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Updated Mar 07, 2024

The Best Online Payroll Services of 2024

Jessica Elliott
Jessica Elliott, Senior Analyst & Expert on Business Operations
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Best for Accounting Integration
  • Variety for flexible subscriptions
  • Affordable contractor-only plan
  • Next-day direct deposit
Visit Site
Links to Intuit QuickBooks Payroll
  • Variety for flexible subscriptions
  • Affordable contractor-only plan
  • Next-day direct deposit
Best for Small Businesses
  • Unlimited multistate pay runs
  • Nationwide benefits administration
  • Tax accuracy guarantee
Visit Site
Links to OnPay Payroll Software
  • Unlimited multistate pay runs
  • Nationwide benefits administration
  • Tax accuracy guarantee
Best for Growing Businesses
  • Seven subscription plans
  • Hundreds of app integrations
  • Tax filing guarantee
Visit Site
Links to ADP Payroll Software
  • Seven subscription plans
  • Hundreds of app integrations
  • Tax filing guarantee
Best for Employee Self-Service
  • Mobile apps
  • Unlimited payroll processing
  • Flexible pay options
Visit Site
Links to Paycor
  • Mobile apps
  • Unlimited payroll processing
  • Flexible pay options
Best for HR Integration
  • Robust app integrations
  • Hiring and onboarding tools
  • Unlimited pay runs
Visit Site
Links to Gusto Payroll Software
  • Robust app integrations
  • Hiring and onboarding tools
  • Unlimited pay runs

Table of Contents

Open row

The best online payroll services automate the payroll process, freeing your time to focus on core business activities. Yet comparing payroll software prices and features is challenging. To help you decide, we identified the top payroll providers. Our assessment compared costs, tools, usability and customer service. Use this guide to find the right payroll solution for your company.

Why You Should Trust Us

At business.com, we’ve independently evaluated hundreds of business software and services to determine the best products for small businesses. Our expert editorial staff identified the best online payroll service based on firsthand experience, comprehensive research and rigorous testing. Each product was analyzed and rated on a number of factors, including cost, payment options, ease of use and features. The business.com team prioritizes accuracy and fairness in all of our assessments. Learn more about our methodology.

What Is an Online Payroll Service?

An online payroll service provides businesses with the software and tools to run payroll on their own. With the software, you enter each employee and then some additional details, including their salary or hourly wage, their benefit deductions, and where they live, among others. With all of this completed, the service automatically calculates each employee’s paycheck each pay period. Additionally, it withholds and, in some cases, pays your local, state and federal payroll taxes. The service also provides detailed reporting that lets you know how much you spend on payroll each month.

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How We Decided

Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

77

Considered

17

Researched

11

Selected

Compare Our Best Picks

BDC Ribbon
Our Top Picks for 2024
Intuit QuickBooks Payroll
OnPay Payroll Software
ADP Payroll Software
Gusto Payroll Software
Paychex Payroll Software
Rippling Payroll Software
Papaya Global Payroll
Square Payroll
TriNet
isolved Payroll
Justworks PEO
Heartland Global
AspenHR
Patriot Software
Rating (Out of 10)9.09.39.28.99.29.09.38.38.79.19.09.68.70.08.9
Best Use Case

Best for Accounting Integration

Best for Small Businesses

Best for Growing Businesses

Best for Employee Self-Service

Best for HR Integration

Best for Larger Businesses

Best for Automating Processes

Best for an International Workforce

Best for User Friendliness

Best for Built-In Time-Tracking

Best for Plan Customization

Best for PEO Services

Best for HR Support

Best for Multi-State Benefits

Best for Small Teams

Base Plan Price (Monthly)

$45

$40

Varies

Varies

$40

$39

Starts at $35

Varies

$35

N/A

Varies

N/A

Starts at $89

Varies

$17

Per Employee Fee (Monthly)

$5

$6

Varies

Varies

$6

$5

Starts at $8

Starts at $12

$5

Starts at $6

Varies

$59

N/A

Varies

$4

Contractor-Only Subscriptions

Yes

No

No

No

Yes

No

No

No

Yes

No

No

No

No

No

No

24/7 Customer Service

Yes, Elite plans

No

Yes

No

No

Yes

No

No

No

No

No

Yes

No

No

No

Mobile App

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

No

No

Payroll Cards Supplied by Provider

Yes

Yes

Yes

Yes

No

Yes

No

Yes, Cash App

Yes

No

Yes

No

Yes

No

No

Multi-State Payroll on Base Plans

No

Yes

Yes

Yes

No

Yes

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

Review Link
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Our Reviews

Intuit QuickBooks Payroll: Best for Accounting Integration

  • Payroll data syncs seamlessly with QuickBooks accounting software.
  • The online payroll service provides next-day and same-day direct deposits.
  • QuickBooks Payroll offers fewer onboarding, hiring and HR tools than competitors.
Editor's Rating: 9/10
Visit Site

Syncing payroll journal entries to accounting software can be a pain for small business owners and accountants alike. Intuit QuickBooks eliminates this headache with its integrated payroll and accounting software solutions. Payroll administrators can pay employees and contractors through QuickBooks Payroll or update wages and benefits deductions, and all information syncs with QuickBooks Online. Its competitive price and bundled services made it our top choice for a payroll provider with accounting integration.

