most businesses arrives between the third and tenth hire rather than the first.
How long does it take to set up payroll for one employee?
Software configuration takes hours; state registrations set the real timeline. The federal EIN is immediate online, while state withholding and unemployment accounts range from same-day to several weeks. Collecting a signed I-9 and W-4 adds its own dependency. Allow three to four weeks before your intended first pay date.
Can I switch payroll providers with only one employee?
Yes, and it is easier with one employee than with twenty. The critical item is year-to-date wages, taxes, and deductions so the W-2 reconciles in January. Quarter boundaries are cleanest and January 1 cleanest of all. Confirm in writing who issues the W-2 before cancelling, and check for automatic contract renewal.