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You may already be offering payroll services or considering offering them for the first time. But how should you go about it?
Should you choose a referral partnership with an established brand, or invest in a third-party software and in-house payroll team? And what are the pros and cons of each?
Once you've determined which model intrigues you most, you're likely wondering about the benefits and costs to implement. In this article, we’ll break down the costs of the two partnership options Whirks offers and help you understand which model is the best fit for your business.
Network Partnership
A Network Partnership with Whirks allows you to integrate payroll services directly into your business's service offerings. One of the primary benefits of the Network Partnership option is that you make minimal investment in technology while retaining complete control of your relationship with your clients. You can continue to manage all client interactions, keeping you in full control of the experience your clients receive.
However, this model requires dedicated payroll staff within your organization. These employees will need to be trained to handle payroll-related questions and manage your clients' needs. While you’ll have access to training opportunities from the Whirks team, becoming a Network Partner means committing to having a payroll department within your business.
This partnership can be an ideal fit for CPAs, consultants, or brokers who prefer to maintain control of client relationships and internal processes but lack the technology or tools to do it on their own.
How It Works
In a Network Partnership, you, as the partner, manage the day-to-day interactions, gather data, and maintain full control over how payroll is processed.
You’ll use Whirks’ technology to deliver the service, but all client interactions and management remain in your hands.
Whirks will also manage all ACH transactions, check or direct deposit payments, and filing and paying of all appropriate federal and state payroll taxes.
Pricing Structure
Our Network Partner pricing model scales with your business, allowing you to manage costs effectively as your client base grows.
One-Time Investment
Before you begin managing payroll as a Network Partner, there is a one-time investment of $2,500. This fee covers the initial training provided by Whirks so that you and your team are fully prepared to use the payroll platform, manage client interactions, and handle the technical aspects of payroll processing. It also covers the initial client conversion from your previous payroll system to our system.
Base Cost: Per-Employee and Per-Entity Pricing
The Network Partnership operates with a base fee of $12 per FEIN plus $7.70 per employee, per month (PEPM). For larger employers, the PEPM fee reduces to $5.25 PEPM for each additional employee over 20.
For instance, if you manage payroll for 10 companies, and each company has 10 employees (total of 100 employees), your total cost would be:
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PEPM: $7.70 × 10 = $77 per FEIN x 10 companies = $770
- Entities: $12 × 10 companies = $120
Total Monthly Cost: $890
And now let’s say you manage payroll for 10 companies, but each company has 30 employees (total of 300 employees), your total cost would be:
- First 20 PEPM: $7.70 × 20 = $154 per FEIN x 10 companies = $1,540
- Remaining 10 PEPM: $5.25 x 10 = $52.50 per FEIN x 10 companies = $525
- Entities: $12 × 10 companies = $120
Total Monthly Cost: $2,185
As you can see, this tiered PEPM pricing structure helps reduce costs and offers better margins when working with larger payroll clients.
Minimum Monthly Spend
To ensure ongoing engagement, Network Partners must meet a minimum spend of $2,000 per month, even if your employee and entity counts don’t reach this level. This guarantees a base commitment but may be challenging for smaller firms that haven’t yet scaled up their payroll service.
This means the total annual minimum cost for network partners is $24,000.
Network Partners also have access to all the services offered by Whirks at a discounted rate, allowing you to expand your service offerings without cannibalizing your margins!
For a complete list of add-ons, view our pricing page.
Additional Costs
Post-Implementation Setup
Once you join as a Network Partner, our first project is to begin the process of converting your payroll clients from their current payroll system over to our system. Typically, this process takes less than 90 days. Once complete, we consider the initial conversion complete, and we enter the post-implementation phase of our relationship. This is where any new FEIN added will trigger additional implementation fees. Our implementation fee for new companies added to our services is $8 per employee paid in the current year, with a minimum charge of $100 per company.
For example, if you bring on a new company that has paid 32 employees in the current year, your implementation fee for that company would be $256 ($8 × 32 employees). And if you bring on a new company that has only paid three employees, year to date, your implementation fee for that company would be $100 (minimum fee).
Payroll Filing & Reporting Fees
These are three annual fees that cover all of the year-end work that is completed in January and February.
- $75 per FEIN + $5 per W-2 form issued
- $75 per FEIN + $5 per Form 1099 issued (only billed if opted in to our 1099 services)
- $125 per FEIN + $7.95 per 1095 issued (only billed for companies using our ACA services)
Client Billing
As a Network Partner, you handle all billing for your clients, and Whirks will bill you directly, giving you the freedom to decide how much to charge your clients. You can upcharge for added services, include payroll as part of a broader package, or adjust your fees based on your clients' needs. This gives you the opportunity to tailor pricing to the value you’re delivering. The only exception to this is for our NSF fee, which is billed directly to your client at the time the NSF occurs, and which is detailed in our service agreement
Ideal for Businesses That Want To Grow Their Own Payroll Service
The Network Partnership is perfect for businesses that want to grow their own payroll service while maintaining control over their client relationships. Typically, it’s a good fit for accounting firms or service providers that are not yet large enough to operate payroll independently but still want to manage their clients’ payroll functions directly.
