Payroll management ― or taking care of employee payrolls ― can be a daunting task for small business owners. A payroll is the list of all workers you have, their salaries, bonuses, and deductions. It is an important aspect of managing Business. Payroll services provide detailed reports regarding a total number of employees, the remuneration paid to them along with various taxes they need to pay to government revenue collectors like Income Tax Department, Service Tax Department, etc.
Payroll software is a bit of an umbrella term. It refers to tools that can help your business keep track of and manage employees and their salary and it has become essential for any company that has employees. Payroll software is the software used by organizations, companies, and organizations for handling payrolls on behalf of their employees. Payroll processing requires a lot of administrative and accounting skills and hence most of the time it is done by professional accounting firms or outsourcing agencies.
ADP TotalSource
PEOs, or professional employer organizations, are HR companies that split ownership of your small business with you fifty-fifty: you handle the business side of the company and the PEO handles the HR side. In technical terms, your employees to the PEO, which then files your taxes under its own company, accepts payroll liability, distributes paychecks, and handles benefits.
ADP is one of the biggest names in the PEO world—and it’s also our top PEO pick for businesses that are big enough to need a separate company to wrangle its HR and payroll needs. ADP also takes over issues like recruiting, hiring, and onboarding. If you have questions about payroll, you can reach out to your dedicated payroll specialist. Just know that when ADP runs your payroll, its payroll team is responsible for any problems with tax deductions.
Plus, as a platform, ADP TotalSource works just as well for employees as employers. Its user-friendly platform has thorough self-service features so employees can check their pay stubs and tax records. And with ADP’s app, they can choose benefits, track time, and request leave or paid time off.
Bear in mind that PEOs are (typically) the most expensive payroll solution. They’re best suited to big businesses with complex HR and payroll needs. If your company isn’t big enough to need a PEO’s assistance, you can always try ADP Run, which is ADP’s full-service payroll and HR software option.
Strengths:
- Easy employee self-service
- No liability for payroll or tax errors
Weaknesses:
- Higher costs than full-service payroll
- Pricing unavailable online
Gusto
Gusto, previously known as ZenPayroll, is an intuitive payroll service for any sort of small business.
Not only will Gusto automatically file your local, state, and federal taxes and integrate with your accounting software, it’ll also give your employees access to their information, pay stubs, and W-2s—even after they’ve left your company. This means less data entry work for you, more convenience for them, and an easier time for everyone.
PC Magazine named Gusto its payroll service of choice for a reason: after its one-month free trial ends, Gusto costs only $39/month, plus $6 per month per employee. That includes benefits planning, direct deposit and check services, and more.
QuickBooks Online Payroll
Designed to integrate with QuickBooks Online Accounting, QuickBooks Online Payroll can also be used as a stand-alone payroll software application. QuickBooks Online Payroll can be used for up to 50 employees, but because of varying pricing levels, is most affordable for businesses with 15 employees or less.
QuickBooks Online Payroll offers an easy onboarding process, so you can be up and running quickly. The application offers unlimited payroll runs, direct deposit capability, and tax reporting and remittance in all of its plans.
There is also an employee portal available so your employees can access pay stubs and tax forms. All plans include a mobile app for both iOS and Android devices.
QuickBooks Online Payroll does offer HR features, but they are only available in the Premium and Elite plans. Both plans also include time tracking capability.
QuickBooks Online Payroll starts at $22.50/month, with the Premium plan running $37.50/month, and Elite $62.50/month. All pricing reflects an initial 50% discount for the first three months, with a $4 per employee fee added to the base price.
Payroll4Free
Designed for small businesses with less than 25 employees, Payroll4Free offers decent payroll processing. While Payroll4Free does not offer tax filing and remittance in the free version, you can choose to add tax reporting and remittance for a small fee.
Although the core application is free, Payroll4Free includes valuable features such as direct deposit capability and includes a grid entry option to speed up the process of entering payroll-related data. Payroll4Free handles all payroll setup, but the process is complicated and in the end, doesn’t save you any time.
Payroll4Free’s interface is dated, though the application is easily navigated, with a set of tiles on the home screen representing all available payroll features.
Payroll4Free lets you pay both employees and contractors, and processes all year-end forms such as W-2s and 1099s. In addition, they offer an employee portal, a nice feature for any payroll service, and particularly nice for a free service.
