Best Payroll Services for 2023

What is Payroll Software?

Payroll software streamlines payroll processing for employers, ensuring they are able to pay their employees and contractors correctly and on time. The best payroll software integrates with accounting software and time and attendance systems, reducing the need for double data entry and the likelihood of mistakes. Most payroll software also tracks payroll tax liabilities, and the best will handle reporting paperwork with the appropriate jurisdictions. Employees can also use the best payroll software solutions to access their pay stubs and other records through an employee self-service portal or mobile application.

Best Payroll Software of 2023

• OnPay: Best for Smal Businesses
• Gusto Payroll: Best for Added HR Services
• ADP: Best for Growing Businesses
• Rippling: Best for Ease of Use
• Paychex: Best for Businesses of All Sizes
• Intuit Quickbooks: Best for Same-day Direct Deposit
• Paycor: Best for Employee Self-Service
• Deluxe: Best for Integrations
• Square: Best for Tax Filing
• Papaya Global: Best for International Businesses
• Remote Payroll: Best for Onboarding

• The right payroll processing software ensures employees and contractors are paid correctly and on time.
• Online payroll software helps companies automate payroll, file quarterly and annual taxes, and make better business decisions.
• As your business grows, your payroll needs will change, so it’s a good idea to look for software that can scale with your business.
• This best picks page is for small business owners looking to simplify payroll and pay their employees and contractors quickly. 

Payroll is one of the largest expenses businesses incur, and managing it can be frustrating for everyone involved. Frequent payroll errors are time-consuming to fix and can cause employee satisfaction to plummet. That’s why many small businesses turn to online services for processing payroll.

Online payroll services allow you to automate your payroll and simplify tax filings. But with so many payroll providers to choose from, it’s hard to know which vendor is the right choice for your business. That’s why we researched more than 70 top payroll companies to identify the best providers.

Online payroll providers typically have a monthly or per-payroll cost structure. With monthly plans, you pay a base fee and a per-employee fee. Base fees typically range between $30 and $150 per month, and per-employee fees often range from $5 to $15 per month.

With a monthly fee structure, you can usually run payroll as often as you like for one flat fee. This is often a more economical choice for a business that runs payroll several times per month. With a per-payroll fee structure, companies may charge you anywhere from $10 to $100 per payroll run, plus per-employee fees of $2 to $15 per month. A per-payroll model might work better for a business that runs payroll more infrequently. In addition, some providers charge extra for year-end tax services and the initial setup.

A few online payroll services offer a free trial, giving you the chance to try out the software for at least one payroll run to see if it meets your needs. Fortunately, even if you can’t get a free trial, several vendors will let you cancel your contract at any time.

Payroll services offer a variety of features and tools that streamline payroll processing for small businesses. Here are some of the most valuable features to look for when considering payroll companies.

• Unlimited payroll processing: Some payroll services allow you to run payroll as many times as you want each month. This gives you the freedom to determine the pay periods that make the most sense for your employees. This flexibility also lets you pay independent contractors whenever they complete a project without paying extra for additional payroll runs.
• Payment options: Most online payroll services allow you to pay employees by direct deposit, paper checks and prepaid debit cards (also known as pay cards).
• Payroll tax: Online payroll services determine how much your business owes in payroll taxes. They’ll also complete and file the paperwork with the appropriate federal, state and local tax agencies, and make the required payments on your behalf.
• Year-end tax forms: Payroll services prepare all of the necessary year-end tax forms for your workforce and provide them to your employees and independent contractors.
• PTO management: Some payroll services handle some or all of your PTO management. This can include tracking how much PTO employees earn and use, as well as allowing employees to request time off and managers to approve or deny those requests.
• Employee self-service: Payroll software typically has an online portal that employees can access to view their pay stubs and year-end tax forms.
• New-hire reporting: Many payroll services can complete and file the required paperwork each time you hire a new employee. These documents need to be filed in the state where your business operates.
• Mobile access: Most payroll services provide a dedicated mobile app or a mobile-friendly website, ensuring the platform is accessible from smartphones and tablets.
• HR services: In recent years, many payroll vendors have started offering additional HR services, like onboarding tools, employee benefits management and HR compliance. Additionally, some payroll companies give your business access to dedicated HR professionals who can help you navigate HR issues.

If you’re ready to choose the right online payroll software for your small business, here are the steps to get started.

1. Determine Your Business’s Needs

When choosing an online payroll service for your small business, there are several factors to consider. For most companies, budget will play a big role in figuring out which provider to go with. What can your organization afford to spend on payroll processing and assorted services? What features can you live without and which are absolute necessities?

You will also need to determine how often you process payroll. Is it every week, biweekly or just once a month? Some payroll providers offer unlimited payroll runs, while others charge per payroll run, so this is an important factor to consider.

Weigh your different priorities. Is next-day deposit important to you? Is it more vital than other functions? Does your business need a platform that includes additional HR services? Make a list of everything you want your payroll software to help you accomplish so you can look for providers that meet your company’s needs.

2. Research Potential Vendors

Once you know what specific features you’re looking for in a payroll software provider, you can compile a list of potential vendors. From there, you can review the features each vendor offers and get a sense of where each one stands out or falls short. Compare each system against your list of desired functions, and remove from consideration the platforms that don’t align.

