September 13, 2019

Payroll Companies

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What is the best payroll company? And how much does it cost to hire one? Keep reading to find out how the right payroll service can help grow your business.

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Handling payroll by yourself is time-consuming and confusing. But deciding to use a payroll service can be just as daunting—where do you begin?

No matter the size of your small business, there are many factors to consider, from adjustment management to multi-state tax filings.

Whether you want to start using a payroll company or switch to a new one for a fresh start, read on for ways to find the perfect pick for your small business.

What Does a Payroll System Do?

Payroll companies have two basic functions:

  • Processing Payroll
    Payroll companies split up salaries and distribute salaries to employee accounts or print physical checks.

  • Tax Statements
    Payroll companies prepare required and periodic tax statements. The company also prepares year-end tax fillings for your company and your employees, including 1099s and W-2 forms.

However, some payroll companies will offer added help with select human resources, paid time off tracking, and 401(k)s in addition to just payroll and taxes.

Many payroll companies offer bundles with added support, including healthcare and complete human resources assistance.

Best Payroll Companies

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A basic Google search brings up thousands of payroll service options. So how do you find a company that fits your needs?

Here are some of the most popular payroll companies to start your search.

Gusto

Gusto is an all-in-one payroll, HR, and benefits system that automates many necessary functions. All plans offer a baseline of comprehensive services, including:

  • Unlimited tax filings in all 50 states

  • W-2 employees and 1099 contractors

  • State and federal unemployment insurance

  • Garnishments

  • Multiple pay rates and schedules

  • Tip credits

  • Direct deposit

  • New hire reporting

  • Payroll reports

Gusto integrates with your accounting software as well as time tracking software. You can add extra benefits, like 401(k)s, FSAs, and more, to any plan for an added cost.

PLAN OPTIONS

  1. Core
    Gusto's most basic plan offers everything a growing and small business may need for payroll. It costs $39 a month as a base rate with an additional $6 a month per person.

    The plan includes several key features:

    • Full-service payroll

    • Employee self-service portal and profiles

    • Health benefits administration

    • Workers' comp administration

    • Support

    • Paid time off policies

  2. Complete
    The complete plan, Gusto's mid-level plan, offers some added features for payroll. It costs $39 a month as a base rate with an additional $12 a month per person.

    The plan includes several key features:

    • Full-service payroll

    • Employee self-service portal

    • Health benefits administration

    • Workers' comp administration

    • Support

    • Admin permissions

    • Employee offers and onboarding

    • Simple time tracking

    • PTO policies and time-off requests

    • Employee directory and surveys

  3. Concierge
    Gusto's Concierge plan offers a large variety of payroll and HR services for a relatively affordable cost. It costs $149 a month as a base rate with an additional $12 a month per person.

    The plan includes several key features:

    • Full-service payroll

    • Employee self-service profiles

    • Health benefits administration

    • Workers' comp administration

    • Dedicated support

    • Admin permissions

    • Employee offers and onboarding

    • Simple time tracking

    • PTO policies and time off requests

    • Employee directory and surveys

    • Certified HR pros

    • HR Resource center

Take a closer look at Gusto's three plans here.

Intuit QuickBooks Payroll

QuickBooks Payroll management is one of the most popular payroll providers for small businesses. It has two programs: self-service payroll and full-service payroll.

The services also integrate with QuickBooks. If you do not have QuickBooks, the company offers small business owners a discount with Payroll.

With Intuit's mobile app, you can even manage payroll on your own.

You can try either Intuit QuickBooks service free for 30 days.

PLAN OPTIONS

  1. Self-Service Payroll
    The basic package costs $17.50 a month if you pay for the first three months in advance. Each employee costs $4 extra.

    The plan includes:

    • 24-hour direct deposit and deductions, from health insurance to retirement plans
    • Payroll calculations for up to 50 employees

    • Pay for W-2 employees and 1099 contractors

    • E-file options

    • Payment customizations: choose how and when to pay your employees

    • Automatic tax updates: monitor and apply the most recent tax rates at the federal and state level

    • Payment reminders

    • Employee time tracking

    For a closer look at Intuit QuickBooks' Self Service program, check out our article here.

