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Run the Payroll Fee Auditor →Blog · Payroll Management · Retail
Retail Businesses: Payroll Software vs. Managed Payroll Service (2026)
Payroll software gives a retail business the fields; managed payroll gives it someone accountable for filling them correctly, which for retail businesses means high turnover and new-hire volume, multi-location payroll and seasonal overtime spikes configured against the rules cited here rather than left at defaults. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
What software leaves to a retail business to get right
Commissioned employees of a retail or service establishment are exempt from overtime under section 7(i) only when three conditions are met: the employee works for a retail or service establishment, the regular rate exceeds one and one-half times the minimum wage for every hour worked in an overtime week, and more than half of total earnings in a representative period of one month to one year are commissions. If any condition fails, overtime is owed at time and one-half for hours over 40.
A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer must pay a tipped worker a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour, and must make up the difference in any workweek where cash wages plus tips fall below $7.25 per hour.
The honest comparison
Software at roughly $40 to $150 a month plus $5 to $12 per employee handles a single-state, all-W-2, hourly-and-salary payroll well, and the customer owns every configuration decision, every deposit and every notice. Managed payroll at $45 per employee per month, with no monthly minimum, owns the configuration, the deposits, the filings and the corrections. For retail businesses the deciding question is who documents the exemption status of sales associates and cashiers and who rebuilds the pay codes when the rule changes.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Commissioned employees of a retail or service establishment are exempt from overtime under section 7(i) only when three conditions are met: the employee works for a retail or service establishment, the regular rate exceeds one and one-half times the minimum wage for every hour worked in an overtime week, and more than half of total earnings in a representative period of one month to one year are commissions. If any condition fails, overtime is owed at time and one-half for hours over 40. [DOL Fact Sheet #20]
- A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer must pay a tipped worker a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour, and must make up the difference in any workweek where cash wages plus tips fall below $7.25 per hour. [DOL Fact Sheet #15]
Read the full guide to fully managed versus self-service payroll, and the rest of the retail business payroll library.
Managed Payroll, Handled.
BEG manages payroll at $45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
What does payroll software get wrong for retail businesses?
Commissioned employees of a retail or service establishment are exempt from overtime under section 7(i) only when three conditions are met: the employee works for a retail or service establishment, the regular rate exceeds one and one-half times the minimum wage for every hour worked in an overtime week, and more than half of total earnings in a representative period of one month to one year are commissions. If any condition fails, overtime is owed at time and one-half for hours over 40.
When is software the right answer for a retail business?
A single state, all W-2, hourly and salary pay, no high turnover and new-hire volume, and under about 20 employees, where software's lower per-employee cost outweighs what a managed service adds.
What does managed payroll cost for a retail business?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. High turnover and new-hire volume, multi-location payroll and seasonal overtime spikes are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Retail Businesses. BEG manages payroll at $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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