How Payroll Tools Charge a Base Fee Plus Per Person

Payroll is almost never sold per seat. It is sold as two numbers added together.

A fixed base fee arrives whether you pay one person or forty. On top of it sits a charge for each person actually paid that month.

That shape matters most to the smallest teams, because the base fee is spread across very few heads. This note gathers what five vendors publish on their own pages, read on October 23, 2026.

The seat-based alternative is covered in how per-user pricing works with contractors.

Four shapes, and the smallest teams pay for the difference

Every page read here uses one of four structures. Read which one you are being quoted before comparing any two figures.

• Base fee plus per person: a fixed monthly charge and a per-head charge added to it.
• Per person only: no base fee, a higher rate per worker.
• Per location: the subscription is priced by site rather than by headcount.
• Bundled small-team rate: a flat price up to a stated number of people, then the two-part tariff.

Square publishes the cleanest version of the two-part fee

Square Payroll's pricing page states the structure in one line. Full-service payroll is listed at a "$35/mo" base fee plus "$6 monthly fee per person paid", checked October 23, 2026.

The contractor-only option drops the base fee entirely. The page lists it at "$6/mo per person paid" with no monthly subscription attached.

That gap is the whole lesson of this article. Paying five contractors is $30 a month. Paying five employees is $35 plus $30, or $65.

Editorial arithmetic on the full-service rate: one employee costs $41 a month, or $41 a head. Five cost $65, or $13 a head. Twenty-five cost $185, or $7.40 a head.

The per-head cost falls by more than five times across that range without the published rate changing at all. That is a fixed cost, not a discount.

Homebase charges per location for the app and per person for payroll

Homebase splits its pricing across two different units, which is worth seeing because the mistake it invites is common.

The scheduling and time-tracking plans are priced per site. Its page lists Basic at "$0 / location / month for 1 location, up to 10 employees", Essentials at "$30 / location / month unlimited employees", Plus at "$70" and All-in-One at "$120".

Headcount is unlimited on the paid tiers, so a 40-person single-site restaurant pays the same as a 12-person one. A two-site business on Essentials pays $60.

Payroll is then a separate add-on with its own two-part fee: "$49/month base fee + $6/month per employee paid".

The page also lists a small-team rate of "$29 per month for teams up to 5", which is the bundled shape rather than the two-part one.

Editorial arithmetic: five employees on the add-on rate is $49 plus $30, or $79. The same five on the bundled rate is $29. The bundle is worth finding.

Pricing a subscription by location rather than by person creates the same floor effect described in what a minimum seat count does to small team pricing.

Four separate vendors landed on $6 per person

The per-head figure is remarkably consistent across the pages we read, while the base fee is where vendors differentiate.

Square lists $35 a month plus $6 per person paid. Homebase lists $49 plus $6 per employee paid.

Xero's US pricing page lists Xero Payroll, powered by Gusto, at "$36 a month + $6 per employee/contractor". FreshBooks lists its payroll add-on at "$40/mo plus $6/mo per user".

Four vendors, four base fees between $35 and $49, and the same $6 per head on all of them, checked October 23, 2026.

Wave is the outlier in presentation: its page lists payroll "from $25/month" without a per-person figure beside it on the page we read.

The practical reading is that the base fee is the only number to compare between these four, and it spans a $14 range. On a three-person payroll that is $168 a year.

Deel removes the base fee and raises the rate per worker

Deel prices the other way: no base platform fee on the page we read, and a much higher charge per worker.

Its pricing page lists contractor management at "$49 per contractor per month" for self-classified contractors, and Contractor of Record at "$325 per contractor of record per month".

Employee hiring is listed at "$125 per US PEO employee per month" and "$599 per EOR employee per month". A talent-sourcing product is listed as starting at "$14 per worker per month".

The page states "You only pay for the services you use - no hidden fees" and shows no separate platform subscription for those products.

Editorial arithmetic against the domestic option: five contractors cost $245 a month at Deel's $49 rate, against $30 on Square's contractor-only rate. These are not the same product, but they appear on the same shortlist.

