Law Firms: How to Calculate Your Payroll Costs (2026)

Managed payroll by headcount for a law firm

10 employees: $450 a month, $5,400 a year; 25 employees: $1,125 a month, $13,500 a year; 50 employees: $2,250 a month, $27,000 a year; 100 employees: $4,500 a month, $54,000 a year. Every row is $45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum, so the per-employee cost is the same at 10 as at 100. Nothing in the law firm setup, billable hours tracking, partner draw vs. salary, attorney bonus structures and IOLTA compliance, is billed as an add-on.

The employer-side tax that rides on every law firm wage

At the May 2025 national median for paralegals and legal assistants, $62,890 a year or about $30 an hour, the employer share of Social Security and Medicare is $4,811 per employee per year and FUTA is $42 after the state credit, before state unemployment at the assigned rate. Those costs are the same whoever runs payroll; the calculator question is only who does the work and who carries the error.

Attorney and staff bonuses are wages subject to Social Security, Medicare, FUTA and income tax withholding. Bonuses paid separately from regular wages are supplemental wages withheld at a flat 22 percent, rising to 37 percent on an employee's supplemental wages above $1 million in a calendar year.

The in-house line in the calculation

BLS OEWS May 2025: payroll and timekeeping clerks, national median $58,260, mean $59,630. Add roughly 30 percent for benefits and employer taxes, about $75,738, before the software that person runs, and set it against the headcount rows above. Managed payroll stays under that loaded figure until about 140 employees.