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Updated May 17, 2024

Best Payroll Services for 2024

From paying your team on time to managing payroll taxes, our picks for best payroll services reduce your administrative burden.

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Jamie Johnson, Business Operations Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.
Best for Same-Day Direct Deposit
Intuit QuickBooks Payroll
Quickbooks logo
  • Same-day direct deposits
  • Variety of plans and price points
  • Accessible on various devices
USALinks to Intuit QuickBooks Payroll
Visit Site
  • Same-day direct deposits
  • Variety of plans and price points
  • Accessible on various devices
Best for Small Businesses
OnPay Payroll Software
Onpay company logo
  • Well equipped for startups
  • Straightforward, affordable pricing
  • Employee self-service features
USALinks to OnPay Payroll Software
Visit Site
  • Well equipped for startups
  • Straightforward, affordable pricing
  • Employee self-service features
Best for Employee Self-Service
Paycor
Paycor company logo
  • Robust employee portal
  • Comprehensive HR tools
  • Benefits administration
USALinks to Paycor
Visit Site
  • Robust employee portal
  • Comprehensive HR tools
  • Benefits administration
Best for Growing Businesses
ADP Payroll
ADP company logo
  • Ideal for scaling companies
  • Manages payroll and HR tasks
  • Software grows with your business
USALinks to ADP Payroll
Visit Site
  • Ideal for scaling companies
  • Manages payroll and HR tasks
  • Software grows with your business
Best for Added HR Services
Gusto Payroll Software
Gusto Payroll Software logo
  • Comes with payroll and HR services
  • Access to HR experts for guidance
  • Ensures compliance
USALinks to Gusto Payroll Software
Visit Site
  • Comes with payroll and HR services
  • Access to HR experts for guidance
  • Ensures compliance

Table of Contents

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When choosing our picks for the best payroll software and services, our team of small business experts considered a wide range of factors, including features like same-day deposit, payroll tax automation and reporting tools. We attended live demonstrations and asked representative tough questions about their pricing and plans, setup and installation, and how they stack up in a competitive field. We also tested payroll software ourselves, taking note of the overall user experience and how effective the features were. Finally, we examined user reviews from real customers to get a sense of how well each payroll platform worked in a growing business’s day-to-day operations. Learn more about our methodology.

What Is A Payroll Service?

Payroll services take over management of the payroll process for businesses, handling everything from paying employees to managing payroll tax obligations. Small business payroll service providers can either take over part or all of the payroll process, allowing employers to retain whatever level of control they want when it comes to ensuring employees are paid. A small business payroll services also typically include access to payroll software tools to monitor when payroll is processed and how much it costs each cycle. While a few companies offer the flexibility of processing international workforce payments, most are focused on American employees and merely provide basic support for paying overseas contractors.

Payroll is often one of the largest expenses incurred by a company, and managing it can be frustrating for everyone involved. Payroll errors are time-consuming to fix and can cause employee satisfaction to plummet. That’s why many small businesses turn to payroll services for processing payroll. However, not all small business payroll services are created equal. The most basic will simply help you crunch numbers, while the best will allow you to automate your payroll and simplify tax filings. When it comes to choosing a payroll service for your business, you’ll want to select one that can handle everything you need. To help you make an informed decision, we researched the top small business payroll service providers to identify the best providers, highlighting the brands that excel in specific areas.

Find the Right Online Payroll Service for Your Business

Fill out this questionnaire to find vendors that meet your needs.

