If you are running a small business with a couple of employees, whether you have hired them to work part-time or full time, managing their payday is essential. Compared to large businesses and organizations, in a small business establishment, there are lesser challenges and these can be dealt with easily.
Paying wages or salary to your employees when payday approaches, or paying tax and also keeping all financial records accurately using payroll software is a must these days.
With the rapid advancement in technology, there are always newer and more efficient solutions that can help get the job done quickly and with no “human error”.
Today, various business tasks can easily be achieved by software applications that can run on any device, such as a desktop computer, laptop, tablet and even on a smartphone. It is both hassle-free and time-saving.
Well, that said, in this post, we shall take a look at some of the best payroll software solutions for small businesses. Also, with the information provided about these small business payroll software, you can decide for yourself which one best fits your needs.
Are you still relying on spreadsheets when running payroll? This outdated method is often known for being prone to errors especially when it comes to data entry.
And because manual data entry will always entail mistakes, the practice often leads to employee complaints and worse, discontent. You may not know it, but payroll errors have a significant financial impact on your business, not to mention errors in tax deductions, which could get you in trouble with the government. Needless to say, these should not become a regular occurrence.
Good thing you have payroll software providers on your side. These tools deliver full automation, effectively getting rid of inaccuracies that come with human intervention. Payroll tools let you carry out automatic data entry, tax computation, attendance tracking and more.
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Payroll management is one of the processes found at the core of every business. However, more often than not, start-up companies and small businesses don’t have the budget for a fully-featured payroll solution. Given the importance of payroll systems to small businesses, this state of things puts SMBs at a disadvantage.
At this crucial time, they need to rely on cheaper options so they can focus on earning a profit to help their endeavor grow. This is where free payroll software providers come in. In this article, we will present the best payroll software for small businesses currently in the market. Their key features, functionalities and unique selling propositions will be discussed in detail.
The best payroll apps offer the convenience of managing payroll and they allow users to perform tasks like running payroll, managing benefits and electronically filing payroll taxes.
We considered several payroll software tools and chose the best five payroll software for small businesses. The list is not ranked and is in alphabetical order. Let’s look at the given below.
Best for: Businesses required to pay online local income tax some municipalities charge, for example, the NYC.
Gusto is essentially an HR services tool, which also manages payroll and benefits. It comes with an easy-to-use interface that brings to the table automation features that make just about any payroll process an easy undertaking. And key features include payroll, health benefits, and worker compensation insurance that are tailored to US businesses.
Gusto is designed to cater to SMBs, providing them with top-notch functionalities such as payroll and tax computation and submission. You have the option of paying both employees and government through check or direct deposit so that you never have to leave your office during payroll runs. Other notable features include unlimited payroll runs, new hire reporting and year-end W-2s and 1099s.
(i) Error-Free Payroll Runs: Inaccuracies associated with manual data entry are eliminated as the system automatically enters information across different data sources. Deductions are likewise automatically computed while keeping a record of your employees’ data.
(ii) Payroll Automation: Entire team information can be entered into the system with ease with you deciding how staff are to be paid while handling W-2s. Self-service is also possible with the system, allowing employees to update and download their own data. All manners of taxes are automatically computed with validated forms generated by the system, which can be used for any purpose.
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(iii) Streamlined HR Processes: All staff information is consolidated by the system, which can be accessed anytime, anywhere. They can also be altered and downloaded if needed. This feature can help you to be HIPAA compliant while promoting transparency in HR management.
Best for: Small businesses looking for free payroll software.
Payroll4Free is absolutely free and one of the best software solutions that provide a full range of payroll services for small businesses. It delivers the necessary tools to process checks for 25 people or less, it has a complete suite of features that you can enhance with different integrations.
Among the tools, their subscription plan provides are payroll and tax calculations, vacation time tracking, detailed reporting, and direct deposits. It also has an employee portal, so your staff members can stay updated on their payroll information.
(i) Seamless Integrations: Are you using multiple software solutions for your accounting processes? Payroll4Free has functionalities to connect with different programs, so you can easily export your payroll data. It lets users to import employee hours from a time clock file.
(ii) Simplified Tax Form Filing: In addition to computing monthly salaries, Payroll4Free has a tax calculation and form filing feature. Whether you need to handle federal, state, or local taxes, this software can provide you with the tools you require to make it simpler.
(iii) Vacation Time Tracking: Keeping tabs on employee vacations, sick leaves and PTO time is no easy feat, especially once you start computing your employees’ billable hours. Fortunately, the Payroll4Free system can calculate these factors and accrue the correct number of work hours per employee. This way, you no longer have to make these adjustments manually.
Best for CPA firms and other small service businesses that need a simple payroll solution.
