Payroll for One Employee: 10 Services Compared

If another founder asked me what payroll costs for one employee, I would start with the arithmetic most comparisons skip. They quote a base fee and a per-employee fee, and almost none publish the total for one person. That total is $36 to $57 a month for full-service payroll, and the base fee, not the per-employee charge, drives the entire spread.

The base fee sets the 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. A low per-employee rate can make a provider look cheap at fifty employees and still lose to a lower base fee at a single person.

This page compares ten services at exactly one employee: what each costs, how the ranking shifts at five and ten, and the setup steps in the order they actually have to happen. It covers both kinds of one-person payroll: 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, the two fees add up to $36 to $57 a month for full-service payroll.

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. Patriot's $5 per-worker rate makes it the cheapest full-service option here at ten employees, yet SurePayroll's lower $29 base beats it at one. ADP RUN cannot be placed at all, because ADP publishes no RUN pricing and every figure comes from a quote.

Two different reasons people need this

One person on payroll can mean two different situations: you have hired your first employee, or you are an S-corp owner paying yourself. They come with different requirements, so knowing which one you are in changes what matters.

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 judgment the first does not. An S-corp owner has to decide what salary is defensible, and that decision carries audit exposure. Both are covered below.

10 payroll services at a glance

The table puts all ten services side by side, sorted by total monthly cost at exactly one employee. Every provider shown is a full-service tier that files your federal and state taxes.

The services reviewed

Each review below gives the cost at one employee, the trial terms, who the service fits best, and the pros and cons that matter at that size.

SurePayroll is owned by Paychex and built deliberately for the smallest employers, which is exactly the segment this page is about. Its $29 base fee, the lowest among full-service options, makes it the cheapest at one employee, even though its $7 per-employee rate is the highest among budget providers.

It sells one small business plan, so there is no cheaper self-filing tier. It also maintains a dedicated Nanny and Household plan from $39 a month for families paying a nanny or caregiver, which is a common one-employee situation.

Square has 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 import from the point of sale into payroll without an integration step, and labor-cost reporting includes tips.

Patriot is 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. Its 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 who pays only themselves or a single employee, completing the run in under a minute is a real advantage over configuring a dashboard.

It offers next-day and same-day deposit options, pays W-2 employees and 1099 contractors at the same $5 rate, and runs ADP payroll tax automation behind a simple front end. New customers get three months free, and you cancel inside the app with no notice period.

Gusto is 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 $19 monthly gap against SurePayroll. Gusto also runs a Solo plan aimed specifically at S-corp owners with compliance tooling for that case.

OnPay has the same headline price as Gusto with a different structure: one base plan, with all 50 states included, 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.

QuickBooks is 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 its per-employee fees on July 1, 2026, and now sells the product as QuickBooks Workforce, so older guides quote both a different name (QuickBooks Payroll) 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 states, where Wave filed for you, and self-service states, where you filed yourself. 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 details matter at one employee. Payroll is an add-on at $49 plus $6 per employee paid, and it can sit on the free Basic plan for a single location, so a one-location business pays only the payroll fee. It also pays 1099 contractors and files their forms, so a worker who is not a W-2 employee can run through the same system.

ADP markets a Payroll for One option specifically at S-corp owners and other one-person 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 hard to judge at one employee. ADP publishes no RUN pricing for any package, so the cost of a single person on payroll depends on a quote, and you cannot compare it with the published options here without a sales conversation.

How the ranking changes as you grow

The ranking shifts as you add people, because the per-employee rate weighs more with every hire. That is worth knowing before you commit: 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.

Two reversals stand out. SurePayroll is cheapest at one employee but only tied for second at five, behind Patriot, because each added person costs $7 there, more than at any other budget provider. Patriot goes the other way: third at one employee and cheapest at ten.

In practice, if you expect to stay at one employee, optimize for the base fee. If you expect to pass four employees within eighteen months, the per-employee rate starts to matter and Patriot pulls ahead.

What payroll for 2 employees costs

Payroll for 2 employees runs $43 to $64 a month at full service, which is $5 to $7 more than the same providers charge at one. The second person barely moves the bill, because the base fee is still doing almost all of the work.

These are the nine providers that publish full-service pricing. ADP RUN is left out because ADP does not publish list pricing at all.

