The term “small business” (also known as the micro business) refers to a company in which capital and responsibilities are confined. This is in contrast to a large corporation, where duties and responsibilities are spread across various departments. Typically, the number of employees is smaller for a small business than it is for a larger one.
Small business is an incorporated organization or a place of business that employs fewer than 50 people. A small business can also be defined as an enterprise that usually operates with a limited budget, is constrained in the employment of persons, and is often an owner-operated business. In-house payroll software is a software application that automates the payroll process for a company.
In-house payroll software helps small business owners make timely and accurate payments to their employees and financial institutions, as well as manage administrative tasks such as employee attendance tracking, time off requests, etc. With the help of the right software, it is easy for you to run your business from day to day without spending excessive time on monotonous tasks.
TYPES OF PAYROLL SYSTEM
In-House:
In-house payroll processing is a viable option if you have a small staff, typically fewer than 10 employees, with few changes in weekly work hours. If your needs are straightforward, an on-site employee can use payroll software to manage the process and be readily available to answer questions and deal quickly with any problems. The employee responsible for payroll must stay up-to-date and knowledgeable of staff changes and payroll tax laws for accurate pay, tax withholding, and filing. You also lower security risks for financial data by processing payroll in-house.
Bookkeepers and CPAs:
You can outsource payroll to a bookkeeper or a certified public accountant; however, they generally prepare payroll and maintain tax records and may not offer bank interface services such as direct deposit or 401(k) deductions. Make sure the bookkeeper or CPA has expertise in all the services you need as well as the flexibility to accommodate last-minute changes to prevent processing errors. Even if you outsource payroll processing, you are ultimately responsible for accurate deposit and payment of federal tax liabilities; if there are issues, the Internal Revenue Service will contact you rather than the payroll service.
Payroll Service:
Payroll services provide well-informed experts on payroll tax and regulatory requirements, keeping you compliant and free of day-to-day payroll obligations. They provide administrative services such as direct deposit and automatic deductions from paychecks, and most services guarantee their work and are less likely to incur penalties for inaccurate or late filing. The U.S. Department of Treasury offers a free, secure service called the Electronic Federal Tax Payment System so you can confirm tax payments are being made on your behalf, which you can take advantage of if the payroll service offers electronic filing through EFTPS.
Online Payroll:
Online payroll companies allow you to manage and monitor payroll details 24 hours a day, seven days a week from a secure Web browser, and you never have to purchase additional software and equipment. You can enter and update payroll and track employee vacation days and sick pay from your computer or laptop at your convenience. Many online payroll companies offer payroll tax filing and payment in addition to basic payroll services, allowing you to focus on other aspects of your business. If email updates are offered, you can sign up to receive payroll status and other relevant account information for quick review.
Payroll4Free
True to its name, Payroll4Free is a handy tool for completing payroll for free. If you are paying 25 or fewer people, your small business is eligible to access its basic services for free.
Even at its most stripped-down level, Payroll4Free still packs a comprehensive array of features that can take the hassle out of completing payroll. For starters, it allows users to pay both W2 and 1099 employees. The software also can print checks and calculate federal, state, and local taxes. Furthermore, users can export their payroll data to be integrated with accounting and banking software like QuickBooks.
Payroll4Free’s portal and reporting features let employers and employees alike keep track of sick days, vacation, and other PTO. Additionally, employees can print out their pay stubs and W2 forms off the platform, saving small business owners time and resources.
The platform is able to offer free service through paid advertising, which users will encounter periodically while using the software.
Pros
- Direct deposit and tax calculations are available as free basic services
- Basic service includes unlimited customer support by phone, email, and online chat if you hit any roadblocks.
- Customer data and information is encrypted.
- Provides preset tax forms for submission.
Cons
- Mac users will need to use Windows operating software since iOS isn’t compatible.