QuickBooks Payroll starts at $45 per month, plus a $5-per-employee fee. It also offers an affordable contractor-only option, which includes up to 20 independent workers or freelancers for $15 per month. You can add QuickBooks Payroll to your subscription if you already use QuickBooks Online. Intuit recently announced several new plans for Canadian customers, called New Payroll Premium and New Payroll Elite. These new plans include time-tracking, HR services and more.

Like competitors, QuickBooks Payroll provides unlimited payroll runs, a self-service employee portal and benefits administration tools. Since QuickBooks Online integrates with payroll tax preparation software, using its payroll services streamlines the entire reporting process. We liked that even the base plan offers next-day direct deposit, as most payroll companies have two- or four-day time frames. Premium and higher-tier packages provide same-day direct deposit, which is helpful for last-minute payroll processing.

OnPay Payroll Software: Best for Small Businesses

  • Onboarding specialists assist with setting up payroll software and integrations.
  • Small business owners won’t be surprised by hidden fees and can take advantage of a one-month free trial.
  • OnPay’s payroll solution does not have automated payroll processing for salaried workers, so you must manually approve payroll each pay period.
Editor's Rating: 9.3/10
Visit Site

OnPay’s payroll solution does not have automated payroll processing for salaried workers, so you must manually approve payroll each pay period.

OnPay’s transparent pricing model, excellent customer support and user-friendly payroll software set it apart from other payroll providers. But don’t let its simplicity fool you. OnPay offers many options that most online payroll services charge extra for, like multistate payroll processing and custom payroll reports. We appreciated OnPay’s commitment to small business owners and the overall value its service provides, which is why we chose OnPay as the best payroll software for small companies.

OnPay’s pricing ($40 monthly plus a $6 per employee fee) is on par with the base plans from most payroll services. Yet it does not skimp on features. OnPay allows unlimited payroll runs for employees and contractors, and it handles local, state and federal payroll taxes. Tax penalty protection provides peace of mind, while proactive alerts prevent payroll processing if errors exist.

The payroll service offers accounting software and time-tracking integrations and helps set up custom general ledger integrations. OnPay’s hands-on support extends to implementation and benefits management. The payroll company assigns an onboarding specialist who prepares the system for you, and licensed brokers help you compare employee benefits packages. OnPay even offers emergency weekend support, which is a huge help for small business owners processing payroll during non-business hours.

ADP Payroll Software: Best for Growing Businesses

  • With seven HR and payroll service plans, ADP scales with your company, supporting one to over 1,000 employees.
  • Mobile apps let staff access pay stubs, direct deposit information and employee benefits.
  • Some ADP plans charge per payroll run, which can be costly for small businesses with multiple pay schedules.
Editor's Rating: 9.2/10
Visit Site

The best payroll services grow with your company so that you don’t have to switch providers and migrate to a new system. ADP is our top choice for growing businesses because it scales from a basic payroll solution to a full-service HR and payroll system for over 1,000 employees and contractors. Each feature, from payroll reports to compliance support, expands to handle your company’s growth. ADP helps ensure that your tax obligations, new hires and HR teams receive the attention they deserve.

Rapid growth often strains staff as companies seek new employees. With seven RUN Powered by ADP and ADP Workforce Now plans, you can add run payroll automatically and let ADP handle your quarterly and annual tax filing responsibilities. The employee portal and highly rated mobile app give workers access to pay stubs and tax forms, reducing calls to your HR department.

Moreover, ADP’s advanced features help you reach goals quicker. It supplies an applicant tracking system, workforce management tools and compensation benchmark reports to assist hiring and retention. Digital recordkeeping and an employee handbook wizard enable a small HR team to manage a growing workforce.

Paycor: Best for Employee Self-Service

  • Paycor provides an employee self-service portal and mobile app for viewing pay stubs, time off, financial wellness tools and benefits.
  • Pay stub preview and tax compliance support reduce payroll processing and tax filing errors.
  • Paycor’s online payroll services cost more than competitors, and since you must get a custom quote, the buying process takes longer.
Editor's Rating: 8.9/10
Visit Site

Exceptional employee self-service portals enhance user experiences, resulting in fewer calls and emails to your HR department. Indeed, we were impressed with Paycor’s online payroll software, which gives staff access to personal records, benefits, schedules and payroll data. Its drag-and-drop functionality lets workers swap shifts or request time off online. The functionality extends to HR leaders and managers. As such, we chose Paycor as the top payroll system for employee self-service.

