For years, Sage 300’s PR has required an annual tax table subscription. Since the invoice goes straight from Sage to the customer, I don’t know the pricing unless a client mentions it to us. It seems like it is somewhere around $695.
Last week, we got an email from Sage telling us that this was about to change. From now on, the annual fee for payroll support (which included payroll tax tables) will be more for users that process more employees. For 1-15 employees, the annual fee will change to $1,000, and it rises from there to 501+ employees. The email we received said that Sage customers (users) will get the notice in November.
That is the way ADP, PayChex, and a number of other Payroll software companies handle it, after all. I guess I’m just sensitive because smaller clients in our area have been piqued at the $695 cost. I still remember the calls I got when Sage took out the feature in the DOS software that allowed us to change the payroll tax tables ourselves. But I also know that we and Sage got more calls because of messed up tax tables than we could shake a stick at.
Back to the change…I think there are several things driving this change:
- Fifteen years ago, many of our small business clients with 50 or so employees processed their own payroll. Some of them did it on spreadsheets, so updating to computer software was a big improvement. Most of our clients wanted Payroll in their systems. Today, I have to think to count the number of clients who are actually processing their own payroll. And we have several that have payroll software but don’t use it.
- The number of regulations and reports even a small company has to keep up with today are multiplying: E-verify, W-4, I-9, new employee reports, employee separation notices, worker’s compensation, AHA, COBRA, state insurance laws, unemployment, etc. Outsourcing payroll just to get someone else to watch out for these things and take care of them has been on the rise for several years. Even companies with 1000+ employees are outsourcing pieces of this puzzle.
- Both of these items put together mean that there are more features an average piece of payroll software has to have, but there are fewer companies to spread the cost across. Voila: price increase.
After all, that’s really what it is, isn’t it Sage?