*Our Top 4 Payroll Services for 2024 *Our Top 4 Payroll Services for 2024
See expert comparisons, reviews and prices for our top-rated Payroll Services this year.
Online Payroll Pricing
While the costs of payroll services differ by company, each provider uses a similar cost structure. There is typically a base fee and a per-employee charge. Our best picks charge base fees of $29 to $150 and per-employee fees of $2 to $12.
How often you are charged also varies by provider. Some charge monthly, while others charge each time you run payroll. The providers that charge monthly allow unlimited payroll runs each month.
While some providers offer just one package that includes all their services, others offer several plans at various price points with different levels of service. For example, the cheapest plan may include payroll processing only, with the most expensive plan handling all payroll tax filing and payment responsibilities.
Many payroll services don't charge any implementation or setup fees. For the most part, getting set up in the software is an easy process that employees can even do on their own. Some companies may charge a one-time fee to transfer over all of your previous payroll and employee data; while this isn't hard to do on your own, the transfer fee might be worth it to save you some time.
When determining the true cost of payroll services for your small business, you need to factor in any taxes and implementation or other fees. Be sure to inquire about fees when discussing prices with vendors.
Before signing up with a payroll service provider, ask the company these questions to get the best deal possible:
- Does it offer a discount for agreeing to a long-term contract?
- Does it offer discounts for businesses with a large number of employees (if you're a larger company)?
- Would it be willing to match the price of one of its cheaper competitors?
It is critical to review the contract thoroughly before you sign anything. Make sure the contract includes everything you have agreed to and doesn't have any built-in price increases after a certain time period.
Also, ask about the process for canceling service. Find out if there are any costs associated with that and how much notice you need to give.
Pros and Cons of Online Payroll
There are numerous benefits to using online payroll software. The two biggest are accuracy and timeliness. Online payroll software is critical in ensuring your employees are paid on time and accurately.
The software helps with accuracy because it handles all of the calculations for you. As long as you enter the correct number of hours each employee worked each pay period, the amount they are paid should be correct every time. Since you don't have to do any of the math yourself, this greatly reduces the chance of errors.
In addition, many payroll services are essentially "set it and forget it." Again, as long as you enter the correct number of hours worked, everything else will be handled in time for payday, without any extra input from you.
One of the most confusing aspects of running payroll is making sure the correct amount of taxes are withheld each pay period. Payroll software handles all of that for you, which is a huge benefit. In addition to withholding the correct amount of payroll taxes, some payroll services will fill out the correct federal and state payroll forms and file them for you, along with your payments.
The one potential downside of payroll software is that these are usually cloud-hosted services. This means you are at your provider's mercy in making sure the software is always up and running. If your provider has a catastrophic issue that takes its services offline, you run the risk of not being able to pay employees on time.
Payroll Software Features
Payroll services offer a variety of features and tools that streamline payroll processing for small businesses. Here are some of the most valuable features:
Unlimited payroll processing. Some payroll services allow you to run payroll as many times as you want each month, giving you the freedom to determine the pay periods that make the most sense for your employees. This flexibility also lets you pay independent contractors whenever they complete a project without paying extra for additional payroll runs.
Payment options. Most online payroll services allow you to pay employees by direct deposit, paper checks and prepaid debit cards.
Payroll tax. Online payroll services determine how much your business owes in payroll taxes; complete and file the paperwork with the appropriate federal, state, and local tax agencies; and make the required payments.
Year-end tax forms. Payroll services prepare all of the necessary year-end tax forms for your workforce, including W-2 and 1099 forms, and provide them to your employees and independent contractors.
PTO management. Some payroll services handle some or all of your PTO management. This includes tracking how much paid time off employees earn and use, as well as allowing employees to request time off and managers to approve or deny those requests.
Employee self-service. The software has an online portal that employees can access to view their pay stubs and year-end tax forms.
New-hire reporting. Many payroll services can complete and file the required paperwork each time you hire a new employee. This paperwork needs to be filed in the state where your business operates.
Mobile access. Most payroll services provide either a dedicated mobile app for iOS and Android devices or a mobile-friendly website, ensuring the payroll software is accessible from smartphones and tablets.
HR services. In recent years, many payroll services have started offering additional HR services, such as onboarding tools, employee benefits management and HR compliance. Additionally, some payroll services give your business access to a dedicated human resources professional who can help you navigate HR issues.
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