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OnPay Review: The Best Payroll Service for Very Small Businesses

After conducting extensive research and analysis, we recommend OnPay as the best online payroll service for businesses with fewer than 12 employees. We chose OnPay from a pool of the dozens of payroll services we considered. To understand how we selected our best picks, you can find our methodology and a comprehensive list of online payroll services on our best picks page here.

OnPay combines an easy-to-use payroll system and a simple pricing structure with excellent customer service. OnPay has a monthly base fee of $39.95 per month. This includes service for up to 10 employees. Each additional employee is $1 per month. Here's a more detailed breakdown of why OnPay is our best pick.

OnPay handles all small business payroll and tax responsibilities. With this service, you can run payroll for W-2 employees and 1099 contract workers quickly and easily each month. OnPay offers unlimited payrolls — something not available on all of the other systems we considered. Some payroll providers charge by pay period, which drives up costs, depending on how often employees are paid.

Having the option to run payroll at any time allows you to create multiple pay schedules for different types of employees. For example, you can pay contract workers every week and salaried employees every other week.

With OnPay, employees can be paid by check or direct deposit. For direct deposit, employees are paid two days after each pay run. For employees who don't use direct deposit, you can print your own checks using any standard printer. The checks are created automatically and do not require you to install any special software.

Editor's note: Looking for information on payroll systems? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need:

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OnPay also handles all payroll tax responsibilities. The service 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 of your quarterly and annual payroll returns. At the end of the year, OnPay prepares all W-2 and 1099 forms.

We like that the company guarantees that all tax filings will be paid accurately and on time. If a mistake is made, OnPay pays any fines or interest incurred. Not all of the services we analyzed made such guarantees.

The service also handles all payroll deductions. Deductions are calculated every pay run and are listed on each employee's pay stub. You can offer as many types of payroll deductions as you want, and add or edit deductions at any time. Types of payroll deductions include the following:

  1. Standard dollar amount or percentage deductions
  2. Goal or loan deductions that stop automatically
  3. Retirement deductions, such as 401(k), IRA and other retirement contributions
  4. Section 125 or (pretax) health insurance deductions

OnPay integrates with a variety of accounting software programs, including QuickBooks and Xero. While most services offer similar integration, some have an added cost for this convenience.

OnPay integrates with a variety of accounting, time and attendance and retirement systems.

We also like that the system manages paid time off. It tracks vacation and sick-time accruals. Time can be accrued per pay period, annually or hourly. Accrued and remaining hours are shown to employees on their pay stubs and online.

OnPay offers several optional services that integrate with its payroll platform, including online time tracking and pay-as-you go workers' compensation plans.  In addition, the company provides pay cards to employers for free. The pay cards have no enrollment, activation, loading, monthly or annual fees.

OnPay's low cost is part of what makes the service so appealing to very small businesses. For the service, businesses pay the following:

  • A monthly base fee of $39.95 per month. This includes service for up to 10 employees.
  • There is an added $1 charge per month, per employee after the first 10 employees.

This was the only service we found that included the cost of some employees into its base price. All of the other payroll providers we examined charged extra for each employee.

There are a few optional fees, including an $8 per month charge to pay employees via direct deposit. The only other monthly fee applies only if you have employees working in multiple states; each additional state is $10 per month.

OnPay also charges a year-end fee of $3.75, plus shipping, per employee to print and mail W-2 tax forms. However, businesses can print W-2s on their own at no cost.

We like that OnPay is transparent about its pricing. The company's website clearly outlines all of the costs, and includes a price calculator that figures out your exact monthly fee based on how many employees you have, whether you want direct deposit and the number of states in which you have employees. Many of the services we looked into required you to call for a price quote.

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 so you can test the system.

OnPay is very simple to use. Because the system is cloud-based, there is no software to install or maintain.

To run payroll, you log in to the system, click on the Payroll tab and choose the employees you want to pay. Then, you add the hours each employee worked and make sure the proper deductions are being withheld for health and retirement benefits. You also have the option to add bonuses or commissions employees may have earned.

With OnPay, you can run payroll is just four steps.

