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OnPay Review: The Best Payroll Service for Very Small Businesses

After conducting extensive research and analysis of online payroll services, we recommend OnPay as the best online payroll service for businesses with fewer than 12 employees.

OnPay combines an easy-to-use payroll system with excellent customer service. Here's a breakdown of why it's our best pick.

OnPay's low cost is what makes it so appealing to small businesses. Out of all the services we reviewed, few were cheaper than OnPay. There is a monthly base fee of $39.95 per month, which includes service for up to 10 employees. There is an added $1 charge per employee after the first 10. This was the only service we found that included the cost of some employees into its base price. All of the other services we examined charged an extra fee for each employee. Having the first 10 included in the cost of OnPay's monthly fee is part of what makes this service such a great value for very small businesses.

In addition to the monthly base fee, there's also an additional $8-a-month charge for businesses that want to pay employees via direct deposit. The only other monthly fee you can incur is if you have employees working in multiple states. Each additional state is $10 per month.

Besides the monthly price, OnPay charges a year-end fee of $3.75, plus shipping, per employee for printing and mailing out W-2 tax forms. Previously, there was a $1 fee per new hire if you wanted OnPay to report them to the state for you. However, those services are now included in the monthly costs.

We like how transparent OnPay is with its pricing. The company's website clearly outlines all its costs and even has a price calculator that figures out your exact monthly fee based on how many employees you have, if you want direct deposit and how many states your employees live in. Many of the services we looked into weren't as open about their pricing. Some required you to call them to get a quote over the phone, while others offered pricing on their websites, but didn't break down the fees so you knew exactly what you were being charged for.

Editor’s Note: Looking for a payroll service for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:


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Other positives are that OnPay doesn't require you to sign any long-term contracts, doesn't charge a cancellation fee and offers a 30-day free trial as a way to test the system.

OnPay has all the features and tools a very small business needs from a payroll service. The cloud-based system allows you to manage and run your payroll from anywhere with an Internet connection. Additionally, the system is tablet-friendly and has touch-screen compatibility.

With OnPay, you can run payroll as many times as you want each month for no additional charge. Some of the other payroll services we evaluated charged businesses per pay period.

OnPay also handles all your payroll tax responsibilities. The service automatically calculates the payroll taxes each month, processes the required payments and pays the local, state and federal tax agencies for you. In addition, the company prepares and files all your quarterly and annual payroll returns. The company offers a guarantee that all tax filings will be paid accurately and on time. That means that if they make a mistake when paying your taxes, they pay any fines or interest fees your business may incur. Not all the services we analyzed offered this type of guarantee.

The service also integrates with a variety of accounting software, such as QuickBooks and Xero. While most services offer similar integration, some have an added cost for this convenience.

OnPay makes it easy to integrate the system with accounting software, such as QuickBooks and Xero.

Another valuable feature is that the system manages paid time off. You can use this tool to accrue and track used vacation, sick and PTO hours. You can create accrual policies with up to three policy periods, with time being accrued per pay period, annually or hourly. Accrued and remaining hours are shown to employees on their pay stubs and online.

OnPay is very easy to use. To run payroll, click on the Payroll tab at the top of the home page and click on the employees you want to pay. You then add in the hours each employee worked and make sure the proper deductions are being withheld for any health benefits or employee retirement plans you have in place. You also have the option of adding in bonuses or commissions your employees may have earned during that pay period.

With OnPay, you can pay both salaried and hourly employees. The only information you need to add into the system each pay period is how many hours your hourly employees worked and if anyone worked overtime or took paid time off. All of the calculations are then automatically made for you.

The system instantly calculates your pay run and displays the totals for you to review. If everything is correct, you can approve the checks and your payroll will run. You can then either print out the checks on your own or have the money directly deposited into your employees' bank accounts. With this system, you can print professional payroll checks and stubs using any standard printer.

It's also simple to add employees into the system. To add a new staff member, you click on the Employee tab at the top of the home page and select Add Employee. Among the items you then fill in are:

  • Name
  • Address
  • Birth date
  • Start date
  • How often they are paid
  • If they are hourly or salaried employees
  • Pay amount each hour or pay period
  • Federal and state tax withholdings

Once that information is added, the staff member is automatically saved into your employee roster and is eligible to start getting paid.

To help make sure you don't forget to run payroll on time, you can set up email reminders anywhere from one to 14 days before your payday. In addition, OnPay emails employees once a payroll has been run, so they know to look for their checks or check their bank accounts for the direct deposit.

To learn more about using the system, there are variety of videos you can watch on the OnPay website, as well as on YouTube.

We were very impressed with the support we received from OnPay.  To test the level of service provided, we called the company posing as a new business owner interested in payroll services. During our initial call last year, we were greeted by a company executive instead of a typical customer service representative. Hearing that we were just searching for information for a potential new business, the executive took the time to answer each question, rather than pass us off to someone else.

During the course of our nearly 30-minute call we discussed a range of topics, including the cost, how easy the system is to use, how taxes are handled and if mobile payroll was available. The executive answered each question with detail and clarity. He also took the time to explain how the company was founded and why he felt it stood out from other services. While other companies we spoke with spent time trying to persuade us their service was the best, OnPay did so in a way that focused on their offerings, rather than bashing their competitors.

To ensure that the customer service was still up to par this year, we again called OnPay posing as a new business. While a company executive didn't greet us this time around, the customer service agent we spoke with was just as helpful. He answered our call immediately and provided answers that were just as detailed as those we received last year. We discussed all of the costs associated with service, how the tax services work and how easy the system is to use.

At no time did the customer service representative try to pressure us into signing up for the service. He simply answered our questions thoroughly and encouraged us to call back if we were interested in moving forward with OnPay. That was different from many of the other payroll providers we looked into. During many of our other calls, the customer service agents were more focused on trying to get our business than they were with trying to answer our questions.

OnPay offers customer service between 9 a.m. and 8 p.m. (EST) Monday through Friday. We like that the customer service support was available until 8 p.m., since many other services close their offices at 6 p.m. Additionally, OnPay provides an emergency support line between 9 a.m. and 8 p.m. on Saturdays and Sundays. This was one of the only services we found that offered customer support on Sundays.

OnPay also has a live-chat tool that can be used to access immediate help. Most of the payroll services we investigated didn't offer this option.

There are a couple of potential downsides to OnPay. The first is that the company is relatively new and doesn't have the years of experience many of its competitors do. While many of the online payroll services have been around for at least 10 years, OnPay has only been up and running since 2011. That being said, the service's parent company, Payroll Center Inc., has been processing payrolls for more than 30 years.

OnPay also doesn't have the variety of extra service offerings that some of its competitors do. Businesses looking to combine their payroll service with other needs, such as health care benefits or employee retirement plans, will have to find another service. The only added services OnPay offers are online time tracking and workers' compensation plans.

We chose OnPay from a pool of the dozens of payroll services we considered. To read our full methodology and for a more comprehensive list of payroll services, visit our best picks roundup page here

Ready to choose a payroll service? Here's a breakdown of our complete coverage:



Editor’s Note: Looking for a payroll service for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:

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Chad  Brooks
Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.