Online payroll software encompasses a lot of services. These are some of the most valuable features and services these programs offer.
The primary purpose of these services is to get your employees paid, which saves you from doing the laborious and tedious work of learning how to process payroll by yourself. Based on the wage rates you enter and the hours each employee worked, the system automatically calculates how much workers should be paid. For each employee, the service applies the appropriate deductions, such as for medical benefits and Social Security.
One big plus of using an online payroll service is that it handles your business’s payroll tax responsibilities. Based on each paycheck, the software can withhold the required employee taxes. The payroll company then fills out and files the quarterly payroll tax reports and pays the appropriate local, state and federal agencies.
At the end of the year, the software generates the W-2 and 1099 tax forms for your workers. Many payroll companies offer an error-free guarantee, which means that if the company makes an error on your taxes, your payroll provider will correct the mistake and pay any fines or interest it incurred.
Each time you hire a new employee, you must report that information to the state. Online payroll services can complete those forms for your business and send them to the proper state agencies. Information on the forms includes the employee’s name, address and Social Security number, as well as the employer’s name, address and federal employer identification number.
Payroll companies offer multiple ways to pay your employees. The most convenient option is direct deposit. With this method, an employee provides their bank account information and the payroll software automatically deposits the paycheck into the employee’s account on payday.
Another option is paper checks. Some payroll providers offer check-stuffing services: They print the checks, stuff them in envelopes and then deliver the envelopes to your office to be given directly to employees.
In addition, some payroll services now offer prepaid debit cards. With this option, money from each paycheck is automatically deposited onto each debit card, and the employees who are using the payroll cards then have instant access to the funds.
Some payroll providers and third-party services now offer on-demand pay options, which allow employees to determine when they want to be paid, rather than waiting for their specific pay date. In these scenarios, employees are paid for the time they have already worked. So, if a worker is eight days into a 14-day payroll cycle and has an unexpected expense come up that they need money for, they can utilize their on-demand pay to be processed a check for the eight days they have already worked.
You can pay all types of employees with online payroll software. The software can process pay for full- and part-time W-2 employees, as well as for 1099 contractors, including consultants and freelancers. The software treats both W-2 and 1099 employees the same in terms of payment and reporting. All employees are stored in the software; oftentimes, both types of employees can log in to the system to access their payroll records.
Online payroll software can provide a wide range of payroll reports that give businesses insight into your company and employees. The types of payroll reports that some services offer include payroll registers, contribution reports and payroll tax reports.
Many online payroll software platforms integrate with programs that businesses already use. These include accounting software, time and attendance systems, and HR software. These integrations allow the programs to connect seamlessly; data is automatically shared and transferred between them, thereby saving you the time you’d otherwise spend entering the same information in multiple places.
Each employee has their own login to access the software. The employee portal allows them to review their digital paystubs, access their year-end tax forms and check their time-off balances.
Many payroll services include some level of management for your employees’ paid time off. This may mean simply tracking PTO accruals, or it may also offer the ability for employees to request PTO and managers to approve or deny it.
Some payroll companies include human resources services in their platforms. These might include employee onboarding services, as well as tools to create employee handbooks or job templates. Some payroll services even offer on-demand HR consultations.
Online payroll companies offer a variety of customer support options. Some assign a dedicated support representative to your company; this is your go-to person for any issue that requires a call. Other payroll services just have a general support number that you call for help. Most companies offer customer support Monday through Friday, though a few have support available over the weekend. In addition, most online payroll services have extensive resources on their websites, such as how-to-guides, FAQs and videos.
Some payroll services provide mobile access to their software. Some have mobile-friendly websites, while others have dedicated iOS and Android apps that allow you and your employees to access all of the same features from any location.
Today, people spend more time on mobile devices than on desktop computers, which is important to keep in mind when you’re thinking about how to choose payroll software.
In addition to the core payroll functions, many payroll companies offer a litany of other services that you can tack on to your plan. These include workers’ compensation insurance, benefits administration, retirement plans, college savings plans, and time and attendance systems.