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Jessica Dennis Avatar

Written by
Jessica Dennis, Lead Writer
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Kaiti Norton Avatar

Reviewed by
Kaiti Norton, Managing Editor
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Jessica Dennis Avatar

Written by
Jessica Dennis, Lead Writer
Read more by Jessica →

Kaiti Norton Avatar

Reviewed by
Kaiti Norton, Managing Editor
Read more HR content →

What is payroll software?

Businesses use payroll software to manage, organize, and automate the employee payment and tax filing process. It eliminates time-consuming, payroll-related tasks for human resources (HR), reduces pay errors, and guarantees that employees receive payment on time.

Extensive payroll platforms allow organizations to monitor time and attendance, tax information, and pay structure. They can keep track of worked hours, calculate wages, deduct tax withholdings, and pay government employment taxes. Reliable payroll software solutions automatically update when tax laws change and alert employers when it’s time to file tax forms.

Aside from payroll processing and management, most payroll software solutions deliver direct deposit, expense management, employee self-service, compensation management, and reporting features. Payroll solutions may be a standalone system or integrated as part of a larger human capital management (HCM) system.

I reviewed 10 market-leading payroll software solutions and narrowed my list of recommendations to the best of the best:

Our picks for the best payroll software

Jan. 18, 2024: Jessica Dennis reevaluated our top choices for 2024 using an objective scoring rubric. As a result, Rippling was added to the list as best overall, and Patriot was removed from the list. She also rewrote most of the article and updated product information, prices, and key features.

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I picked my choices with you in mind.

First, I conducted market research based on current options and narrowed down my list based on the reviews of readers like you. I then researched the following 10 payroll platforms using free trials, demos, and knowledge bases.

  • Gusto.
  • ADP Workforce Now.
  • Patriot Payroll.
  • QuickBooks Payroll.
  • OnPay.
  • Rippling.
  • Paychex Flex.
  • Paycor.
  • Deel.
  • APS Payroll.

My research focused on your top-of-mind concerns like price, compliance support, automations, and ease of use. Below is a breakdown of the categories I used to grade each platform. Each category also includes my expert score, which contributes to its overall score.

​​As the market changes, I reevaluate my choices so you always receive the best insights for your purchasing decision.

User reviews: 5%

User reviews from third-party software platforms like Capterra, G2, and TrustRadius accounted for 5% of the software’s overall score. I focused on software that received at least 3.5 out of 5 stars on these sites. Because users have real-world experience with each platform, they played a significant role in narrowing down my list of top products to compare.

Pricing: 20%

Pricing accounts for 20% of the weighted score. Software with transparent pricing, scalable tiers, discounts, and free trials received the highest scores. I also considered each platform’s “value for money,” which determines whether the number of features in each price tier or module is competitive with other vendors in the space.

Platform and interface: 20%

How easy is the platform to use? Will it be able to grow with the company? What is the customer service like? And will employees’ data be safe? This category covers the solution’s intrinsic features and offerings, including how well it will integrate with your current tech stack. This category represents 20% of the platform’s total score.

HRIS: 15%

The human resources information system (HRIS) category covers the strength of the software’s underlying employee information data repository. Software with robust recordkeeping features, onboarding and offboarding capabilities, and employee self-service portals earned the top marks. HRIS comprises 15% of the solution’s total score.

Payroll: 25%

Payroll is weighted the most in my roundup at 25%. During my evaluation, I considered critical payroll software features like automatic federal, state, and local payroll tax filings, unlimited off-cycle payroll runs, support for various employee pay options, and compliance safeguards. The best vendors automate most of the payroll process while pinpointing errors and reducing manual data entry.

Reporting and analytics: 15%

Because payroll processing is highly regulated, solutions with in-depth payroll reporting and analytics addressing compliance needs performed the best in this category. I also evaluated each platform’s ability to create custom reports, unite data across modules, and print or eFile mandatory federal, state, and local forms. Reporting and analytics accounts for 15% of the software’s score.

Rippling: Best overall payroll software


Pros

  • Supports payroll for hourly and salary workforces in 50 countries.
  • Available PEO and EOR services to outsource your payroll needs.
  • Automated garnishment deductions and payouts on your behalf.
  • Job costing by location, client, and task for insights into labor costs and proper contractor billing.
  • Customizable payroll reports that can connect data from over three different sources.

Cons

  • Payroll is an add-on module to its core Rippling Unity platform.
  • Only available to companies headquartered in the U.S. and UK.
  • You must purchase its HR Help Desk module for support by phone.
  • Occasionally slow and glitchy when moving between modules.
Rippling logo.

Our Rating: 4.29/5

Rippling is an all-in-one human resources (HR) platform that targets growing midsize businesses. It includes a massive library of HR modules to support the employee life cycle. In particular, its payroll features are versatile enough to accommodate workforces across the U.S. and 50 countries worldwide.

Rippling also offers professional employer organization (PEO) and employers of record (EOR) services for businesses that want to share or completely outsource payroll compliance and administration to experts. This is great if you’re new to payroll or your payroll processes are becoming more complex, such as juggling multiple pay schedules, employee classifications, pay types, and business entities.

Rippling received the highest score overall in my roundup and the highest within the payroll subcategory at 4.44 out of 5. It offers all the payroll essentials, including unlimited pay runs, compliance assistance, and fast direct deposit turnaround times to expedite payroll processing times. It even handles deducting and submitting garnishment payments to various states where other vendors require you to process garnishments yourself. Gusto and Deel, for example, only handle child support payments.

Processing payroll is also straightforward, requiring minimal data input, especially if you subscribe to Rippling’s other HR modules, like benefits administration and time and attendance. For example, Rippling pulls data changes directly from the employee’s profile every pay cycle, so you don’t have to remember to enter status changes, like pay changes, during payroll. Instead, Rippling continuously updates payroll in the background whenever you change employee information. This is unlike other vendors that run payroll in batches, such as APS Payroll.

Unfortunately, Rippling does not currently offer native scheduling abilities. And, if you use its PEO service, all your employees must have direct deposits for payroll processing. This can be a turnoff if you have mainly non-exempt from overtime hourly workers, frontline workers, or workers with religious, moral, or cultural reservations about opening bank accounts.

Despite this, Rippling integrates with many popular scheduling applications, such as When I Work and Homebase. It also supports paying non-exempt hourly workers in international countries. In contrast, Gusto Global currently only covers exempt, salaried workers.

Did you know?

Rippling has one of the industry’s fastest new feature release schedules, with modules and features like recruiting, headcount planning, compensation bands, and performance management released in 2023 alone. Its comprehensive HR coverage also makes it one of the most adaptable products in the industry, leading to spots in several of our buyer’s guides. Check out some of them below:

Automated payroll approval

Of the software I tested, only Rippling, Gusto, QuickBooks Payroll, and Paycor offered automated payroll runs. But only Rippling offers automatic payroll runs for both employees and contingent workers. In contrast, QuickBooks Payroll only supports automatic payrolls for salaried employees. Gusto’s AutoPilot feature also does not support automatic contractor payments. 

