🧾 Payrolling / Employer of Record Pricing Calculator
Payrolling (employer of record) is the fastest revenue stream in staffing: the client finds the worker, and you handle payroll, taxes, benefits, workers comp, and compliance for a fee. This calculator, straight from Dee's How To Charge workbook, builds your true hourly cost from the full employer burden, prices your service fee two ways (percentage of pay and flat fee per hour), scales it to monthly and annual revenue, and then stress-tests whether that revenue can support a payroll specialist and a sales rep (W2 or 1099). Run your numbers once free; the $27 one-time unlock keeps every section live forever and includes the Excel workbook.
B · Worker pay and burden
You become the legal employer, so you carry the full burden: payroll taxes, workers comp, liability, and any benefits cost.
Picking a state loads 2025 new-employer planning defaults into the SUTA and workers comp fields.
What you pay the worker per hour.
7.65% standard.
0.6% on the first $7,000 of wages.
Varies by state, enter your rate.
Varies by classification and state.
If applicable based on hours and ACA thresholds.
Your payroll system cost allocated per hour.
C · Your service fee and bill rate
The service fee is your profit for handling payroll, compliance, and risk. Price it two ways and compare.
Payrolling fees typically range from 3% to 15% of pay rate.
Common range: $2.00 to $6.00/hr for standard payrolling.
D · Monthly and annual volume
E · Role 1: payroll specialist (the processor)
The person running your payroll engine: timesheets, taxes, payments, compliance records, worker questions.
Market range: $47,000 to $64,000 nationally. California: $62,000 to $70,000.
Market range: $5 to $15 per new employee added to payroll.
The volume bonus kicks in above this headcount.
Range: $0 to $4.75/hr. Used for the 1099 scenario column. Set to $0 if you process payroll yourself.
E · Role 2: W2 business development rep (the seller)
Market range: $55,000 to $70,000 for mid-level BDR/AE.
The sheet left this blank; the spec's corrected default is $75 (market range $50 to $100 per head).
The accelerator kicks in above this.
Market range: $50 to $100.
E · Role 2B: 1099 sales rep (commission-only)
No base salary, no employer burden. Lower fixed cost for you, higher commission to attract strong reps.
The sheet left this blank; it is treated as $0 unless you enter one.
Higher than W2 because there is no base salary. Market range: $75 to $150.
Same volume assumption as the W2 rep for comparison.
Blank in the workbook: leave empty to match it (standard commission on every head plus the accelerator on all of them), or enter a number for a real threshold.
Higher than the W2 accelerator since there is no base safety net. Market range: $100 to $200.
E · Step 3: commission protection (holdback)
Market recommendation: 30 to 60 days for payrolling contracts.
Market range: 3% to 7% for payrolling-only contracts.
Estimates for planning, not financial advice. Burden rates, fee ranges, and comp figures are the workbook's guidance; your state, your carrier, and your market decide the real ones.
Does this resonate?
The client finds the worker. You build the machine that pays them.
If recurring, low-sourcing revenue like payrolling fits the business you want, the platform can turn it into a real plan: positioning, compliance checklist, and the week-by-week path from first EOR contract to a full book of workers.
Build my launch plan free →Good questions about this math
What is a typical payrolling markup?
The workbook's guidance is a service fee of 3% to 15% of the pay rate, or a flat $2.00 to $6.00 per hour for standard payrolling. Because the client sources the candidate, payrolling fees run far below staffing markups; the calculator shows both models side by side so you can quote whichever nets more at your volume.
How does employer of record pricing work?
As the employer of record you pay the worker, withhold taxes, and carry FICA, FUTA, SUTA, workers comp, liability, and any ACA or benefits cost. The calculator stacks that full burden on the pay rate to get your true hourly cost, then adds your service fee to reach the bill rate the client pays.
Payrolling vs 1099: why not just let the client pay contractors directly?
Clients use payrolling precisely to avoid 1099 misclassification risk: the worker looks, schedules, and reports like an employee, so paying them as a contractor invites tax liability. Your EOR service converts that risk into a W2 relationship you carry, which is the value you charge for.
How many workers do I need before hiring a sales rep or payroll specialist?
The comp plan section builds compensation for a payroll specialist plus a W2 or 1099 sales rep, then divides total monthly comp by your service fee per worker to show the minimum headcount that covers it, with a clear surplus or deficit verdict at your current volume.
Why is payrolling worth doing at such thin per-worker margins?
Because it recurs and it scales: the model shows the fee on every hour, every pay cycle, for as long as each worker stays on assignment, with zero sourcing cost. It is also a gateway service; once you are the employer of record, recruiting, credentialing, and consulting upsells follow.
Do I get the Excel version?
Yes. The $27 unlock includes the standalone Payrolling Pricing workbook (the exact sheet from Dee's How To Charge master, with every formula live) plus the START HERE guide tab, yours to download and keep.
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