Top 7 Payroll Options for Small Businesses

All businesses, whether large or small, must be able to effectively manage its payroll activities. If an employee is not paid on time or correctly, there could be serious legal consequences, not to mention the likelihood of increased staff turnover. Isn’t it about time that you make the effort to tame the chaotic payroll, benefits and human resource management processes? Of course, there is more to the payroll function than just ensuring employees are paid.

Some of the key payroll activities are:

  • Strict adherence to existing employment, wage, compensation and tax laws (withholding and payroll taxes).

  • Tracking and updating employee data, such as compensation, hours worked, vacation and sick time.

If your company cannot perform these activities accurately and on time, you certainly need to consider outsourcing some or even all of them.

It is interesting to note that over 30% of small businesses in the U.S. are fined annually by the IRS and other regulatory agencies for simple and avoidable payroll-related errors. It’s clear that small businesses need to find the ways and means to effectively manage their payroll-related activities in order to avoid paying these unnecessary fines; some of the more common fines include failure to account for proper tax withholdings, retirement deductions and other benefits. Moreover, almost all the businesses guilty of these transgressions have this in common—dependency on rigid payroll filing policies or else adopting the wrong payroll software solutions. That is the reason why it is important to choose a payroll system that is affordable and which meets your company’s needs. A good and effective payroll software will put your mind at ease and you will worry less about legal errors, clerical inconsistencies, or other tax-related mistakes.

That said, it’s not easy to choose the right payroll software, one which is not only affordable, but which has relevant features, is user-friendly, and offers exceptional customer service. Of course, if your business has only few staff members, a full payroll service provider will probably not be necessary. Instead, for a small monthly fee, you can use some of the services provided by a full service provider. To help you choose the right software for your company, we looked at the top 7 payroll options for small businesses.

Intuit Payroll Software

Some customers have described Intuit Payroll as the best payroll software available in the market, due to its outstanding QuickBooks and accounting features, and because it is extremely user-friendly. A positive reputation makes this software a good value for your money. It also offers different options, depending on the size of your company, and a 30-day free trial is usually available.

The first option is the Basic Subscription Plan. Under this plan the software feature calculates all your employee payroll taxes for $20 a month plus $2 per month per employee. Many consider this a reasonable cost, considering the spectrum of quality services. Intuit’s next option is the Advanced Subscription Plan, which has more enhanced features including tax filing services. Its subscription fee is $32 per month plus $2 per month per employee.

Intuit’s Premium Plan costs $79 per month. Under the Premium Plan, the payroll processing is fully automated and your payroll filling services is always on autopilot. With this plan, you have the ability to integrate data and information from other payroll services systems to your existing database systems. The plan also comes with high level of accuracy combined with features from other plans. Recently, certain HR-related features, such as complex employee compensation and compliance services were added. With that in mind, if you engage Intuit Payroll, you should expect the following:

  • Automatic tax calculation and filing, depending on your subscription plan.

  • Anti-tax penalty guarantee policy.

  • No fees on any direct deposit to your employees.

  • Unique and optional integration with your QuickBooks.

  • Mobile apps to run your payroll processes from your iPhone or Android.

Gusto Software

Gusto (formerly known as Zen payroll), is a cloud-based payroll solution designed to primarily serve small and medium-size businesses. It provides you with the necessary tools to effectively manage your core human resource needs. It is a fully equipped payroll, tax compliance and benefits administration management platform. It also offers products and services that will help you insure your business, payroll-related, and employees, in one easy-to-use integrated platform.

Gusto software provides expert guidance when you want to buy health insurance, integrate an existing insurance plan with your payroll, or if you need assistance with add-ons like life insurance, commuter benefits and 401(k) plans. The software is designed to automatically calculate and pay your payroll taxes, and ensure compliance with all federal, state and local agencies. It also has fully developed automation to deal with the W-2s and 1099s. Its differentiating features will reduce your HR burden as it will give you the power to easily manage your payroll protocols, employee benefits and other employee compensation processes. This means a fully integrated HR system within a single platform. This, therefore, leads to less paperwork for you, more convenience for your workers, and less time wasted.

Gusto also offers several Subscription Plans. Its Core Plan is the most basic service plan with the fewest features. It costs $39 a month with an additional $6 charge per month per employee. The plan comes with features that include a full service payroll system that allows for employee self-service, direct deposit payments, health benefits, and other employees’ compensation administration. The Gusto Complete Plan is also $39 a month, but there is an additional $12 fee per month per employee. In addition to the features it offers under the Core Plan, the Complete Plan offers employee onboarding resources, a complete paid time off administration system, as well as employee directories and surveys.

The Concierge Plan has all the features offered under the Gusto Complete Plan. However, it offers extra features for HR management and it provides you with HR experts who will assist you as the need arises. This plan is recommended for relatively large businesses at a cost of $149 per month, with an additional $12 per month per employee. It also offers other important HR resources such as HR handbooks, guides, and advanced training. Other overall features include:

  • College saving plans.

  • Workers insurance services.

  • Commuters’ compensation and benefits.

  • Health savings accounts.

OnPay Software

OnPay is an easy-to use yet affordable and comprehensive payroll software that offers scalable payroll solutions to relatively small and medium-size businesses. Just like most payroll software, OnPay software streamlines the payroll and payment processes and automates your tax filling. Key features of this software is the new hiring reporting, automated payroll taxation, employee self-onboarding, access to past pay stubs and tax forms. OnPay offers you an employee management feature that enables employees to better plan for their own retirement. The software also allows for easy integration with third-party software applications and systems.