How We Decided

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

77

considered

22

reviewed

13

selected

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

77

considered

22

reviewed

13

selected

Compare Our Best Picks

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Our Top Picks for 2024
Intuit QuickBooks Payroll
OnPay Payroll Software
ADP Payroll
Gusto Payroll Software
Paychex Payroll
Rippling Payroll
Remote Payroll
Papaya Global Payroll
Deluxe
Square Payroll
TriNet Payroll
isolved
Rating9.3/109.5/109.0/109.2/109.2/109.3/109.4/109.0/109.0/109.3/109.5/109.4/108.1/10
Best use case

Best for same-day direct deposit

Best for small businesses

Best for employee self-service

Best for growing businesses

Best for added HR services

Best for businesses of all sizes

Best for ease of use

Best for onboarding employees and contractors

Best for companies with a global workforce

Best for integration capabilities

Best for tax filing

Best for companies with a limited budget

Best for firms needing full HR tools

Free trial

Yes

Yes

Yes

No

No

No

No

No

No

No

No

Yes

No

Starting price

$45/month + $5/month per person

$40/month + $6/month per person

$99/month + $5 per employee

Custom pricing

$40/month + $6/month per person

$39/month + $5/month per person

$8/month per user + custom pricing

$299/month per employee

$20/month per employee

$45/month + $7/month per employee

$35/month + $6/month per user

$14/month per employee

N/A

Third-party integrations*

750+

11

300

55

189

250+

500+

5000 (through Zapier)

7

Yes

Yes

43

64

Mobile app

Yes

No

Yes

Yes

No

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Review Link
Scroll Table

Our Reviews

Quickbooks logo
  • QuickBooks has a variety of plans at a wide range of price points.
  • The payroll software fully integrates with the QuickBooks accounting software.
  • Not all plans come with an error-free tax guarantee.
Editor's Rating: 9.3/10
Visit Site

QuickBooks Payroll provides small businesses with scalable payroll services that easily integrate with QuickBooks accounting software and over a dozen other Intuit product offerings. QuickBooks’ payroll features are available in multiple packages that vary due to add-ons, but each includes unlimited payroll runs, automatic tax forms, a workforce portal, payroll reports, and free next- or same-day direct deposit.

You can run payroll in all 50 states for employees at varying pay grades, and the software can handle garnishments and tax withholding. QuickBooks Payroll can be accessed on various devices, including through iOS and Android mobile apps. Forthcoming changes will see the introduction of IRS Form 943 filing and the ability to retroactively edit state unemployment insurance rates. We also like that QuickBooks now offers health benefits for employees through Allstate insurance. With this partnership, you can seamlessly manage payroll deductions.

Businesses can also use QuickBooks Payroll for health benefits administration and HR support, depending on the plan. Its “Tax Penalty Protection,” in which the vendor promises to reimburse you up to $25,000 if you incur any fines or interest charges due to inaccurate tax filings, is available only with the Elite package.

Onpay company logo
  • OnPay provides straightforward pricing for small businesses.
  • Businesses can run payroll an unlimited number of times.
  • OnPay doesn’t offer a mobile app.
Editor's Rating: 9.5/10
Visit Site

OnPay is a user-friendly payroll solution that caters to small businesses and startups. You can pay employees via direct deposit or paper check. Best of all, OnPay allows you to run payroll an unlimited number of times, which is helpful for businesses that run payroll weekly or routinely pay contractors for projects.

You can use the OnPay software to add employees to your payroll, set statuses, run payroll and manage paid time off (PTO). The platform comes with a payroll tax and benefit deduction withholding system and offers payroll tax preparation. We found its most useful tools to include compliance checklists and audits, automated workflows, and customizable document templates.

OnPay has one all-inclusive package that incorporates HR tools: The cost is $40 per month, plus $6 per employee per month. Under this model, freelancers do count as employees, so you’ll be charged for any 1099 payments you make. It’s also possible to impose six levels of admin permissions, including external collaborators, while integrations are offered with rivals like QuickBooks as well as platforms such as Vestwell and Mineral.

OnPay also allows users to create custom expense reports. The reporting tool includes the ability to add up to 50 data points to key reports, reorder columns to emphasize important data and save multiple views for different company stakeholders. We found this valuable for tracking business finances and making informed decisions.

