Best Payroll Software
Large number of customizations available
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Feature-rich plan tiers well-suited for enterprise-level businesses
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Zero-dollar base plan for contractors
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Same-day deposits available for some plan choices
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Plans start at just $17 a month plus $4 per employee
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Payroll software systems help businesses save time by enhancing workplace efficiency. They manage critical functions like calculating wages, deductions, bonuses, commissions and more. Many software systems also assist with creating financial statements and important tax documents.
We've compiled a list of the five best payroll software systems to help you select the right one for your organization. Continue reading to learn about their strengths, weaknesses and stand-out features.
Our Top Picks For Best Payroll Software
- OnPay– Best For Small Businesses
- ADP – Best For Larger Companies
- QuickBooks Payroll – Best For Same-Day Direct Deposit
- Gusto – Best Variety Of Plan Options
- Patriot Payroll – Best For Most Affordable Prices
Best Payroll Software Reviews
Why we chose it: OnPay offers a broad range of customizable features at a very affordable price making it the perfect tool for small businesses.
The software charges a base price of $40 a month and an additional $6 per employee. Currently, OnPay only has a single plan option which might make it a poor choice for larger businesses or businesses with more third-party integration needs.
With this service, you gain access to several valuable features, including self-onboarding for new employees and lifetime access to an employee web portal containing important information like past pay stubs, W-2 forms, PTO requests and more. It comes with tax calculation and filing features that work with local, state and federal taxes. OnPay also lets you manage benefits, including medical, dental, life and disability insurance.
Its 401(k) integration helps you manage your employees' retirement savings. You can also manage deductions for other programs like flexible spending accounts (FSAs), health savings accounts (HSAs), public transportation employer subsidies and more. If you run into a problem, OnPay offers live chat and phone support from 9 am to 8 pm (EST) Monday through Friday.
The user interface (UI) is relatively simple and intuitive. The program offers an HR resource library filled with helpful information for managing various payroll functions. You can even use OnPay as a broker when selecting health insurance and 401(k) plans.
Online reviews are generally satisfactory from customers, but OnPay is not accredited by the Better Business Bureau, and some customers have mentioned concerns about payroll and tax issues. More positive reviews mentioned excellent customer service, a user-friendly interface and budget-friendly pricing.
Why we chose it: ADP stands out for its range of features that make it a solid choice for any enterprise-level business looking for a payroll processing software system.
As one of the more established players in payroll processing, ADP offers a rich suite of third-party integrations and HR features that make it well-suited for large businesses. You can choose from one of four plan options, including:
- Essential
- Enhanced
- Complete
- HR Pro
The Essential currently costs $79 per month with a $4 add-on charge for each employee. It provides a solid range of features sufficient for most small businesses. The enhanced, complete and HR pro get you access to nice-to-have add-ons like HR support, training courses, state unemployment insurance assistance, legal assistance, phone and email support, access to an HR library and more.
Only some of the advanced plan features are absolute must-haves. However, the additional support and resources may be worth the price tag for larger businesses. The presence of so many plan options and features makes it an excellent choice for smaller businesses in the process of rapid growth.
The software scores points for ease of use. Its interface is relatively straightforward to navigate. You can move seamlessly between the web and its mobile app.
Customer reviews taken from reputable online platforms praise the company for its smooth functionality and lack of issues. Less complimentary reviews largely took issue with the company's customer service.
Why we chose it: Best known for its accounting software, Quickbooks also offers a reliable payroll services plan with same-day direct deposit capabilities. This stands in contrast to other payroll services that may take several days to process payroll or that charge an additional fee for same-day service.
You can choose from three plan options, including:
- Core: $45 a month plus $5 per employee
- Premium: $75 a month plus $5 per employee
- Elite: $125 a month plus $5 per employee
Each plan comes with a different range of features. The core plan functions best for small teams offering basic tax, direct deposit, reporting and payroll features. Two areas where it falls short include a lack of time-tracking functionality and next-day direct deposit.
The premium plan gets you access to same-day direct deposit, time tracking, HR support and more. The elite plan is best suited for large or smaller businesses with a strong need for expert guidance. This plan will net you 24/7 assistance, a personal HR advisor and assistance setting up your system. You also get tax penalty protection coverage for up to $25,000.
Employees can access an online web portal, and independent contractor payroll features come standard with each plan choice. Quickbooks supports robust reporting features and automated tax services. Its step by step set up system makes for an intuitive UI.