Rippling’s Auto Approve also lets you turn the functionality on or off based on your various pay schedules. For example, suppose you pay your hourly workforce on a biweekly basis and your salaried workforce on a semi-monthly basis. In that case, you may only want auto-approved payroll active for your salaried employees while manually running payroll for your hourly employees.

This gives you more control over checking your hourly workforce’s hours and adjusting for late timesheets or incorrect punches — instead of relying solely on Rippling’s automated reminders.

Alternatively, you can program all payroll schedules to run on auto-approval as a backstop but continue manually adjusting, reviewing, and submitting payrolls. This ensures consistent paydays for your workforce, especially if your small HR or accounting departments tackle multiple priorities outside payroll processing.

Plus, Rippling will notify you if it cannot auto-approve payroll, such as if employees are missing critical payroll information. In this case, you can manually complete payroll and request the missing information from workers during the payroll workflow. That way, your HR or accounting teams save time by not chasing employees for this information.

Rippling displays auto-approve payroll runs instructions and a dropdown box with the options "yes, set up auto-approval of runs" or "no, I'll approve runs manually" next to the pay schedule "hourly employee schedule."
Rippling lets you customize which payroll schedules it auto-approves, allowing its system to manage your simpler payrolls so you can concentrate on your more complex schedules. Source: TechnologyAdvice
Built-in compliance

One of my favorite features of Rippling is its Compliance 360 feature, which comes standard for all Rippling customers. Compliance 360 monitors minimum wage and mandatory paid leave policies worldwide and populates a list of potential violations. You can organize the list by level of urgency to tackle the issues with the most risk to your business first.

All the platforms on my shortlist have some degree of payroll and tax error controls to monitor and address issues like two employees with the same Social Security number and deductions exceeding gross earnings. Paycor even highlights compliance alerts on its homepage, so you are aware of issues needing your review as soon as you log in.

What makes Rippling’s compliance monitoring different is that it also provides in-app ways to help you resolve various issues. It removes the friction in fixing issues, saving your team time and money from contacting HR experts or employment law attorneys.

Rippling even provides resources for problems without an easy fix, giving your teams a place to start. This is a huge benefit, especially as you grow your business into new locations domestically and internationally with unfamiliar payroll, time, and tax regulations.

Here’s an example: At the end of the year, Rippling compiles a year-end checklist of necessary actions to keep your payroll processes compliant for the new year. Rippling explains the task, its importance, due date, and priority. Moreover, it also directs you to where you can complete the tasks within Rippling. Others on my list either don’t have a checklist or only note important due dates for various year-end tasks, like Gusto.

Rippling displays a list of tasks for the end of the year, with the task "make sure your 'filing 1099' payroll settings are accurate" expanded to see instructions for completion, due date, and priority.
Rippling provides a list of year-end payroll compliance tasks plus ways to resolve them, shortening the time it takes to complete them. Source: TechnologyAdvice

Rippling’s U.S. and Global Full-Service Payroll is an add-on to its base platform, Rippling Unity. All customers must purchase Rippling Unity first, which starts at $8 per employee per month (PEPM). It includes four plans based on the number of workflows, advanced reporting features, and integrations you need.

Rippling may also charge you an additional monthly base fee, depending on the modules you choose. Most third-party sources indicate the monthly base fee starts at $35.

Rippling lacks a free trial, hides its prices, and reserves payroll capabilities for a separate module, resulting in a 2.88 out of 5 rating for pricing. While Rippling has the most robust payroll features in my lineup, it does not offer a standalone payroll product.

Therefore, you’re better off choosing Gusto or QuickBooks Payroll if you’re looking for a standalone payroll solution to supplement your human resources information system (HRIS). You can also check out Patriot Payroll or Roll by ADP if you have fewer than 10 employees.

But if you’re dissatisfied with your current people management software or your current payroll software can’t handle your distributed teams, you may save money in the long term with Rippling. This is because you don’t have to stitch together various systems to pay your employees, which results in repetitive data entry, process inefficiencies, and poor user experience.

The chart below outlines Rippling Unity’s various plans, add-on modules, and services.

Rippling Unity

Core

Includes:

  • Global organizational chart.
  • Global workforce analytics.
  • Permissions and access control.
  • Approval management.
  • Document and policy management.
  • Compliance management.
  • Salary banding.
  • PTO and leave management.
  • Localization for 150+ countries.
  • Customized workflows (for onboarding only).

Pro

Includes everything in Core, plus:

  • Customized workflows (for any event).
  • Up to 10 workflows.
  • Up to 10 formula fields in reports.
  • Up to 10 reports that join data from three or more sources.
  • Integrate with Slack for approvals and sending messages.
  • Integrate with Microsoft Teams for sending messages.
  • Create and send calendar invites.
  • Scheduled reports.

Unlimited

Includes everything in Pro, plus:

  • Unlimited customized workflows.
  • Unlimited formula fields.
  • Unlimited advanced reports.
  • Webhooks.

Enterprise

Includes everything in Unlimited, plus:

  • Access to Rippling’s API.

Rippling’s add-on modules

HR Cloud

  • U.S. and global payroll.
  • Benefits administration.
  • Time and attendance.
  • Flex benefits (FSA, HSA, and commuter).
  • Recruiting.
  • Learning management.
  • Pulse (employee engagement).
  • Headcount planning.
  • Performance management.

IT Cloud

  • App management.
  • Device management.
  • Inventory management.

Finance Cloud

  • Corporate cards.
  • Expense management.

Rippling’s services

  • ACA and COBRA administration.
  • HR Help Desk (HR Support).
  • PEO services.
  • Global employer of record services.

Did you know?

Rippling currently offers a one-month free subscription if you sign up within six weeks. This is subject to end anytime, so please check its website for the latest.

Rippling is the best payroll choice overall for its ability to accommodate complex payrolls, plus its scalable features and services. In particular, its customizable workflow automations impressed me. Besides auto-approving payrolls, you can get as granular as you need with your payroll runs by creating workflows to notify necessary stakeholders of payroll changes, automate sending reports, and pay multiple employee types in the same payroll run.

Rippling earned a total of 4.29 out of 5, losing points only for pricing, lack of native accounting features, and minimal customer support options. Rippling is also better suited for companies paying salary-exempt, distributed workers since its time-tracking features are unwieldy. For example, it takes no less than three clicks to clock in for a shift using Rippling’s desktop application.

Rippling also does not monitor regulations regarding youth employment, which affect working hours and wages for employees under 18 years old in the U.S. This can be a huge drawback if you’re in an industry like food or retail, where minors can make up a significant portion of your workforce.