Paycor company logo
  • Paycor has a robust self-service portal where employees can confirm their information and check their compensation.
  • Paycor streamlines payroll tax preparation and ensures employers meet deadlines.
  • The plans are more expensive than what other payroll providers charge.
Editor's Rating: 9/10
Visit Site

Paycor offers easy-to-use online payroll software that comes with a comprehensive employee self-service portal. This portal can be used to review compensation data and update personal or financial information. Employees can also use the portal to request paid time off, monitor their payments, review their benefits and access their pay stubs, while the Paycor Time solution offers physical or app-based time clocks.

Paycor has four plans, each with a flat monthly base rate and per-employee fee. Here is an overview of each of the packages.

  • Basic: The Basic plan is $99 per month, plus $5 per employee per month. It comes with payroll processing, payroll tax filing, PDF reports, access to the Paycor mobile app, and employee self-service for wage garnishment and child support information.
  • Essential: The Essential plan is $149 per month, plus $7 per employee per month. It expands on the Basic plan with PTO requests and manager approvals, new-hire onboarding and tax filing, and compliance checklists and templates.
  • Core: The Core plan is $199 per month, plus $8 per employee per month. It comes with everything offered in the first two plans, plus HR and career management services.
  • Complete: The Complete plan is $199 per month, plus $14 per employee per month. It adds advanced analytics and data benchmarking, integrations with 401(k) providers, and dedicated account manager support.

We liked that Paycor was designed for simplicity, with payroll running automatically (while generating updates through the accompanying mobile app) and proactive alerts sent out if there is missing information. It handles tax filing, 1099 and W-2 processing, and setting up tax guidance based on employee work and office addresses. Like Paychex, staff can examine pay stubs up to three days before payment is received, to proactively report mistakes.

ADP company logo
  • ADP is one of the largest and most trusted payroll providers.
  • ADP can support your business at every stage of growth.
  • You’ll need to get a custom quote to find out specifics about pricing.
Editor's Rating: 9.2/10
Visit Site

ADP offers a scalable payroll platform that provides all the tools and features businesses need to process payroll and pay associated taxes. We found that ADP works well for companies across all industries and is a particularly good option for businesses with complex needs.

The company facilitates payroll for small, midsize and large businesses, with dedicated plans for companies employing over 1,000 people. If you have fewer than 50 employees, there are four different plans available, but ADP customizes pricing and does not reveal costs upfront. We liked ADP’s additional features, such as the employee self-service portal, direct deposit payments and onboarding tools. The advanced plans can include HR support, background checks, employee training and the ability to post job openings on ZipRecruiter.

Unlike many of its competitors, ADP has an international presence and can offer payroll services in more than 140 countries. You can run payroll on your desktop computer, on your mobile device or over the phone. ADP automatically calculates an employee’s paycheck based on their wages and time off, which saves you time and reduces the likelihood of error.

Gusto Payroll Software logo
  • Gusto offers comprehensive HR services with access to HR experts.
  • Flexible pricing plans are available.
  • The per-person pricing can get expensive for large businesses.
Editor's Rating: 9.2/10
Visit Site

Gusto has established itself as a cutting-edge payroll service provider for small businesses, especially those that want additional human resources tools. We love that Gusto seamlessly integrates with over 20 time-tracking applications and numerous hiring, performance management and learning platforms. These integrations empower small businesses to better leverage Gusto’s native onboarding, benefits administration and payroll features. With these advantages and more, Gusto stood out as our top choice for the best online payroll service with added HR services. 

Gusto’s cloud-based software is easy to use and comes with direct deposit, new-hire reporting and detailed payroll reports. The service also handles tax registration for employees in all 50 states, and the software can facilitate contractor payments in more than 120 countries. Most recently, Gusto began supporting international payments in over 75 countries, in partnership with Remote. Other tools we found useful include customizable offer letter templates, an e-signature tool and an onboarding checklist.

Gusto has four tiers of service, with the Simple plan starting at $40 per month, plus $6 per employee per month. We liked that Gusto doesn’t include hidden fees for syncing time tracking tools or accounting software. The variety of packages means the software can grow with your business, and you can add on more features as you’re ready.