OnPay offers a monthly subscription plan at a fee of $36 per month, with an additional $4 fee for each employee per month. The employees covered under the Subscription Plan can either be full time or part time workers. OnPay offers a free trial of their services for the first month of the plan which allows you to run your payroll processes for free and test the effectiveness, user-friendliness and affordability of the features before opting for a monthly subscription. In case the software features do not meet your needs, you are allowed to cancel the subscription at no cost.

While it may appear that the features offered by OnPay are somewhat basic, it is the software’s strength which is key, because of its ability to provide its core services effectively and in a user-friendly manner. It is also cost-effective, simply because of how it bundles and prices its service packages, taking into account the number of employees. Generally the software offers the following payroll and human resource management services:

  • Comprehensive payroll processes.

  • Payroll deductions; OnPay will calculate all the deductions, including percentage deductions, retirement contributions and insurance deductions.

  • Employee payment options, i.e., direct deposits, pay checks, and prepaid cards.

  • Tax deductions; OnPay software will accurately calculate your company payroll taxes and pay them on time.

  • Report new hires; as required by the government, OnPay will handle all reporting tasks as it relates to new hires, including name, Social Security number, ID numbers and their respective addresses.

Sage Software

Sage is a world-recognized company that provides enterprise resources planning software. Sage offers numerous financial management solutions designed to cater for your unique needs. For example, Sage Master Builder and Sage Timberline are well known accounting software in the construction industry; they offer construction-specific software features for activities such as equipment tracking, job costing and more. Other products of Sage are Accpac, ERP x3, MAS 90/200 and MIP Fund Accounting. Sage’s products not only provide support to manufacturing, service and distribution companies, but also offer specialized help to specific manufacturing industries.

Most of Sage’s software features are different from those offered by other software providers. Some have described it as “Intuit 2.0” with fewer features. The difference between Sage and Intuit is pricing and the number of employees; Sage charges a monthly fee of $49.95 and additional fee of $1.75 per month for each employee. If your business has less than 10 employees, the $49.95 plan with $1.75 for each employee will likely be your best option. In case your business outgrows that plan, or if your employees exceed 10, Sage will provide you with a customized plan to meet your needs. The customized plan and price will also depend on how often you intend to run your payroll processes.

Just like any other industry, every program or company must have its unique and differentiating features. Beside providing affordable prices to small businesses, Sage’s software has features that allow you to track employee time and attendance, and prepare payroll and taxes. More importantly, it allows you to submit employees’ payroll details via phone or fax. This standard plan will also offer you unlimited access to payroll consultancy from payroll experts—a likely reason why the company has the highest customer retention rate in the industry.

Namely Software

Namely is a unique software that provides you with a single comprehensive system for managing your payroll, human resources, tax compliance, and other benefits all under a single platform. Just like many other payroll platforms, Namely is a cloud-based software that enables small and big businesses to manage both simple and complex HR compliance needs. Basically, this software enables you to streamline and manage your payroll processes, benefits and employee management. Unfortunately, Namely does not disclose the prices of it services upfront; this information will be made available to you as and when you contact them. Below are some of the services you will receive if you opt for the Namely software:

  • Full service payroll process that allows you calculate and make deductions as soon as a new employee comes on board.

  • Tax Filing; once you sign up, the software will handle all of your local and federal taxes. That means less data entry for you and, consequently, fewer costly errors. It will also present your employees with a payroll deduction document to enable them understand how deductions were made.

  • Payroll reporting; this unique feature is unavailable in most payroll systems. It allows your HR department to view the workers information and how it is relates to the performance of the business. In addition to reviewing the number of hours worked and payroll deductions, it also analyzes the overall staff turnover.

  • Time management; Namely is designed to help you track the number of working hours in your organization so that you can better manage labor costs. As a result, you will have a 360° view of your workforce performance and costs.

Paycor Software

Paycor is a strategically designed integrated human capital platform that offers small and medium-size businesses payroll, human resources and extensive recruitment solutions. Its all-in-one HRIS system offers payroll and tax compliance, onboarding, recruiting, reporting and time-keeping that can be easily managed. The software offers solid features at affordable prices that can meet the needs of most small businesses. It also allows entrepreneurs to upgrade their subscription plan as they scale their business. Paycor does not have defined prices, thus potential new clients should reach out to them for a customized quote. Generally, though, small business will incur a $49 fee per payroll cycle with a $3 charge per employee. Employers have 24/7 access to Paycor customer service, though a company’s employees will be directed to contact the HR department directly if there is a problem or question. All in all, Paycor provides a good value for the cost when you consider the following services:

  • Automated payroll entry.

  • Tax compliance services.

  • Direct deposit to your employees.

  • Integration of 401(K) plans in their systems.

  • Human resource consultancy on demand.

  • Time and attendance management.

Xero Payroll Software

Like Gusto, Xero offers payroll software service solutions around the globe. Their services include automated payroll systems, tax filing and compliance, and other human resource management services. Xero offers a 2-month free trial period so that you can adequately assess their capabilities over more than one payroll period. If you are satisfied with the service after the trial period, the subscription plan bears a fee of $39 a month, with an additional $6 per month per employee. Besides its easy-to-use interface, the software allows multiple users’ connection from different locations. Its accounting features also eliminates the need for you to hire an accountant or bookkeeper. In general, you will receive the following services after signing up for the subscription plan:

  • Automated payroll service if your business operates within the 50 states.

  • Accurate federal and local tax fillings.

  • Free direct deposits.

  • Benefits and contribution management.

CONCLUSION

The aforementioned payroll software options can help your small business cut operational costs by reducing the number of employees required in HR, as well as the financial and accounting departments. Regardless of the size of your business, its location or industry, or the number of employees you have or plan to have, it’s a near certainty that one of these vendors will meet your payroll and HR needs.

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