9 Best Payroll Services For Small Businesses In 2022
Growing your team as a small business owner is exciting. It means your business is growing and more folks are willing to invest their time into your vision. The logistics of managing them, on the other hand? Not that much fun (for most of us). Online HR and payroll software take a lot of the work off your plate so you can focus on the work you go into business to do. Below, we’ve rounded up the best payroll services to help you compare and choose the platform that’s best for your business.
Methodology
Forbes Advisor analyzed weighted criteria to compile this list of the best payroll services. Based on those factors, each payroll service earned a star rating of up to five stars.
Our criteria (and their weights out of 100) included:
- Pricing. For pricing, we considered whether a service offers a free trial, as well as the affordability of its lowest and highest price tiers.
- Features. While our reviews mention a variety of features attractive to small businesses, we maintained consistency in our ratings by looking for these features for each service: self-service employee portal, HR library, new hire reporting, third-party integrations, analytics and ledger reporting.
- Third-party reviews. We researched reviews from real users to gauge their opinion of each platform.
- Expert analysis. When compared to the competition, we gauged all of the above to select the nine finalists seen here.
How a Payroll Service Works
Each has a unique design with varied features, but most online payroll services work basically the same way. They typically include a cloud-based portal for both employers and employees. Employers—or your accountant, bookkeeper or HR employee—set up benefits and salaries for employees and, on some platforms, contractors.
When you hire a new worker, you can invite them to self-onboard through the employee portal, so you’ll easily gather their W-4 or W-9 form and contact information, and they can sign up for relevant benefits.
Some payroll services offer automated payroll, so you can set worker pay and employees can track their time (if necessary), and the service runs payroll on schedule. The services let workers enter direct deposit information, and you connect a business bank account on the employer end, so payroll runs without you having to print and deliver checks.
If payroll isn’t automated, you have to run it manually on schedule a couple of days before payday, entering worker pay amounts and scheduling paydays.
Many online payroll services include features that help you administer benefits in the same platform, as well as integrations for accounting software. Many offer workers the option to get a payment card, so they can receive money before payday and use the card directly to make purchases.
Some payroll services are part of comprehensive HR platforms that include not only pay and benefits, but also employee development, education and coaching programs.
How To Use a Payroll Service
How your team uses online payroll software will vary depending on the size of your team, the expertise of your employees and the software you use. Most services come with excellent sales and customer service reps who can help you get set up and answer questions you have along the way.
A basic payroll service helps you pay employees and, on some platforms, contractors. Use it to facilitate direct deposit as well as to manage payroll checks, taxes and reporting.
Most payroll services also include benefits administration, so you can use the platform to set up paid time off, retirement plans, insurance and other benefits for employees, and integrate benefits with payroll.
A payroll service can be useful for your business, whether you work solely with contractors, pay yourself as an S-Corp employee-owner or have a team of employees.
How To Choose a Payroll Service
Every worthwhile payroll service provider offers a few key things most businesses need, including:
- Direct deposit payments
- Payroll tax filing and payment
- Employee self-service and self-onboarding
- Integration with QuickBooks or other accounting software
- Basic reports
- Automatic compliance updates
Those features are generally must-haves; without them, payroll software doesn’t offer much you couldn’t do manually with a spreadsheet.
To figure out which other features you need to look for and which are worth your business’s money, ask these questions when choosing a payroll service:
- Do you pay contractors, employees or both?
- Are your workers located in various states and/or countries?
- Do you need to administer benefits like 401(k), insurance and time off?
- Do you want to include employee development and training?
- How many workers do you pay each month?
- How many times do you run payroll per month?
- Do you want live HR assistance?
- How much do you expect your company to grow in the near or long-term future?
- Which accounting software do you use?
Answering these questions will help you understand what you need in payroll software, so you can make a list of features your business requires before you start shopping. That’ll help you know what to look for—and what you can ignore in a shiny sales pitch.