Paycor’s self-service technology alerts HR leaders, managers and employees if there are any payroll or timecard errors. It allows staff to sign company documents online and can even notify them when certifications are about to expire. We found its payroll service comprehensive, with automated payroll processing and tax filing. Paycor supports multiple pay options, including paycards, earned wage access and a digital wallet. Furthermore, companies can monitor employee self-service usage through their reporting capabilities.

Gusto Payroll Software: Best for HR Integration

  • Gusto’s full-service payroll system integrates with dozens of accounting and time-tracking apps.
  • It offers robust payroll and HR tools for hiring and onboarding tasks.
  • Additional charges apply for paying international contractors, and Gusto does not support W-2 payments to foreign workers.
Editor's Rating: 9.2/10
Visit Site

Gusto’s full-service HR and payroll solutions fit into and even improve existing workflows, helping small business owners save time and enhance employee experiences. We were pleased that Gusto connected to more than 20 time-tracking applications and dozens of other business apps. These integrations let us use our existing tools alongside Gusto’s native onboarding, benefits administration and payroll features. For these reasons and others, we selected Gusto as the best online payroll service for HR integration.

The tiered pricing model starts at $40 per month, plus $6 per employee, similar to rivals’. However, you won’t find hidden fees for syncing your time clock tools or accounting software. Nor will you pay more for cloud storage of employee documents. We liked the customizable offer letter templates, e-signature tool and onboarding checklist. Gusto scales to relieve HR burdens with its one-click software provisioning and team management tools. Additionally, managers can assess worker performance through Gusto’s platform.

Paychex Payroll Software: Best for Larger Businesses

  • Paychex provides enterprise-grade integrations, APIs and developer resources.
  • Payroll administrators can process payroll from the Paychex Flex mobile app.
  • Several HR and payroll services and features cost extra, and Paychex’s pricing is less transparent than its rivals’.
Editor's Rating: 9/10
Visit Site

Large organizations with diverse workforces and multiple locations can use Paychex Flex to serve employees and contractors better while streamlining back-office workflows. It offers direct deposit alternatives and employee self-service options. The payroll software integrates with over 250 third-party applications and supports custom integrations through its API Developer Center. Flexible plans and various add-ons make Paychex a great payroll service for large companies.

Paychex understands that larger businesses need more ways to pay employees. It provides eChecks service, on-demand pay, direct deposit, payroll cards, 24/7 real-time payments and a Readychex service that prints and mails paper checks. Paychex Flex Essentials pricing starts at $39 per month, plus a $5-per-employee fee, and scales to Paychex Flex Enterprise. This is a custom plan that includes a performance management system and payroll data visualization tools.

We also appreciate the Paychex Pre-Check add-on feature, which reduces payroll errors by allowing employees to preview paychecks. Tax penalty protection is a bonus for big companies wanting to provide more employee tools. And with more than 160 reports, enterprises can dive into employee benefits administration costs or benchmark compensation.

Rippling Payroll Software: Best for Automating Processes

  • Rippling’s workflow builder triggers actions across hundreds of integrated third-party systems.
  • Data visualization tools, customizable prebuilt payroll reports and automatic delivery simplify reporting processes.
  • Rippling does not have a stand-alone payroll solution, and administrators must add modules for benefits management and payroll services.
Editor's Rating: 9.3/10
Visit Site

Workflow automation reduces task switching, allowing HR professionals to focus on high-level duties. The best payroll services automate tax filing and payroll processing, but none offer extensive integrations and prebuilt automation formulas like Rippling. Its no-code workflow builder can update your accounting software and assign tasks to pay employees a referral bonus or retroactive pay raise. Consequently, we chose Rippling as the best payroll provider for automating processes.

Although Rippling lacks an individual payroll service, its workforce management platform and payroll module costs are competitively priced. Rippling Unity starts at $35 per month, and Rippling Payroll has an $8-per-employee fee. For this price, you can automate over 1,000 common workflows and connect your HR and payroll system to third-party tools like Slack, Jira and Zendesk. One new feature is Rippling Recruiting. This new applicant tracking tool integrates with the wider workforce management platform.

With Rippling, you can run payroll in 90 seconds and pay employees via direct deposit. The customizable service packages let you add benefits administration, expense management and compliance tools. In each case, you can automate workflows across Rippling’s integrated modules.