Online reviews appear largely satisfactory — positive feedback centers mainly on the software's multiple integration features and expansive functionality. More negative comments focus on the steep learning curve of mastering its many features.
Why we chose it: Gusto offers four different plan options, each tailored to different business needs. Its contractor-only plan is unique for charging a $0 base price, on top of which you pay $6 a month per independent contractor.
If you own a business with non-contractor employees, you'll want to choose from its Simple, Plus or Premium plans. The Simple plan starts at $40 a month with an additional $6 charge per employee.
With this plan option, you gain access to a set of automatic payroll features and some benefit integrations. You can also access features like hiring and onboarding tools, brokered health insurance plans, time off reports, third-party integrations and basic customer support.
The Plus plan costs $80 a month and $12 per person, giving you access to comprehensive payroll and benefits tools alongside HR support. That includes perks like next-day direct deposit, time and project tracking and full-service multi-state payrolls. You must request a price quote for the Premium option. It mainly offers additional HR functionality and compliance services.
The software has a simple step-by-step setup system making for solid ease of use. Reviews sampled from a variety of online platforms are largely positive.
Many reviews mention solid customer service, great all-in-one functionality and a user-friendly design. More negative reviews mentioned the software's limitations, such as an inability to support international hires and restrictions on benefit features.
Why we chose it: Patriot Payroll offers basic payroll functionality in exchange for rock-bottom prices. At $17 a month plus $4 per employee, its basic plan comes in at less than half the cost of many of its leading competitors.
Patriot Payroll offers two plan options with robust yet basic functionality. The basic plan lets you run payroll in all 50 states. It also integrates with time-tracking software and various accounting software platforms. You can account for paid time-off policies, workers' compensation policies, and it also comes with an employee web portal.
The Full Service plan costs $37 a month with a $4 charge per person. It comes with everything from the basic plan along with local, state and federal tax filings and deposits. It also comes with a tax filing guarantee that covers all penalties and interest accrued if Patriot misfiles or files late.
All plans have guided setup features, including over-the-phone support and an intuitive UI. It holds an A+ rating from the BBB.
Other Payroll Software We Considered
We assessed each payroll software system on affordability, range of features, ease of use and customer ratings. The following payroll software systems provide quality services. However, they did not make our list because they failed to excel in one or more of our criteria.
Paycor
Paycor stands out for its robust suite of HR tools, integrations and functions. However, it failed to make our list due to its uncompetitive pricing and lack of contractor functionality.
Wave Payroll
Wave Payroll is a newcomer to the field of payroll processing. Its heavy focus on small businesses limits its appeal. It failed to make our list due to its geographic limitations and lack of benefit administration capabilities.
Deluxe
Deluxe failed to make our list due to its lack of features and uncompetitive pricing.
Payroll Software Guide
We compiled the following guide to help you understand the ins and outs of payroll software and learn everything you need to choose the right program for your business.
What Is Payroll Software?
Payroll software automates and manages critical functions involved in tracking and issuing employee paychecks. It also helps business owners with other essential functions like calculating tax withholdings and complying with local, state and federal laws.
How Does Payroll Software Work?
Payroll software works by calculating gross wages for a set pay period. It makes deductions and withholdings for various taxes and benefits. Many software systems automatically remit taxes to the appropriate government body for W-2 workers.
Payroll software often integrates directly with a direct deposit system to disburse net pay to employees. It may also generate a pay slip detailing important information like hours worked, rate of pay, tax withholding, deductions for healthcare and retirement plans and more.
Essential Features Of Payroll Software
Payroll software systems vary dramatically according to the features and services offered. Enterprise-level businesses typically have more complex requirements compared to small and medium-sized businesses. However, most companies will benefit from the following features regardless of size.
ACH Direct Deposit
Automated clearing house (ACH) direct deposit is a secure, electronic system that lets banks easily transfer funds. Since ensuring that your workers get paid on time is a core function of any payroll software system, it's vital that you choose a program with ACH capabilities. ACH direct deposit reduces the risk of fraud with its automated and human security measures network.
Issuing paper checks remains one of the primary alternatives to using ACH direct deposit. Not only does creating and disbursing paper checks require more labor, but it also opens up several frustrating possibilities, such as the potential of having to replace lost or stolen checks. By contrast, ACH direct deposit offers a seamless user experience and a quick transfer of funds.
Time Tracking
Time-tracking software is essential for businesses with hourly workers or independent contractors who are paid by the hour. Employees punch in and out at the beginning and end of their shifts using a computer or mobile app. Their hours are tallied for each pay period, and necessary deductions and withholdings are made.