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

Adding employees into the system is also a simple process. You start by filling in basic details on the employee, including their name, address, birth date and start date. Then, you add information about their pay rate, such as how often they are paid, whether they are hourly or salaried employees, how much they are paid, and federal and state withholdings.

OnPay makes it simple to add employees into the system.

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 remember to run payroll on time, you can set up email reminders up to 14 days before your payday. In addition, OnPay emails employees once payroll has been run so they know to look for their paychecks or check their bank accounts for the direct deposit.

We like that the system offers five types of user access levels for those with different roles throughout the company:

  1. Owner: This is the owner of the account. He or she has full access to the system.
  2. Approvers: They have full access to the account but can't delete other users.
  3. Controllers: They have access similar to approvers' but can't "approve" a pay run.
  4. Managers: They have access similar to controllers' but can only view and edit employees to whom they have been assigned.
  5. Employees: They can access pay stubs, W-2s, 1099s and other information for their account.

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

Managers and employees also have access to the system via mobile devices. OnPay offers a mobile-friendly website with touch-screen compatibility. It can be used to access payroll history, view and edit employee information, enter hours, and calculate, review and submit pay runs. Employees can use the mobile website to see pay stubs and year-end tax forms.

We were very impressed by the support we received from OnPay.  To test the level of service provided, we called the company multiple times, posing as a new business owner interested in payroll services.

During our initial call, we were greeted by a company executive instead of a typical customer service representative. Despite hearing that we were only looking for information for a potential new business, the executive still took time to answer our questions instead of passing us off to someone else.

Throughout our nearly 30-minute call, the executive answered each of our questions clearly and comprehensively. 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 convince us that their service was the best, OnPay did so in a way that focused on its offerings rather than bashing its competitors.

During subsequent calls, we received the same high level of service, even though we were speaking to support representatives and not a company executive. During our additional calls, the representatives were friendly and helpful. They answered all of our questions thoroughly, and by the end of our conversations, we had a clear understanding of how the system worked.

At no time did anyone at OnPay try to pressure us into signing up for the service. They simply answered our questions and encouraged us to call back if we were interested in moving forward with OnPay. During many of our calls to other payroll providers, the customer service agents were more focused on trying to get our business than on answering our questions.

OnPay offers customer service between 9 a.m. and 8 p.m. (ET) Monday through Friday. Additionally, the company 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's website also features a Resources section that includes a variety of training guides on how to use the system

One of the potential downsides of OnPay is the extra cost for direct deposit. Most of the other payroll services we looked into included those costs in their base fee. However, for businesses that don't want direct deposit, this pricing is actually beneficial; the monthly fees would likely be higher if direct deposit were included, and businesses not using it would end up paying for a service they didn't want.

Moreover, OnPay doesn't have some of the extra service offerings that some of its competitors provide. For example, businesses looking to combine their payroll service with other needs, like health care benefits or employee retirement plans, will have to find another payroll provider.

We were also a bit disappointed that we couldn't find any record of OnPay, or its parent company Payroll Center Inc., with the Better Business Bureau.

  • Small Businesses Overall
    Intuit Payroll
    Read Review
    • Base Fee
      $20-$99 per month
    • Per Employee Cost
      $2 per employee
    • Tax Guarantee
      Full Service Only
    • Customer Service
      Phone, Email, Live Chat
  • Very Small Businesses
    OnPay
    Read Review
    • Base Fee
      $39 per month
    • Per Employee Cost
      No cost for first 10, $1 for all others
    • Tax Guarantee
      Yes
    • Customer Service
      Phone, Email and Live Chat
  • Sole Proprietor or S Corp.
    Gusto
    Read Review
    • Base Fee
      $39 per month
    • Per Employee Cost
      $6
    • Tax Guarantee
      No
    • Customer Service
      Phone and Email
  • Household Employer
    SurePayroll
    Read Review
    • Base Fee
      $39.99 per month
    • Per Employee Cost
      Two included, $2 for all others
    • Tax Guarantee
      Yes
    • Customer Service
      Phone and Email

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

Editor’s note: Looking for information on payroll systems? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need: 

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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.