To start a payroll service business you register your company, get an EIN, apply for IRS Reporting Agent authorization, choose payroll software, carry E&O insurance and a fidelity bond, and price per pay run plus per employee. You can launch lean for $2,000–$8,000 because it is laptop work, not inventory. The real business is recurring monthly revenue from small employers who would rather not run payroll themselves — and the trust that you will never miss a tax deposit.
We build websites and lead-capture for service businesses, so the marketing and first-clients part is where we genuinely help. The rest below is the honest setup, including where you do not need us yet.
Register the business and get an EIN
Form an LLC or S-corp for liability protection, get your federal EIN, and open a business bank account. Because you'll move client funds, separate accounts are not optional — they protect you in an audit.
Get IRS Reporting Agent authorization
To file and deposit federal payroll taxes on a client's behalf, apply for Reporting Agent status (Form 8655) or e-file authorization. Register for state withholding and unemployment filing in each state you serve.
Carry insurance and a bond
Errors-and-omissions insurance covers a filing mistake; a fidelity bond covers the funds you handle. Clients will ask. A missed deposit can mean IRS penalties, so this protects both sides.
Choose your payroll platform
Pick a white-label or accountant-partner payroll platform that handles calculations, tax filing, direct deposit, and W-2s. This is your core tool — vet it on multi-state filing and support before you commit clients to it.
Set pricing and get your website live
Decide your base-plus-per-employee pricing, then build a website that explains it and captures inquiries. Searches for "payroll service near me" are where your first clients start. This is the part we build.
Rough numbers for a one-person payroll service launching from home:
On the revenue side, a common model is a base of $20–$50 per pay run plus $4–$10 per employee. Twenty small clients averaging $120/month is $2,400 in recurring revenue — and because it recurs, the business compounds as you add clients without the work scaling one-for-one.
We would rather you spend money in the right order. Hold off on hiring us if:
A website pays off once you're past referrals and competing for "payroll service near me" — and once a single client's annual fee dwarfs the monthly cost.
Once you're ready to grow, our $249/month plan is a trustworthy payroll service website plus AI lead capture that answers "how much for five employees and do you handle tax filing" after hours and books the call. $597/month adds the monthly SEO engine so you rank for "payroll service near me" and "small business payroll." Month-to-month, you own the site and every lead, and there's a free working demo in 48 hours. We run our own cleaning company in Tucson and HVAC company in Sacramento on this same stack.
Related: payroll service software, what payroll services cost, how to start a CPA business, and the start-a-business guides plus accounting business plan.
We don't post stock testimonials. On a 15-minute call we screen-share the real dashboards behind our own businesses — live leads, rankings, and the exact page that produced each one. See the proof →
No single federal license, but you register the business, get an EIN, and apply for IRS Reporting Agent authorization to file and deposit taxes for clients. Some states add registration or bonding rules. Carry E&O and a fidelity bond.
You can launch lean for $2,000 to $8,000 — registration, software, insurance and bond, a website, and basic tools. It's laptop work, so there's little buildout cost.
Referrals from accountants and bookkeepers who don't run payroll, plus local small businesses. A website that ranks for "payroll service near me" turns searches into calls once you're past referrals.
Send your company name and city — we'll confirm your market is open and build a working website demo within 48 hours. Free, no card, no commitment.
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