Payroll is a critical function for any business. The right software makes it easy to pay your team while also submitting taxes, records management, and more.
All providers on our list offer access to payroll and HR tools, including employee self-service portals, time tracking, two-day direct deposit, and state and federal tax filing services. They also include accounting integrations, which reduce the manual data entry accountants and bookkeepers require.
1. Time-Saving Features
Streamlined payroll processes mean less data entry and fewer mistakes. Many small business payroll systems can also integrate with other HR tools and accounting software to reduce workflows and errors further.
Look for a system with time-tracking features that monitor your employees’ hours and then convert them into wages on their timesheets. It ensures accuracy and helps prevent payroll deductions from being added to the wrong paycheck. Most solutions will also allow you to integrate your time and attendance systems with your payroll system.
When determining a budget and benefits package for your company, it’s important to consider the size of your staff and any essential coverage such as health insurance and worker’s compensation. Most online payroll services automatically calculate and pay state, federal, and local taxes; a few offer 401(k) retirement plans and health insurance. Many providers offer a free trial or demo of their products and can provide a personalized quote tailored to your payroll needs.
2. Integrations
The best small business payroll software integrates with time-tracking tools, accounting platforms, and more to streamline data entry. It should also support direct deposit so employees can receive their paychecks online, eliminating the need for a physical check to be delivered. Choosing a solution with integrations can help you avoid extra fees for connecting different software and save you from manually transferring information between solutions.
For instance, the home base includes built-in time-tracking capabilities for hourly employees and contractors. It also integrates with other employee management systems. It also allows users to filter reports in multiple ways and offers exporting options for further analysis.
Meanwhile, ADP Run is a full-featured payroll software for small businesses that support international compliance with global tax filing and reporting features. It also has an HR library that covers hiring and onboarding with tools for background checks, learning management, and job postings. Its higher-tier plans include additional HR and training tools to help growing companies keep their bigger teams on track.
4. Expense Tracking
You’ll want to find a payroll solution that lets you track expenses easily so employees can get reimbursed quickly. It’s essential to have this feature because it reduces the amount of paperwork for everyone involved. Plus, it helps ensure compliance with tax laws.
Look for a solution that automatically updates state and federal tax rates. This way, you will notice a tax change and avoid getting hit with underpayment penalties or other consequences.
Similarly, some solutions can quickly turn any device into a time clock and monitor breaks, overtime, and PTO. It can help you create accurate timesheets compliant with local labor laws. And some providers even offer employee self-service tools that allow workers to check their PTO balance, W-2 information, and pay stubs without needing an HR team member to handle it. It can save you time and money. I
5. Reporting
The top-rated payroll solutions we reviewed offer robust reporting features. They allow you to create and filter payroll reports to help with your data-driven decision-making. They also provide an overview of current employees and payroll taxes to help you manage your business’s finances. Some systems even have a feature that allows employees to cash out their wages using any device and then deposit the money into their bank accounts.
Full-service payroll software calculates worker pay based on wage rates and hours worked, withholds and files employee taxes, and handles benefit deductions. Some solutions let you choose between hourly or salaried workers and some support employee perks such as pay cards. Some providers also offer new-hire reporting services and year-end tax filing.
6. Security
Small businesses rely on payroll systems to protect sensitive employee data and bank information from hackers. Look for a system that uses a firewall to block unauthorized access, backs up data regularly, and applies software updates as they’re released.
A quality system will also help you catch calculation errors, avoiding costly mistakes that tarnish your business reputation and harm your bottom line. Look for a system that automates payroll processing and checks every pay run against your database of employees, deductions, wages, and taxes.
A quality payroll system should be able to integrate with other essential systems, like accounting and time-tracking tools, for seamless data synchronization. It helps reduce manual work and improves overall efficiency. Additionally, look for a system that supports scalability and growth as your company grows.
You may need to add more employees or change bank account details or other employee information, and a sound system will handle these changes without any unnecessary delays. Also, ask potential providers about their scalability and support options for different industries and other niche industries.