Papaya Global Payroll: Best Payroll Software for an International Workforce

Papaya Global Payroll
  • Papaya Global becomes your employer of record (EOR) to hire and pay employees in over 160 countries.
  • AI-powered payroll software automates compliance and approval processes.
  • Papaya Global’s implementation fee and monthly cost may be prohibitive for startups and small businesses.
Editor's Rating: 8.3/10

Global payroll is challenging for small and midsize businesses, but Papaya Global makes hiring employees and contractors in more than 160 countries convenient. It supports over 100 payout currencies and offers international employee benefits plans. Papaya Global leverages AI technology to audit payroll to ensure accuracy and compliance. We identified Papaya Global as the best payroll software for an international workforce.

Papaya Global provides a dedicated mobile app and online portal available for use by global employees and contractors. The payroll provider enables a consistent experience regardless of your team’s location by automating workflows and notifications. It provides a full payroll calendar specific to each region, with customized approval chains to keep your payroll process flowing.

We were pleased with how Papaya Global helps small businesses avoid contractor misclassification. It handles the legal paperwork, including country-specific tax forms and agreement templates. Papaya Global payroll pricing starts at $3 per person per month to add international payments to your current payroll service, whereas full-service payroll costs $12 per person per month.

Square: Best for User-Friendliness

  • Square offers inclusive pricing, a paused billing feature and easy-to-deploy payroll services.
  • Small business owners can run payroll through the Square Payroll mobile app.
  • Square Payroll has fewer payroll reports, HR tools and employee benefits services than competitors.
Editor's Rating: 8.7/10
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Small businesses with hourly workers and 1099 contractors will appreciate Square Payroll’s straightforward payroll processing platform. The system is intuitive, requiring only a few steps to run payroll each pay period. In addition, the payroll company provides live support for account setup and does not have a steep learning curve. For these reasons and others, we chose Square Payroll as the best payroll software for its ease of use.

Square Payroll imports commissions and tips from Square POS and attendance data from Square Team Management. And we appreciate that Square does not require a contract. Seasonal companies can pause billing to avoid paying for inactive periods. Along with unlimited payroll runs and automated tax filing, Square Payroll mails W-2 and 1099-NEC tax forms, which costs extra through most payroll services.

We also like that we could pay staff by direct deposit, check or Cash App. The single full-service payroll subscription costs $35 per month plus $5 per employee. Small businesses without W-2 workers can select Square’s contractor-only option, as it does not have a monthly fee. Instead, clients pay $6 per active independent contractor or freelancer.

More recently, Square unveiled AI-powered tools to make your life as a manager even easier. These include AI to generate personalized email content and team announcements.

TriNet: Best Payroll Software for Built-in Time Tracking

TriNet
Trinet logo
  • Integrated scheduling and time-tracking tools sync with Zenefits’ payroll system.
  • Zenefits’ mobile app gives employees lifetime access to pay stubs and tax information.
  • The payroll software connects to fewer third-party software applications than competitors.x
Editor's Rating: 9.1/10

Entering time card data into a payroll system is time-intensive and error-prone. Zenefits solves this problem with native time-tracking tools for on-site, remote and field workers. Built-in scheduling and compliance features help companies comply with overtime regulations and notify employees of new shifts. Since everything syncs to Zenefits’ payroll service, it’s our top choice for payroll software with built-in time tracking.

We were pleased with the flexibility of Zenefits’ attendance features. Employees could clock in and out from the mobile app, and employers can establish a perimeter to prevent buddy punching or enable GPS to monitor worker locations. Alternatively, you can set up Zenefits on an iPad terminal or a desktop. We were impressed that staff could switch shifts or request coverage and, when scheduling, we could block out dates to prevent time-off requests during the busy season.

Price-wise, Zenefits is reasonable. The base package starts at $10 per employee per month, or $8 with annual billing, plus an additional $6 per person for payroll services. It includes compliance features that can remind staff to take a break or go to lunch and assist small businesses with Affordable Care Act (ACA) benefits management.

isolved Payroll: Best Payroll Software for Plan Customization

isolved Payroll
isolved payroll logo
  • isolved lets employers design a custom HR and payroll solution by choosing from over a dozen products and features.
  • Companies can pay employees through direct deposit, payroll cards or on-demand wages.
  • Implementing isolved HR and payroll services takes longer than other systems, and administrators may require additional training.
Editor's Rating: 9/10

No two small businesses are alike, yet payroll service providers must accommodate all of them. Often, owners end up paying for features they don’t want or use. isolved is the best payroll software for plan customization because you pick which tools and products your company needs. Choose the payroll processing module if you want unlimited payroll runs and automated tax filing without the bells and whistles. Or go all out and add benefits administration, scheduling and employee engagement tools.

