Best Payroll Services for 2020

Update: We updated this page to include Intuit's new pricing.

Running payroll can be a difficult and time-consuming process. To simplify the complex task, more and more small businesses are employing online payroll services. With so many to choose from in 2020, we researched more than 70 of the top payroll companies to find the ones we think are best. Our top recommendations are below, but if you want to take a step back and learn more about this type of service, visit our guide to choosing a payroll service.

To determine the payroll services we think are best for small businesses and household employers in 2020, we spent dozens of hours researching the top online payroll companies. Here is an explanation of our selection process.

Locating the Best Services

To determine the best payroll services for businesses, we started with a pool of more than 70 online payroll service providers. Following preliminary research of other best-picks lists, we interviewed small business owners to discover new ones to add to our list.

Choosing the Best Services

After conducting some initial research into each, we settled on 21 payroll services to consider as best picks for our business categories: ADP, AmCheck, APS, BenefitMall, Big Fish Payroll Services, Fuse Workforce Management, GetPayroll, Gusto, Intuit, IOIPay, MyPayrollHR, OnPay, Patriot Software, PayUSA, Paychex, Paycor, Paylocity, Payroll On A Budget, Sage, SurePayroll and Wagepoint.

Researching Each Service

Next, we scrutinized each finalist. We reviewed their offerings, watched tutorials and how-to videos, read user comments, reviewed Better Business Bureau ratings and complaints, and tested out services when demos were available. After narrowing down the list to 10 contenders, we contacted each company posing as business owners to test their customer support and learn more about the service.

Analyzing Each Service

In all, we looked at cost, tax services, ease of use, customer service, integration options, incentives (free trials, free months, etc.), tax guarantees, mobile accessibility, payroll reports, employee self-service, extra services (employee retirement plans, workers' compensation, etc.), and Better Business Bureau ratings and complaints.

Best Household Employers

We followed a similar methodology to determine the best payroll service for household employers. In addition to SurePayroll and Intuit, which have plans tailored specifically to household employers, we considered five companies that specialize in payroll services for household employees: NannyChex, HomeWork Solutions, Savvy Nanny Payroll Services, GTM Payroll Services and HomePay by Breedlove.

In 2020, expect a growing trend of more flexibility for employees in when they get paid. For decades, employees were at the mercy of their employer on when they got paid. For some, that meant every two weeks; for others, it meant just once a month. 

While the vast majority of businesses still follow this practice, some are loosening the strings on it. Some employers now allow employees to decide when they are paid. For example, if an unexpected cost pops up, like a car repair, employees can choose to get paid immediately for the days they have worked since the last time they were paid. This means they can get the cash they need immediately, instead of waiting for their normal payday. 

In addition to the stand-alone services that work in tandem with payroll services, some payroll providers are starting to build this type of service into their software. One example of this is Gusto. Last year, the payroll company unveiled its Flexible Pay option to employers in Texas. With this option, employees can choose the days they get paid, instead of their employer deciding for them. Gusto is expected to roll this out to more of its customers across the country. We expect that other payroll providers will look at the level of success Gusto achieves with this feature and consider adding it to their own services.

Online payroll companies provide a valuable service to small businesses. They automatically calculate the correct amount your employees should be paid each pay period. They also make the appropriate deductions for things like healthcare benefits and Social Security. 

In addition, online payroll services handle all of your company's payroll tax responsibilities. This includes withholding the proper amount of funds, filling out and filing the required paperwork, and making the necessary payment to each local, state and federal agency. 

Processing payroll online is very convenient for small businesses. These are cloud-hosted services that provide access to your business's payroll from anywhere. You can log in from any web browser and check your payroll reports, input payroll and employee information, and complete payroll. 

Many online payroll companies offer additional services to small businesses, including new-hire reporting, workers' compensation insurance, paid time off (PTO) management, HR services, time and attendance systems, and retirement savings plans. 

When it comes to small business payroll, these online services typically have a monthly or per-payroll cost structure. With monthly plans, you pay a base fee and a per-employee fee. Base fees can range from $30 to $150 per month. Per-employee fees range from $2 to $15. With a monthly fee structure, you can run payroll as often as you like for one flat fee. If you have a semimonthly pay schedule, you will pay these fees twice a month. Online payroll services with a per-payroll fee structure can charge anywhere from $10 to $100 per pay run, plus per-employee costs of $2 to $15. 

In addition, some payroll companies charge year-end tax service and initial setup fees.

Q: What is online payroll software?

A: Online payroll software and online payroll services are essentially the same thing. It is a bit of semantics. The payroll software is what you access online. It is cloud-based software from the online payroll service provider. The software is what you technically interface with to run the payroll and add new employees into the system. Most online payroll software is easy to use and allows you to process your payroll in minutes. 

Q: What other benefits does payroll software provide? 

A: There are several big benefits to using comprehensive online payroll solutions. One major plus is its efficiency. You don't have to hire someone to handle all of your payroll needs, because pretty much anyone can use the software. In most cases, all you need to do when running payroll each pay period is to enter the hours each employee worked and any bonuses or commissions they earned. The software does the rest for you. It calculates the paychecks, withholds the proper deductions and automatically deposits the money in each employee's bank account. 

Another benefit is that the payroll company takes care of the tax filings and payments for you. Most of them offer a tax guarantee. If they make a mistake when filing your taxes or in how much they pay, they will fix the problem and pay any fines you incur. 

Q: What type of payroll service is right for my small business? 

A: When choosing an online payroll service for your small business, there are several factors to consider. First and foremost, you want to make sure it can handle all your payroll and payroll tax needs. Can you run payroll as often as you like? Will it make the deductions you need? Does it give your employees self-service access? Whatever payroll needs you have, you want to make sure the provider you choose meets them. 

You also need a payroll solution that is easy to use. The online interface should be simple to understand, and it should allow you to run payroll in a matter of minutes. 

Depending on your business's needs, you may benefit from a payroll company that offers additional services, such as time and attendance and HR solutions. 

Q: What is unique about comprehensive payroll companies? 

A: Comprehensive payroll companies do much more than prepare your business's payroll. In addition to payroll processing, they handle all of your payroll tax needs, manage your employees' paid time off, report new hires to the proper agencies and offer workers' compensation insurance. 

Many comprehensive payroll solutions offer additional services, such as HR management, benefits administration, time and attendance services, and 401(k) and college savings programs. 

Q: Why are payroll services important for small businesses? 

A: Many small businesses don't have a dedicated HR team that knows all the ins and outs of payroll. They rely on payroll companies to manage those responsibilities for them. They depend on these services to ensure their employees are properly paid each month and that their payroll taxes are appropriately filed and paid. 

Online payroll services give small businesses peace of mind that, with just a few clicks of a mouse every two weeks (or on their chosen schedule), their employees will get the money they are owed and that the proper payroll taxes are being withheld for payment when the time comes. Instead of you worrying about whether you filed the tax documents correctly and are paying the right amounts, online payroll services handle all of those tasks for you. They are so confident about this that most services offer an error-free guarantee.