The best payroll software: 11 options to streamline your process
For small business owners, anything related to finance is often a source of anxiety. Payroll is no different. Payroll issues can slow down your business and even drive away valuable employees. But payroll software can help you speed up the process, accurately track time, and even manage potential job applicants.
So, how do you find the best payroll software? Before you can answer that question, you must determine if you need it in the first place. This guide will help steer you in the right direction so you can begin streamlining your system sooner than later.
Do you need payroll software?
Technically, you can run a business without payroll software. That said, going this route entails manually calculating payroll taxes, administering checks, initiating deposits, and year-end tax filing. In other words, you're looking at a lot of time spent on manual work and accounting.
Payroll software exists to make your life easier. It helps with time tracking, automatically deducts state and federal taxes, and performs other pay-related calculations. It can also make onboarding easier when you hire new employees — an intuitive payroll system with time tracking is much easier to learn than a manual system.
In general, payroll software can take care of the busy work, giving you more time to focus on business.
Features that make the best payroll software
Payroll needs vary from one business to another. As such, there's no one-size-fits-all solution. However, there are several key features to consider. Here’s what to look for:
Basic payroll functionality
These basic payroll features will save you time and busywork, and are available in most payroll services:
- Digital pay stubs: Pay stubs are a must, not only for an employee’s personal filing purposes, but also because they’re required for verification processes such as mortgage or loan applications. If the software solution doesn’t offer digital pay stubs, it’s a pass.
- Time clock: A time clock allows your employees to punch in and out, ensuring their pay period is accurate. This saves everyone the time of manually tracking time and keeps you from over- or underpaying employees.
- Basic payroll reports: A basic payroll report should include information like the pay run (when payroll processing finished and money will deposit), federal taxes and local taxes withheld, and the number of hours worked. These reports can also help with payroll tax compliance at the end of the year, and make tax filing easier. Tax calculations require significant manual work, but with basic reporting, they're automatically done.
- Direct deposit: Employees should have the option to set up direct deposit, allowing their checks to go directly to their bank account. Most payroll systems offer this, so consider passing on any software that doesn’t include direct deposit.
- General payroll management: The best payroll software will allow you to enter basic payroll information for employees, change pay dates if necessary, and issue paper checks when requested.
- Employee self-service: Employees should be able to log in and manage their own time off and benefits, and access their pay stubs. Self-service isn't just a perk; it's a must — particularly if you have (or plan on having) multiple employees. Look for a payroll tool with an employee portal that, at minimum, allows your team to submit their time off requests and check when paychecks will arrive in their accounts.
Human resources functionality
Aside from basic payroll services, the best payroll software often offers a variety of human resources functionality. Choosing a platform with these features can save you the cost of a supplementary HR tool:
- Paid time off (PTO): PTO functionality allows your team to put in for sick leave, vacation time, or other types of time off.
- Health insurance monitoring: Many payroll tools sync with health insurance providers. This gives your employees a quick and easy way to access benefit information and even jump to the insurance provider's site.
- Workers' compensation: Some payroll tools automatically deduct workers' compensation when required, saving you the task. This makes it easy for you to compensate an employee in the event that they're injured.
- Applicant tracking: Some payroll software includes applicant tracking, making it easy to keep tabs on where applicants are in the pipeline. This is commonly found in HR solutions, but it's not unheard of in a payroll tool.
While you can’t replace full-suite HR software, the above features in your payroll system can go a long way — especially if you can't afford HR tools at the moment, or simply want to keep your software stack small.
As a business owner, you’re always on the go. The best payroll software options offer a mobile app that you can easily access wherever you are. Find out if there’s an Android or iOS mobile app, and what kind of functionality it has.
There’s no guarantee that a mobile app will come with the full suite of features available on the desktop version. But you should still be able to look up paychecks, see your employees’ time-off calendar, and check benefits.
11 payroll software options to check out
The right online payroll software allows you to streamline the entire pay process while cutting down on time-consuming accounting and HR-related tasks. Below are some of the most popular payroll platforms available.
Most payroll platforms offer free trials. It’s always a good idea to take advantage of these before paying for a subscription. Here are 11 options to consider:
- Gusto: This all-in-one platform offers HR functionality, payroll services, and benefits management. If you need a full-service payroll provider and HR tools, Gusto is a solid choice. Packages begin at $19 per month, plus $6 per person. It's worth noting that Gusto is partnered with Xero, an accounting tool. If you decide to use both platforms, there might be free trials or lowered pricing.
- ADP: A household name in payroll and HR, ADP offers a little bit of everything. ADP goes above and beyond many payroll offerings by also including talent management. This feature is especially useful for companies looking to scale their teams. ADP's pricing starts at $29 per month, plus $4 per person for the basic plan.
- Zenefits: Similar to Gusto, Zenefits provides payroll, HR, and benefits management. Plans start at $8 per month per person, making it one of the more affordable payroll and HR tools.
- Patriot Payroll: Patriot Software offers a large suite of HR and payroll tools. The Patriot Software Patriot Payroll service is a straightforward payroll suite, with features ranging from direct deposit to employee portal access. The basic plan starts at $10 per month, and an additional $4 per person. The Pro Plan costs $30 per month and $4 per person, and features automatic federal tax filing.
- Intuit Quickbooks Payroll: Quickbooks is largely known for its bookkeeping and accounting software. Intuit's Quickbooks Payroll software is a full-service payroll suite with automatic payroll tax filing, HR support, and even tax penalty protection. Plans start at $22.50 per month, with an additional $4 per employee. If you already use Quickbooks, there's plenty of cross-tool compatibility.
- Paychex Flex: This payroll suite is geared toward companies of 50 or more employees. Paychex comes with your standard payroll features: payroll tax filing, federal and state filings, and time tracking. There’s also a mobile app, but only for higher-tier plans. Plans start at $59 per month, plus $4 per employee.
- Paycor: Paycor is an all-in-one HR suite and payroll tool that also offers time tracking, talent management, and in-depth analytics. Paycor is one of the pricier options at $99 per month for the basic plan. There’s also a mobile app and the option for garnishments, if necessary.
- Onpay: This straightforward payroll tool allows you to issue payments in multiple formats and file W-2 and 1099 forms. Onpay starts at $36 per month, plus $4 per person.
- Square Payroll: Square, the maker of the popular point of sale (POS) reader, offers Square Payroll. This system seamlessly integrates with a Square reader, making it possible to pay your employees with your Square balance, sync time tracking from the POS to the payroll system, and track metrics across your platforms. Square Payroll starts at $29 per month, plus $5 per employee.
- Sure Payroll: This payroll tool is built around self-service, with optional paid support. Direct deposit, new hire reporting, and live help during select hours are available. Their pricing begins at $29.99 per month, plus $5 for each employee.
- Wagepoint: Wagepoint is an automated payroll tool that features automated deposits, specialized contractor payment compatibility, and wage reports, to name a few. Pricing begins at $20 per month, plus $2 per employee.
Keep in mind that the above options are only some of the payroll tools available. If you're not satisfied with any of those listed, continue searching until you find a solution that suits your business needs.
The best payroll software is the one that works for you
While you can manage your own payroll, chances are your company will need to streamline this process at some point. Fortunately, there are plenty of options when it comes to managing payroll processes.
Take note of the many features mentioned in this guide, compare them to the needs of your business, and start working your way through the list of payroll software providers. In time, you'll find an option that's the perfect fit for your business and your team.