Paychex company logo
  • Paychex offers multiple payment methods for employees.
  • The company provides flexible payroll schedule options.
  • Businesses on a tight budget may find Paychex too expensive.
Editor's Rating: 9.3/10
Visit Site

Paychex is a payroll service that’s a great option for businesses of all sizes. The company offers weekly, biweekly, semimonthly and monthly payroll schedules. Paychex can accommodate all types of workers, including full-time and part-time employees, 1099 contractors, and freelancers. Team members can choose to receive their paycheck as a direct deposit, paper check or prepaid debit card.

You can manage your payroll with the computer software or the Paychex mobile app, which is available for iOS and Android devices. To run payroll in as little as two clicks, you just need to enter the necessary information and submit it for processing. The self-service feature allows employees to log in to the system and view their pay stubs and year-end tax documents, while the optional Pre-Check service enables employees to flag payroll issues before payment is issued. We also liked that Paychex offers more than 250 integrations, from AIG to Xero.

Paychex offers three packages, which start at $39 per month, plus $5 per employee per month. The most basic plan includes payroll processing and tax preparation services, while the more advanced plans come with garnishment payment and onboarding services. In our research, Paychex was unique in having hundreds of compliance experts monitoring regulatory changes across America, feeding this back into the software.

Rippling company logo
  • The software has an easy-to-use and intuitive interface.
  • Rippling offers over 500 integrations with blue-chip software brands.
  • Pricing isn’t transparent beyond the per-employee rate.
Editor's Rating: 9.4/10
Visit Site

Rippling’s online payroll software has a user-friendly interface and requires little training for new users. The software works with over 500 third-party applications to improve your payroll process, tax preparation and other business operations. The payroll process is so simple that you can run it in as little as 90 seconds.

The software tracks important metrics like total hours worked per employee, paid time off and labor expenses. You can set up direct deposits directly in Rippling or give employees paper checks. The software automatically deducts an employee’s tax withholdings based on their filing status, and it automatically files international taxes. Automated workflows support Boolean rule processing, with outcomes such as approval automatically being requested for certain expense values or types.

Rippling advertises a price of $8 per person per month but requires custom quotes for the base fee. The vendor also requires all payroll customers to be on its workforce platform, Rippling Unity, which houses all data related to payroll, onboarding, benefits administration, and time and attendance. Indeed, we like the fact that all employee data is combined into a unified record, allowing Rippling to automate functions like box dispatch so departing employees can return hardware.

The system automatically compiles the necessary data for payroll tax preparation and automatically identifies applicable local, state and federal forms. You can then file and remit payments directly through Rippling. If your business operates across national borders, Rippling offers international payment support. Bill paying software will be added toward the end of 2023, covering global invoices and expenses, while domestic receipts can already be forwarded and viewed digitally.

Remote Payroll company logo
  • Remote offers payroll solutions for a distributed, global workforce.
  • The platform comes with a seamless onboarding process for employees and contractors.
  • Customer support is available only via email or through the company’s Help Center.
Editor's Rating: 9/10

Remote Payroll is an all-in-one payroll provider for businesses with an international workforce. The company is compliant in more than 60 countries and even offers country-specific benefits packages, with payments made in employees’ local currencies.

There are a variety of plans available depending on whether you want to use the software to manage contractors, a remote workforce or a global payroll. The standard solution comes with an employee self-service portal, HR library, new-hire reporting and analytics. We liked that there are no contracts or minimum employee headcounts, making this ideal for companies who rely heavily on contractors or firms with fluctuating workforce numbers.

You can also use Remote Payroll as your employer of record. If you choose this option, the company will manage the local payroll, taxes and benefits for you to ensure your business stays compliant in various countries. The employer of record service costs $599, but you will need to contact the vendor for a global payroll quote. It costs $29 per contractor per month to manage and pay international contractors, with no exchange fees and one-click approval for recurring invoices.

