As a small business owner, one of the most important tasks you will need to undertake is paying your employees. Payroll can feel like an overwhelming task, particularly to new business owners who may be paying employees for the first time, and who are wondering exactly how payroll really works.
Here are some of the tasks that you’ll need to take care of when paying employees:
- Have your employees complete payroll forms (I-9 and W-4 for employee; W-9 for contractors)
- Set up employees as hourly or salaried
- Decide on pay frequency: weekly, biweekly, semi-monthly, or monthly
- Track employee hours
- Track employee benefits
- Withhold taxes and make timely tax payments
- Issue W-2s and/or 1099s at year-end
The number one reason business owners turn to payroll service providers is to ensure that payroll taxes are withheld properly, tax forms are filled out properly and accurately, and taxes remitted to the appropriate agency on a timely basis.
But payroll services do a lot of other things as well. They allow your employees to be paid by direct deposit, they track personal information such as start dates, termination dates, hourly and salaried wages, and in many cases, integrate with accounting software applications for easier tracking of payroll expenses.
The bottom line: There is no good reason to not use a payroll service provider.
Here are the best payroll services your small business can use:
What to look for in payroll services
Before looking for payroll processing services, you first must determine what features are the most important to you. Here are a few things to consider:
1. Features offered
While most payroll providers offer similar services, in some cases those services may be included in the base price, while in other cases, they are available at an additional cost.
HR features can be beneficial to a smaller business with no dedicated HR staff person, but are HR features included in the pricing, or do you have to pay extra for them?
Some payroll companies offer numerous plans, with some features only found in the more expensive plans, so be sure to keep that in mind when looking for a payroll service provider.
2. Ease of use
Small business owners have to wear many hats, and often don’t have the time or desire to learn a complicated software application.
Before purchasing a payroll application for your business, be sure that the product is easy to use and can be up and running in a short period of time.
What can your business afford to pay? We know that affordability is subjective. While the majority of the payroll service providers included in this list come in at around the same price, some of the applications include all features, while others offer a basic plan, with the option to add additional features at an additional cost.
Another thing to keep in mind is that while the base fee may be higher in some applications, it can actually cost you less if all of the features are included in that base price.
4. Access to benefit management
If you offer benefits to your employees, you’ll also want to have access to benefit management features. These can include standard benefit management, as well as access to affordable health, life, and disability insurance plans.
In addition, if you currently offer benefits such as group term life insurance over $50,000, personal use of a vehicle, dependent care assistance, or a gym membership, you may need to add the value of these benefits as imputed income. Make sure your payroll service offers that option.
Our 10 picks for the best payroll services
Small business owners have a lot of choices when it comes to finding a payroll service provider. While the majority of the payroll applications reviewed offer online payroll services, there are a few that offer an on-premise solution, and there’s even one free option. Here are our top 10 choices.
OnPay is The Blueprint’s number one choice for payroll services for small businesses with good reason. Though designed for small businesses, OnPay can scale up nicely to suit mid-size businesses as well.
Featuring easy system navigation, OnPay offers industry-specific features for restaurants and other businesses that need to account for employee tips.
OnPay’s plan also includes unlimited payroll runs, complete mobile accessibility from any device, direct deposit, and multistate payroll capability, as well as employee onboarding and self-service capability.
No separate mobile app is needed, as the application is designed to work on any platform and the application easily pays both employees and contractors, producing both W-2s and 1099s at year-end.
In addition to complete payroll processing, OnPay offers comprehensive HR resources including employee offer letters, PTO approvals, compliance tools, and a variety of HR templates that can be used in various situations.
OnPay offers excellent integration options with a variety of third-party accounting and timesheet/timekeeping applications, and their support team is trained by the American Payroll Association.
OnPay offers a single plan, with pricing for the plan currently running $36/month, plus a $4 per employee fee. All features, including HR and complete support options, are included in the price.
2. 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.
3. Patriot Payroll
Patriot Payroll may not be as well known as some of the other payroll applications highlighted here, but they offer many of the same features. Patriot Payroll is designed for small businesses and currently offers two plans, both offering free direct deposit, an employee portal, and free payroll setup.
Keep in mind that the Basic plan does not include tax filing and remittance..
Patriot Payroll offers easy, intuitive navigation, and the cost includes complete program setup. The software works on any device, so no mobile app is needed. The application also includes an excellent accrual rule option, for easy tracking of employee PTO.
Optional Time and Attendance and HR modules are also available, both integrating with the payroll application.
While Patriot Payroll doesn’t include a lot of extras, small businesses that are looking for an easy way to pay employees and payroll taxes will appreciate its simplicity.
Patriot Payroll offers two plans, Basic which is $10/month and Full-Service, which is $30/month, with a $4 per employee fee added to the base price. The add-on Time and Attendance module is $5/month, with the Human Resources module running $4/month, with each adding an additional $1 per employee fee.
4. Gusto Payroll
Gusto is designed for small businesses, and is particularly well suited to those in the hospitality industry, offering tools and resources that make tracking varying wage levels and tip amounts a relatively simple task. Gusto also assists new users with the initial payroll setup process, getting you up and running quickly.
Offering easy system navigation, Gusto includes new-hire reporting, flexible payroll schedules, unlimited payroll runs, contractor payments, and multistate payroll capability. Gusto can be accessed from any device, so no mobile app is necessary.
The application also includes employee onboarding, complete tax reporting and remittance. Gusto also offers HR resources, but only in their most expensive plan.
The AutoPilot feature is a great option for businesses that pay a high number of salaried employees, and Gusto offers good integration options with a variety of third-party applications.