Since isolved is a human capital management (HCM) solution, you’ll find solutions for every workforce-related issue, including financial wellness programs, learning management platforms and predictive analytics tools. The employee self-service portal displays pay stubs and direct deposit details. Each module expands the system’s capabilities, so if you add time tracking, the report writer tool can analyze employment trends alongside payroll reports and summaries.

Aside from full-service payroll, isolved offers a conversational virtual assistant to answer HR questions in Microsoft Teams, or you can partner with isolved to create a unique employee benefits program. Plus, isolved integrates with several third-party apps, including QuickBooks Online and OnShift.

Justworks PEO: Best Payroll Software for PEO Services

  • Justworks PEO plans offer affordable compliance, benefits administration, HR and payroll services for businesses with two to 200 employees.
  • It automates payroll processing and remits payroll taxes for workers in all 50 states.
  • Although Justworks has a stand-alone payroll software solution, this option is available in only 12 states and is suitable for small businesses with 30 or fewer employees.
Editor's Rating: 9.6/10
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Outsourcing payroll and some HR services to a professional employer organization (PEO) can help your company save on benefits and payroll expenses. Justworks is an affordable solution with robust online payroll services, employment practices liability insurance and accounting software integrations. Its high-quality health insurance options and native time-tracking tools make it our favorite payroll provider for PEO services.

Justworks’ pricing starts at $59 per employee per month, which is more expensive than standard payroll software solutions. However, as your PEO, Justworks becomes your co-employer and provides access to a 24/7 customer service team via Slack, phone, email, chat and text. Certified HR consultants offer assistance in handling complex payroll and employment situations. The payroll process supports employees and contractors, off-cycle or bonus payments, and reimbursements.

By working with Justworks, you can get workers’ compensation coverage and many employee benefits, including fitness memberships, retirement plans, pretax commuter benefits and life insurance packages. Employers can view tools through an intuitive online dashboard, and Justworks files your payroll taxes, W-2s and 1099s.

Heartland Global: Best Payroll Software for HR Support

Heartland Global
Heartland Global logo
  • Heartland Payroll subscriptions offer unlimited, dedicated customer service, and the Complete plan includes professional HR support.
  • The online payroll solution has new-hire reporting, payroll tax services and integrated onboarding tools.
  • Setting up and deploying Heartland Payroll may take longer than it would with payroll service providers like Gusto or Square Payroll.
Editor's Rating: 8.7/10

Not all online payroll services respond quickly when issues arise. However, Heartland Payroll provides on-demand access to professionals who can answer your questions about payroll tax preparation and labor laws. Its HR Support Center includes the Ease and Employee Navigator, simplifying new-hire reporting and benefits-related payroll deductions. With a full-service payroll solution and vast HR resources, small businesses can prevent manual data entry errors and stay updated on the latest regulations. We identified Heartland Payroll as the best payroll software for HR support.

Aside from its regular services, Heartland Payroll offers HR On Demand. With this option, companies can speak with SHRM-certified experts for advice on creating a company handbook or terminating employees. The HR platform also includes file storage for onboarding documents, and Heartland Payroll emails alerts when a court decision or regulation could affect your business. We also appreciate that the payroll software integrates with QuickBooks Online, POS systems and time-tracking apps.

AspenHR: Best Payroll Software for Multistate Benefits

AspenHR
AspenHR logo
  • AspenHR’s PEO services offer custom employee benefits plans with unique options for 401(k) packages, health insurance and perks.
  • With AspenHR as your PEO, it manages your end-to-end tax filing and payroll process.
  • Since AspenHR does not have a stand-alone payroll solution, it’s better for companies looking for PEO services.
Editor's Rating: 0/10

AspenHR does more than offer health insurance and employee benefits. It answers employee questions, processes enrollments and manages claims issues. We were impressed with its level of service that extends to administering COBRA and providing ACA reports. With AspenHR, small businesses can attract and retain workers with a comprehensive Fortune 500 benefits package. It’s our pick as the top payroll solution and PEO service for companies wanting outstanding multistate benefits.

Aside from payroll processing and tax filings, AspenHR has a certified HR team to advise your company on payroll, benefits, compliance and labor issues. It offers the broadest range of customized benefits programs, including medical plans through Aetna and dental benefits with orthodontia care. We love the unique options like travel assistance, identity protection and pet care. Also, AspenHR can meet the needs of executives with coverage options that allow companies to cover some expenses or care on a pretax basis.