For smaller businesses with limited budgets, Payroll4Free can be a lifesaver. If you absolutely must have tax reporting and remittance, Payroll4Free offers complete tax service for $15/month.
Justworks
Justworks is a professional employer organization (PEO) that will completely outsource all of your payrolls and handle them for you. The drawback of PEOs is that your employees are technically employees of the PEO and you have less control when something goes wrong. Justworks is our best outsourcing payroll service because of its ease of use, pricing, and the number of HR functions you can outsource with payroll.
Here’s a more detailed breakdown of Justworks payroll service:
- Pricing: $39 to $49 per employee per month, depending on how many employees you have
- Ease of Use: The easiest because you don’t have to do anything except point your employees to Justworks to get signed up
- Tax Services: Handles all W2 and 1099 filings and employer payroll tax filings
- Year-End Fees: Issues all year-end W2s and 1099s online, included in the price
- Accounting Integrations: QuickBooks and Xero, with other API options
Justworks has a strong online reputation in regard to its customer support. They offer support via phone, email, Slack, chat, or SMS 24/7. They also offer a lot of helpful articles and other forms of content that might help your employees through any issues they’re having with the service.
OnPay
OnPay is a solid payroll service that offers integrations for not only most accounting software options but also with most time tracking software. OnPay’s API makes it easy to integrate even if they don’t currently offer a direct integration. That’s why we chose OnPay as the best option if you’re looking for integration options. OnPay is also very quick to process payroll, and you can run the entire process easily right on your mobile device. They offer a flat pricing structure that’s affordable and easy to understand.
Here’s a more detailed breakdown of OnPay’s payroll service:
- Pricing: $36 + $4 per employee per month
- Ease of Use: Very Easy
- Tax Services: Handles all W2 and 1099 filings, annual employer tax filings
- Year-End Fees: All filings are included in the flat fee pricing
- Accounting Integrations: QuickBooks, Xero, and most other major accounting software
OnPay has strong reviews for its customer support. They offer both phone and email support, available Monday to Friday from 9:00 a.m. to 8:00 pm Eastern. If customer support is one of the most important things to you, then this is a great option.
Zenefits Payroll
Zenefits offers easy-to-use payroll software that enables you to run payroll in four easy steps. Making manual adjustments, such as including bonuses, is also easy when running payroll. Zenefits Payroll offers unlimited payroll processing, wage garnishment support, direct deposits, tips reporting, multiple pay schedules and rate tables, 1099 contractor payments, general ledger reports, and mobile pay stubs.
Zenefits Payroll seamlessly integrates with other Zenefits HR modules, including Time and Scheduling, Benefits, and HR. Zenefits Payroll works best in this environment because these integrations expand its functionality and it leans heavily on the data in other modules to run payroll.
For example, the connection between Zenefits Payroll and HR enables easy changes to benefits and salaries, while integration with Time and Scheduling allows it to tabulate paid time off automatically when running payroll.
Zenefits Payroll is an add-on to this larger HR software suite, which has three pricing plans:
- Essentials: This is a low-cost plan that offers the core features of online payroll, starting at $10 per employee per month (at the time of this writing, a 20% discount is in effect, dropping the per-employee price to $8). The Essentials plan includes Core HR, Time and Scheduling, third-party integrations, and access to the mobile app.
- Growth: Zenefits’ Growth plan starts at $18 per employee per month (discounted to $14 at the time of this writing). It includes compensation and performance management tools on top of the Essentials plan’s features. This plan is a good choice for businesses that anticipate continued growth in the near future.
- Zen: The Zen plan starts at $27 per employee per month (discounted to $21 at the time of this writing). It includes a well-being module, employee engagement surveys, and a “people hub,” which allows employees and managers to join a social media-style collaborative digital environment.
Zenefits Payroll can be added to any of these plans for an additional $6 per employee per month. Unfortunately, the payroll module cannot be purchased on its own. When paired with Zenefits’ larger HR platform, however, the payroll module is a very useful tool for growing businesses.
Conclusion
Payroll is a system that allows an employer to calculate the amount that their employees should be paid. It also handles withholding taxes, benefits, things like that. Most people think of payroll in the context of large companies which means lots of employees who are being paid every week. But there are small businesses out there with just one or two employees. This makes managing payroll for small businesses a lot more challenging without the proper software.