Despite this, Rippling checks all of the major boxes for payroll. So, if you need a strong payroll solution and a people management system, I recommend starting with Rippling rather than connecting disparate applications.

Gusto: Best for businesses new to payroll


Pros

  • International contractor payroll in more than 120 countries.
  • Gusto-brokered health insurance that integrates with payroll on all plans.
  • Customer service is available by phone, email, or chat.
  • Native employee financial wellness tools through Gusto Wallet app and Gusto debit card.

Cons

  • No dedicated account manager (unless with a Premium subscription).
  • Check delivery is currently in beta and costs $1.50 per check.
  • EOR services are limited to Canada only.
  • The lowest price plan is only for single-state payroll.
Gusto logo.

Our Rating: 4.03/5

Gusto started as an employee and contractor payments company but now supports various HR functions like benefits administration, performance management, and recruitment. But Gusto remains a payroll company at heart, growing to support contractors in over 120 countries. Gusto even recently partnered with Remote to offer EOR services for employers wishing to hire and pay employees in Canada.

Gusto has a simple but modern user interface (UI) with pre-built payroll workflows requiring minimal effort to set up. This is a major advantage for a small business because it ensures you become familiar with basic payroll flows and compliance requirements. You can even enable Gusto’s AutoPilot feature, which automatically approves payroll and rivals Rippling’s auto-approve payroll.

As a full-service payroll company, Gusto also deducts and files all federal, state, and local payroll, pays out child support payments for employees in 49 states (except for South Carolina), and adjusts minimum wages for tip credits. In contrast, many standalone payroll solutions either don’t support local payroll tax filing or require you to deduct and pay out garnishments yourself. Even Workforce Now, by payroll giant ADP, asks you to manually look up local tax codes during employee onboarding

Despite this, Gusto is not the most scalable solution on the market, even as it starts offering support for employees internationally. Enterprises, for example, will have difficulty finding crucial pay data insights, such as pay disparity by various minority groups or compensation benchmarking. This is because Gusto has limited report customization capabilities and completely lacks visualizations. Instead, you’ll need to export the reports to a spreadsheet program to create customized charts and gain data insights.

Gusto also becomes tedious to use once you have over 50 employees since it still requires manual entry for things like time tracking and new hire onboarding unless you opt for a higher-paying tier. But this might not be an issue if your team is small and does not need the reporting or customization of more complex platforms like Rippling.

Simple payroll interface

If you don’t enable Gusto’s AutoPilot function, running payroll takes only three steps: enter hours and earnings, account for employee time off, and review and submit. Gusto also features a payroll progress bar with steps and instructions at the top so you stay on track and remember what information you need for payroll finalization.

Gusto makes the process somewhat less tedious than Rippling if you don’t have a native or integrated time-tracking module. This is because Gusto includes fields to adjust employees’ hours, earnings, deductions, and reimbursements on the same page. You only have to open the section to adjust the fields that apply to each employee.

This is unlike Rippling, which separates hourly and salary employees into different steps and puts each employee’s earnings and deductions in tabs. Rippling still uses a spreadsheet for entering this information, resulting in long, horizontal scrolls to find and adjust the pay codes that apply to each employee. As a result, it takes significantly more clicks to finish payroll than Gusto.

Gusto displays a payroll dashboard with instructions for adding in employee hours and additional earnings, plus editable regular hours and additional earning fields for an employee named Maya Angelou.
Gusto organizes all payroll change data by employee, shortening the time it takes to enter any earnings, reimbursements, and deductions for speedier overall payment processing. Source: TechnologyAdvice
Payroll add-ons

Gusto offers several add-on features that benefit small businesses. For example, Gusto can help you save money with R&D tax credits or start a pay-as-you-go workers’ compensation policy through its partner, AP Intego. Gusto’s state tax registration add-on also puts the responsibility on Gusto to file and monitor all the paperwork needed to expand your business into new states.

Gusto also offers a free bill pay module. You can upload bills from vendors, suppliers, and subcontractors and schedule payments. You can also create an electronic roster of all your vendors.

However, the module is quite rudimentary. For example, you can’t attribute codes, like utilities, to payments for accounting purposes. You also can’t filter or export bill payment data to your accounting application. And finally, it doesn’t have electronic approval workflows for various stakeholders to check the bill’s accuracy before payment.

Nevertheless, if you’re switching to Gusto after doing accounting and payroll processes yourself, it is a step up from manually maintaining billing and vendor profiles.

Gusto displays a bill pay dashboard with a payment of $100 scheduled for ACME Inc. on January 1, 2024.
With Gusto’s bill pay, you can upload and schedule bill payments to control payments within the same platform as your employee and contractor payroll. Source: TechnologyAdvice

Curious about other HR platforms that can support your new, rapidly expanding business? Check out the 5 Best HR Software for Startups.

You can choose between three pricing tiers with Gusto: Simple, Plus, and Premium. Gusto also includes a contractor-only plan for $35 per month plus $6 per contractor per month.+ QuickBooks Payroll is the only other platform in my top five with a contractor-only option.

At 4 out of 5, Gusto has the highest score for pricing out of the payroll solutions I reviewed. Besides its contractor-only feature, Gusto beats the competition with its discount offerings for contractors and EOR services and its breadth of features for what you pay. Many competitors mirror Gusto’s tier plans or charge similar prices to attract customers. For example, OnPay’s one-price-for-everything is the same as Gusto’s Simple plan: $40 plus $6 PEPM.

Gusto only lost points for lacking a free trial (although you can test out its interactive demo) and because it’s not the most scalable platform. For example, small organizations needing payroll may not need some of Gusto’s HR capabilities, like benefits administration and onboarding. Meanwhile, larger organizations will be hard-pressed to make strategic business plans using Gusto’s limited reporting and analytics capabilities.

Nevertheless, Gusto continues to grow, adding recruiting, performance management, and global employee payroll within the last few years. It also maintains its user-friendly appeal, illustrating its dedication to small-business customers new to payroll and HR processes.

Simple

$40/mo. + $6 PEPM.

Includes:

  • Single-state payroll.
  • Full support.
  • Self-service.
  • Gusto-brokered health insurance.
  • Basic hiring and onboarding.
  • Reports for payroll and time off.
  • Accounting, time tracking, and expense management integrations.
Plus

$80/mo. + $12 PEPM.

Includes everything in Simple, plus:

  • Multi-state payroll.
  • Advanced hiring and onboarding.
  • Time off management.
  • Time tracking.
  • Project tracking.
  • Performance reviews.
  • Employee surveys.
  • Workforce costing.
Premium

Contact sales.