  2. Full Service Payroll
    QuickBooks Payroll's more advanced payroll system costs $40 a month if you pay for three months in advance. Each employee costs $4 extra.

    This more expensive option includes all of the Self Service Payroll features and a number of added benefits like expert payroll setup help and an accuracy guarantee.

    Other features include:

    • U.S.-based payroll experts will help you set up your payroll system and integration

    • QuickBooks will calculate and file all tax forms on your behalf

    • Full Service Payroll comes with an accuracy guarantee. QuickBooks will cover any tax penalties or fees associated with filling errors.

    • QuickBooks will track tax rates and adjust on your behalf

    • Free same-day direct deposits

    • Customizable payroll, from pay schedules to deductions to bonuses

    • Customer service over the phone, email or chat.

To learn more about Intuit QuickBooks Full Service Payroll, click here.

PayUSA

PayUSA customizes payroll options for small businesses up to 1,000 employees. For a company of 25 employees, that costs about $45 per payroll.

It offers a number of flexible payroll features, including:

  • Direct deposit: Employees can deposit their money into one account or several accounts at the same time

  • Check-stuffing services with signatures printed on the check, if you need physical checks

  • New hire reporting

  • Workers' compensation

  • Tax reporting

  • ACA Compliance

  • W-2/W-3 printing

  • Additional tax services

Try out PayUSA's one-month free trial online.

ADP

One of the largest payroll companies, ADP services large and small businesses—more than 600,000 companies in all. Despite their size, they have thousands of positive reviews.

ADP has four different plans for small businesses of up to 50 employees, two of which include HR and Payroll.

All the plans include these basic features:

  • Payroll on desktop, mobile, and phone

  • Direct deposit

  • Payroll delivery

  • Robust reporting

  • Reporting

  • New hire reporting

  • W-2 and 1099 fillings

  • Tax fillings

  • ADP employee access

  • State and federal forms and resources

  • HR checkups

  • Healthcare compliance

  • Insurance

  • Retirement

PLAN OPTIONS

  1. Essential Payroll
    The basic of the four systems works best for startups and small businesses looking for basic payroll services. The Essential package only offers the basic features.

    It lacks any HR options. If you're looking for HR integration as well as payroll, read on.

  2. Enhanced Payroll
    The Enhanced payroll package includes wage garnishment payments, state unemployment insurance (SUI) and labor law posters to display in your office.

    In addition to the basic features, the Enhanced payroll package also offers:

    • Check signing and stuffing

    • Signature check

    • Prepaid card for paying employees

    • Poster compliance

    • State unemployment insurance (SUI)

    • Garnishment payment services

  3. Complete Payroll & HR Plus
    ADP's Payroll & HR plus blends payroll and HR into one monthly package. The plan includes advanced payroll features and HR tasks, like background checks and employee handbooks.

    In addition to the features in previous plans, the Complete Payroll & HR Plus package includes:

    • Access to ZipRecruiter: Post jobs to over 100 of the web's leading job boards

    • Employee handbook wizard: Create an employee handbook based on federal law

    • HR Help Desk: Phone and email support to a team of HR professionals to help navigate issues

    • New-hire onboarding

    • Background checks

    • Job Description Wizard: Create job descriptions using information for an extensive ADP database

    • HR forms and documents

    • HR training and toolkits to help complete HR tasks like hiring and termination correctly

    • HR compliance and database alerts: Get emails when HR laws change that may affect your company

    • Access to ADP's document vault, a secure and searchable online space to store employee and company documents

    • 24/7 access to track and monitor employee information, such as performance and advanced reporting

    • Alerts and notifications across payroll and HR

  4. HR Pro
    ADP's most advanced plan for small businesses includes enhanced HR support and payroll.

    In addition to the features in previous plans, the Complete Payroll & HR Plus package includes:

    • Enhanced employee support handbook, where ADP professionals will help you create a comprehensive employee handbook

    • Enhanced HR help desk support with access to a designated team of business advisors available for scheduled check-ins and one-time questions

    • An employee discount program for nationally recognized brands

    • Work-life employee assistance programs, including counseling sessions and legal help

    • Trainings on sexual and workplace harassment and more.

