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Run the Payroll Fee Auditor →Blog · Payroll Management · Tech
Technology & SaaS Companies: Payroll Software vs. Managed Payroll Service (2026)
Payroll software gives a technology company the fields; managed payroll gives it someone accountable for filling them correctly, which for technology companies means equity compensation handling, remote employee multi-state tax and contractor classification 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 technology company to get right
Computer systems analysts, programmers, software engineers, and similarly skilled workers are exempt from minimum wage and overtime under sections 13(a)(1) and 13(a)(17) if they meet the duties test and are paid either on a salary or fee basis at the standard salary level or on an hourly basis at not less than $27.63 an hour.
The computer employee exemption does not cover employees who manufacture or repair computer hardware, or workers such as engineers and drafters whose jobs depend heavily on computers but who are not primarily engaged in systems analysis, programming, or similarly skilled computer work.
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 technology companies the deciding question is who documents the exemption status of software engineers and product managers 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.
- Computer systems analysts, programmers, software engineers, and similarly skilled workers are exempt from minimum wage and overtime under sections 13(a)(1) and 13(a)(17) if they meet the duties test and are paid either on a salary or fee basis at the standard salary level or on an hourly basis at not less than $27.63 an hour. [DOL Fact Sheet #17E]
- The computer employee exemption does not cover employees who manufacture or repair computer hardware, or workers such as engineers and drafters whose jobs depend heavily on computers but who are not primarily engaged in systems analysis, programming, or similarly skilled computer work. [DOL Fact Sheet #17E]
Read the full guide to fully managed versus self-service payroll, and the rest of the technology company 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 technology companies?
Computer systems analysts, programmers, software engineers, and similarly skilled workers are exempt from minimum wage and overtime under sections 13(a)(1) and 13(a)(17) if they meet the duties test and are paid either on a salary or fee basis at the standard salary level or on an hourly basis at not less than $27.63 an hour.
When is software the right answer for a technology company?
A single state, all W-2, hourly and salary pay, no equity compensation handling, 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 technology company?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Equity compensation handling, remote employee multi-state tax and contractor classification 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 Technology & SaaS Companies. 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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