Patriot Software: Best Payroll Software for Small Teams

Patriot Software
Patriot software logo
  • Patriot Software’s online payroll services cost less than rivals, allowing you to manually pay payroll taxes or upgrade to automated tax services.
  • The payroll software integrates with QuickBooks Time and QuickBooks Online.
  • Patriot Software lacks many hiring and onboarding features available with other payroll solutions.
Editor's Rating: 8.9/10

A small team does not always need a full-service payroll system, and we appreciate that Patriot Software offers a manual tax filing solution. With this option, a small business can save over $200 annually on monthly fees. Patriot Software still provides unlimited payroll runs for all pay frequencies and supports 1099 and W-2 workers. Alternatively, you can upgrade to its full-service payroll solution, which costs less than most competitors. Our evaluation found that Patriot Software is the best online payroll system for small teams.

Although Patriot Software is inexpensive, it supplies the payroll features a small team needs for accurate payroll runs and records. Employers can customize deductions, contributions and pay types. The payroll software lets you set up a PTO policy and run payroll reports. It integrates with 401(k) and workers’ compensation plans. In addition, the employee self-service portal gives staff access to pay history, time-off balances and W-2 forms.

Patriot Software’s pricing is $17 per month, plus $4 per employee for self-service tax filing or $37 per month, plus $4 per person for full-service payroll and tax services. While Patriot Software syncs with QuickBooks Online, you can also select Patriot’s accounting system.

Online Payroll Pricing

While the costs of payroll solutions differ by company, most payroll providers use a similar cost structure. There is typically a base fee and a per-employee charge. Our best picks levy base fees of $17 to more than $100 monthly and per-employee fees of $4 to $12 monthly.

Many payroll services charge monthly fees or offer discounts for annual billing, and these subscriptions include unlimited pay runs. However, some providers apply a fee each time you run payroll.

Likewise, payroll companies may have a single plan or tiered pricing model. The cheapest payroll packages may include payroll processing only, whereas full-service subscriptions provide payroll tax filing and payment services. Additionally, some providers charge add-on fees for year-end tax forms, system implementation and integrations.

Payroll Implementation Costs

Most payroll services offer free setup and implementation. The process may be fully online and self-guided or require hands-on support from payroll specialists. Payroll companies often migrate your payroll and employee data from your current service to your new provider. But some may charge a one-time fee for setup or migration.

Even if a provider does not charge fees, you can expect to pay for your employees to be onboarded and trained. Depending on the payroll software’s complexity, these expenses can add up.

Before you sign up with a payroll service provider, ask the company these questions to get the best deal possible:

  • Does it offer price reductions for long-term contracts?
  • Would it be willing to match the price of one of its cheaper competitors?
  • Does it provide volume-based discounts for larger companies?
  • Are there fees for 1099 and W-2 form generation?
  • Does it cost more for general ledger or accounting integrations?

It is essential to review the agreement thoroughly before you sign anything. Ensure the contract includes everything you have agreed to and doesn’t have any built-in price increases after a certain period.

Also, ask about the process for canceling service. For example, find out if there are any costs associated with payroll service termination and how much notice you need to give.

Online Payroll Free Trial

Some payroll providers offer first-time customers a 30-day free trial, allowing you to run payroll at least once to determine how you like the service. In addition, many payroll services don’t require long-term commitments, so if you test it out for a few months and decide the program doesn’t fit your needs, you can easily cancel it and find a better match elsewhere.

Online Payroll Features

Online payroll software encompasses a lot of services. These are some of the most valuable features and tools these programs offer.

Payroll Processing

Full-service payroll systems calculate worker pay based on the entered wage rates and hours worked. It deducts employee benefits contributions and payroll taxes. Some software has an auto-pay option for salaried workers, so you only need to approve payroll each pay period. Depending on your payroll service, it may allow unlimited payroll runs and one or more pay schedules.

Payroll Tax

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. If the company makes a mistake on your taxes, your payroll provider will correct the oversight and pay any fines or interest incurred.

Automation

Payroll software is increasingly employing new artificial intelligence (AI) technology. AI automates routine payroll tasks such as data entry, time tracking and calculations. This reduces the chances of human errors and ensures accuracy in payroll processing.

New-Hire Reporting

When hiring a new employee, you must report that information to the state. Online payroll services can complete those forms for your small 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.

Employee Payment Options

Payroll companies offer multiple ways to pay your employees. The most common methods are direct deposit and paper checks. With direct deposit, an employee provides their bank account information, and the payroll software automatically deposits the paycheck into their account on payday.

Another option is paper checks. You can print them yourself, or some payroll providers offer check-stuffing services, meaning they print the checks, put them in envelopes and deliver them to your office.

Payroll cards are another alternative to direct deposit. Employees don’t need a bank account. Instead, they have prepaid debit cards and paycheck funds go onto the card. Also, a handful of payroll services provide on-demand wages. In these cases, workers can request payment before a scheduled pay cycle.

FYIDid you know

Not all paycards benefit your staff; some have hefty fees. Learn the pros and cons of payroll cards before offering them to your workforce.

