You guys might want to change the verbiage, I thought it said per employee but you're right it says per employer. Still seems weird to say 25 per employer per month, especially when that seems to be the standard fee structure for most other services - http://wavepayroll.com/pricing/

Is there some type of IRS cost associated with providing deposits that changes the cost from $5 to $25?

In the US there are many agencies you have to deal with and a lot of paperwork that must be filed. Unlike Canada where you tax based on the work-location and pay everything to the federal government, the US has all sorts of fun rules that mean you could be remitting taxes to multiple state/county/local agencies. And each agency has a different level of technology savvy so you could be faxing/mailing forms to get a particular tax paid.

So calculating gross->net scales nicely, but paying the fed/state/county/local agencies doesn't. And aside from the actual costs of providing the service, it's a tremendous value to the employer. Even at low hourly wages that $25 pays for itself.