Papaya Global logo
  • Papaya Global can run payroll in more than 160 countries.
  • The company ensures your business stays compliant in different countries.
  • The HR services aren’t as robust as those offered by other payroll providers.
Editor's Rating: 9/10

If you plan to expand your business globally, Papaya Global is a great option for payroll processing. The vendor can run payroll in more than 160 countries for all types of employment. That’s why it’s used by large brands like Microsoft, Toyota and Shopify.

The company’s employer of record service ensures that you stay compliant with the various employment laws in all the countries where you have workers. Papaya Global will even help you secure short-term or long-term work permits for employees outside their home countries.

Papaya Global doesn’t charge a base fee for running payroll; the payroll package simply costs $20 per employee per month. But if you need to use the company as your global employer of record, it costs $650 per month.

Papaya Global is best for businesses looking to expand internationally. If you run a small business and don’t need global payroll tools, the software may come with many features that won’t be beneficial for your organization. An employee app, launched earlier this year, adds to its flexibility.

Deluxe company logo
  • Deluxe’s full-service payroll is backed by a dedicated customer service team that can optimize your processes.
  • Deluxe handles all implementation and configuration, ensuring it’s done correctly.
  • There are no free trials to test the software.
Editor's Rating: 9.3/10

With Deluxe’s easy-to-use payroll software, payroll can be completed in just three simple steps. The software allows you to adjust pay for fractions of hours worked, and you can issue paper checks or direct deposit payments. All the core services are offered: full-service payroll and tax filings across all 50 U.S. states, W-2/W-4/1099 filing, and benefit enrollment deductions.

Deluxe interfaces with dozens of third-party software providers, including accounting software and point-of-sale (POS) systems. The integration process includes seamless data migration, while the in-house integration between HR, benefits and payroll ensures changes in one automatically are applied to the others.

As a Deluxe customer, you’ll have access to a dedicated customer service team that can offer tax advice and general guidance. These reps can ensure you’re tax-compliant and help you find ways to save time and money on your reporting and filing processes. Even with this consultative approach, the vendor has simple pricing plans: $45 per month, plus $7 per employee per month, for its Payroll + HR Essentials package and $45 per month, plus $14 per employee per month, for its Payroll & HR Enhanced package with custom reporting fields and unlimited workflow automation.

Deluxe’s Microsoft partnership means its services can be accessed via Microsoft Dynamics 365 Business Central. This all-in-one solution is meant to simplify your business software needs via a single platform. Deluxe now offers integrations with several popular accounting software services, including QuickBooks, Xero and Sage. The ability to sync payroll and accounting software is another advantage for business owners seeking to streamline their operations.

Square company logo
  • Square is user-friendly and intuitive, requiring minimal training.
  • Square combines payroll data with applicable tax rules to ensure compliance and help you meet filing deadlines.
  • The vendor requires you to set up your own third-party software integrations.
Editor's Rating: 9.5/10
Visit Site

You may know Square as a payment processing platform, but the company also offers an online payroll service. Square Payroll is easy to use and has all the features we looked for in a payroll software company, including a dedicated payroll smartphone app.

You can use Square Payroll to process payroll for W-2 employees and 1099 contractors accurately and on time. The software automatically prepares necessary tax forms based on the information that’s already in your system, filing local and state taxes on your behalf.

Customer service is available via phone, email and live chat. The live chat tool is built directly into the software and allows you to contact payroll specialists, who understand how to optimize payroll processes. Speaking of specialists, Square has copied Intuit in outsourcing the HR and compliance services it offers to external partner Mineral.

Square can integrate with the best time and attendance systems as well as POS software. The system tracks employee hours automatically, and when it comes time to process payroll, you can pay employees using their Square balance rather than their bank account. We are impressed with Square’s new AI tools as well. These include AI-generated content for your emails and business communications.