Includes everything in Plus, with:

  • Dedicated customer success manager.
  • HR templates for handbooks, job descriptions, and policies.
  • Proactive federal and state labor law compliance alerts.
  • Access to HR experts.
  • Health insurance broker integration.
  • Priority support.
Add-ons
  • International contractor payments: Price varies by foreign exchange rate.
  • State tax registration: Prices vary by state.
  • R&D tax credits: Pay 15% of identified tax credits.
  • Gusto Global: $629.10 PEPM (limited time offer until 3/31/24; then $699 PEPM).+
  • Health insurance broker integration: $6 per month per eligible employee.
  • 401(k) retirement savings: Price varies by 401(k) integration.
  • Health Savings Accounts (HSAs): $2.50 per month per participant.**
  • Flexible Spending Accounts (FSAs): $4 per month per participant, with a $20 per month minimum.**
  • Dependent care FSAs: $4 per month per participant, with a $20 per month minimum.**
  • Commuter benefits: $4 per month per participant, with a $20 per month minimum.**
  • Workers’ compensation: Price of premiums only.
  • Life and disability insurance: Price of premiums only.

Annually updated labor law posters: $8.99/mo. (for onsite posters); $10/mo. for up to five employees, plus $1/mo. for each additional employee (ePoster service for remote employees).

+Gusto waives the $35 monthly base fee for the first six months; this could change anytime, so please explore its website for the latest.

*EOR support is available only for full-time, salaried Canadian employees through Gusto’s recently launched partnership with Remote. Remote currently operates in more than 75 countries, and Gusto Global plans to expand to more of these countries in 2024. It has an ongoing 10% discount ($629.10 PEPM) for new users until March 31, 2024. This could change at any time. 

**Annual $200 service charge covers HSAs, FSAs, dependent care FSAs, and commuter benefits.

Gusto stands out for its accessible features that make it easy for companies to get familiar with payroll processing for the first time. Besides offering competitive workers’ compensation and health insurance benefits, it can also walk you through registering your business in new states. This support is crucial, especially if learning and adhering to labor law regulations in new states is a major obstacle to expanding your small business.

With a 4.03 out of 5, Gusto’s score reflects its ability to offer accessible tools to payroll newbies while supporting their needs. For example, Gusto’s project tracking allows you to pay your contractors accurately while also providing you with data to make more accurate, competitive project bids to your clients.

Plus, its employee self-service features are easy to use, reducing the need for employees to reach out to your time-strapped HR department for things like W-2s or paystubs. Moreover, employees keep their Gusto profiles for life, even after termination. This is unlike platforms that typically lock employee accounts following separation or delete their accounts if their employers switch payroll platforms.

While Gusto provides basic versions of several HR processes, like learning and development, it’s not the best choice if you need a full-scale human capital management (HCM) system. In this scenario, I’d look to Rippling or ADP with HR modules that rival standalone equivalents. But as a new business, Gusto is a step up from free payroll solutions, ensuring you adhere to tax law and minimize errors.

OnPay: Best for small businesses


Pros

  • Free setup and data migration.
  • Only pay for employees you actively pay in a month.
  • Specialized payroll services for particular industries, like agriculture, churches, and nonprofits.
  • Employee rosters, organizational charts, leave management, and customizable onboarding included.

Cons

  • Does not offer native time-tracking and accounting modules.
  • No mobile app.
  • Limited third-party integrations.
  • Not suitable for fast-growing companies.
The OnPay logo.

Our Rating: 3.61/5

Overview

Although OnPay’s specialty is payroll, its platform has all the features you need to manage small business HR processes. This includes time off management, benefits administration, customizable onboarding workflows, and task management. These all come standard with OnPay, compared to platforms that require you to integrate or purchase a higher-tier subscription, like Gusto.

Completing payroll is also very straightforward on OnPay. While OnPay does not have the automated payroll run features of Gusto, Rippling, and Paycor, its interface is straightforward, requiring just as many (or fewer) clicks as Gusto to complete payroll. Like Gusto, OnPay lets you add or adjust earnings and deductions on the same screen, avoiding extra clicks and cumbersome spreadsheets. You can also adjust specific employee pay information in a sidebar window without leaving the workflow.

OnPay allows you to pay contractors within the same pay cycle as your regular employees, similar to Rippling. This avoids repeating the payroll process for your different worker classifications at the end of every pay period.

Unfortunately, OnPay is not the best choice if you expect to need more robust payroll features later. Although it supports unlimited pay cycles and multi-state payroll, it lacks any global payroll functionality. It also does not have in-app compliance checkers, so you’ll have to become familiar with new state laws on minimum wages, paid time off (PTO), and overtime before running your first payroll.

One of the biggest drawbacks, especially for businesses with mostly non-exempt hourly workers, is OnPay’s lack of native time-tracking or scheduling features. It does integrate with popular options like When I Work and Deputy. Still, if you want to avoid your employees needing to download and use multiple apps to complete and manage their work time, QuickBooks Payroll may be a better alternative.

Employee engagement and recordkeeping

OnPay offers basic employee engagement and recordkeeping elements that you rarely see in standalone payroll platforms, such as employee profile bios and customizable fun fact questions. Employees can view this information and work contact numbers directly in OnPay. This is especially useful if you have shift workers who need to reach team members to report emergencies like tardies or other shift changes.

OnPay’s drag-and-drop customizable forms are also very convenient for keeping track of critical business information. For example, you can use them to collect employee T-shirt sizes for an upcoming work event or to track company equipment like computers and keys.

E-signature capabilities also allow you to collect essential documents and obtain legal acknowledgments from employees. For instance, I can create and have employees sign uniform deduction agreements to deduct the cost of their uniforms from their next paychecks.You can create similar flows for handbook policies, including any that impact payroll processes, such as bonuses, reimbursements, and other deductions. OnPay is the only solution that offers this capability along with payroll. Meanwhile, Gusto reserves such capabilities for its higher-paying plans, while QuickBooks Payroll lacks form creation entirely.

OnPay displays an example non-disclosure agreement with a toolbar on the right to adjust document formatting and add smart fields, like employee name, address, and signatures.
OnPay lets you create documents with smart fields and e-signatures to gather, save, and monitor agreements that impact payroll and workforce management processes. Source: OnPay
Payroll reports builder

OnPay includes a payroll-specific reports dashboard, with links to important reports, like general ledger (GL) summary and payroll register, directly on the main page. Graphs also provide quick views of the number of employees paid each month and paid wages by type to track costs and turnover.

I also like OnPay’s report designer, which lets you filter and drag-and-drop report columns to adjust your report in real time without downloading data to a spreadsheet program of choice. You can even save custom reports and views to access the data you need as it changes with each pay run.

OnPay does not compare to the analytics functionality of Rippling, but for a small business, it has a much lower barrier to entry. It also saves you time from downloading reports repeatedly to get the data you need. In contrast, Gusto requires you to download your reports to view them, even on its Premium plan. If you’d rather avoid wasting hard drive space and clogging up your downloads folder, using OnPay to check your labor costs over time is a simpler solution.