ADP does not provide blank quotes for their packages. For a personalized quote, call them at (855)-230-6728.

To compare plans, click here.

Paychex

The cloud-based company offers plans for companies of different sizes.

Each plan has these same basic benefits:

  • Payroll tax administration: federal, state, and local taxes will be calculated, paid, and filed

  • New hire reporting to remain in compliance with state regulations

  • Access to the Paychex mobile app

  • 24/7 phone and chat support

  • Access to an employee financial wellness plan, including tools and education

  • Direct deposit for all employees, or a pay card

Paychex doesn't list plans prices online. You can request a free quote here.

PLAN OPTIONS

  1. Express Payroll
    Paychex's smallest plan works best for small and emerging businesses with less than 49 employees. The plan features offers no added benefits beyond the basic features.

    However, for a small business with just a few employees, Express Payroll may be exactly what you need to make payroll simple.

  2. Paychex Flex Select
    Paychex Flex Select is the most popular plan for small businesses with less than 49 employees.

    In addition to the above options, this plan includes these added benefits:

    • Dedicated payroll specialist

    • Labor compliance poster kit

    • Additional employee pay options, including check signing and paper checks

    • Paychex learning management system, with online courses designed to help employees

  3. Paychex Flex Pro
    In addition to the above options, this plan includes these added benefits:
    • Garnishment pay service that helps automatically deduct and remit garnished wages

    • General ledger service or the ability to link to select accounting software, like Sage and QuickBooks, with your payroll data

    • Workers' compensation reports that include wages subject to workers' comp insurance

    • State unemployment insurance service

    • Analytics and reporting stored in one large database with custom parameters to deliver new reports

    • Onboarding essentials for new employees, including direct deposit and tax forms

    • Employee screening essentials, like background checks; this package includes a limited number of background checks

  4. Paychex Flex Enterprise
    The largest and most expansive Paychex plan works best for enterprise businesses.

    In addition to the above options, this plan includes these added benefits:

    • Custom analytics and reporting

    • Paychex Flex HR administration, including managing employee training and storing compliance documents

OnPay

OnPay is a basic payroll and tax filing option with a transparent fee structure. This plan works best for businesses with basic needs.

The payment structure is simple: a $36 base fee per month, plus an additional $4 fee per month for each employee.

OnPay integrates with multiple time tracking and accounting software programs, like QuickBooks.

You can calculate your total cost on the website with a sliding bar.

Small business owners can try a one-month free trial.

OnPay will set up everything and migrate your information for free. Here's some of what their plan includes:

  • Payroll tax fillings and payments

  • Annual W-2 and 1099 forms: Free to print, or mailed for $5 each

  • Employee self-onboarding

  • Paid time off management

  • Access to HR documents and resources

  • Ability to cancel pay runs and make corrections

  • All payroll and tax filings guaranteed

Unlike other services, OnPay does not charge extra for direct deposit, debit cards, or printing your own checks. There are also no added fees for withholding, remitting, or filing payroll taxes.

OnPay has several add-on features: HR tools, workers' comp, 401(k) contributions, and health benefits. The costs vary, but even using these may be cheaper than going with an alternate option, depending on your needs.

If you regularly want printed checks or payment cards, opt for another provider. OnPay charges extra for each of these options. If you need printed checks often, it can become pricey.

Bank of America

BoA partners with Intuit's payroll program and ADP. If you already use Bank of America as your small business checking provider, using their payroll system can be a simple and convenient integration.

Intuit and ADP offer similar payroll services. However, ADP offers added access to human resource professionals to help understand labor laws and HR policies.

Intuit, on the other hand, offers small business owners the ability to manage their own payroll with their software.

