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Managed Payroll for Businesses Under 10 Employees
Managed payroll for a business under 10 employees covers the obligations that already apply at any headcount, federal and state withholding, deposits, Form 941 or 944, W-2s, new hire reporting, while none of the 10, 15, 20 or 50 employee laws have tripped yet. BEG runs it for $500 a month at this size, the monthly minimum, all-inclusive, live in 3 to 5 business days.
Under 10 employees is the one size where the law is lighter than people assume. OSHA injury logs are not required, Title VII and the ADA have not attached at the federal level, COBRA has not attached, and a company whose total employment tax liability for the year is $1,000 or less can file Form 944 once a year instead of Form 941 every quarter. What has attached is everything tax-related: every employee, from the first, needs withholding, deposits on the new-employer monthly schedule, and a W-2 in January.
The retirement side favours this size. A 401(k) plan started now qualifies for the startup cost credit, 100 percent of eligible costs up to $5,000 a year for three years at 50 or fewer employees, and SECURE 2.0 does not force automatic enrollment on employers that normally employ 10 or fewer. A qualified small employer health reimbursement arrangement is also available below 50 full-time equivalents, which is the cheapest route to a health benefit at this size.
The honest price note: BEG carries a $500 monthly minimum, and under 10 employees that minimum binds, so the effective rate is above the published per-employee band. The case for a managed service at this size is complexity, not headcount: a second state, a garnishment, tipped or commission pay, or a second EIN.
The line most recently crossed at under 10 employees
| Any size | FLSA minimum wage and overtime. Applies to any enterprise with $500,000 or more in annual sales, or any employee engaged in interstate commerce, which in practice is nearly every employer. Exempt salaried staff must earn at least $684 a week; the 2024 increase was vacated and the 2019 level restored by a May 2026 technical amendment. Regular-rate overtime on every non-exempt employee; a salary test on every exempt one. [DOL, FLSA salary levels] |
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| Any size | Federal employment taxes. Withholding, Social Security and Medicare, FUTA, quarterly Form 941 (or annual Form 944 when annual liability is $1,000 or less), and W-2s. New employers deposit monthly for the first year; the lookback period sets the schedule after that. A deposit calendar that changes as liability grows, and a next-day deposit whenever $100,000 accumulates. [IRS Publication 15] |
Next lines ahead of under 10 employees
| 10+ | Electronic filing of information returns. Ten or more information returns of any type in a year, counted together, must be filed electronically. Ten W-2s alone trip it. Paper W-2 and 1099 filing ends at this line; the e-file setup with the SSA and IRS has to exist before January. [IRS Topic 801] |
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| 11+ | OSHA injury and illness recordkeeping. Employers with 10 or fewer employees at all times during the prior year are exempt from routine OSHA 300 logs. At 11 the exemption ends unless the industry is on the low-hazard list. Headcount is measured across the whole company, so a second location can end the exemption without any one site reaching 11. [OSHA recordkeeping, 29 CFR 1904.1] |
| 15+ | Title VII, ADA, GINA and the Pregnant Workers Fairness Act. Federal discrimination law reaches private employers with 15 or more employees for 20 or more calendar weeks in the current or preceding year. Accommodation and leave decisions start needing documentation; pay data by protected class becomes discoverable. [EEOC, coverage of federal EEO laws] |
| 20+ | ADEA (age discrimination). Applies to private employers with 20 or more employees. Severance and early-retirement paperwork needs ADEA-compliant releases, with the 21-day and 7-day windows. [EEOC, coverage of federal EEO laws] |
| 20+ | COBRA continuation coverage. Group health plans of employers with 20 or more employees on more than 50 percent of typical business days in the prior year must offer continuation coverage. Termination triggers an election notice; below 20 the state mini-COBRA law, if any, governs instead. [DOL, COBRA] |
| 50+ | FMLA. Employers with 50 or more employees in 20 or more workweeks are covered; an employee is eligible after 12 months and 1,250 hours if 50 employees work within 75 miles of their site. Up to 12 weeks of unpaid, job-protected leave with benefits maintained, which means leave tracking and benefit deductions continue while pay stops. [DOL, FMLA] |
| 50+ | ACA employer shared responsibility. An employer with 50 or more full-time plus full-time-equivalent employees on average in the prior year is an applicable large employer. Part-time hours are aggregated at 120 hours a month per FTE. Offer affordable coverage to 95 percent of full-time staff or face a 4980H assessment, and file Forms 1094-C and 1095-C every year from payroll hours data. [IRS, applicable large employer] |
| 100+ | WARN Act. Employers with 100 or more full-time employees must give 60 days written notice of a plant closing or mass layoff. Pay in lieu of notice and final-pay timing on a layoff of 50 or more at one site get planned with counsel, not run as an ordinary termination batch. [DOL, WARN] |
| 100+ | EEO-1 report. Private employers with 100 or more employees, and federal contractors with 50 or more, file the EEO-1 workforce demographic report each year. Job category, sex and race or ethnicity have to sit in the HR record for every employee before the filing window opens. [EEOC, EEO-1 data collection] |
What managed payroll costs at under 10 employees
8 employees at $25 per employee per month comes to $200, which is under the $500 monthly minimum, so the price is $500 a month, an effective $63 per employee. On BEG's isolved HCM at $45 it is $500 a month. Both are all-inclusive: processing, federal and state deposits and filings, new hire reporting, direct deposit, W-2s and 1099s, garnishments, and the threshold-driven filings above. Live in 3 to 5 business days from signing.
Managed Payroll, Handled.
BEG manages payroll at $25-$45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
Does a business under 10 employees have to keep OSHA injury logs?
Not routinely. Employers with 10 or fewer employees at all times during the prior calendar year are exempt from OSHA 300 recordkeeping under 29 CFR 1904.1, though every employer must still report a fatality within 8 hours and an in-patient hospitalisation, amputation or eye loss within 24 hours.
Can a company under 10 employees file Form 944 instead of 941?
Only if the IRS notifies it to, which happens when expected annual employment tax liability is $1,000 or less, generally $5,000 or less in wages per the IRS. Most employers with even a few full-time staff exceed that and stay on quarterly Form 941.
Does SECURE 2.0 automatic enrollment apply to a plan started by a business under 10 employees?
No. IRS Notice 2024-2 confirms the automatic enrollment mandate for plans established after December 29, 2022 does not apply while the employer normally employs 10 or fewer employees, or during the first three years of the business.
Is the $500 monthly minimum a problem at this size?
It is the whole question. At 8 employees the minimum is the price, an effective $63 per employee per month, which is above the published band. It is worth it when the payroll has a complication a self-service tool handles badly, and not worth it for a single-state, all-salaried, all-W-2 payroll.
How is the BEG price calculated at under 10 employees?
8 employees at $25 per employee per month is $200, below the $500 monthly minimum, so the price is $500 a month, an effective $63 per employee. On BEG's isolved HCM at $45 it is $500 a month. Both are all-inclusive.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries. BEG manages payroll at $25-$45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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