Managing payroll is a crucial aspect of running any farming or agricultural operation, but it can also be one of the most expensive and time-consuming tasks—especially when you rely on payroll systems that charge per employee. Many farmers and growers are unknowingly overpaying for payroll services that don’t cater to the unique needs of the farming industry. Whether you’re managing a small team of permanent staff or a large crew of seasonal workers, these hidden costs can add up quickly.
In this post, we’ll explore how traditional payroll systems may be costing you more than necessary and highlight practical ways to reduce those expenses. You’ll also discover a farm accounting system designed to help farmers save money while increasing operational efficiency.
The Hidden Costs of Payroll Systems That Charge Per Employee
Most payroll systems are built for generic business models, often charging users based on the number of employees being paid. While this may work for some industries, it doesn’t always make sense for farming. Farmers often see their workforce fluctuate throughout the year—ramping up during planting and harvest seasons and scaling down in off-peak months. For operations with temporary or seasonal workers, payroll systems that charge per employee can drive up costs unnecessarily.
With most payroll systems, every time you add another worker, your payroll processing fees go up. Often those fee increases affect the entire month or year in which the person worked – even if they only worked for a single day. Over time, these fees can put a strain on your budget, especially for large farms or those that frequently hire seasonal workers. What’s more, many of these systems aren’t built to address the specific challenges of managing farm labor, such as tracking costs for individual crops, fields, or tasks.
How Generic Payroll Systems Fall Short
Farmers face unique challenges that many standard payroll systems don’t adequately address. For instance:
- Fluctuating Labor Needs: Farming is seasonal with labor demands rising and falling depending on the time of year. Traditional payroll systems aren’t built to accommodate these fluctuations without increasing fees.
- Cost Tracking for Crops: In farming, payroll isn’t just about paying employees. It’s also about accurately tracking where your labor costs are going, whether it’s tied to specific crops, fields, or growth strategies.
- Cost Tracking for Equipment: Very few payroll systems allow you to track the equipment used by each employee and use that to correctly allocate the indirect costs of operating that equipment to the appropriate fields.
- Flexibility of Pay Types: Many farmers need to pay workers based on a piece rate—such as the number of fruit boxes picked—rather than the hours worked. Unfortunately, not all payroll systems offer this level of flexibility.
These shortcomings can lead to higher expenses, increased administrative workload, and even inefficiencies in how payroll is managed. So, what’s the solution?
A Payroll Solution Built for Farmers
Farmers and growers need a system that not only cuts costs but also addresses the specific needs of their operations. This is where AgStar, an accounting system designed specifically for the farming industry, steps in. AgStar provides a solution that eliminates per-employee payroll charges while offering tools tailored for the unique complexities of farming.
As Jeremiah Gault, a key team member at AgStar, explains, “We don’t charge per employee, so whether you have 50 employees or 500, your payroll costs stay the same.” This simple pricing structure allows farmers to scale their workforce without worrying about rising payroll fees during peak seasons.
But that’s just the beginning. Let’s explore how AgStar’s features go beyond traditional payroll systems to help farmers manage labor costs effectively.
Tailored to Farming: Crop Cost Centers, Equipment Costing, and More
One of AgStar’s most valuable features is its deep integration of payroll with cost tracking. This helps farmers gain better insights into their operational costs.
1. Crop Cost Centers and Tasks
AgStar allows you to break down payroll and operational costs by specific crops and fields, as well as non-crop operations, giving you a clear understanding of where your money is being spent. Whether you’re tracking the labor costs associated with planting, harvesting, irrigation, or maintaining buildings on the property, you’ll have visibility into the financial impact of every task.
According to Gault, “This costing aspect is tightly integrated with AgStar and permeates both the payroll and the general ledger. When you create a timecard for an employee, it captures all the details—like the field they worked on, the task they performed, and the crop they worked with. You can even track the development phase of the crop, such as ground prep, pre-harvest, or harvest.”
2. Equipment Costing
Farmers can also allocate the costs of running machinery, such as tractors and harvesters, associated with each timecard line. This includes both the initial cost of equipment and its ongoing operational expenses, such as fuel and maintenance, allowing for more accurate financial planning.
3. Piece Rate Pay Types
AgStar offers flexible payroll options, including piece rate pay types that allow you to calculate payments based on the number of units (such as fruit boxes or vegetable crates) completed, rather than – or in addition to – hours worked. This feature is especially useful in farming where hand labor is common.
As Andee Zetterbaum, another expert from AgStar, points out, “Piece rate pay is often used for hand labor—like weeding, pruning, or hand harvesting crops. With AgStar, you have the flexibility to handle different payment methods and rates, so you can choose the ones that work best for each situation.”
4. Designed to Match Your Needs
AgStar is designed to scale with your operation, whether you’re a small family farm or a large agricultural enterprise. You can use it in its simplest form—tracking hours and issuing paychecks—or leverage its advanced features, such as automated timecard imports from third-party labor tracking systems.
As Andee Zetterbaum explains, “AgStar can be as simple or as detailed as you want it to be. Some customers use it just to track basic payroll, while others are power users who take advantage of all the advanced costing and reporting features.” This flexibility makes AgStar an ideal choice for any farm looking to better manage labor and reduce payroll costs.
5. Seamless Integration with General Ledger (GL) and Cost Accounting
In addition to payroll, AgStar offers seamless integration with general ledger and cost accounting functions, making it easy for farmers to manage their finances. You can see costs for the payrolls in progress through the Payroll module. As soon as each payroll is completed and posted, the GL accounting and costing records are updated in real time, giving you an accurate picture of your operation’s financial health.
AgStar’s cost centers, mentioned earlier, are also integrated with the general ledger. This allows you to generate detailed reports that break down labor costs by crop, field, equipment, or task—giving you the insights needed to make smarter, more efficient decisions.
As Gault notes, “We have powerful reporting capabilities that allow you to slice payroll data any way you need—by crop, location, task, or employee. It gives farmers a clear view of where their expenses are going and helps them manage their labor costs more effectively.”
A Smarter Way to Manage Payroll for Farmers and Growers
If you’re still using a payroll system that charges per employee, it’s time to reconsider whether you’re overpaying. Farmers and growers need a system built for their unique needs—one that doesn’t inflate costs based on employee numbers and that integrates seamlessly with general accounting and cost tracking.
By switching to AgStar, you can reduce unnecessary payroll expenses while gaining better visibility and control over your labor, equipment, and overall operational costs. With features like crop cost centers, equipment costing, and flexible pay types, AgStar is designed to help your farm run more efficiently and cost-effectively.
As Zetterbaum puts it, “If you want to streamline your payroll, cut unnecessary costs, and better analyze where your labor costs are going, check us out. AgStar’s farming-centered payroll – plus our outstanding customer support – may be exactly what you need!”