The difference is compliance work and international coverage, not payroll runs. Read the scope before the rate, the same way you would read the unit in per seat, per contact or per credit.

What a base fee does to a three-person payroll

Editorial arithmetic across the four published two-part tariffs, for three employees paid monthly.

• Square: $35 plus $18, or $53 a month, which is $17.67 a head.
• Xero Payroll: $36 plus $18, or $54 a month, which is $18 a head.
• FreshBooks Payroll: $40 plus $18, or $58 a month, which is $19.33 a head.
• Homebase add-on: $49 plus $18, or $67 a month, which is $22.33 a head.
• Homebase small-team rate: $29 a month flat, which is $9.67 a head.

At three people the base fee is between 60 and 73 percent of the bill on those four tariffs. At twenty-five people it falls to between 16 and 25 percent.

So a small employer should shop on base fee and a growing one on the per-head rate. The published prices do not tell you which you are until you run the sum.

What we could not read, and why it is not in the table

Three well-known payroll pages are missing from this note because we could not read their figures at source.

Gusto's pricing page returned HTTP 403 to our fetch on October 23, 2026, and a Cloudflare bot verification page to a headless browser on the same URL. OnPay returned HTTP 403 by both methods.

Patriot Software's payroll pricing page returned the same Cloudflare verification screen. We have no figures for those three and are not going to supply any from memory or from search result snippets.

The Xero figure above is for Xero Payroll powered by Gusto, read on Xero's own page, and should not be read as Gusto's direct pricing.

What to check before you buy payroll

• Separate the base fee from the per-person fee and write both down before comparing vendors.
• Count the people who will actually be paid each month, not the people on the org chart.
• Ask whether contractors are charged at the employee rate or a cheaper contractor-only rate.
• Look for a bundled small-team rate, which can undercut the two-part tariff below five people.
• Check whether the subscription unit is the person, the location or the company.
• Check how many months of pay records stay accessible if you move, since payroll records have retention rules.

That last point is the one to settle at signup rather than at migration; see what happens to your data after you cancel. Trialling on a free tier where one exists is the method in free trial or free plan.

Bottom line

The per-person fee has converged. Square, Homebase, Xero and FreshBooks all publish $6 per person paid, checked October 23, 2026.

The base fee has not: $35 at Square, $36 at Xero, $40 at FreshBooks and $49 at Homebase. On a small payroll that single number decides the ranking.

Deel takes the opposite approach with no base fee and $49 per contractor or $599 per EOR employee, for a different scope of work. Compare the structure first, then the rate, the way how help desks price seats and AI resolutions separates seats from consumption.

Frequently asked questions

How much does payroll software cost per month?

On the pages read here, a base fee of $35 to $49 plus $6 per person paid. Square lists $35 plus $6, Xero Payroll $36 plus $6, FreshBooks $40 plus $6 and Homebase $49 plus $6, checked October 23, 2026.

Why is payroll expensive for a very small team?

Because the base fee does not shrink. On Square's published rates one employee costs $41 a month and twenty-five cost $185, which is $41 a head against $7.40 a head by our arithmetic.

Is paying contractors cheaper than paying employees?

On Square's page, yes: contractor-only payroll is listed at $6 per person paid with no base fee, against $35 plus $6 for full-service payroll. Five contractors are $30 a month against $65 for five employees.

Does Homebase charge per employee or per location?

Both, for different products. Its scheduling plans are priced per location at $0, $30, $70 and $120 a month with unlimited employees. Its payroll add-on is $49 a month plus $6 per employee paid.

Why is Deel so much more expensive per worker?

Its page prices a different scope: $49 per self-classified contractor, $325 per contractor of record, $125 per US PEO employee and $599 per EOR employee per month. Those cover classification and employer-of-record liability, not just pay runs.

Are Gusto's prices included in this comparison?

No. Gusto's pricing page returned HTTP 403 to our fetch and a Cloudflare bot check to a headless browser on October 23, 2026, so we could not read its figures at source and did not estimate them.