The order barely moves at two people. SurePayroll is still cheapest at $43, and Square and Patriot meet at $47, which is where the crossover begins. By five employees Patriot is the cheapest of those three, so if you plan to grow past four people, you are really making the choice at two, not at ten.

How to set up payroll for one employee

Setting up payroll for one employee takes seven steps, and they have to happen in order, starting with a federal Employer Identification Number (EIN). The software is only step six. Choosing a provider first, then discovering you cannot run payroll for three weeks, is a common sequence error.

Step two is what sets the calendar. The federal EIN is free and arrives during the online session through the IRS EIN application, but state withholding and unemployment registrations range from same-day to several weeks depending on the state. 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.

Should you just do it yourself?

You can, and one employee is where it is most tempting, because the fixed cost of software is at its least efficient there. Whether it pays off depends on how you value your time against penalty risk.

Doing it manually saves roughly $432 a year against the cheapest full-service option. The IRS penalty schedule shows what a mistake costs: federal failure-to-deposit penalties are tiered by days late and run from 2 to 15 percent of the deposit amount, plus a separate late-filing penalty. 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

For S-corp owners, one-employee payroll exists to meet a specific requirement. Under IRS guidance on S corporation compensation, a shareholder who performs services for the corporation must receive reasonable compensation as W-2 wages before taking distributions.

Reasonable compensation 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.

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 scrutinizes it.

What reasonable compensation actually means

Reasonable compensation is what you would pay someone else to do your job, assessed on facts and circumstances rather than a fixed percentage. The IRS fact sheet on officer compensation lists factors including training and experience, duties, time devoted to the business, and what comparable businesses pay for similar services.

Widely circulated percentage rules of thumb are not safe harbors that protect you. The downside of setting the salary too low is documented in case law. In Watson, a CPA paid himself $24,000 a year while taking $203,651 in distributions in 2002, and the salary was ruled unreasonable.

In Radtke, an attorney paying himself nothing owed employment taxes on the full distribution amount. Reclassification produces back payroll taxes on both the employer and employee sides, plus interest and penalties.

When you run that arithmetic, remember that one part of the tax has a cap. According to IRS Publication 15, 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.

Payroll software when you are self-employed

If you are a sole proprietor or a single-member LLC with no S-corp election, you do not go on payroll at all. You take draws, and self-employment tax is settled through quarterly estimated payments and Schedule SE rather than through withholding. There is nothing for payroll software to run.

Two things change that. Electing S-corp status turns you into a shareholder-employee who needs real payroll, which is the case covered above. Hiring somebody is the other. Until one of those happens, accounting software and quarterly estimates cover the ground, and a contractor-only plan is the cheaper route if you pay 1099 workers rather than employees.

Which service fits your situation

At one employee the full-service prices sit close together, so your situation decides more than the price does. Start from the row that describes you.

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 is an onboarding and HR platform, not a payroll provider. Payroll runs and payroll tax filing come from the services above, so 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.

This section matters for a first hire rather than for an S-corp owner paying themselves. 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, that paperwork can live in a folder, and most businesses manage exactly that way. Where the folder stops working is a question of count rather than complexity.

The layer we handle is onboarding workflows that put the I-9 and W-4 on the new hire’s first-day task list, e-signature on offer letters, employee records, document management, and training with completion tracking, for US small businesses at a flat $98 a month for up to 10 people or $198 for 11 to 50. At one employee that is more than the situation requires.

If you are reading this because one hire is about to become several, 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 October 2026 rates. SurePayroll is $36; Square $41; Patriot $42; Roll by ADP $44; Wave $46; Gusto, OnPay, and Homebase $55; and QuickBooks $57. Almost all of the cost at one employee is the base fee, since the per-employee charge is only $5 to $7. Patriot's self-filing Basic tier drops to $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 (Social Security and Medicare), state rules, deposits on schedule, quarterly Form 941, annual Form 940, and a W-2 by January 31. It saves roughly $432 a year, but a late deposit carries penalties running from 2 to 15 percent of the amount.

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 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, which saves about $15 a month in exchange for 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 pays off only when the payroll tax it saves exceeds the compliance cost it adds.

What is reasonable compensation for an S-corp owner?

The salary it would take to hire someone else to do your job, judged on facts and circumstances rather than a fixed percentage. The IRS looks at factors such as training, duties, time spent in the business, and what comparable businesses pay. Percentage rules of thumb are not safe harbors, 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 canceling, and check for automatic contract renewal.