There is no contract requirement for Square Payroll, which we found ideal for companies looking to avoid long-term contracts or commitments. Pricing plans start at $35 per month, plus $6 per employee per month. Alternatively, there is a contractors-only option, which allows you to pay 1099 contractors for $6 per payment with no monthly base fee.

Trinet logo
  • Zenefits offers HR and payroll services for $14 per employee per month, which makes it one of the most cost-effective platforms we reviewed.
  • A user-friendly interface has logical layouts and is equally straightforward to use on desktops and mobile devices.
  • Support is available for only part of each weekday and not at all during weekends.
Editor's Rating: 9.4/10

Zenefits Payroll is a smartly presented software platform that can run payroll in just three mouse clicks. It offers all the core functionality we look for in our review of payroll services at a highly competitive cost. There’s extensive report functionality, including pre-prepared reports, while niche features include reported tips and assistance with child support remittance. Part-month payments are automatically prorated, dynamic pay stubs can be personalized with messages, and workers are able to view documents even after they’ve left the company to work elsewhere.

There’s something inherently likeable about Zenefits, from the simplicity of its colorful user interface to the firm’s straightforward pricing structure and available upgrades. It doesn’t try to blind its users with science, focusing instead on logical processes and practical support. We especially appreciated the presence of a 25-course learning path, showing new clients under the hood and offering support with specific challenges like 401 (k) imports and exports.

In terms of pricing, Zenefits offers modular packages that can be built on one of three base plans, which range from $8 to $21 per month, plus $6 per employee per month. Additional costs range from advisory services ($8 per month) to recruiting and applicant tracking software ($323 per month)

isolved logo
  • Despite its cartoonish interface, isolved is a robustly designed suite of payroll, HR and workforce management software.
  • Employees are encouraged to be self-reliant, reducing pressure on managers.
  • The company failed to respond to a variety of requests for support and assistance.
Editor's Rating: 8.1/10

Over the last four decades, isolved has grown into a suite of HR and workforce management tools, of which payroll is an integral component. Its unusual approach to payroll is reflected in the creation of a full learning experience platform called People Heroes University, which covers a wide variety of training and self-tuition.

While some rivals encourage you to upgrade to premium software subscriptions to receive employee self-service, this functionality is baked into isolved. Staff can view everything from paid time off balances and personal data to benefits plans and W-2 forms, with updates automatically fed back to benefit providers and insurance carriers. Meanwhile, managers and admins view consolidated payroll benefits and HR data for each employee through a straightforward user interface.

Having originated in the 1980s in response to the newly unveiled COBRA requirements, isolved brings integrated ACA and COBRA tools to ensure compliance. Other simplification tools include automatic tax calculations, filing and agency payments, tax credit eligibility, and the usual threshold-monitoring rules and alerts.

Payroll Software Costs

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. Some firms are open and honest about their costs, while others prefer to generate a customized quote in response to a new business inquiry. This means handing your contact details over to a sales rep, who is free to give you the hard sell on that company’s products and services.

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 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. Even if you can’t get a free trial, several vendors will let you cancel your contract at any time. Other vendors, such as QuickBooks, offer bundle deals for their accounting and payroll software. Be sure to take advantage of any available discounts and introductory offers.

Key TakeawayKey takeaway

Most online payroll services charge a monthly base fee of $30 to $150 per month, plus a per-employee fee of $5 to $15 per month.

Payroll Software Features

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 or prepaid debit cards (also known as pay cards).
  • Payroll taxes: 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.
  • Automation: Cutting-edge artificial intelligence (AI) technology is on the rise in payroll software. This technology automates mundane payroll tasks like data entry, time tracking and calculations, which diminishes the likelihood of human errors.
  • 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.
  • International coverage: Some payroll software platforms will support payments to overseas contractors, while companies like Remote and Papaya have been built from the ground up to facilitate payments to foreign workers, freelancers and clients.
Key TakeawayKey takeaway

Most payroll software comes with unlimited payroll processing, the ability to pay employees in multiple ways, assistance with year-end tax forms, PTO management, employee self-service and mobile access. It is increasingly common to be able to use a payroll service for other HR needs too.

