In-house or external payroll? The first big question for companies
When deciding whether to handle payroll accounting in-house or externally, companies often face an important choice. In-house payroll often requires extra staff. Outsourcing to an external provider can be a practical and professional alternative. But with external processing, too, it is worth looking closely at the costs. They can quickly turn into a confusing mix of different fees and flat rates.
Layered cost structures at payroll providers and tax advisors
Many payroll providers and tax advisors offer their services as packages that look cheap at first glance. However, many offers hide numerous extra costs that can put a considerable strain on the budget. Below we show the usual cost items and the price ranges that are common:
- Base price per employee:
The base price for payroll is between €15 and €30 per employee per month.
However, this price only covers basic payroll and no additional services. - Setup fee:
Setting up the payroll system for the first time costs a one-off €100 to €500, depending on the complexity of the company and the data already available. - Registering and deregistering employees:
Every change in the workforce (new hire or deregistration) costs an extra €15 to €30. - Issuing certificates:
Secondary employment certificates, income certificates for the family benefits office (Familienkasse) and other documents are often charged separately at €10 to €20 per certificate. - Annual reports and year-end costs:
Annual reports cost an extra €50 to €150 per year.
Year-end closing costs up to €200 to €500, depending on scope. - Service fees for additional communication:
Providers often charge a communication fee of €30 to €50 per hour or a monthly flat fee if more communication is needed. - Licence fees for software and extra features:
Extra costs for software solutions such as digital personnel files or DATEV integrations range from €5 to €15 per employee per month.
More complex HR tools can cost up to €50 per company per month. - Minimum number of employees:
Many providers require a minimum number of employees. This can exclude smaller companies or burden them with high fixed costs.
Example price comparison
A mid-sized company with 10 employees that needs the following services:
- Monthly payroll per employee: 10 employees * €15 (average) = €150 per month
- Setup fee: One-off €200
- Registering and deregistering employees: An average of 3 changes per year * €20 = €60 per year
- Issuing certificates: 5 certificates per year * €15 = €75 per year
- Annual reports: A one-off €100 per year
- Additional service fees (for communication): 2 hours/month * €40 = €80 per month
- Licence fees for extra features: 10 employees * €10 = €100 per month
Total cost with an external payroll accountant:
- Monthly: €150 (payroll) + €80 (service fees) + €100 (licence fees) = €330
- Annually: €330 * 12 months + €200 (setup) + €60 (registrations/deregistrations) + €75 (certificates) + €100 (annual reports) = €4,395
Costs with cleverlohn:
- 10 employees * €15 per payslip/month = €150 per month
- Annually: €150 * 12 months = €1,800
Result: With cleverlohn's flat €15 pricing, the company saves €2,595 per year, with no extra fees for registrations and deregistrations, certificates or service requests.
The solution: simple and predictable costs with cleverlohn
At cleverlohn, we have set ourselves the goal of building a simple and predictable payroll accounting solution. We offer a flat price of €15 per employee per month. Our price includes all* services: from setup and registering and deregistering employees to issuing certificates and preparing annual reports. Our clients also benefit from a dedicated contact for all payroll questions.
With our transparent pricing, companies always know exactly what costs to expect. This gives them full control over their spending. They never have to worry about sudden extra fees.
Conclusion:
Choosing the right payroll provider is crucial for a company's cost structure. Many providers work with confusing, layered pricing. That makes it important to choose transparent and predictable solutions. With cleverlohn, companies get a reliable partner that makes payroll accounting simple and cost-efficient, with no nasty surprises.