Gusto offers three plans: Core, which is best for very small businesses; Complete, which is good for small businesses; and Concierge, which is best for growing businesses.
Core currently has a base price of $39/month with a $6 per employee fee, Complete is $39/month plus a $12 per employee fee, and Concierge has a hefty price tag of $149/month plus a $12 per employee fee.
SurePayroll is designed for small business owners and includes a special version for those paying domestic staff. Best for small businesses with 10 employees or less, SurePayroll has worked to automate the entire payroll process, a major bonus for already overworked business owners.
SurePayroll offers direct deposit, new-employee reporting, and time and attendance tracking. The application also includes complete tax reporting and remittance, with a mobile app available for both iOS and Android devices.
An employee self-service option is also available, and SurePayroll also integrates with a wide variety of third-party applications.
SurePayroll offers an easily navigated payroll dashboard that provides access to all payroll features. The application has simplified the payroll entry process, minimizing the amount of data entry needed. An AutoPayroll option is also available for salaried employees.
SurePayroll offers two plans: Self-Service, which does not include tax reporting and filing, and Full Service, which includes a two-day payroll processing timeframe, along with access to HR resources and compliance posters.
The Self-Service plan runs $19.99/month plus a $4 per employee fee, while the Full-Service plan is $29.99/month, plus a $5 per employee fee.
6. Payroll Mate
Payroll Mate from Real Business Solutions offers an affordably priced payroll application ideally suited for small businesses that prefer an on-premise application. Payroll Mate can only be used on Windows operating systems, and does not offer online access, though the product can be hosted on a remote server if desired.
Payroll Mate is designed for businesses with less than 75 employees, and is also a good option for accountants that process payroll for their clients. A good choice for small businesses with multiple locations, Payroll Mate also supports multiple pay frequencies, unlimited payroll runs, and multistate payroll.
The application also completes all required tax forms, but does not handle filing or tax remittance.
A new employee wizard is available to guide you through the process of entering a new employee, with an easily navigated tax setup page available as well. Direct deposit is available in Payroll Mate, though it’s priced separately.
Payroll Mate is best suited for those comfortable enough to file their own tax forms. The application runs $119/year, and includes all related tax tables, while the Direct Deposit module is available for $95 annually.
7. RUN Powered by ADP
Perhaps the most recognizable name in payroll, ADP has launched several applications that are aimed at the small business market. One of their most popular applications is RUN Powered by ADP, which is designed for businesses with 49 employees or less.
The application offers an easily navigated payroll dashboard, with a handy menu bar at the top of the dashboard that offers access to additional features.
RUN Powered by ADP offers four plans, with many of its more powerful features only included in the top two plans. The application also offers a mobile app for iOS and Android devices, though it is not included in the base pricing.
All plans offer free direct deposit, new employee onboarding, and the ability to pay contractors. In addition, tax reporting and remittance is included with all plans. RUN Powered by ADP also offers a variety of HR resources, but only in their top plans.
ADP is reluctant to release pricing details for their payroll plans, preferring to speak to business owners about the plans and services available. However, they have stated that pricing for a business paying 10 employees would likely start at around $150-$180/monthly, depending on the plan and additional services purchased.
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 $12.50/month.
Paycor is designed for small to mid-size businesses, offering a payroll solution designed specifically for businesses paying 10 employees or less. Paycor offers a long list of payroll features, including direct deposit, an employee self-service option, and the ability to pay contractors.
A mobile app is included for both iOS and Android devices, and Paycor also includes complete tax reporting and remittance. HR resources are available in Paycor’s top two plans, and an onboarding feature is offered in the most expensive plan.
Paycor offers easy, intuitive navigation, with complete initial system configuration handled by Paycor. A pay grid is used to quickly enter payroll data, and you have the option to pay your employees by direct deposit, pay card, or check.
Paycor currently offers three plans designed for small businesses; Basic, which starts at $99/month for up to 10 employees; Essential, which starts at $149/per month for up to 10 employees and includes HR capability and employee garnishment options; and Complete, which is $199/month and also includes HR templates, employee onboarding, and integration with third-party accounting applications.
Add-on modules such as Time & Labor Management, Employee Scheduling, Benefits Management, and Recruiting & Applicant Tracking are also available.
10. Paychex Flex
Paychex Flex is designed for small businesses with 49 employees or less, though they also offer an Enterprise plan that’s suitable for mid-size businesses.
All plans offer new-hire reporting, 24/7 support, automated employment, and income verification, paycards, and multistate payroll capability, as well as complete tax reporting and remittance.
Paychex Flex offers easy system navigation from the user dashboard, which displays current payroll information while offering easy access to system functions.
The software includes direct deposit and has an employee portal where pay stubs, tax forms, and vacation and sick balances can be accessed.
Paychex Flex processes both W-2s and 1099s at an additional fee, with other features such as a Workers’ Compensation report, General Ledger Service, and State Unemployment Insurance only available in the higher-priced plans.
They offers four plans: Express Payroll, Paychex Flex Select, Paychex Flex Pro, and Paychex Flex Enterprise.
Like RUN Powered by ADP, Paychex Flex does not release pricing for any of its payroll plans, though they estimate that a business paying 10 employees would pay approximately $3,000 per year for payroll services, with an additional setup fee of $200. Paychex Flex also offers numerous add-on options that can be purchased separately.
There’s plenty of payroll options to choose from
Instead of struggling through manual systems trying to figure out how to do payroll, why not opt for a payroll service that simplifies the entire payroll process? There are plenty of great options to choose from.
For more detailed information on the best payroll services, be sure to check out The Blueprint’s payroll software reviews.