OnPay displays a payroll check report with a user dragging in a reimbursement column and removing a net pay column from the report.
OnPay allows you to manipulate payroll reports in real-time, including rearranging columns and adding up to 50 data points for comparison. Source: OnPay

OnPay boasts the simplest pricing of all the vendors on my shortlist. For $40 per month plus $6 PEPM, you get access to OnPay’s entire platform, including payroll and basic HR features. These include:

  • Multi-state payroll.
  • Customized employee onboarding and task checklists.
  • Personnel file storage.
  • PTO management.
  • OnPay-brokered health insurance benefits.
  • Company directory and organizational charts.
  • HR resource library.
  • Customer support by phone, chat, and email.

You will also pay for any insurance, retirement, or workers’ compensation premiums on top of this base amount.

OnPay’s price and feature set directly compare to Gusto’s least expensive Simple plan; in many ways, OnPay surpasses Gusto Simple’s capabilities. For example, by choosing OnPay, you don’t have to sacrifice cost savings to manage your workers and tax filings in multiple states. By comparison, you have to upgrade to Gusto Plus or QuickBooks Payroll Elite for this coverage.

However, OnPay only received a 3 out of 5 for pricing because it does not offer a reduced-price contractor-only plan and is one of the least scalable payroll platforms. Despite its competitive one-price-fits-all model, it’s a better choice for small establishments without major growth goals.

For example, if you want to start tracking employee development and progress, you’ll need to purchase a separate application specifically for performance management. Even then, you can’t integrate this data with OnPay since its integrations are limited to time, attendance, accounting, and HR compliance partners.

You’ll also need to purchase other platforms for supporting international employees and more in-depth analytics. In these scenarios, starting with a platform like Gusto that mimics OnPay’s user-friendly payroll interface but includes scalable tiers and add-ons for a more streamlined payroll process may be better.

If you’re looking for basic payroll and HR support for your employees at an affordable price, OnPay is your best bet. Coming in with a score of 3.61 out of 5, OnPay supports small businesses through uncomplicated payroll workflows that accommodate multiple payroll schedules, worker types, and pay methods. It also comes with a suite of HR tools to meet minimum compliance requirements by state and industry, including PTO policy management, compliance audits, and an HR resource library.

OnPay’s consistent pricing structure makes planning for and controlling long-term business costs much easier. This benefits small businesses that have to account for high overhead costs or whose profits change from season to season.

However, this also makes OnPay less likely to innovate and offer more modern features at the same rate as competitors. Its one-price-fits-all feature means that adding more capabilities will result in profit loss for the company unless they raise prices or offer add-on modules for additional fees. If you want a product that improves and adapts constantly, go with Rippling instead.

QuickBooks Payroll: Best for its accounting integration


Pros

  • Online chat support available 24/7.
  • Tax penalty protection for any reason on its Elite subscription tier.
  • Next-day or same-day direct deposits (depending on subscription tier).
  • Mobile app time and mileage tracking.
  • Personal HR advisor at Elite subscription tier.

Cons

  • Local tax filings are only available in Premium and Elite plans.
  • Additional fees for tax filings in multiple states, unless on Elite plan.
  • Does not offer insurance benefits in HI, VT, and Washington D.C.
  • QuickBooks time and attendance features open in a separate application.
  • Service capped at 150 employees.
The QuickBooks logo.

Our Rating: 3.56/5

Intuit’s QuickBooks is a long-standing small business accounting software solution. As a small-business accounting giant, it is typically one of the first software products you purchase alongside a payroll solution. QuickBooks allows you to bundle both software services into one so you can monitor all your business expenses in one place.

Running payroll in QuickBooks is relatively easy. The software looks similar to OnPay, but all employee management and payroll functions occur within the payroll module tab on the left rail. From there, you can click run payroll to access a spreadsheet of your employees for that payroll. QuickBooks automatically populates earnings for your salaried employee, but you’ll have to manually enter regular and overtime hours for your non-exempt hourly staff.

One of the benefits of choosing QuickBooks Payroll is its native time and scheduling capabilities in its higher subscription tiers. This prevents you from having to enter hours for your hourly staff or purchase a third-party time and attendance application that integrates with QuickBooks.

Plus, as you progress subscription tiers, you access most QuickBooks Time features, including geolocation, geofencing, mobile clock-in and clock-out, scheduling, project tracking, and budget monitoring. This is especially helpful if you employ mostly field and contract workers without a primary base of operations. By comparison, only Paycor on my list offers equivalent time tracking and scheduling support, but even these are add-on modules.

Despite this, QuickBooks Payroll functions best if you only need a standalone payroll option for your small business. It doesn’t support third-party integration options for strategic HR functions, such as recruitment and performance management. It also lacks an organizational chart and customized onboarding workflows. And, you must also complete and store W-4 and I-9 forms outside of QuickBooks since it doesn’t support e-signature documents.

As a result, there will likely come a time when you will need to change to a platform with features to support employee retention and 100% electronic personnel files. Alternatively, you may opt to complete payroll processes within QuickBooks but integrate with partners like TriNet HR Platform, Zoho People, or Connecteam that offer broader HR and workforce communication features.

Heads up!

Intuit will discontinue QuickBooks Desktop, its mainstay on-premise small business accounting software, after May 31, 2024. As a result, all modules and services that integrate with this core platform, including QuickBooks Desktop Payroll, will also be discontinued. If you are a current user, learn more about moving to QuickBooks Online or read on for an in-depth look at QuickBooks Payroll.

Payroll and vendor billing

If you bundle your QuickBooks Payroll subscription with QuickBooks Online, you can run payroll and vendor bill payments from the same system. QuickBooks’ is significantly more advanced than Gusto’s bill pay option.

For example, besides creating a list of vendors and paying them directly from the platform, I can log bills by categories to assist with expense management and set up multi-conditional approval workflows. This is great if you’re managing bills from multiple work locations and need certain employees to confirm bill accuracy, such as when bills exceed a certain dollar threshold.

If you don’t have employees, QuickBooks offers a contractor-only option with accounting features. Besides being more affordable, it also means you don’t have to follow typical employee payroll schedules. Instead, you can pay contractors per any pay agreement you make or alongside your regular billing cadences. As a result, you have more control over your company costs, allowing you to schedule payments during periods of higher revenue.

General ledger integration

When you use QuickBooks Payroll and QuickBooks Online together, QuickBooks automatically records this data in your chart of accounts once you finalize payroll. While QuickBooks automatically assigns default accounts to map your payroll based on wages, expenses, and liabilities, you can modify these settings to your liking.

For instance, you may use a particular account to monitor your contribution to payroll taxes outside of a general expense account. Besides helping you understand your tax liabilities, you can also use it to determine some of the costs associated with hiring a new employee for recruitment and headcount planning purposes.

