How outsourced payroll pricing is calculated
Payroll outsourcing does not have one standard price because two employers with the same number of employees can require very different levels of work. A payroll with fixed monthly salaries is simpler than one involving shifts, hourly wages, overtime, commissions, multiple branches, bargaining-council rules or frequent employee changes.
A professional quote should therefore explain the fee structure, the work included and the events that create additional charges. The lowest price is not always the lowest total cost if statutory submissions, corrections or year-end reconciliations are excluded.
The usual payroll pricing structure
Monthly base fee
Covers the administration required to maintain the payroll, manage the processing cycle, communicate with the employer and produce standard reports.
Per-employee fee
Calculated using the number of active employees or payslips processed during the payroll period.
Compliance services
EMP201, EMP501, IRP5/IT3(a), UIF or COIDA-related work may be included in the package or quoted separately.
Once-off setup
May apply when employee records, payroll rules, opening balances and year-to-date information must be loaded and checked.
Additional payroll runs
Weekly, fortnightly, bonus, correction, termination or off-cycle payrolls can create additional processing fees.
Optional reporting
Custom cost-centre, branch, job-costing, leave, variance or management reports may fall outside the standard package.
What affects the monthly payroll cost?
Number of employees: More employees generally mean more payslips, records, changes and queries.
Pay frequency: A weekly payroll requires more processing cycles than a monthly payroll, even with the same headcount.
Salary structure: Fixed salaries are simpler than variable hours, overtime, commissions, incentives and allowances.
Workforce movement: Frequent starters, terminations, unpaid leave and banking changes increase administration.
Branches and cost centres: Separate reports, approvals or payment files add complexity.
Industry requirements: Bargaining-council rules, shifts, Sunday work or sector-specific deductions may require additional setup and review.
Quality of source information: Complete, approved inputs reduce processing time; inconsistent spreadsheets and missing records require follow-up and correction.
Compliance scope: The fee changes depending on whether the provider only calculates payroll or also assists with employer declarations and reconciliations.
What should a standard payroll package include?
Processing of the agreed weekly, fortnightly or monthly payroll cycle.
Calculation of gross remuneration, authorised deductions and net pay.
PAYE, UIF and SDL calculations based on the approved payroll information.
Electronic payslips and a final payroll register.
Payroll summary and statutory control totals.
New employee setup and routine employee changes within the agreed limits.
Standard reports and an audit trail of payroll changes.
A defined cut-off, review and approval process.
Services that may be charged separately
Providers structure packages differently. Ask whether the following items are included before comparing prices:
Initial payroll setup, historical-data loading and opening-balance verification.
EMP201 preparation or submission and monthly SARS payment schedules.
Interim and annual EMP501 reconciliations and IRP5/IT3(a) certificates.
UIF declarations, employee UI19 forms and termination documents.
COIDA Return of Earnings schedules.
Leave administration, time-and-attendance imports or manual timesheet capture.
Corrections after the employer has approved the final payroll.
Off-cycle, bonus, back-pay and termination runs.
Custom reports, bank files or integration with accounting software.
Assistance with SARS queries, verifications or historical payroll corrections.
Example of how a quote is built
Illustrative pricing formula—not an Orion Moon tariff:
Monthly base fee + employee or payslip fee × number of employees + additional payroll cycles + selected compliance services + any once-off setup work.
For example, a 10-person monthly payroll with fixed salaries and one approval contact will usually require less work than a 10-person weekly payroll with overtime, shifts, commissions and multiple locations.
Information needed for an accurate payroll quote
Number of active employees and expected growth.
Whether employees are salaried, hourly paid or paid by shift.
Weekly, fortnightly or monthly pay frequency.
Typical overtime, allowances, commissions, benefits and deductions.
Number of branches, departments, cost centres and approval contacts.
Existing payroll software and whether year-to-date balances must be transferred.
Required services: payslips only, full payroll, EMP201, EMP501, UIF, COIDA, leave or reporting.
Any bargaining-council, union or industry-specific payroll requirements.
How to compare payroll quotations properly
Compare the full annual cost, including setup and reconciliation fees—not only the monthly amount.
Confirm whether pricing is per active employee, per payslip or per payroll run.
Check how starters, terminations and correction runs are charged.
Confirm who submits declarations and who remains responsible for approving and paying them.
Ask what support is provided when SARS values do not reconcile.
Review confidentiality, access control, backups and POPIA-related handling of employee information.
Confirm response times, payroll cut-offs and what happens when information is submitted late.
Outsourced payroll versus doing it internally
When comparing costs, include more than software. An internal payroll also requires staff time, training, leave cover, review controls, system maintenance and time spent correcting errors or reconciling SARS submissions. Outsourcing can offer predictable processing support and access to specialist knowledge, while the employer retains responsibility for lawful instructions, accurate input and final approval.
How Orion Moon prepares a payroll proposal
We first review your headcount, pay cycle, employee types, payroll variables, current systems and compliance needs. The proposal then sets out the monthly scope, included reports, submission responsibilities, cut-off dates, approval process, once-off setup and any items priced separately. This gives you a clear view of the service before the first payroll is processed.
Frequently asked questions
Is payroll outsourcing priced per employee or per payslip?
Either method may be used. The quote should state whether the fee is based on active employees, payslips produced or payroll runs completed.
Why is there often a setup fee?
Setup involves loading and checking employee information, payroll rules, deductions, leave balances and year-to-date statutory values. This work is essential when changing providers during a tax year.
Will the price change when employee numbers change?
Usually, if the service contains a per-employee component. The proposal should explain how starters, terminations and seasonal employees affect the invoice.
Are EMP501 reconciliations included in the monthly fee?
Not always. Confirm whether interim and annual reconciliations, tax certificates and correction submissions are included or charged separately.
Orion Moon provides tailored quotations after reviewing the actual payroll requirements. This page explains common pricing structures and does not publish or promise a fixed tariff.
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