What's the price difference? It's hard to say. While Intuit is transparent about their pricing, ADP requires that small business owners call for a quote.

ADP (via Bank of America)
ADP offers the same plans through Bank of America as they do for their customers, in addition to 24/7 payroll customer support (find the detailed plan-by-plan analysis above).

For information, visit their website or call 866-543-2808.

Intuit (via Bank of America)
There are three payroll options through Intuit: Intuit Basic, Intuit Enhanced, and Intuit Full Service Payroll. All services support a maximum of 150 employees.

Whichever plan you pick, expect full reports, processing for multiple pay types, and a tax accuracy guarantee. But you will need a Bank of America business checking account and access to Small Business Online Banking.

Under each Intuit plan, Bank of America gives you the option to offer employees a low-cost 401(k) plan (through Merrill Edge).

PLAN OPTIONS

  1. Intuit Online Payroll: Basic
    This plan works best for small businesses with few employees and basic needs. It's completely free if you pay all employees through direct deposit to a Bank of America account.

  2. Intuit Online Payroll: Enhanced
    A middle ground between their basic and full-service options, this plan fits best for growing and developing businesses with a diverse workforce.

  3. Intuit Full Service Payroll
    The most expensive (and most convenient) option is ideal for business owners with a dedicated income for payroll systems and little free time to spare.

For pricing information and to compare plans, click here.

Sage

This cloud-based payroll service has some of the highest customer retention rates in the country.

The biggest perk? Sage offers integration options with Office365 and other major accounting software.

The service has nearly a dozen plans for small businesses tailored to their needs. It offers these key payroll services:

  • Local, state, and federal tax filings

  • Direct deposit

  • Sage handles government notices

  • For support, talk with an American Payroll Association (FPC) certified expert.

Sage's full-service payroll program with all the features handles:

  • Direct deposit with paper check options, online pay stubs, and more

  • Access to a dedicated service representative for issues

  • Paid time off and sick time tracking with built-in reports

  • Tax fillings in all states

  • Integration with your accounting software

For more information on the full-service option, including a quote, click here.

WHAT Does YOUR SMALL BUSINESS NEED

Your payroll company needs to be able to do basic functions like payroll processing and tax statements. But depending on your needs, your payroll company may need to do more.

Here are some of the factors to consider when you look for a payroll company:

Pricing
Most small businesses will want to opt for a base rate price with added costs per employee in the system. Base rates will include:

  • Payroll processing
  • Tax fillings
  • Payroll taxes

Be wary of companies that are not transparent about pricing. There's no way to know if the company will raise prices down the line.

Understanding the pricing structure in advance is important. Some companies will list prices online and others will require you to call for a quote.

Ease of Use
You will have to input data yourself, so it's important that you understand how to use your payroll system. If it's too complicated, you'll waste valuable time.

Tax Filling Services Guarantee
Ask your payroll company for a guarantee that you will not be responsible for any mistakes the processor might make, like missing deadlines or making payments. Sign with a company that agrees to absorb the cost of their mistakes.

401(k) Management
An added perk for your new payroll company would be the ability to manage and distribute 401(k) payments for employees.

Paid Time Off (PTO) Management
Some payroll companies will offer PTO requests, approval, and tracking for employees and employers.

Paychecks and Direct Deposits
Make sure your future payroll company offers direct deposit services as well as printed paychecks. The ability to direct deposit employee's pay saves paper—and time.

Alerts
Some small business owners will want alerts from their payroll company for matters like employees approaching overtime or benefits eligibility.

New Hire Reports
Some states—like Texas—require companies to report information about new hires. If your company is based in one of these states, make sure your payroll company can handle this for you.

Web-Based System
In this day and age, make sure your payroll company has a comprehensive webpage to file payroll.

Varied Pay Rules Engine
If your small business has many different types of employees, your payroll company needs to supports different types of pay, from overtime to shift differentials to location and more.

Adjustment Management
Make sure your small business company has the ability to handle tips for employees, bonuses, reimbursements, and more.

