# Guide to HR Software Pricing Models | Capterra > Check out this HR software pricing guide for an overview of how much human resources software costs. Source: https://www.capterra.com/resources/guide-to-hr-software-pricing-models --- HR BasicsHuman Resources # Guide to HR Software Pricing Models Written by: Preksha Buttan Preksha ButtanAuthor Writer Experience I am a writer at Capterra, where I've been providing expert insights to help small businesses find the right software solutions since Janua... [See bio & all articles](https://www.capterra.com/resources/author/pbuttan/) and edited by: Caroline Rousseau Caroline RousseauEditor Senior Content Editor Experience As a senior content editor, and formerly as a content analyst, at Capterra, I have been crafting, writing, and refining rese... [See bio & all articles](https://www.capterra.com/resources/author/caroline-rousseau/) Published July 17, 2024 8 min read Table of Contents - [How is HR software priced?](#how-is-hr-software-priced) - [What are the costs associated with HR software?](#what-are-the-upfront-and-recurring-costs-associated-with-hr-software) - [What are the additional fees associated with HR software?](#what-are-the-additional-fees-associated-with-hr-software) - [How to find the right HR software price range](#how-to-find-the-right-hr-software-price-range) - [Common questions to ask when choosing HR software](#common-questions-to-ask-when-choosing-hr-software) Can you, as a human resources manager, imagine storing all the employee data (performance reviews, salary details, contracts, etc.) on your computer? It would be nearly impossible for you to quickly access these records and maintain their up-to-date versions. Luckily, you can invest in [human resources (HR) software](https://www.capterra.com/human-resource-software/) to efficiently store and manage these employee records. However this investment should be thought out because HR software vendors offer multiple pricing options. These pricing plans include different sets of features and a careful analysis helps you pick the right one for your needs. With that in mind, we’ve compiled this comprehensive pricing guide to help you compare the common HR software pricing models. This guide explains how much HR software costs, and will help you determine which pricing plan will provide the most value for your investment. ## How is HR software priced? The cost of human resources software depends on several factors. This includes the number of users, features and functionalities, deployment method, customization, integration, support and training, storage, and business size. ### Types of HR software pricing models The subscription model is the most common pricing approach for an HR software solution. In this model, users make monthly or yearly payments to the software provider, instead of one-time payments.  Other HR software pricing models include: - **Freemium:** Core features are free, with premium features available at a cost - **Per user:** Pricing is based on the number of software users. - **One-time fee:** A single upfront cost for a lifetime license. - **Pay-as-you-go:** Charges are based on actual usage rather than a flat fee (monthly/annually) Some software providers also offer custom pricing plans based on the specific needs of a user. Human resources solutions typically include three different pricing plans based on the number of users:  - **Entry-level (1-10 users):** Starting at $361 per month, the basic plan includes limited HR features and functionality, such as employee database, payroll management, and document management. This plan can be a good option for small business HR managers handling a limited number of employees. - **Mid-tier (11-20 users):** Costing on average $1,244 per month, the mid-tier plan often includes more advanced features and capabilities, such as performance management, talent management, and benefits administration. This plan is suitable for those HR managers who have outgrown basic HR solutions but don’t require the full range of functionality offered by enterprise-level tools. - **High-end (21+ users):** Costs over $2,181 per month and offers a range of advanced capabilities, including unlimited access to entry-level and mid-tier features, priority customer support, compensation management, advanced reporting, and compliance management. This plan is suitable for HRs that need a customized solution. For reference, below is a snapshot of the costs of some popular human resources software solutions. A note on core features HR software helps manage various human resource functions, such as employee records, payroll, recruitment, and performance management. It enhances efficiency, accuracy, and compliance in HR processes, making it easier for businesses to handle their workforce operations. The core or basic functionalities include employee database, HR management, and reporting and analytics. ## What are the upfront and recurring costs associated with HR software? The initial expenses for an HR software solution, called upfront costs, include a one-time license, customization, installation, and integration. These cover the setup and tailoring of the software to fit specific needs. Recurring costs, such as subscription fees, premium support, and maintenance, are ongoing expenses. These costs, billed monthly or yearly, may also include upgrades and additional user licenses as the organization grows. This ensures continued access, regular updates, and enhanced customer support. Let's look at the upfront