In contrast, exporting payroll ledgers to your accounting program of choice can be tedious, especially if your payroll platform doesn’t integrate with your accounting program. For example, ADP Workforce Now requires that you remember to export this data following every payroll run. You also have to navigate ADP’s General Ledger Interface, which is clunky and takes time to process the data into an exportable journal entry.

QuickBooks offers several different pricing plans and bundles, depending on whether you want only payroll features or payroll and accounting. If you want more information on QuickBooks payroll and accounting suites, check out its payroll and bookkeeping bundles. But if you only need small business payroll, its lowest-priced tier starts at $45 per month plus $6 PEPM.

QuickBooks Payroll earned a 3.63 out of 5 for price, standing out for its free 30-day trial and contractor-only plan. But it lost points for its bare-boned HR features in its lowest-priced Core plan compared to competitors like Gusto and OnPay. And its Core plan doesn’t support automated local tax filings.

As a result, QuickBooks pushes customers toward its Premium plan, which includes local tax filing, time tracking, and an HR support center. But you must still pay $12 per month for each additional state you file taxes in, compared to multi-state support with OnPay and Gusto Premium. Only QuickBooks Payroll’s Elite plan includes unlimited state filing.

That said, QuickBooks Payroll’s time tracking, scheduling, and accounting abilities make it a much more cost-effective choice than purchasing separate software to cover these key areas.

Core

Regular: $45/mo. + $6 PEPM.

3-month discount offer: $22.50/mo. + $6 PEPM.*

Includes:

  • Single-state payroll (each additional state costs an extra $12/mo).
  • Automated federal and state withholdings and filings.
  • Auto payroll.
  • Next-day direct deposit.
  • Employee portal.
  • SimplyInsured-brokered health insurance plans.
  • 401(k) plans.
  • AP Intego-brokered workers’ compensation coverage.
  • Payroll reports.
Premium

Regular: $80/mo. + $8 PEPM.

3-month discount offer: $40/mo. + $8 PEPM.*

Includes everything in Core, plus:

  • Same-day direct deposit.
  • Time tracking and scheduling.
  • 24/7 product support.
  • Review of payroll setup
  • HR support center.
Elite

Regular: $125/mo. + $10 PEPM.

3-month discount offer: $62.50/mo. + $10 PEPM.*

Includes everything in Premium, plus:

  • Expert payroll setup.
  • Project tracking, geofencing, and photo attachment.
  • Up to $25,000 tax penalty protection.
  • Personal HR advisor (by Mineral).

*You can choose between a 30-day free trial of the software or a 50% discount for the first three months if you buy the program now. These terms can change anytime, so please check their website for the latest.

QuickBooks Payroll is one of the top providers for small business payroll, with an interface, pricing, and features very similar to those of competitors like Gusto, OnPay, and Deel. It earned 3.56 out of 5 and stands out for its emphasis on accounting functions, even within its payroll product.

For example, it has a specialized interface just for your accountant, automatic data syncing to your chart of accounts, and data analysis tools, like budgeting, if you have a QuickBooks Online subscription. QuickBooks also has default settings for tracking payroll financial data within your business accounts. Alternatively, you can customize how it enters this data into your accounts to meet your business needs.

While QuickBooks Payroll is an excellent choice if you want to save money by joining your payroll and accounting processes together, it lost points for its minimal HR and employee management features. For example, it relies on partnerships with SimplyInsured and Mineral for benefits offerings and HR advisory services.

However, this might be a minor issue if you only have a few employees and operate your business in one state. Using QuickBooks Payroll minimizes the need for multiple software to run your business operations, so you save time from repeated data entry and uploads.

Paycor: Best for midsize businesses


Pros

  • All plans include multi-state payroll support and automated local tax deductions and filings.
  • Robust employee self-service features, including earned wage access, via its mobile app.
  • Ability to view multiple pay cycles months in advance for effective status change management.
  • Automatic prorated pay for mid-cycle hourly employee pay rate changes (with Paycor’s time tracking add-on).
  • Garnishment services included in Essential plan and up.

Cons

  • Expensive choice for small businesses.
  • Must purchase Essential plan or higher for onboarding, analytics, and PTO management modules.
  • Time tracking, scheduling, and benefits administration are paid add-on modules.
  • Difficult to navigate UI.
The Paycor logo.

Our Rating: 3.59/5

Paycor is an all-in-one human resources management system (HRMS) with modules supporting critical HR functions, like payroll, and auxiliary processes, like learning and development. This makes Paycor best suited for well-established companies that need direct control over their payroll processes and want to unify their HR tech stack.

Paycor lets you add or modify existing payroll schedules as needed, and the system will automatically make the necessary adjustments. Its payroll dashboard also includes a button to let you run off-cycle payrolls whenever you need, such as issuing last paychecks per state laws. You don’t have to contact Paycor to complete either of these functions nor do you incur an additional fee.

The most unique feature of Paycor is its grid interface for completing payroll. Unlike Rippling, Gusto, or OnPay, which walks users step-by-step through completing payroll, Paycor lets you complete payroll in one step with its customizable pay grid. Organized by rows of employees, you can add and remove columns to fit your needs, such as adding columns to adjust bonuses or commissions.

Some other neat features include the ability to pay a terminated employee instead of temporarily reactivating an employee and terminating them again. This is great if there was an error in the employee’s previous payroll and you need to pay them an adjustment after they’ve separated.

There are also buttons to automatically adjust an employee’s gross pay so that the net pay is a certain amount, like in the case of bonus checks. Paycor even has alerts for shortfalls, no pay, earnings, and hours based on your company’s needs.

However, Paycor’s pay grid setup can be overwhelming, especially if you’re a small business new to payroll. Without separating the payroll process into steps, newbies are less likely to remember to check, add, or adjust pay items unless they follow their own checklist off-screen.

For instance, you might forget to key in PTO hours for employees unless you entered the data ahead of time. Gusto, by comparison, has a separate step just for PTO. Paycor also doesn’t support payroll outside of the U.S. So it’s best for domestic businesses with seasoned HR or payroll specialists looking for flexibility over their pay processes.

Did you know?

Paycor is one of my favorite platforms aimed at SMBs. If you’d like to explore other options, check out Best Human Resources (HR) Software for Small Businesses for more info.

Custom reports and analytics

Before finalizing payroll, Paycor populates charts to view key information about payroll runs quickly. Doughnut charts allow you to see the breakdown of employer and employee tax liabilities, while a series of quick links lets you download popular reports, like your payroll journal.

Paycor also has a report builder to craft customized reports from scratch. You can work off pre-existing reports by adding, renaming, or creating new columns for analysis. Many of the payroll reports also come with visualizations, like total compensation by month and department, to understand changes in labor costs without switching to your accounting software.

Paycor’s analytics module even includes an AI digital assistant to ask questions and receive answers to your people data in natural language. Meanwhile, benchmarking and predictive analytics let you compare pay practices with industry standards and adequately plan for the future.