- Direct deposit through Payroll4Free’s own bank is not free
Payroll4Free Features & Pricing
Payroll4Free offers all of its basic services free of charge, which it achieves by hosting advertisements within its software for companies who pay them for their exposure. The free version of Payroll4Free places no limits on payroll or direct deposit processing and doesn’t require that you upgrade to a higher-tier plan to enjoy its basic features. Features that Payroll4Free offers at no additional cost include:
- Direct deposits and paper checks
- Tax calculations and required forms
- Time tracking for vacation and time off
- Employee dashboard portal
- Customer service
- Employee enrollment
The above basic services are for free for clients who staff 25 or fewer employees, although not all of Payroll4Free’s benefits are free.
Despite its name, Payroll4Free places two optional services behind a paywall. Employers that don’t want to deal with depositing and filling out payroll taxes themselves need to pay a $15/month fee for Payroll4Free to take care of it for them. However, Payroll4Free does offer free tools as a basic service that you can use to make this process easier.
If you don’t want to rely on your own bank to transfer direct deposit funds to your employees, you will need to pay another $15 dollars per month for Payroll4Free to complete these transfers using their bank. So, if you decide to opt-in for all paid services that Payroll4Free offers, you’ll be paying $30 every month at the very most.
Payroll4Free is the best choice for small businesses with fewer than 25 employees that want an easy-to-use payroll application that gives them the tools they need to succeed. Free features like direct deposit and a self-service portal are absolute must-haves for small companies that need to invest in other areas of their business. Payroll4Free is the best overall payroll software choice for businesses that need basic features with a simple, easy-to-use interface.
HR.my
Managing employees is a major task for any business. When employees are spread across multiple locations, or even countries, there may be language barriers and added steps for completing payroll taxes to account for. Boasting support for a whopping 65 languages, HR.my is perfect for multinational teams that also need access to basic payroll processing features and human resource management tools.
HR.my is able to support payment by direct deposit, check, or even cash. A business can also designate multiple managers in the system through a role-based user access control feature to divide payroll responsibilities. Additionally, employees can use the platform to input hours worked, request PTO, print their pay stubs, and check their vacation accrual among other tasks. Users can also import timesheets, expense reports, and share documents via the software’s workflow function.
Pros
- The software supports a total of 65 languages.
- Businesses with any number of employees may utilize HR.my.
- The flexible payment schedule lets you cut checks monthly, semi-monthly, biweekly, and weekly.
- Data is encrypted and secured daily with off-site backup.
Cons
- Does not incorporate U.S. labor law compliance.
- Customer support is handled through a crowd-sourced online forum.
HR.my Features & Pricing
HR.my offers free access to one hundred percent of its features and doesn’t require that you subscribe to any plans to unlock extra benefits. It accomplishes its free service through crowdfunding from its user community, so you just need to sign up to start using it. HR.my’s free features include:
- Payroll processing that supports multiple pay periods
- Attendance management & time-tracking
- Employee self-service portal
- Print & export payroll results, leave transactions, and time clock records
- Regular software updates that introduce new free features
For the number of features it offers for free, HR.my is a contender not to be taken lightly when compared to other ostensibly free payroll software solutions, which sometimes gate certain features behind monthly fees and annual renewals. HR.my is “Free! Forever.” according to their home page, so what you see with them is what you get when you sign up: support for unlimited user accounts, time management, multiple pay schedules, a self-service portal, and much more.
Small business owners and HR managers who need multi-lingual payroll software will be pleased with HR.my’s support for literally dozens of languages. The software offers payroll features such as online HR and payroll, leave management, and expense reporting that is essential to businesses that don’t yet have mature payroll processes set up. And, since HR.my supports an unlimited amount of user accounts, it’s a feasible payroll solution for businesses that want to increase their number of employees in the near future.
eSmart Paycheck
There’s a lot of arithmetic that goes into completing payroll. eSmart Paycheck is a free payroll calculator that can quickly compute payroll for hourly or salaried workers while taking care of 401k contributions and other deductions.
eSmart stands out from other payroll calculators in that it lets users download and print paychecks and pay stubs. If you live in a state with more complicated payroll taxes, such as New York or Maryland, state-specific calculators can help safeguard you’re withholding the right amount.