Once you’ve narrowed your list down to just a couple of options, it can help to schedule demos with these providers. During a demo, you can see how the software works and ask the sales team pertinent questions. For instance, can you run payroll as often as you want each month? Does the package come with a mobile app and an employee self-service portal? You should also evaluate how intuitive and easy it is to use the program. The platform’s interface should be simple to understand and allow you to run payroll in a matter of minutes.

Make sure you fully comprehend how the provider’s pricing works and what you can expect to spend each month. For instance, many payroll providers charge a base fee along with an additional per-employee fee. What structure do they use? And be sure to ask if there are any setup charges or fees for additional payroll runs.

Finally, you should look into what kind of customer service the company provides. How is the payroll provider rated by the Better Business Bureau, and how many customer complaints are there? Is there phone, email and chat support, or are you limited to just one of those options? The answers to these questions should further narrow down your prospects.

3. Make Your Selection

After you’ve weighed the pros and cons of each provider, you can identify your top options and begin the sign-up process with your most preferred vendor. See if you can negotiate the price, and always ask if any discounts are available. Once you’ve chosen the software that’s best for your business, you can move forward with the setup phase.

Here are some of the biggest advantages of using payroll software.

• Increased efficiency: Using a comprehensive payroll platform means you don’t have to hire someone in-house to handle all of your business’s payroll needs.
• High ease of use: The software does most of the heavy lifting for you. It calculates pay amounts, withholds the proper deductions and automatically distributes payments based on the method chosen.
• Ensured tax compliance: Payroll companies also take care of tax filings and payments for you, ensuring you meet your legal obligations. Most offer a tax guarantee, so if the payroll service makes a mistake when filing or paying your taxes, it will fix the problem and pay any fines you incur.
• Reduced expenses: The best payroll software can save your company money by streamlining tax preparation. It can also help you cut costs by running more accurate payrolls and, if you go entirely digital, eliminating the need for paper documents.
• Reliable processing: Payroll software is the most reliable way you can run payroll each week. If you set up automatic payroll, it will run without you having to do anything. But even if you choose to operate it manually, the system can still send you reminders each week. This ensures employees are paid accurately and on time.
• Wide accessibility: If your payroll software has a self-service app, employees can easily access any details they need. All they have to do is log in to the app to see their pay stubs, W-2s and direct deposit information. Similarly, you’ll be able to monitor payroll while on the go.
• Manage remote workforces: Payroll software provides you with the tools to stay in compliance with laws and regulations in almost any jurisdiction. Some providers also offer employee-of-record services for overseas workers.

Here are answers to some of the most common questions about payroll software and services.

What is online payroll software?

Online payroll software, also known as online payroll services, is cloud-based software you can use to process payroll and onboard new employees. Most online payroll software is easy to use and allows you to run payroll in minutes.

What is unique about comprehensive payroll companies?

What’s unique about comprehensive payroll companies is that in addition to managing your business’s payroll, they also handle your company’s payroll taxes, manage employees’ paid time off, provide new-hire reporting and facilitate workers’ compensation insurance. They may also offer HR management, benefits administration, time and attendance services, and 401(k) programs. [Learn about taxable fringe benefits and how they relate to wages.]

Why are payroll services important for small businesses?

Payroll services are important for small businesses because most small companies don’t have a dedicated HR team that knows the ins and outs of running payroll. Instead, they can rely on payroll companies to manage these tasks for them. These services ensure employees are paid correctly each month and that payroll taxes are filed. By outsourcing these tasks, business owners can save money and time.

How do you set up payroll software?

To set up payroll software, you’ll start by connecting your business’s bank account to your payroll platform of choice and entering your employees’ pay rates and withholding information. Employees who want to be paid by direct deposit can enter their banking information in the system’s online portal. Once this information has been submitted, you can set your pay schedule and start processing payroll based on each team member’s pay rate and hours worked.

Do payroll service providers offer mobile applications?

Yes. Most payroll service providers offer mobile applications for iOS and Android devices. These apps typically allow administrators to run payroll, review past payroll runs and pay payroll taxes. Additionally, employees may be able to use the mobile apps to review their pay stubs, pay history and PTO accruals.

How long does it take to process payroll?

How long it takes to process payroll varies by provider, but many payroll services complete the process within two days. This means payroll administrators need to submit their final payroll numbers two days before payday.

Are there any free payroll software solutions?

There are several free payroll software solutions, which may be useful for businesses that are just getting started. Free payroll software can help you manage payroll taxes, wage garnishments and benefits deductions. However, when using a free service, you may have to sacrifice other valuable features, like dedicated customer support.

Tip: You can hire a certified public accountant (CPA) if you need help managing the collection and reporting aspects of payroll processing. Accountants can analyze your payroll and provide valuable guidance for your business.

What are unpaid payroll tax penalties?

Unpaid payroll tax penalties apply when an employer fails to pay the Internal Revenue Service the proper amount of payroll tax funds it owes. Failure to complete Form 941 or to provide proper documentation, like W-2s or 1099s, is another possible issue that could lead to penalties. To avoid fines, you need to ensure your payroll taxes are paid on time in the correct amount and that your company has filed all the required paperwork.

What is an example of a payroll tax?

An example of payroll tax is the Federal Insurance Contributions Act (FICA) tax. This is a mandatory payroll deduction that employers pay to the IRS to cover Social Security retirement benefits and Medicare for employees.

What is a pay period?

A pay period is the recurring length of time during which an employee’s wages are calculated for payment. Pay periods can be weekly, biweekly, semimonthly or monthly. To choose the best pay schedule for your business, weigh the pros and cons of each option.