Five online payroll services to simplify your small business’ financials.

Husain Sumra profile image March 22, 2021 | 4 min read

Online payroll services are one way you can simplify your company’s financial obligations. By using a payroll processing system, you will be able to pay your employees, pay health insurance premiums on time, and more. Before exploring some of the common features offered by these systems, think about how these systems save you time.

Four ways online payroll services save time.

Before you pick up your business phone to contact your accountant for suggestions about online payroll services, take a few minutes to review the benefits.

  1. Reduce the risk of company tax problems.

Online payroll services make it easier to fulfill your tax obligations as a company. These services will automatically deduct amounts for income tax, social security and other taxes. Your business is less likely to face questions about inconsistent or missing tax payments by automating these deductions. That means you can reduce the risk of having to respond to IRS audits, investigations and penalties.

  1. Reducing mistakes on employee pay. 

Your employees expect to be paid on time and in the correct amounts. Manually preparing payroll each week or month can lead to errors, especially if you happen to get distracted by other responsibilities. By contrast, online payroll services generally automatically calculate pay amounts and can automatically handle deposits directly to employee bank accounts.

  1. Simplify tax filings for employees.

Your employees have their own tax filings to manage. A crucial part of their tax filing, in many cases, will include employer-provided forms, such as a 1099 form (a form commonly issued to contractors) or a W-2. If these documents are not automatically produced by software or online payroll services, you or your finance staff might be overwhelmed by requests to produce these forms during tax season.

  1. Increase the productivity of your accounting and bookkeeping staff.

Your accounting and bookkeeping staff can help a business in several ways. At a minimum, these professionals can help you with relatively simple administrative matters, such as allowing you to pay your employees on time.

By using online payroll software, your accounting employees will have more time available for other activities. For example, a business owner might ask her accountant to meet with her monthly to review key accounting reports. During these reviews, the business owner can ask questions about expense trends, explore which goods and services are most profitable, and plan for future expenses. It is easier to hold such meetings if software handles repetitive tasks such as payroll processing.

Five options for online payroll software.

Online payroll services come in a variety of different forms, prices and features. Choosing the right package for your company will depend on multiple factors. For example, your accountant might have a preference for a certain software program. Alternatively, you might need to pay employees in multiple states or even countries! To navigate the options, let’s consider some of the most popular options.

This list of online payroll services is based on the best-reviewed software payroll products on Capterra. Capterra is a business software review website that has over one million user reviews.

  1. ADP Workforce Now

  • Average Capterra Rating: Average 4.4-star rating out of 5 on Capterra.
  • Pricing: Pricing is not disclosed on the company’s website.
  • Self-service Support: The platform offers an employee self-service portal.

According to user reviews on Capterra, this product is highly customizable, includes various reporting features, and makes it easy to access documents like W2s. Some users commented in reviews about problems with the company’s customer service, pricing and feeling overwhelmed by the product’s number of features.

  1. Paycom

  • Average Capterra Rating: Average 4.4-star rating out of 5 on Capterra.
  • Pricing: The Paycom website does not provide pricing. Another business website, Merchant Maverick, observes multiple elements of the product’s pricing, including monthly fees and a setup fee.
  • Self-service Support: The payroll software provides an employee self-service portal.

According to user comments on Capterra, Paycom’s advantages include the ease of finding information like pay stubs, benefits information, and the ease of clocking in and out from a phone. On the other hand, some people observed limitations in integrations with third-party software, pricing complexity and challenges with retirement plan features (i.e., 401k).

  1. Paylocity

  • Average Capterra Rating: Average 4.1-star rating out of 5 on Capterra.
  • Pricing: The company website does not provide pricing.
  • Self-service Support: Paylocity offers an employee self-service capability.

Paylocity’s key advantages include a smooth onboarding process, ease of finding pay stub information, and downloading reports, according to user reviews on the Capterra website. However, some users were frustrated by the differences between the web and mobile versions of the product and challenges reviewing pay reports for accuracy.

  1. Rippling

  • Average Capterra Rating: Average 4.9-star rating out of 5 on Capterra.
  • Pricing: The price starts at $35 per month.
  • Self-service Support: Rippling provides an employee self-service payroll portal.

Rippling users on Capterra commented positively on the company’s customer service quality, ease of accessing payroll documents, and integration with third-party systems for benefits information. Some users commented on problems with the product’s reporting features, managing health insurance benefits, and a lack of phone technical support.

  1. Gusto

  • Average Capterra Rating: Average 4.7-star rating out of 5 on Capterra.
  • Pricing: The price for the online payroll software starts at $25 per month.
  • Self-service Support: Gusto offers an employee self-service portal.

According to user reviews on Capterra, the advantages of Gusto include effective tax filings, a clean user interface, and two-day payroll processing. Users also mention customer service problems, difficulties managing contractors with the software, and weaknesses in reporting.

Final thoughts on choosing the right payroll processing software.

Online payroll services vary considerably in pricing, reporting capabilities, and customer service options. In addition to these factors, note whether the payroll processing system will integrate with your current business software like QuickBooks. When feasible, ask to use the software on a free trial basis so you can test the complexity of the software and its suitability for your company’s needs.

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