If you have a small business, chances are, you have had to create a payroll system. And if you have not created a payroll system for your small business, your employees will likely approach you at some point and ask you to implement one. Since most businesses do not start out with large sums of capital allocated toward technology, the implementation of an in-house payroll system is usually quite expensive. But there are alternatives!
Payroll is the foundation of any business’s financial structure. From preparing payroll checks to calculating taxes, payroll can be a daunting task for even the seasoned bookkeeper. Make it easy on yourself by choosing the best payroll software for small businesses.
Paychex Flex
Paychex is one of the most popular payroll software for small businesses but also one of the more expensive solutions, mostly due to public demand. Rumor around the accounting department’s water cooler is that Paychex is robust but not simple, easy to use, or set up.
That can be a huge factor for small businesses when they’re looking for the best payroll software. Paychex requires a lot of personal information to get started and running reports comes with its share of red tape and added costs.
Key Features:
- Check printing
- Benefits management
- Compensation management
- Direct deposit
- Employee database
Pros & Cons
- Great import and export capabilities
- Desktop, mobile, kiosk access
- Difficult to implement
- Poor customer service
RUN by ADP
The solutions offered by ADP, and specifically their small-business-oriented RUN, are very similar to those offered by above mentioned Paychex – expensive but popular. This solution is for you if you prefer to send employees physical paychecks rather than direct deposit as ADP can (for an additional fee) print, sign, and mail paychecks on your behalf.
Key Features:
- Benefits tracking
- Check to print
- Compensation management
- Direct deposit
- Employee database
- Payroll reporting
Pros & Cons
- Mobile access
- Easy to use
- Can be expensive for large teams
Wagepoint
If you’re looking for the best-rated service and support, you should really check out what Wagepoint’s offering. And since they’re Canadian, you can probably trust their claim to have the friendliest support and service staff around. In addition to clear and affordable pricing, Wagepoint offers a free trial period to let you try before you buy.
Key Features:
- Direct deposit
- Tax compliance
- W-2 preparation
- Wage garnishment
Pros & Cons
- Superb customer service
- Easy to use
- Users remark that the reporting feature is weak
- Only desktop access
PayCor Perform
Like many other payroll software solutions, PayCor is about much more than just payroll. It is a modular system that can be used for payroll alone, or use additional modules offered on the platform to manage all employee “lifetimes” within the company, from recruiting to departure. Did we already mention that flexibility is important to payroll software?
Key Features:
- 401(k) tracking
- Benefits management
- Check printing
- Compensation management
- Direct deposit
- COBRA administration
- HIPAA compliant
- Employee database
- Payroll reporting
Pros & Cons
- Desktop and mobile access
- Feature rich
- Some users complain the interface is confusing
OnPay
OnPay is our top choice for very small businesses because it handles all payroll and payroll tax needs, has an easy-to-use online platform, and is affordable even on a tight budget. The service costs $36 per month, plus $4 for each employee.
There is only one plan available through OnPay for all customers. The service costs $36 per month, plus $4 for each employee. “Employees” are any individuals you compensate for their services, so part-time employees and independent contractors are considered “employees” and are included in this fee.
The only other additional fee you might incur with OnPay is if you have them print and mail year-end tax forms to your workers. You can print W-2s and 1099s for free, but to have OnPay send those forms through the mail to your office costs $5 plus shipping per form. It costs $6 plus shipping to mail those forms to an employee’s home.
OnPay doesn’t sacrifice features and value by edging toward simplicity. Users can enjoy payroll processing, tax compliance, multiple employee types, multiple payment options, and employee self-service access. This software can also integrate with many popular small business services, like QuickBooks Online, Xero, Kabbage, Humanity, Guideline, and ThinkHR.
One of the standout aspects of OnPay is its unlimited payroll runs and automated payroll processing features. OnPay stays up to date with federal, local, and state payroll tax rates and calculates how much your business owes based on where your employees are located. OnPay even takes responsibility for any fines associated with payroll tax errors. If your company offers employees benefits like a 401(k) or commuter benefits, OnPay automatically withholds the correct amounts for these items.
OnPay includes a full suite of HR tools with its payroll services for no extra charge. In addition to online onboarding, companies get PTO accrual and approval, e-signable legal document templates, in-app messaging, secure document storage, and a full library of free HR guides and resources. It also offers an employee self-service portal, where employees can see their pay stubs and year-end tax forms. They can also update their banking information or their address, saving time for your staff and ensuring your payroll records are up to date.
The reporting tools give small businesses the ability to create enterprise-level expense reports. The tools can examine 50 different data points, rearrange columns as needed and save the report in multiple views based on who within the company is reviewing it. The reporting functionality is available to all users.
Square
Square is a highly popular payment processing platform, but it also offers Square Payroll, an online payroll software program that is easy to use and makes payroll tax compliance simple. Square automatically compiles and files your federal, state, and local payroll taxes based on the data that already exists in your system, giving you more time to focus on operations.
Additionally, Square offers expert support through a live chat tool that allows you to connect with payroll specialists who can help you manage your business’s payroll and improve your process. Square can sync with a wide range of time and attendance systems and POS systems, tracking employee hours automatically. When it’s time to run payroll, you can pay employees directly from your Square Balance, rather than waiting for ACH transfers to go through the banks.
Square Payroll is intuitive and easy to use. Like its payment processing counterpart, it doesn’t have a steep learning curve, and most users will not be wanting additional features. Square Payroll can be used to process payroll for W-2 employees and 1099 contractors.
In addition to payroll processing tools, Square offers a team management feature that can help you sync hours, review an employee’s performance and manage system permissions for each team member. This is an especially important function in a time where remote work is more common than ever.