At the end of each pay period, a detailed report is generated showing gross pay, hours worked, hourly rates, overtime, deductions and withholdings. These pay slips may be issued to employees in accordance with state law or company policy, depending on your geographic location.
Payroll administrators can review time-tracking software to ensure that no mistakes have been made. This data may also be analyzed to see where labor costs are highest and how they can be most effectively reduced. Some time-tracking software systems also come with scheduling tools and time-off request forms.
A common alternative to time tracking software is to have employees record their hours on a shared paper or electronic spreadsheet. This system has a more significant potential for fraud and error. Additionally, it requires more man-hours to process, making it less efficient overall.
Payroll Tax Filing
Payroll tax filing refers to the filing and remittance of various employee taxes to the relevant federal and local government organizations. This may include:
- Federal income tax
- State income tax
- City or local government income tax
- Medicare tax
- Social security tax
- Unemployment tax
While some employers manually record and pay for these taxes, many opt for dedicated payroll software or third-party processors due to the complexity, amount of work involved and penalties for non-compliance. Payroll software makes these calculations automatically, freeing up valuable time and energy for other tasks.
Payroll software may also assist with other functions, such as filling out the relevant tax forms to comply with the law and remitting employee taxes to the appropriate government body. Select a program that integrates with the electronic federal tax payment system (EFTPS) when shopping for a payroll software system.
Finally, you want to guarantee that your system can handle payroll tax reconciliation. Reconciliation refers to the process of reviewing payroll tax data to ensure that your numbers are accurate and that you're in full compliance with all applicable tax laws.
Detailed Reports
Detailed reports include comprehensive breakdowns of employee wages, bonuses, deductions, withholdings, hours worked and other relevant information for a discrete period of time, such as a fiscal year or an employee pay period. Business leaders use these reports to identify inefficiencies and spot trends that could lead to cost savings. They may also use detailed reports to help maintain compliance with labor laws.
HR Integrations
The best payroll software systems integrate with a variety of helpful third-party tools. Common HR integrations include:
- Applicant tracking systems (ATS): These programs sort and process applications for open positions within the company. Payroll integration allows for a smooth transfer of information between the hiring and onboarding processes.
- Human resource information systems (HRIS): HRIS manages vital employee data from onboarding to offboarding. An HRIS integration allows for a smooth transfer of personal information, saving HR staff from needlessly duplicating certain tasks.
- Accounting software: Integrations with accounting software enable companies to better account for labor costs. Since the two systems have a great deal of overlap in the information they handle, integrative sharing reduces redundant tasks and enhances labor efficiency.
- Employee benefits management systems: Integrating these two processes helps to ensure accuracy in payroll numbers.
- Time and attendance tracking software: Integration with time and attendance tracking software is a must for any payroll system that handles workers who are paid by the hour.
- Performance management systems: These software systems help businesses track employee performance for awarding bonuses, promotions and merit pay.
- Legal and regulatory compliance management software: Payroll is subject to a litany of regulatory and compliance measures. Integrating your payroll processing systems directly with compliance management software can help keep your company on the right side of the law.
HR integrations allow for greater labor efficiency by eliminating duplicate tasks through automation. You can also lower the rate of mistakes. The free sharing of information between programs eliminates the opportunity for user errors and other blunders.
Reducing the number of redundant tasks your HR department has to perform frees them up for higher-value-added work. This boosts workplace efficiency and your company's bottom line.
Payroll And Tax Compliance
Failure to maintain legal compliance with local, state or federal tax laws can result in steep fines, lawsuits, negative publicity and even criminal charges in extreme cases. Selecting a software system with a reputation for strict adherence to all applicable rules and regulations is necessary for any business that wants to stay on the right side of the law.
The shift toward cloud-based software has enabled many businesses to stay up-to-date on the latest innovations in tax laws, regulatory changes and best practices. Many software programs make it easy to deduct taxes and maintain compliance with all prevailing tax and labor laws.
Payroll Software FAQ
How We Chose The Best Payroll Software
We looked at the following factors when assessing the payroll software systems on our list.
- Affordability: We evaluated each program on its base price, the additional cost per employee and any extra fees.
- Range of features: We assessed each product based on the range of helpful features offered.
- Ease of use: We favored software programs with intuitive user interface systems and accessible customer support.
- Customer ratings: We used customer ratings from trusted review platforms like the BBB to inform the choices on our list.