and recurring costs of HR software pricing models in detail before making a decision. ### Subscription license - **What it is:** You pay a monthly or yearly fee to use the solution for a specific period. Usually, the pricing is based on the number of users each month. There are also pay-as-you-go options with no contracts, allowing you to stop anytime. - **Commonly used for:** Cloud-based deployments, where the system is hosted by vendors on their servers and can be accessed on compatible devices over the internet, such as laptops, smartphones and tablets. - **Upfront costs:** Installation, setup, and customization of the software. - **Recurring costs:** A monthly or annual subscription fee per user and access to premium support offerings (e.g., 24/7 phone support hours and quick ticket response time). - **Hidden costs:** Customization, implementation of unique company branding, and integration with existing software (such as [payroll](https://www.capterra.com/payroll-software/), [performance management](https://www.capterra.com/performance-appraisal-software/), and [collaboration tools](https://www.capterra.com/collaboration-software/)). ### Perpetual license - **What it is:** One-time fee for a permanent license to use the HR solution. The fee for the perpetual license can vary based on the number of users. - **Commonly used for:** On-premise deployments, where the system is hosted and maintained in-house on your own servers. - **Upfront costs:** One-time license fee, hardware (for example, servers) cost, and installation charges. - **Recurring costs:** Monthly, annual, or ad hoc maintenance (for example, updates, patches, and upgrades). Recurring costs may include premium support offerings (for example, extended phone support hours). - **Hidden costs:** Customization, integration, and IT staff overtime (or hiring more IT staff) to maintain servers. ### Free plans - **What it is:** Basic HR software is free to use, allowing you to conduct basic tasks without having to incur any expense. - **Commonly used by:** Small business HR managers with limited budgets and resources. - **Upfront costs:** Installation or setup costs. - **Recurring costs:** There are no recurring costs. You can use it freely, typically with limited features. - **Hidden costs:** Implementation, customization, maintenance, integration with existing tech stack, training, and premium support options. ## What are the additional fees associated with HR software? There can be additional fees associated with an HR system that you may incur during implementation. These fees can increase your total cost of ownership. Since these costs are common across different HR software vendors and pricing models, it is important to budget for them in advance. - **Data migration:**  Data migration involves transferring existing employee data from old systems to the new software. This process can be time-consuming and requires specialized expertise, resulting in extra expenses. Costs may include hiring experts, data mapping, validation, and ensuring data integrity. Proper planning and budgeting for data migration are crucial to avoid unexpected financial impacts during software implementation. - **Training:** Training involves educating staff on how to effectively use the new system. Expenses can include hiring trainers, developing training materials, and dedicating time for HR employees to learn the software. Some vendors offer free resources such as webinars and videos, but comprehensive, in-depth training sessions may incur significant costs. Proper budgeting for training ensures smooth adoption and efficient use of the software. - **Hardware and IT:** Hardware and IT costs include upgrading or purchasing servers to host the software, updating employee computers or mobile devices to meet technical requirements, and possibly hiring IT staff to manage and maintain the new system. Proper budgeting for these upgrades ensures the software runs efficiently and integrates seamlessly with your existing infrastructure. - **Maintenance and upgrades:** These expenses cover regular system updates, bug fixes, and enhancements to keep the software running smoothly and securely. Upgrades may also include new features or improved functionalities. These ongoing costs ensure the software remains current and effective, supporting your business needs over time. Proper budgeting for maintenance and upgrades helps avoid unexpected disruptions and keeps the system optimized. ## How to find the right HR software price range - **Assess your business needs.** Assessing your business needs when evaluating HR system prices ensures you choose a solution that fits your specific requirements. This helps you avoid overspending on unnecessary features and ensures you get the essential tools needed to manage your HR processes effectively. Based on your needs, you might consider basic plans for essential features, mid-tier plans for added functionalities such as performance management, or high-end plans for comprehensive tools, including advanced analytics and integrations. This careful assessment maximizes value and enhances operational efficiency. - **Consider business growth plans.** Considering business growth plans helps you select an HR scalable solution. This helps you avoid the need for frequent upgrades or replacements as your business expands, saving time and money in the long run. Selecting a scalable solution ensures that the software can accommodate additional users, increased data, and more complex processes. Planning for growth allows you to invest in a tool that will support your evolving business needs effectively. - **Evaluate your budget and pricing commitments.