⚡ Quick answer DIY payroll costs a small business 4–10 hours a month of owner or admin time plus software, and carries the full penalty risk of every mistake — one missed EMP201 (10% penalty) typically costs more than a month of outsourced payroll. Outsourcing payroll converts that into a fixed fee with the deadlines, calculations and filings carried by the provider. The crossover point is usually lower than owners expect: from your first employee if payroll is not your skill set, and almost certainly by five employees. Every small employer does the same calculation eventually: keep doing payroll myself, or hand it over? The DIY column always looks cheaper…