Employee and Contractor Types

Payroll software supports hourly and salaried employees, vendor payments and 1099 contractors, including consultants and freelancers. Systems may let you select individual pay rates (even during the same shift), calculate tip credits, assign bonuses and reimburse expenses.

Payroll Reports

Online payroll software can provide various reporting tools that give businesses insight into their company and employees. The types of payroll reports that some services offer include payroll registers, contribution reports and payroll tax reports. Advanced data visualization features can break down workforce costs and benchmark compensation rates.

TipBottom line

You should run regular payroll reports regardless of your business size or payroll process. Explore our guide to learn what to include in your payroll reporting.

Third-Party Integrations

Many online payroll software platforms integrate with programs that businesses already use. These include accounting software, time and attendance systems, and HR tools. These integrations allow the programs to connect seamlessly. Data is automatically shared and transferred between them, saving you the time you’d otherwise spend entering the same information in multiple places.

Employee Self-Service

The best online payroll services give each employee a login to access the software. The employee portal lets them review pay stubs, access their year-end tax forms and check their time-off balances. Depending on your payroll program, workers may be able to enroll in benefits plans and request shift coverage from co-workers.

PTO Management

Many payroll services include management for your employees’ paid time off. This may mean simply tracking PTO accruals or allowing employees to request time off and managers to approve or deny it. Like other features, these updates can sync automatically to your payroll software.

HR Features and Tools

Some payroll companies include HR services in their platforms. Customizable offer letters and onboarding tools, like e-signatures, are popular features. Plans may also provide employee handbook wizards, document templates and HR resource libraries.

Customer Service

Online payroll companies typically offer support during weekday business hours, although a few provide 24-hour coverage or emergency weekend hours. Some assign a dedicated support specialist, eliminating the need to go through a call center.

While email, phone and live chat are the most common methods, certain providers offer customer service through text messaging or Slack. In addition, most online payroll services have extensive resources on their website, such as how-to guides, FAQs and videos.

Mobile Access

Some payroll services provide mobile access to their software. Options may include mobile-friendly websites that open on smartphone browsers or dedicated iOS and Android apps. These apps let staff view digital pay stubs and annual tax forms. Others serve as time-tracking tools with scheduling or PTO management capabilities.

Benefits Administration

Many payroll companies allow businesses to manage employee benefits through their payroll software. Benefits administration services may include health and dental insurance, retirement plans, pre-tax savings accounts, and workers’ compensation. Also, several payroll service providers can integrate with your current broker.

How to Choose Online Payroll Services

Outsourcing payroll processing and tax filing is a big step for big or small businesses. Owners should consider several factors and assess potential online payroll services thoroughly. [For a deeper dive into this subject, see our guide: How to Choose Payroll Software.]

1. Evaluate Your Current Payroll Process

Think about how you process payroll now and look over the results of your last payroll audit. What aspects of running payroll do you want to improve? Business owners often wish to save time while preventing tax and payroll errors. The ability to offer employee self-service options, direct deposit, and payroll cards and benefits may also appeal to you.

2. Identify Your Business Needs

To assess payroll service providers, you must understand which features and resources will benefit your company the most. For instance, small businesses with fewer than 50 employees face fewer labor and tax regulations than larger companies but may want help complying with paycheck recordkeeping laws. Also, consider the experience levels of your HR staff and what types of tools would help them fulfill their roles.

Think about the following questions:

  • How many employees and contractors do you have?
  • Do you need to process payroll in multiple states or foreign countries?
  • Will you pay out bonuses, commissions or expense reimbursements?
  • Which third-party software applications need to integrate with your payroll software?
  • Do you want HR support, resources or features?
  • Should your system include benefits management and administration?
  • Are you in a niche industry with specific payroll requirements?
TipBottom line

If you work with an accountant, ask for their advice for transferring payroll journal entries to your bookkeeping software. Many configure the general ledger for specific business needs, and understanding their process can help inform your payroll software buying decision.

3. Compare Various Payroll Software Solutions

Make a list of payroll service providers and your criteria. Read professional reviews involving user testing to get an idea of the pros and cons of deploying and using various tools. Also, check out user reviews and software ratings. Look for patterns of complaints or positive points.

Don’t hesitate to reach out to your professional network. Often, other business leaders readily share insights and recommendations. Track your findings in a spreadsheet or project management platform.

4. Obtain Demos and Free Trials

Once you’ve narrowed your list, contact the best online payroll services to request demonstrations, quotes and free trials. Involve staff members who will use the software, and encourage them to ask questions. Remember to call or message customer service and interact with various representatives to get a feel for how the company handles support tickets.

Did You Know?Did you know

Before implementing a new payroll system, you may need to update your payroll forms. Ask potential providers if they have an onboarding checklist you can review.