Choosing Payroll Software

There are three key stages involved in choosing the right payroll service for your small business. We outline these below.

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? Many payroll platforms are bundled into larger suites of HR and human capital management (HCM) software, indivisible from these wider offerings and therefore unsuitable for businesses that want a payroll package only.

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 run, so this is an important factor to consider.

Evaluate your firm’s competing priorities. Is same-day or 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 the 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. Remember that sales reps will talk up positives and gloss over negatives, so be probing in your questions and don’t let them distract you from getting the answers you need.

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 are any setup charges or fees levied for additional payroll runs? Do you pay for the software when it’s installed, a month after subscribing or when you perform your first payroll run?

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, as will the hours in which support is available. We found many companies offering fixed hours based on either Pacific or Eastern time, which obviously isn’t ideal if those hours of business don’t align with yours.

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 preferred vendor. If possible, take advantage of demos or free trials so you can get some hands-on experience. Many providers also provide introductory offers and discounts. See if you can negotiate the advertised price, and always ask if any discounts are available; recently withdrawn offers or incentives may still be available on request. Once you’ve chosen the software that’s best for your business, you can move forward with the setup phase.

Advantages of Payroll Software

Here are some of the biggest advantages of using a payroll service:

  • Increased efficiency: Using a comprehensive payroll service means you don’t have to hire someone in-house to handle all of your business’s payroll needs.
  • 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. If a particular platform doesn’t make this promise, look elsewhere.
  • Reduced expenses: The best payroll services 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 services are the most reliable way you can run payroll each week. If you set up automatic payroll, it will run without any input from you. 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 service offers a self-service app, employees can easily access any details they need. Logging in to the app should reveal their pay stubs, W-2s and direct deposit information. Some platforms let employees check their pay slips before payroll is run, providing a useful window to correct errors preemptively.
  • Manage remote workforces: Payroll services provide 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.
Did You Know?Did you know

In addition to determining whether you should pay employees hourly or on a salary basis, you need to figure out whether they are classified as exempt or nonexempt.

Frequently Asked Questions

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

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.

In addition to managing your business’s payroll, comprehensive payroll companies also handle your firm’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.]

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.

To set up payroll software, you’ll start by connecting your business’s bank account to your payroll platform of choice, 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.

Yes. Most payroll service providers offer mobile apps 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. Pay attention to whether the mobile apps offered by specific providers are specifically aimed at employees or designed to help managers and administrators.

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. If you need same-day direct deposits, Intuit QuickBooks Payroll is able to provide this service.

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.

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. These penalties include fines, interest on back taxes and liens on property. IRS fines range from 2% of the missing deposit to 15%, depending on the number of days the business is behind. To avoid fines and even criminal charges, ensure your payroll taxes are paid on time in the correct amount and that your company has filed all the required paperwork.

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.

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.

An employer-of-record (EOR) service helps you hire workers in foreign countries by acting as the legal employer for overseas employees. This solution ensures that you aren’t responsible for many payroll and compliance issues. However, it tends to be far more expensive than standard payroll services. For instance, Remote charges $599 for its EOR service.

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Jamie Johnson, Business Operations Insider and Senior Analyst
For more than five years, Jamie Johnson has been guiding business owners on financial matters both big and small. This includes investment advice, insights on business loans and funding options, recommendations on insurance and more. Johnson excels at delivering easy-to-understand direction so entrepreneurs can make the best financial decisions for their businesses and, as a solopreneur herself, she regularly tests business strategies and services. Johnson's expertise can be found in a variety of finance publications, including InvestorPlace, Credit Karma, Insurify and Rocket Mortgage. She has also demonstrated a deep understanding of other B2B topics — including sales, payroll, marketing and social media — for the likes of the U.S. Chamber of Commerce, U.S. News & World Report, CNN, USA Today and Business Insider.
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