Mobile Options
If you prefer working on the go, your payroll company needs to offer comprehensive mobile options, including an app.

Employee Self-Service
Most services will offer a portal for employees to access their payroll information, like payroll stubs and PTO requests.

Analysis Reports
Analysis reports may not seem urgent, but access to analysis and data can help show you how your business grows.

QUESTIONS TO ASK A POTENTIAL PAYROLL COMPANY

Your initial research may raise additional questions. If possible, get on the phone with a representative from a specific payroll. This ensures you'll get the answers you need.

Here are some additional questions BEFORE you sign a contract:

What is your pricing structure? What services are included at each price point?
Get an exact quote for the services your business needs right now and may need in the future. If the pricing will change, it's important to know whether it's in your budget.

What industry do you specialize in?
Pick a company that specializes in your industry, so they're familiar with the structure of your business and the related tax laws.

What insights do you offer through the dashboard?
Insights can help your small business better understand the financial breakdown.

Is the payroll system customizable?
This question will be especially important for small businesses with different types of employees like

  • Freelancers
  • Salaried full-time employees
  • Hourly part-time employees

Your payroll company should be able to accommodate all types of pay structures.

What customer support does your company offer?
Many companies will promise many types of customer service, but the best way to check is to give them a call. See who picks up and how they help you. Call at different times of the day to see if there is a wait time.

Will you be assigned a representative to help, or do you get the next available customer service representative? Is support available during business hours or around the clock?

How secure is your service?
Payroll involves lots of sensitive information, from Social Security numbers to tax information.

As a small business owner, you need to be confident your employees' information is secure. Ask how the payroll company plans to protect the data on their servers.

Is there an added cost to file taxes in multiple states?
Clarify all costs associated with filing taxes in multiple states.

What am I responsible for and what will the company handle?
Narrow down what you will need to handle and what the payroll service will take care of.

A few more questions to consider:
What payroll taxes do you include in your service and which taxes cost extra?

Do annual fees fluctuate? How have they changed in the past?

Can they integrate with your current accounting software?

How often will I receive reports from your service?

Tips for RESEARCHING

Here are a few ways to ensure you found the right payroll company for your business:

Ask for References
Speaking to their references—real customers—will allow you to talk to someone who has been using the service.

However, some larger companies, like ADP, may not have personal references to offer aside from testimonials on their site.

Seek recommendations from similar small businesses. They'll likely be honest in their assessment of their payroll company.

Check with the BBB
The BBB gives you a better sense of the business, including:

  • How many years it's been in business
  • Customer complaints
  • Reviews
  • An overall rating

If the company has any complaints, make sure to read those too.

Read Online Reviews
Check Google and Yelp to see what customers are saying. Just make sure not to take every negative review so seriously—weigh all the reviews.

Ask for a Sample Report
Make sure the analysis reports are easy to read and simple to understand right off the bat. You need to be able to understand the important information.

WHAT HAPPENS WHEN YOU SIGN WITH A PAYROLL COMPANY

When signing with a payroll service, make sure you understand what you need to do and what the payroll service will take care of.

In most cases, you will provide employees' documents, such as:

  • Names
  • Addresses
  • Wages
  • Deductions
  • Void checks for direct deposit

W-2 forms will be provided by your payroll company. But employees will have to fill out the W-2 forms.

Most businesses will keep their old payroll system for the first month or so after switching over to ensure a smooth transition. Double-check the numbers the first few pay cycles to make sure your new company works correctly.

If you find your payroll service is not working the way you want it to, consider switching.

There are two ideal times to make the switch:

  • The start of the year, when the pay cycle starts over

  • The end of a quarter, when your previous payroll service wraps up the quarterly reports.

THE BOTTOM LINE

Finding a new payroll company can be tricky. But with the right amount of research and planning, your small business will find the best fit for its needs.

Start by asking for recommendations from similar small businesses. They'll likely be honest in their assessment of their payroll company.

And remember: If the payroll system doesn't work out, you can always switch to another provider and start again.

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