Paycor’s reports and analytics enable you to shift from compliance-focused reports to more strategic planning to improve business growth and the employee experience.

Multiple employee payment methods

Paycor lets you pay employees through direct deposits, paycards, or checks. What’s more, Paycor offers on-demand pay, allowing employees to access up to 50% of their wages before payday through its mobile app. Free budgeting, financial counseling, and learning resources for employees also compete with the financial wellness resources offered by Gusto and ADP.

Another great feature is Paycor’s check-stuffing services to pay your unbanked employees. While most payroll platforms let you print live checks, it adds extra steps to the payroll process. For example, ensuring you have the proper check stock paper and remembering to submit positive pay to your bank before printing checks falls to you.

Moreover, you don’t need a mandatory direct deposit policy, which could be offputting to employees who are used to conducting their finances with cash. Paycor is the only vendor in my top five with this feature, making it an appealing choice if you need flexible ways to pay your diverse workforce.

Three side-by-side mobile phones display views of Paycor's app, with two views showing an employee has $500 in earned wage access and the third view showing a button to apply for a Paycor Visa Card.
Paycor gives employees access to their wages before payday, plus financial wellness tools to help them plan and save for large expenses. Source: Paycor

If you have fewer than 50 employees, Paycor offers four small business plans: Basic, Essential, Core, and Complete. Although Paycor does not publish pricing on its website, its Basic plan starts at $99 per month plus $6 PEPM. If you have 50 or more employees, you must contact Paycor’s sales team for a customized quote for its mid-market tier.

Paycor performed the worst among my top five for pricing, earning only 1.94 out of 5. This is because its small business payroll plans are some of the most expensive on the market, especially when you look at what features it includes in its lowest tier.

For example, the other vendors in my top five all offer some form of employee self-onboarding features in their lowest plans. Self-onboarding speeds up the payroll process because it places the responsibility on employees to correctly enter their critical pay information, such as direct deposit, Social Security number, and tax status. Instead, you must gather and enter this information yourself in Paycor’s Basic plan.

If you’re a small business, I recommend OnPay or Gusto, which includes a balance of payroll and HR features at a competitive price. But if you’re an established midsize business, you might like the ability to pick and choose exactly what modules you want and have Paycor customize a solution for you. Paycor’s huge feature set and advanced payroll capabilities, including automated pay runs, allow your HR teams to save time, even if it costs a little more.

Basic

Starts at $99 per month plus $6 PEPM.

Includes:

  • Federal, state, and local tax filings.
  • Client-managed garnishments.
  • Check stuffing.
  • Basic reporting (pre-built reports and scheduled reporting).
  • New hire filing.
  • On-demand pay.
  • AutoRun payroll.
  • Work Opportunity Tax Credit (WOTC).
Essential

Includes everything in Basic, plus:

  • Labor law posters.
  • Onboarding.
  • Time off management.
  • Report builder.
  • Job costing.
  • 401(k) integrations and EDI processing.
  • General ledger report and electronic GL.
  • E-Verify service.
  • Recruit and hire.
  • Basic analytics.
  • HR support center.
Core

Includes everything in Essential, plus:

  • On-demand HR support.
  • Expense management.
  • Employee import.
  • HR, COR leadership, and engage modules.
Complete

Includes everything in Core, plus:

  • Career management.
  • Compensation planning.
  • Talent development.
Add-ons
  • Workers’ compensation.
  • Time and scheduling.
  • Benefits administration.
  • Recruiting.

Note: Paycor currently offers a 50% discount on all its plans for the first six months, plus waived setup fees. For its mid-market plans, you can get access to one-month free HCM Cor that includes payroll, HR, onboarding, and analytics modules.

Paycor’s advanced analytics, in-app tax compliance alerts, and customizable payroll processes suit midsize businesses that need more versatile pay controls. I was especially impressed with its pay grid for completing payroll functions, which allowed me to adjust how I wanted to see and complete payroll. It also allows me to complete payroll faster since I don’t have to go through a set series of steps compared to competitors like Rippling and Gusto.

With a total score of 3.59 out of 5, Paycor also stands out for its modules that support midsize company goals. For example, unlike Gusto, Paycor offers a full-scale recruiting module that leverages AI to source top prospects and engage passive candidates. Other features like compensation planning, pulse surveys, and career management support your long-term talent needs and align them with your company’s objectives and costs.

However, Paycor’s pricing scheme makes it an expensive option if you only need payroll. It also does not support businesses with international teams. But if you need a customizable payroll system or more robust modules to complete your increasingly advanced HR needs, then Paycor is a great choice.

Honorable mentions

Several platforms that didn’t make my top five have features that might better fit your needs. Learn more about my runners-up: ADP Workforce Now, Deel, and Paychex.

ADP Workforce Now: Best for complex payroll needs

Alternative for: Rippling

When to choose ADP Workforce Now: ADP Workforce Now is best for SMBs with complex payroll needs since it supports options like certified payroll, on-demand pay through its Wisely app, industry-specific pay cadences (like tip credits), and international payroll. ADP also offers PEO and human resources outsourcing (HRO) services if you’d like to offload most of your payroll processes.

Why it didn’t make the list: Navigating ADP Workforce Now is unintuitive, and processing payroll can take several steps to complete. ADP also does not offer automated payroll runs like Rippling, Gusto, or Paycor. Plus, you pay a processing fee for each payroll you run, making it an expensive option if you have multiple pay schedules.

Currently using ADP but want to switch? Check out Top 6 ADP Vendor Competitors & Alternatives for other options.

The ADP logo.

Our Rating: 4.03/5

Deel: Best for international payroll

Alternative for: Rippling and Gusto

When to choose Deel: Deel offers an EOR service or the ability to pay employees using your local entities in over 100 countries. Deel also offers global-friendly services such as assistance in obtaining U.S. visas, international background checks, and employee misclassification protection.

Why it didn’t make the list: Deel’s platform is minimalistic and does not offer much native support for HR processes outside payroll. For example, you have to integrate with Slack for features like employee communication, surveying, onboarding, and time off management.

Also, Deel only supports biweekly, semi-monthly, and monthly pay schedules for U.S. payroll, while direct deposit turnaround is five days. As a result, you may only want to use Deel for paying international teams and use an alternative for your U.S. payroll and HR management.

The Deel logo.

Our Rating: 3.48/5

Paychex Flex: Best for business and payroll services

Alternative for: Paycor

When to choose Paychex Flex: Paychex Flex, like Paycor, offers payroll plans to support small, midsize, and large companies. Besides a PEO, Paychex provides other services, like hiring, HR consulting, and business insurance, including workers’ compensation, general liability, and employment practices liability insurance (EPLI). Paychex helps you avoid shopping elsewhere for the services you need to support your business and employees.

