Outsourced Payroll vs. Payroll Software: Solo S-Corp Owners

For most solo S-corp owners, full-service payroll software is the right call. You're running payroll for one person: yourself. One salary, the same quarterly filing cycle every year. You set your salary and pay schedule once; the payroll software platform calculates your withholding, deposits your taxes, files your quarterly and annual returns, and delivers your W-2 at year end.

SurePayroll® By Paychex is built for single-owner S-corps and small teams running exactly this setup.

Full-service software and outsourced payroll cover much of the same payroll tasks and responsibilities. What they don't share is price.

For a one-person S-corp, full-service software is usually the right fit

Cost

Full-service software typically runs $40 to $80 per month, a flat base fee plus a per-employee fee. At one employee, the math is direct. For a detailed breakdown across software options, see how much payroll software costs.

Outsourcing fees for a one-person S-corp typically run $150 to $200 or more per month. The fee typically holds regardless of how often you run payroll: twice a month, twice a quarter, the monthly charge stays the same. At $150 per month, that's $1,800 per year. At $200, it's $2,400.

For a single-employee S-corp, the cost gap between full-service payroll software and outsourced payroll is often around $1,000 per year.

That gap adds up. Over three years at $150 per month, you spend $5,400 on outsourced payroll services. At $60 per month for full-service software, you spend $2,160. The difference isn't in what gets filed. It's in what you pay to have it filed.

Convenience

With payroll software, you can log into the dashboard each time you process payroll to confirm and approve the run. Or, with some payroll software services, you can use auto pay, where you set your salary and pay schedule once. The payroll software platform runs payroll on your schedule. This option works well when your salary is consistent each pay period. You can review any run you choose to review.

SurePayroll Auto Pay is designed for recurring pay scenarios: salaried employees, fixed contractor payments, and S-corp owners paying themselves a reasonable salary.

When your salary changes, you can update it yourself in your payroll software account. At the start of the year, after a strong quarter, when your income picture shifts: you make the change and the software picks it up. No calls to coordinate the update with a provider. No waiting for someone else to process it before your next payroll date.

That also means you're not on anyone else's timeline when you need to make changes. Your pay frequency, your salary, your payment method: you adjust them when you need to, not when a provider can get to them. If your income is uneven, that flexibility matters.

You also have direct access to your own records. Your payroll records — run history, tax payment confirmations, filed forms — are in your account, not filtered through what a provider decides to surface. When your accountant asks for a number at year end, you pull it yourself.

The National Small Business Association's 2024 survey found that 41% of small business owners spend three to ten hours per month on payroll taxes, and another 10% spend more than ten hours. Among small businesses using payroll software, 46% spend less than one hour per month. Full-service software doesn't change what you owe. The numbers reflect a difference in how much time payroll takes.

Coverage

Full-service payroll software covers the same payroll processing that an outsourced provider covers: it calculates your tax withholdings, makes your federal and state tax deposits, sets up direct deposit, files your quarterly Form 941 and annual Form 940, and delivers your W-2 at year end.

Both options cover the same payroll functions. The primary difference is what you pay and how you prefer to manage payroll.

SurePayroll calculates payroll and tax withholdings, makes payroll tax payments, and submits tax filings — so nothing slows you down.

Full-service software calculates and deposits your payroll taxes, files your Form 941 each quarter, and generates your W-2 at year end. You pay $40 to $80 per month.

"[SurePayroll is] great so far; would recommend to solo entrepreneurs like myself!" — Bennie C., Trustpilot review

When outsourced payroll is worth the extra cost for a solo S-corp owner

Outsourced payroll is worth the extra cost in two situations.

You want zero involvement

You don't want a dashboard. You don't want to log in. You want to confirm your salary once and know it's taken care of. If the idea of reviewing a payroll run, even occasionally, is one more task you don't want to carry, outsourced payroll fits that preference. You pay more for that service.

What that looks like in practice: you confirm your salary and pay schedule with your provider. Your payroll runs. You see what the provider reports back. You don't have to check a dashboard, review a run, or look up a form. If you're already managing a full client load, paying more to have someone else manage payroll makes sense.

You're in a broader engagement with your accountant

Your accountant runs your books, handles your taxes, and runs your payroll as part of a larger arrangement. The relationship is working. You're not looking to separate it into pieces. That's a legitimate reason to stay with outsourced payroll, if the price is right.

To check: find out what you're paying for payroll specifically, as a line item separate from bookkeeping and tax prep. Ask your accountant to break out the payroll line. What does payroll cost, not what does the whole engagement cost. If the payroll line, on its own, is more than $80 per month, run the math against a full-service software option. If it's not, and the relationship is working, the premium may be worth keeping.

In a 2023 SurePayroll survey of 500 CPAs and bookkeepers, 79% said they refer small business clients to online payroll software.

For more on what to look for when evaluating an outsourced provider, see outsourced payroll: what to know before you choose.

How full-service software and outsourced payroll compare

Here's how the two options stack up for a one-employee S-corp, side by side.

Filing and deposit obligations are the same either way — that's not what you're choosing between. What separates the two options is cost, how much visibility you have into your own records, and how independently you operate from day to day. With full-service software, you pull your run records, review your payment history, and access your filed documents directly. With outsourced payroll, your visibility depends on what your provider surfaces. For more on software cost, see how much payroll software costs.

SurePayroll runs calculations, deposits, and filings in the background — consistently on your schedule.

Your core federal S-corp payroll obligations don't change. Both options meet them.

As a solo S-corp owner, your core federal filing deadlines are fixed regardless of whether you choose full-service payroll software or outsourced payroll: federal and state payroll tax deposits according to your deposit frequency, a Form 941 each quarter, a Form 940 at the end of the year, and a W-2 delivered by January 31. When a filing deadline falls on a weekend or federal holiday, it generally shifts to the next business day. As an S-corp owner who works in the business, you're also required to pay yourself a reasonable salary before you take distributions. For more on how salary and distributions work together, see W-2 salary and distributions.

Both full-service software and outsourced payroll cover your core federal payroll obligations. Either option calculates your deposits, files your quarterly and annual returns, and delivers your W-2. Nearly 40% of small businesses pay almost $1,000 in payroll tax penalties, according to industry data. The choice is about cost, convenience, and how you want to work.

For the full quarterly filing walkthrough, see S-corp quarterly payroll taxes: what to file and when.

Your next step as a solo S-corp owner

Here's your next step.

Ready to set up full-service software: Check pricing to know what you'll pay for a single-employee S-corp. Then use the step-by-step guide to get through salary setup, pay schedule, and your first run.

→ How to set up S-corp payroll, step by step

Still comparing software options: Full-service platforms differ on price, features, and how they handle your setup — a single employee paying only yourself. See how they compare before you commit.

→ Payroll software for S-corp owners: how to choose

Still weighing outsourced payroll: If the zero-involvement preference or the accountant situation applies to you, here's what to look for in a provider and what to ask before you sign.

→ Outsourced payroll: what to know before you choose

SurePayroll is built for single owner-employee payroll processing: salary processing, tax deposits, and quarterly filings for small S-corps.

Start your setup