** Evaluating your budget before making a decision ensures the tool you pick aligns with your financial constraints and long-term plans. This helps you avoid overspending and ensures that you can sustain the costs over time. Assessing both the initial investment and ongoing expenses, such as subscription fees and maintenance, allows you to choose a solution that fits within your budget. Careful financial planning ensures you can fully leverage the software's benefits without straining your resources. ## Common questions to ask when choosing HR software Does the vendor provide training resources? Training resources help your team effectively use the tool. Knowing what training options are available, such as webinars, tutorials, or on-site training, helps you plan for a smooth implementation. Comprehensive training reduces the learning curve, minimizes disruptions, and maximizes the software's benefits. Proper training resources ensure your staff can utilize all features efficiently, leading to better overall performance and productivity. Are there any hidden costs? Enquiring about any hidden charges in advance helps avoid unexpected expenses that can strain your budget. Hidden costs might include fees for additional users, advanced features, integrations, maintenance, or support. Knowing these potential charges upfront helps you accurately compare pricing plans and manage your budget effectively. Transparency about all costs ensures you make an informed decision and prevents financial surprises down the line. Are there any long-term commitments? Knowing about the long-term commitment, such as software requiring a multi-year contract or penalties for early termination, helps you assess financial risks and plan accordingly. This information ensures you are not locked into a solution that might not meet future needs, allowing for better strategic planning and budgeting for your business. ## Find the best HR software packages Do the HR tools listed in this guide fall within your software budget? If yes, compare their features and read real user reviews of more than 1,000 similar products listed on our [HR software category page](https://www.capterra.com/human-resource-software/). * * * Looking for Human Resources software?Check out Capterra's list of the [best Human Resources software](https://www.capterra.com/human-resource-software/) solutions. ### Was this article helpful? * * * ## About the Authors [### Preksha Buttan](https://www.capterra.com/resources/author/pbuttan/) Preksha Buttan is a writer at Capterra. She provides insights to help small businesses identify the right software for their needs by analyzing more than 550,000 Capterra user reviews and nearly 48,000 interactions between Capterra software advisors and buyers. [### Caroline Rousseau](https://www.capterra.com/resources/author/caroline-rousseau/) After three years of building surveys, analyzing data, and writing her own research, Caroline has been a senior content editor since 2022. Her previous experience as an analyst converged into a skill set that allows her to help her peers develop and produce compelling content about today’s business matters. ### RELATED READING - [LMS Pricing Models Explained: Hidden Costs, Plans, And Comparisons](https://www.capterra.com/resources/lms-pricing-models-guide/) - [Payroll Pricing Explained: Flat-Rate vs Per-Employee Models](https://www.capterra.com/resources/payroll-pricing-models-guide/) - [Personalizing Recruiting and Onboarding With the Right HR Tools](https://www.capterra.com/resources/how-hr-software-personalizes-recruiting-onboarding/) - [AI vs. HR Software Reviews: What SMBs Should Consider When Selecting HR Tools](https://www.capterra.com/resources/ai-vs-hr-software-reviews/) - [7 Top-Rated AI Applicant Tracking Software](https://www.capterra.com/resources/ai-applicant-tracking-software/) - [Employee Retention Strategy: Practical Steps and Resources for SMB HR Teams](https://www.capterra.com/resources/employee-retention-strategies-smbs/) - [Build Your SMB's HR Tech Stack to Address Growth, Skills, and Retention Challenges](https://www.capterra.com/resources/build-your-smbs-hr-tech-stack/) - [How To Set Up Payroll for a Small Business](https://www.capterra.com/resources/steps-to-setting-up-your-small-business-payroll/) - [5 Key Recruitment Software Features With Top Products That Offer Them](https://www.capterra.com/resources/recruiting-software-key-features/) The products in this guide qualified for the most recent [Shortlist for HR software](https://www.capterra.com/human-resource-software/) and were highly rated by users. Only products with publicly available pricing information were included in this table. We summarized publicly available pricing sources, including vendor websites as of April 2024, beginning with the lowest monthly pricing (not including annual discounts) for packages that include the core functionality for a software category. We list pricing for more advanced packages (per user, when available) that include the core software feature(s). Your company’s needs may differ, and final pricing may vary. _NOTE: This article is intended to inform our readers about business-related concerns in the U.S. It is in no way intended to provide financial advice or to endorse a specific course of action. For advice on your specific situation, consult your accountant or financial consultant._