Why it didn’t make the list: Although its small business Essentials plan starts at $35 per month plus $5 PEPM, many of its features require more manual processing than competitors — unless you sign up for its PEO. For example, the Essentials plan requires you to remember to pay payroll taxes from your account instead of Paychex handling it for you.

Paychex logo.

Our Rating: 3.25/5

Find your new payroll software

Payroll software FAQs

Payroll processing involves:

  • Calculating paychecks.
  • Adding employees to the company’s payroll.
  • Ensuring compliance with state and federal tax laws.
  • Maintaining payroll records.

Payroll software simplifies these tasks and empowers HR professionals to handle activities from one place. It also typically integrates with other business systems.

First, payroll software requires businesses to input employee information and attendance or hours worked. The system then takes this data to compute, deduct withholdings, support direct deposits, and enable the entire payroll process. You can also link modern payroll software to your bank accounts for automatic salary disbursement. Payroll solutions also generate pay slips to show pay information and create relevant payroll reports.

Saves time and money

One of the most significant benefits of a payroll system is saving time. Compared to manual payroll processing, the automated features of payroll software cut down time spent on core payroll tasks. HR departments can instead dedicate their time to concentrating on other critical business areas.

Payroll software also eliminates the need for an accountant or in-house employee dedicated to payroll. Additionally, many software packages guarantee accuracy, so you have less risk of being hit with IRS penalties. Additionally, many businesses save on printing costs because everything is paperless.

Minimizes errors

In addition to consuming a lot of time, manually running payroll leaves the business at risk for various human errors. Payroll errors can lead to employee dissatisfaction or tax issues, resulting in costly fines, penalties, and litigation. Payroll software minimizes errors and ensures accurate and on-time payments to all employees for every pay period.

Payroll solutions can handle complex and simple calculations, keeping the process hassle-free. Moreover, numerous payroll software vendors offer penalty protection for any tax penalties related to system errors.

Organizes employee information

Payroll software organizes records related to payroll that employers must maintain for each employee. This includes total compensation, pay rates, tax deductions, hours worked, and benefits and deductions. Payroll platforms enable users to access all necessary documents in a centralized, secure place.

Keeping payroll records organized is also a requirement for regulations and compliance, such as the Fair Labor Standards Act (FLSA) and the Equal Employment Opportunity Commission (EEOC).

Improves compliance

Payroll platforms give employers confidence that they’re adhering to tax filing rules and requirements at all times. The software makes it easy to monitor all business data and guarantees the organization pays taxes efficiently.

Many payroll systems automatically update to meet the latest tax laws. For global businesses that operate across multiple countries, advanced payroll solutions offer features for handling international payroll, including compliance with local rules and regulations.

Increases security

Payroll systems protect sensitive employee information such as salary, taxes, Social Security, and bank account details. Businesses can boost security and block unauthorized access to this data with strict access controls provided by payroll software solutions.

Promotes transparency

Since most payroll software offers seamless integration with finance and accounting data, it provides transparency that allows organizations to stay on budget, create timely reports, and plan for the future of the business. Additionally, payroll’s self-service features promote transparency and build trust with employees. Employee self-service features let staff view their benefits and time and attendance information.

Payroll software drives efficiency, reduces paperwork and expenses, and saves HR from doing repetitive administrative work. More importantly, it ensures accurate and timely wage payments, which is critical for employee satisfaction. Correct compensation is fundamental to the employee-employer relationship.

Manual payroll processing is complex, time-consuming, and vulnerable to inaccuracies. Any of these issues can cause payment delays and paycheck errors, affect employee morale and performance, and ultimately impact the business negatively. Payroll solutions help employers avoid all these problems. On top of that, they automatically calculate the appropriate benefits and tax payments for each employee.

Payroll software offers secure digital recordkeeping, eliminating the need for keeping hard copies and physical safe storage. Companies of all sizes must also ensure they retain their payroll records for the specific length of time mandated by federal, state, and local laws.

Payroll software can be a great asset to any business, big or small. It streamlines payroll processes, decreases payroll and accounting staff labor, and minimizes compliance problems.

Read more: How to Choose the Right Small Business Payroll Software.

Direct deposit

There’s a beauty to having funds go directly into your employees’ bank accounts. In addition to the speed and convenience, there’s a lower risk of fraud, lost checks, and global deforestation.

Tax compliance

When you have employees, or even when you pay yourself, there are several payroll taxes to take into consideration, including income tax, social security, Medicare, and other standard expenses. Payroll software helps automate this function by deducting and reporting the amounts, and then paying (reporting) these funds to the appropriate federal, state, and local tax authorities.

Reporting capabilities

Reporting goes hand in hand with tax compliance. Often, these same agencies require regular reporting of payment amounts. Reporting is also required at the end of the year, and it’s pretty helpful for keeping an eye on labor costs.

Employee self-service

Employee self-service gives employees control over their payroll information and reduces work for payroll administrators. Each employee has a personal payroll profile where they can see information about their wages, payroll deductions, time-off balance, fringe benefits, and W-2s. Depending on the software you use, employees can make adjustments to their accounts, upload or download documents, and address their own needs.

Employee onboarding and offboarding

The right payroll software will make it simple to add or remove employees through an administrative panel.

Income types

Your small business payroll should allow for different types of income, including holiday pay, expense reimbursements, commission, bonuses, and other taxable benefits.

Deduction types

The ability to deduct costs like medical, dental, vision, and life insurance should also be on your checklist.

Contractor payments

A lot of small businesses use contractors. Your payroll software should be able to handle a 1099 and issue a paycheck with no withholding amounts.

Off-cycle payroll

You’d use this function to distribute bonuses, process an advance or final pay, or make a correction.

Accounting reports

Payroll is an expense that you must account for in your business records. Payroll software that allows you to export reports reduces time spent on accounting. Additionally, accounting software that integrates with your payroll software creates an automatic expense entry whenever you run payroll, which eliminates duplicate data entry.

Transparent pricing

As a starting point, most small business payroll companies charge a base fee per pay cycle (each time you run payroll) combined with a dollar amount per employee. Other factors that affect pricing include the number of pay cycles you run per month.

For example, weekly payroll would mean a minimum of four pay cycles per month. There may also be costs that are set by your payroll tax needs and the number of entities to which you report and remit. For an exact amount, speak with a sales rep to get an estimate.

Excellent customer service

If you can’t ask questions, you can’t get answers. You’re going to trust this company with your payroll, the money you’ve set aside for your employees. If you don’t feel welcome, walk away.

Flexibility

One size does not fit all, especially if you’re a small business. Make sure you feel like your payroll provider understands your needs and is willing to meet them. Try to find a provider that doesn’t require an annual contract, in case your situation changes or something goes wrong.

Free trial

Most small business payroll providers also offer a 30-day free trial, meaning you can get set up, run a few pay cycles, and “kick the tires” to make sure the software is right for you. Note: Getting set up means entering your employee information. Be prepared for a little hands-on onboarding at first.

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