Benefits of Online Payroll Software

The advantages of paperless payroll are vast. Replacing spreadsheets and manual data entry can free your time to focus on core business tasks and improve HR workflows. Moreover, many payroll services include additional features for enhancing onboarding and hiring processes.

Reduce Payroll and Tax Filing Errors

Automatic payroll calculations and tax payments decrease the chances of human mistakes. Plus, several top-rated payroll solutions offer tax penalty protection or allow employees to preview paychecks before employers run payroll.

Improve Employee Experiences

Mobile apps, self-service portals and employee benefits can increase staff satisfaction, resulting in lower turnover and higher engagement. Workers appreciate flexible payment options like direct deposit and payroll cards.

Increase Productivity

Payroll software calculates the wages, deductions and withholdings, meaning less manual work. General ledger and time-tracking integrations eliminate the need to enter the same data more than once. In addition, many systems include new-hire reporting services, year-end tax filing and other tools to streamline HR and payroll processes.

Support Key Business Goals

Technology tools should help your company meet objectives, like improving your bottom line or hiring well-qualified job candidates. Payroll platforms can reduce costs while allowing your staff to streamline hiring and onboarding experiences. With a benefits administration service, you reach goals for attracting and retaining employees.

Manage a global workforce

In an era of remote work and globalization, many employers are seeking to hire workers overseas. Payroll software helps you stay in compliance with laws and regulations around the world, which ensures you don’t run into trouble with local governments. Some payroll software companies also provide employer of record services.

What to Expect in 2024

Payroll outsourcing is expected to grow at over 6 percent per year until at least 2033, according to a Fact.MR study. The increased demand stems from the desire to standardize processes and leverage technology to automate workflows. As companies face staffing challenges, employee self-service options offer a way to improve experiences and provide greater transparency.

Here are a few key payroll software trends that we will be watching this year.

  • Financial access: We’ve seen more employee payroll features focusing on digital wallets with financial wellness tools. While these perks don’t cost an employer extra, they can improve worker engagement and financial access.
  • Cloud computing: Payroll software’s scalability and easy access contribute to its widespread adoption. With most businesses comfortable using cloud-based tools, transitioning to an online payroll service is a natural next step.
  • Artificial intelligence: Advancements in artificial intelligence (AI) and machine learning (ML) also assist with reporting and compliance. AI and ML can reduce payroll discrepancies, detect fraud and increase accuracy overall.
  • Remote work: The hiring of remote workers and independent contractors remains high, increasing the need for multistate payroll solutions and a clear understanding of regulations across state lines. As more regions contemplate the differences between W-2 and 1099 workers, employers must classify team members correctly to avoid hefty fines.

Payroll providers may offer employer of record (EOR) or professional employer organization (PEO) services to facilitate global hiring and payroll processing. In both cases, the EOR or PEO handles regulatory compliance concerns.

Payroll taxes will remain unchanged at the federal level in 2024. The maximum FICA tax will increase from $9,932 to $10,453. Other states are changing their payroll taxes, minimum wage and paid leave requirements. Noncompliance can cost business owners significant time and money. Payroll software can help you keep track of these requirements and alert you to any instances of noncompliance.

Payroll FAQ

Small business owners can process payroll manually or through payroll software. The manual method requires accurate data entry and calculations. You must know the correct amount of federal and state taxes to withhold from your workers’ pay, which varies by individual according to Form W-4. It also involves submitting local, state and federal tax deposits and returns.

Most payroll software allows you to pay contractors alongside your full-time employees, despite some tax differences. Taxes are not withheld from contractors’ paychecks. (Instead, independent contractors pay self-employment tax on their earnings.) If you pay a contractor at least $600 annually, you will need to fill out Form 1099-NEC.

An employer of record (EOR) acts as the legal employer for your overseas workers. Some payroll providers offer this service to ease compliance burdens for companies that want to hire employees in foreign countries.

Consider a direct deposit alternative like paper checks or prepaid debit cards, aka payroll cards. With a paycard, the payroll service deposits the paycheck onto the employee’s card, giving them immediate access to funds.

An employer of record (EOR) acts as the legal employer for your overseas workers. Some payroll providers offer this service to ease compliance burdens for companies that want to hire employees in foreign countries.

Consider a direct deposit alternative like paper checks or prepaid debit cards, aka payroll cards. With a paycard, the payroll service deposits the paycheck onto the employee’s card, giving them immediate access to funds.

Jessica Elliott
Jessica Elliott, Senior Analyst & Expert on Business Operations
Jessica is a technology writer specializing in business communications, marketing and customer management tools. She analyzes software and breaks-down complex subjects, helping leaders make strategic decisions.
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