If you've gotten this far and are not interested in hiring payroll staff and working with your client base directly, perhaps you're a better candidate for a Referral Partnership. This is often a good fit for CPAs who have no desire to do payroll in their firm, for franchisors, and for associations who want to offer a dedicated partner to their members.
Referral Partnership: A Hands-Off Approach
The Referral Partnership takes a hands-off approach, allowing you to refer clients to Whirks, who will manage everything from payroll processing to client support. This model involves no direct costs to you and operates through a revenue-sharing agreement.
How It Works
With a Referral Partnership, your involvement is limited to referring clients to Whirks. From there, the Whirks team handles the entire process of onboarding, training, and supporting the complete payroll function for your clients. You do not manage payroll or interact with the clients regarding their payroll needs.
Pricing Structure
No Minimum Spend
One of the main advantages of the Referral Partnership is that there are no minimum spend requirements, which makes this partnership more accessible for firms with smaller client bases.
Your business is not responsible for any direct costs related to client payroll processing.
Revenue Sharing
The Referral Partnership operates on a tiered revenue share model that grows as you grow your client referrals. To start earning revenue, refer at least 100 employees across 10 or more FEINs.
Once you reach this threshold, your revenue share is calculated as follows:
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101–1,000 employees: 8% annual recurring revenue share
- 1,000+ employees: 12% annual recurring revenue share
Maintain your revenue share by bringing in at least one new client per quarter.
This structure allows your firm to earn additional income without managing payroll directly, providing a scalable way to grow revenue as you increase your referrals.
Whirks Bills Clients Directly
In this model, Whirks takes care of all client billing, eliminating any need for you to manage invoices or payments.
Whirks will also maintain the sales process and identify the best services for your client. We provide a form for you to use to submit referrals, or you can simply introduce your client to our team via email. Each of these methods will count towards your referrals.
Referral revenue is shared for the lifetime of your client. So over time, if you consistently refer clients, this can add up to significant revenue!
Ideal Fit for Our Referral Partnership
The Referral Partnership is ideal for businesses that don’t want to manage payroll directly but still want to offer payroll services to their clients.
It’s ideal for companies, such as accounting firms, that recognize their clients’ need for payroll services but don’t want to take on the operational responsibility. It’s also a great fit for franchisors who want to provide a preferred partner for payroll and receive a revenue share for the introduction.
Benefit brokers and HR consultants can leverage this model to offer payroll services without the burden of in-house management, while still generating additional revenue.
Which Partnership Model Is Right for Your Business?
Choosing a partnership model is a significant decision that can shape the future of your business, and it’s one you want to get right. Whether you’re looking for a model that will grow alongside you or prefer a completely hands-off approach, it’s essential to find a partnership that aligns with your goals and one you won’t regret down the line.
What's Included in Each Partnership?
Both partnership models come with access to Whirks’ advanced payroll technology and support, but the level of inclusion depends on your role in the process.
Network Partnership Inclusions:
- Access to the isolved platform for payroll processing.
- Whirkshops and training on payroll management.
- Full support from Whirks’ team for payroll-related issues.
- Flexibility in how you manage client billing and interactions.
- Ongoing training opportunities at Whirks for continual professional development and coaching.
Referral Partnership Inclusions:
- Whirks handles the entire sales process, onboarding, and client management.
- Revenue share for client referrals.
- No responsibility for billing or payroll operations.
- Access to marketing support to help refer clients to Whirks.
- Annual strategy session with the Whirks team for product updates and more.
- Free payroll for your business once you refer 50 employees or more.
Choosing between the Network and Referral Partnership depends on how much control and involvement you want in payroll operations, as well as how your business wants to handle costs.
Choose the Network Partnership if:
- You want to manage your clients’ payroll operations directly.
- You’re looking to grow your payroll service offering with advanced technology.
- You’re comfortable with billing clients and managing their relationships.
- You can meet the minimum spend requirement of $2,000 per month.
Choose the Referral Partnership if:
- You prefer a hands-off approach to payroll.
- You want to refer clients to a trusted payroll provider without handling any operations.
- You want to earn a revenue share without the responsibility of managing payroll or billing.
- You don’t want to meet a minimum spend requirement but are ready to refer clients to qualify for revenue sharing.
Finding Value in the Right Payroll Partnership
Understanding the cost differences and inclusions of being a Whirks Network Partner or Whirks Referral Partner is crucial for deciding which model is best for your business. If you’re looking for more involvement and control over payroll operations, the Network Partnership may be right for you. However, if you prefer a hands-off approach while still benefiting from referring clients, the Referral Partnership offers an ideal solution.
To learn more or discuss which partnership suits your business, schedule a call with Whirks today and let us help you find the right fit.