Pros
- Helps you abide by state income tax laws
- The pay cycle has eight settings (daily, weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annually, and annually)
- The interface for inputting information is very intuitive.
Cons
- The free calculator does not save data, so you’ll need to make records separately.
- Does not help file taxes.
eSmart Paycheck Features & Pricing
eSmart Paycheck is more of a payroll calculator than it is a software solution. Small business owners can use eSmart to input employee wages and withhold information to run payroll themselves. Among the standout free features that come with the eSmart Paycheck calculator include:
- Print paychecks and pay stubs
- State-specific calculators
- Adjustable pay cycles
- Quick web-based access
Businesses that need tools to file tax information will need to subscribe to a paid eSmart Payroll service plan. eSmart Payroll provides paid access to federal and state payroll forms at various prices.
eSmart is best saved for businesses that already have a firm grasp on how to calculate their payroll and are confident in filing taxes themselves. If your company is well-organized and just needs a solution to calculate and print its payroll numbers, then eSmart Paycheck may be right for you.
ExcelPayroll
Spreadsheets are a helpful and time-tested tool for creating budgets and making calculations. If you’re already using spreadsheets or Microsoft Excel to handle payroll, ExcelPayroll can simplify the process for no extra cost.
After entering employee information, along with their earnings and deductions, ExcelPayroll can run the payroll calculations from there. Users can also print checks and tax forms, see workers’ compensation reports and record payroll deductions, such as 401k contributions.
Pros
- Whereas Microsoft Excel charges a subscription fee, ExcelPayroll is free.
- Easily translatable for anyone savvy in Microsoft Excel.
- Customized withholding and timecard options are available.
Cons
- More manual entry involved than other payroll software.
- Does not handle tax or benefits administration.
- Not ideal for employers with 50 or more employees because Affordable Care Act compliance isn’t programmed in.
ExcelPayroll Features & Pricing
According to its program mission, ExcelPayroll strives to create a Microsoft Excel-based payroll application that includes no monthly fees and zero costs attached to using it. Installation is also free of charge, so you don’t need to pay anything extra to get your software set up and running smoothly. Best of all, ExcelPayroll offers a full set of reliable payroll tools for free including:
- Prints tax forms including W2s, W3s, 940, 941, DE9 & taxes liabilities
- Vacation accrual
- 401(K), garnishment, and other payroll deductions
- Print checks
- Time-tracking
- Bookkeeping entries
ExcelPayroll itself is free to download, and you don’t need to pay any fees to use its features. Technically speaking, though, ExcelPayroll isn’t completely free, since it requires that you purchase a licensed version of Microsoft Office Suite to run Excel.
Microsoft’s 365 Business Standard plan is the cheapest of its cloud-enabled plans that offer the Microsoft Excel application, which charges a monthly fee of $12.50 per user. Keep in mind that you also need to pay an annual commitment fee to retain access to your Office 365 applications, including Excel.
ExcelPayroll makes sense for small businesses that are already comfortable with using Excel spreadsheets and want to use core payroll features such as W2 form and check printing in a spreadsheet format. ExcelPayroll directly syncs up with the Excel app, so you don’t need to worry about creating a spreadsheet from scratch — ExcelPayroll can do that for you. So long as your business either currently has access to a licensed version of Office 365 or doesn’t mind subscribing to a new plan, ExcelPayroll is a robust spreadsheet-based solution that still behaves like payroll software.
Conclusion
In-house payroll software for small businesses is a trending topic these days as more and more companies want to learn how they can enjoy the benefits of in-house payroll. Hiring a consultant or a specialized accounting firm for handling payroll services can be very expensive. This is especially true if you own a small business with limited funds. A lot of small businesses have decided that hiring a specialist may not be a necessity. They rely on using their existing personnel who have good computer skills and knowledge on the subject. However, they lack the necessary expertise to set up proper payrolls so they wind up spending more than expected each month.