Top Payroll Software Systems for Small Businesses
Spending time processing payroll is not what you want to be doing as a small business owner, as the chore can often be tedious, expensive, error-prone and time-consuming.
Managing your payroll, however, is obviously one of the most important aspects of your business. The Software-as-a-service (SaaS) industry is skyrocketing, and utilizing top payroll software for your business can conveniently automate your payroll process for a small, monthly fee, and can help you avoid costly mistakes.
Advantages of Automating
If you manually process your payroll on your own via a spreadsheet, you should consider automating your payroll processing through relatively inexpensive software designed specifically for small- to medium-sized businesses (SMBs) to resolve the challenges of keeping up with your task. Whether you run a dry-cleaning business and only have two employees, or you run an accounting firm and have 20, the benefits of utilizing a good payroll software system are endless, and can help you:
- Automatically keep up with new tax and employment laws and regulatory changes and incorporate them into your payroll system;
- Maintain accurate payroll records in accordance with the Fair Labor Standards Act;
- Prevent unintentional under- or overpayments to employees which can complicate year-end accounting and W-2 processing and cause potential legal issues for you;
- Ensure that you are properly withholding federal, state and local taxes from your employees’ paychecks, and
- Reduce administrative costs or time (if you’re the owner and are the one responsible for payroll).
If you think payroll software may be too expensive, think again. Kapitus has identified six of the best payroll software systems based on cost, capabilities, ease of use and the availability of customer support.
Gusto is ranked as the number one payroll software package by a variety of sources, including PCMag and US News and World Report, for its ease of use and low cost. Every Gusto plan offers Automatic local, state, and federal payroll tax filing, automatic state new-hire form filing, workers compensation administration, paystub and W-2 access for employees, and two-day direct deposit.
Gusto offers four distinct packages:
- The Basic package is $19 per month and $6 per employee and offers features such as automatic payroll filing, employee self-service and workers compensation administration.
- The Core package is $39 per month and $6 per employee, and offers automated tax filing in addition to what the Basic package offers.
- The Complete package is also $39 per month, but increases to $12 per employee. In addition to offering everything in the Basic and Core packages, it incorporates PTO tracking, time tracking, employee directory and onboarding services.
- The Concierge Package costs $149 per month and $12 per employee, and offers what the firm coins “complete and comprehensive HR support.”
The Paychex Flex package starts at $39 per month and $4 per employee, and generally has positive user reviews for its ease-of-use and compatibility with most HR software systems. The price increases as you add more features. While Paychex does not detail the price increases on its main website, what differentiates it is that it offers cloud-based payroll management and HR software to small businesses. All Paychex payroll programs include new-hire state reporting, automatic payroll tax filing, and an employee financial wellness program. Paychex Flex offers 160+ reports with its payroll and HR packages – something that most payroll software packages do not offer.
ADP is one of the oldest and most popular payroll companies. Reviews are mostly positive for its customer service and ease-of-use. It offers four RUN Powered by ADP plans, but you need to contact ADP to get a price quote based on your needs. Each plan offers basics such as direct deposit, automatic payroll tax filing, and W-2 submissions. Its cheapest plan, Core Payroll, does include employee onboarding, health care compliance forms, and a regular HR checkup. It’s more expensive plans include employee background checks and ZipRecruiter assistance plus more comprehensive payroll help, like wage garnishments and state unemployment tax deductions.
OnPay starts at $6 per month and $5 per employee, and has garnered mostly positive reviews for the extra features it includes for which most payroll software companies charge additional money for. Even its most basic package offers services such as garnishing wages, withholding state unemployment insurance, and giving employees multiple payment options such as direct deposit and paper checks. OnPay also will tailor its payroll services to specific industries such as construction and restaurants at no extra cost. Unlike Gusto, however, it does not offer a mobile app.
SurePayroll has garnered excellent reviews for its guarantee to deal with the IRS in case you make any mistakes deducting taxes from your employees’ paychecks, including paying any fines that might be levied against you in case you do. The service starts at $19.99 per month and $4 per employee, and will charge more as you add on additional services. SurePayroll charges extra for services such as accounting integration software and is limited to QuickBooks and Xero. Time-clock integration starts at $4.99 a month. Still, the $29.99 it charges for its full-service payroll system makes it one of the cheaper payroll software services out there, especially given its tax guarantees.
UZIO starts at $30 per month and $4.50 per employee, and is specially tailored to small businesses with fewer than 10 employees. Its affordability and ease-of-use has garnered it positive reviews. Its self-service employee portal and automatic payroll tax deductions make it simple and affordable. If you want to add additional HR support, you can upgrade to UZIO’s All-in-One package, which does not cost much more than its basic package.
All in all, while utilizing payroll software may be an extra expense, automating your payroll system is definitely worth the money. Doing so ensures that your employees get paid in full and on time, and it will avoid costly mistakes that could result in hefty fines by the IRS and other agencies if you make a mistake,