Do You Earn Rewards on Payroll Services?
The fee earns, the wages do not
A payroll service has two parts: the fee you pay the provider, and the wages and taxes that go to employees and the government. The fee can usually go on a card and earns your base rate, but wages and payroll taxes are pulled by ACH from your bank account, so those, often the large majority of payroll, earn nothing. This is the same split as many bill-pay services.
How the fee codes
The payroll software fee rings up under a business-services or computer-services category code, outside the usual bonus buckets, so most cards earn the base rate. A business card is the natural home for it, keeping the cost clean for bookkeeping, as with other work tools like software subscriptions.
The best card for payroll fees
Since the fee is small relative to payroll and has no bonus, a strong flat-rate business card earns the most on it. Do not expect to earn on the wages themselves. See options in best cash back cards and value points at a flat 1 cent.
Frequently asked questions
Related reading
