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OnPay Review: The Best Payroll Service for Very Small Businesses

After conducting extensive research and analysis, we recommend OnPay as our 2018 pick for the  best online payroll service for very small businesses. We chose OnPay from the dozens of payroll services we considered. To understand how we selected our top picks, you can find our methodology and a comprehensive list of online payroll services on our best picks page.

OnPay combines an easy-to-use and comprehensive online payroll system with excellent customer service. It charges a monthly base fee of $36, plus $4 per employee. Here's a more detailed breakdown of why OnPay is our best pick.

OnPay's online payroll services take care of all payroll and payroll tax responsibilities for small businesses. The service allows an unlimited number of payroll runs each month for W-2 employees and 1099 contract workers. The option to run payroll at any time allows you to create multiple pay schedules for different types of employees. For example, contract workers can be paid every week and salaried employees every other week.

Not all online payroll services allow unlimited payroll runs. Some of the providers we considered charge by pay period, which drives up costs, depending on how often employees are paid.

With OnPay, employees can be paid by check or direct deposit. For direct deposit, employees are paid two days after each pay run. You can also print out checks for employees using any standard printer. The checks are created automatically and do not require 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 quarterly and annual payroll returns. At the end of the year, OnPay generates W-2 and 1099 forms.

All of the tax services are guaranteed. If a mistake is made, OnPay pays any fines or interest incurred. Not all of the services we analyzed make such assurances.

The service also manages all payroll deductions. Deductions are calculated every pay run and listed on each employee's pay stub. The system allows as many types of payroll deductions as you want, including the following:

  • Standard dollar amount or percentage deductions
  • Goal or loan deductions that stop automatically
  • 401(k), IRA and other retirement contributions
  • Section 125 or (pretax) health insurance deductions

OnPay integrates with several types of accounting software: QuickBooks, QuickBooks Online and Xero. In addition, there is a general ledger summary report that you can export into Excel. The system also integrates with a number of other programs, including Kabbage, When I Work, SwipeClock, ThinkHR, PosterElite and Humanity.

OnPay integrates with a variety of accounting, time and attendance and other popular programs.

Another benefit of OnPay is that it manages paid time off by tracking vacation and sick-time accruals. Time can be accrued per pay period, annually or hourly. Accrued and remaining hours are visible to employees on their pay stubs and online.

OnPay also offers several additional services, including online time tracking, employee insurance benefits and pay-as-you go workers' compensation plans. 

OnPay charges a monthly base fee of $36 per month, plus $4 per employee. The monthly fees include the ability to pay employees via direct deposit, as well as all of the other features OnPay offers.

The only other fee you may incur is for year-end W-2 tax forms. OnPay charges $5, plus shipping, per employee to print and mail the year-end tax forms. However, you can print W-2s on your own for 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. Some of the services we looked into require you to call for a price quote.

Other positives are that OnPay doesn't have long-term contracts, provides the first month of service for free and doesn't charge a cancellation fee.

OnPay is a cloud-based payroll service that doesn't require any software to be installed or maintained and is accessible online from anywhere.

The OnPay dashboard provides a quick overview of your payroll system, including a summary of your payroll runs and any upcoming important dates.

To run payroll, you log in to the system, click on the Payroll tab and choose the employees you want to pay. You add the hours each employee worked and make sure the proper deductions are withheld for health and retirement benefits. You also have the option to add in any employee bonuses or commissions. In addition, OnPay allows one-time changes to pay rates and deduction amounts.

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

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

Adding employees into the system is 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, how much they are paid, and federal and state withholdings. Once you enter that information, the staff member is automatically saved into the employee roster and eligible to start getting paid.

OnPay can also take care of some of this work for you. Businesses that are transferring from a previous payroll service can give OnPay their current payroll information and a member of OnPay's staff will have the new account set up and ready to use within three business days.

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

The system offers five user access levels for those with different roles throughout the company:

  • Owner: This is the owner of the account. He or she has full access to the system.
  • Approvers: They have full access to the account but can't delete other users.
  • Controllers: They have access similar to approvers' but can't approve a pay run.
  • Managers: They have access similar to controllers' but can only view and edit employees to whom they have been assigned.
  • Employees: They can access pay stubs, year-end tax forms and other information for their own accounts.

Managers and employees can also tap into the system via mobile devices. OnPay offers a mobile-friendly website with touchscreen compatibility. You can use it 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.

Since it is a cloud-based service, OnPay takes a number of steps to ensure its system is secure and always up and running. The system is accessed only through industry-standard SSL high-grade encryption. In addition, security guards and surveillance systems monitor OnPay's data center, which has diverse power feeds, redundant generators and N+2 UPS systems, around the clock. OnPay also has a fully redundant backup system to protect against downtime.

We were very impressed by the support we received from OnPay. To test the level of service it provides, we called the company multiple times, posing as a 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 services are 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 company executives. 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 works.

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. During many of our calls to other payroll providers, the customer service agents were more focused on trying to land our business than answering our questions.

OnPay offers customer service between 9 a.m. and 8 p.m. (ET) Monday through Friday. It provides an emergency support line between 9 a.m. and 8 p.m. on Saturdays and Sundays. This is one of the only services we found that offers customer support seven days a week.

OnPay's website also features a Resources section that includes a variety of training guides for using the system.

One negative of OnPay is its recent price structure changes. The company used to have a higher base fee, but the first 10 employees were included in those costs. For a very small business, having up to 10 employees included in your base fee would have added up to a bit of a cost savings. However, when you consider the drop in the monthly base price and that direct deposit is now included, whereas it was an added fee before, the costs are the same for businesses with three employees and only increase by $4 per employee thereafter. Despite the price structure changes, OnPay is still one of the more affordable payroll systems we found during our research.

Another potential downside of OnPay is that it doesn't have its own mobile app. While it does have a mobile-friendly website, some organizations prefer being able to access their payroll system through an app.

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. We would have liked to see how it rates in terms of providing service to consumers and what, if any, complaints have been levied against the company.

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
Read Review
  • Base Fee
    $36 per month
  • Per Employee Cost
  • Tax Guarantee
  • Customer Service
    Phone, Email and Live Chat
Sole Proprietor or S Corp.
Read Review
  • Base Fee
    $39 per month
  • Per Employee Cost
  • Tax Guarantee
  • Customer Service
    Phone, Email and Live Chat
Household Employer
Read Review
  • Base Fee
    $33.99 per month
  • Per Employee Cost
    One included, $4 for all others
  • Tax Guarantee
  • 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 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.