There is no contract requirement for Square Payroll, and pricing plans start at $29 per month, plus $5 per employee paid. Alternatively, there is a contractor’s only option that charges you $5 per payment with no monthly base fee.
Zenefits
Zenefits offers an easy-to-use payroll system that enables you to run payroll in four steps. Making manual adjustments, such as including bonuses, is easy when running payroll as well. Zenefits’ payroll solution offers unlimited payroll processing, wage garnishment support, direct deposits, tips reporting, multiple pay schedules/rate tables, 1099 contractor payments, general ledger reporting, and mobile paystubs.
Zenefits Payroll seamlessly integrates with other Zenefits HR modules, including Time Tracking, Benefits, and HR. Zenefits Payroll works best when you purchase all of the modules because these integrations expand its functionality. For example, the connection between Zenefits Payroll and HR enables easy benefits changes and salary changes, while integration with Time Tracking can automatically tabulate paid time off when running payroll. Zenefits Payroll is an add-on to this larger HR software suite; it costs $6 per employee, per month.
Zenefits larger HR software suite comes with three pricing plans. These include:
- Essentials: The Essentials Plan is the most basic (and lowest-cost) plan Zenefits offers. Starting at $8 per employee per month (at the time of this writing there was a 20% discount from the usual $10 per employee per month in effect), this plan includes HR and time scheduling features, third-party integrations, and access to the mobile app.
- Growth: The Growth plan is $14 per employee per month (discounted from $18 per employee per month at the time we published this review) and includes compensation and performance management tools in addition to everything in the Essentials plan. This is useful for a scaling business that is adding new employees and wants to keep track of their performance and compensation over time.
- Zen: The Zen plan costs $21 per employee per month (discounted from $27 per employee per month at the time of this writing) and includes a well-being module, employee engagement surveys and a “people hub,” where allows employees and managers join a social media styled collaborative digital environment.
Deluxe Payroll
Payroll and human resources are close bedfellows and the tasks you routinely handle in both departments tend to go hand-in-hand. Whereas some services don’t offer much in the way of HR and others may be overkill for your needs, Deluxe offers a simple solution for running payroll and basic HR management in one package.
With Deluxe Payroll, you get everything you need to reduce headaches and time spent on recurring actions. The platform offers full-service tax filings for all 50 states in the U.S., two-day direct deposit, time tracking, paid time off administration, and detailed reporting.
Deluxe’s HR prowess really shines, though, in its included hiring and onboarding tools. Through Deluxe Payroll, you get access to the company’s Text To Apply feature—a streamlined, fully compliant way for talented people to apply for openings at your organization.
You can take that and other job postings you have on the internet and track everything in the Deluxe dashboard. The software will even simplify the process of posting new openings to the most prominent social media platforms and job boards. It even makes pre-screening and interview scheduling a cinch.
Once you’ve found a great new hire, Deluxe keeps making things easier still. You get all sorts of onboarding tools, like new hire document management, easy federal and state documentation, and customizable onboarding forms. You even get SSN verification completely for free.
And that’s all just at the basic tier of Deluxe’s payroll and HR packages:
- Lite: $39/month + $7/employee; full-service payroll with HR reports and hiring and onboarding features
- Blended: $49/month + $7/employee; HR-centric solution with no payroll or tax features
- All-Access: $39/month + $12/employee; the best of both worlds—everything in Lite and Blended
While the Lite package may be a bit high for simple payroll needs, the All-Access tier is very competitively priced, especially considering the features you get within.
The Blended package isn’t going to work if you need payroll service. And, since you’re reading this article, that means it probably won’t fulfill your needs. But the All-Access Package adds a lot of useful HR bonuses to Deluxe Payroll.
For one, you get a lot of assistance with compliance. Like with ACA compliance, where Deluxe will help you not only handle W-2, W-4, and 1099 forms but also the 1094 and 1095 forms regarding provided healthcare options.
You also get key features like the ability to track employee performance, organizational charts, customizable and shareable HR documents, and assistance with employee terminations.
Plus, All-Access unlocks helpful workflow automation for routine HR tasks, user access customization, and single sign-on through Google, Slack, and others. If you need a solid payroll service with included HR tools that won’t break the bank, reach out to Deluxe today.
Gusto
Gusto offers one of the best online payroll services out there. They serve more than 100,000 businesses across the country.
The reason why so many companies are choosing Gusto for payroll is because of the platform’s simplicity. It’s easy for anyone to set up, manage, and pay workers.
That’s what makes it perfect for startups and new business ventures. They’re perfectly scaled for small-but-growing operations, and the learning curve is a snap for both employers and employees.
With Gusto, you can run payroll in minutes. You can even run it on autopilot, assuming things aren’t changing each pay cycle.
The user experience of Gusto is unparalleled too. It’s incredibly simple to use even if you’re completely inexperienced with online payroll services.
Not only does Gusto calculate your taxes, but it files everything for you. Local, state, and federal taxes are automatically paid to the right government office each time you run payroll. This benefit is 100% free, while competitors charge extra for it.
I love Gusto’s onboarding process for each employee. Whether you have a new W-2 hire or 1099 contractor, they can onboard themselves.
Your staff will have easy access to pay stubs, W-2s, and everything else they need online. Even former employees will still be able to view old payroll information.
Gusto offers unlimited payroll cycles, meaning you can issue payments whenever you want. You’re not locked into weekly or bi-weekly cycles.
Gusto helps you with compliance, time-tracking, PTO, employee benefits, and more, in addition to being a full-service online payroll company.
Conclusion
If you own a small business or thinking about starting your own company, you should pay attention to the payroll services which are offered for your convenience. They can help to keep you aware of any payroll taxes and reduce your workload in general.