Popular payroll platform SurePayroll is well-known for making simple complex payroll processes. It has the ability and potential to process payroll with a click of a mouse, saving you valuable time. This small business-friendly tool stands out with features that will surely make payroll processing much easier.
These offer support for a variety of payroll types, a powerful interface and tax management. It can also integrate with known third-party applications to further boost its functionalities and features.
(i) It Simplifies Payroll Processing: SurePayroll is designed to make tasks and processes much simpler. This is achieved with the robust tools that come with the application, not to mention its integrations with third-party apps.
(ii) Employee-Friendly System: The software offers your employees access to their payroll data, allowing them to view and even update their own information. This applies to data such as benefits, leaves, and paychecks, to name a few.
(iii) One-Click Payroll Runs: When you use the app, you instantly process payrolls. All it takes is a single click of a mouse and the system takes it from there. This saves you valuable time, allowing you to focus on more pressing matters.
Best for: Small businesses and freelancers looking for a free payroll software solution. Serving more than 3-4 million users and growing, Wave deserves a position to be in our list of free payroll software for small businesses. It is a free integrated business software that provides multiple processing such as accounting, invoicing, and receipt scanning capabilities.
It seems ideal for small businesses, independent entrepreneurs, and freelancers, this platform also has a complete payroll system that can compute and keep track of employee vacations, bonuses, and benefits.
Whether a company targets a weekly, bi-weekly, monthly, or semi-monthly payroll scheme, Wave can support it. With an easy-to-use dashboard and available customer support, this software can help users manage payroll information and access banking details quickly and securely.
(i) Streamlined Computations: Businesses can easily calculate an employee’s vacations, bonuses, and benefits as well as regular pay using Wave. With this platform, team managers can compile attendance reports quickly to make sure that the accounting division rolls out accurate financial reports and pay stubs every time.
This feature is especially effective for companies comprised of employees with wide-ranging pay grades.
(ii) Direct Deposit Capability: Even for small businesses, having to bring thick wads of money to deposit in every teammates’ bank account is tedious, impractical, and risky to say the least. There is no assurance that everyone in your workforce will receive their salary on time either.
By utilizing Wave, you free yourself from shouldering the burden of depositing your employees’ wages, making it easy for you to distribute their hard-earned and well-deserved monetary reward. To make this more convenient, employers use Wave to pay their employees from being anywhere else in the world.
(iii) Self-Service Document Printing: Instead of worrying about completing a mass printing task on time, you can take advantage of this platform’s self-service direct printing feature. Wave grants employees access to pay stubs, tax forms, and other banking information, so they can make sure that all of these details are correct. Also, they can print these documents at their convenience, which allows them as well as their team leaders to focus on their work.
Best for: Businesses that want the option of a stand-alone system and QuickBooks Online integration.
The QuickBooks Payroll software for small businesses is ideal for QuickBooks Online users who need unlimited payroll runs and assurance their taxes will be handled correctly. The payroll application is free to use and integrates seamlessly with QuickBooks Online for as low as $59 per month. Historically, it could only be used within the QuickBooks Online software, but now, you can use QuickBooks Payroll without the software for as little as $39 per month.
(i) QuickBooks Payroll’s Automation: QuickBooks’ level of automation is not as strong as Square’s or Gusto’s. How much work you or your bookkeeper have to do largely depends on which payroll plan you choose.
If you have your own bookkeeper, you can run payroll through the app. Automatic federal and state payroll tax calculations are a standard feature, and your bookkeeper can manually e-file your taxes through the app. QuickBooks Payroll guarantees penalty-free filing if one of its professionals handles your taxes. If you have local taxes that need to be handled, you may want to consider Gusto or the Full-Service payroll option.
(ii) Paychecks in QuickBooks Payroll: You can pay your employees by direct deposit or check for free. Unlike Paychex, which charges $10 to print paper checks, QuickBooks Payroll software gives you what you need to print paychecks yourself, putting you in more control of your costs. Unlike the standard four-day processing time some of the other recommended software providers impose, QuickBooks only requires you to give two days for standard processing time.
(iii) QuickBooks Payroll’s Integration: Since the QuickBooks Payroll app was created to use with QuickBooks Online, we did not find a lot of integration options for accounting software. QuickBooks Online is a popular software among small business owners, so many add-on companies in the payroll space cater to it.
If you need a time and attendance system, QuickBooks offers seamless integration with OnTheClock Time Clock that you can download for free if you have two users or less. If you are already using one of the other popular time tracking systems, like TSheets, it integrates with QuickBooks Payroll too.
Freeware software applications allow you to utilize the features of a particular software solution at no cost. As compared to paid software solutions, it is a cost-effective alternative for smaller businesses that have limited budgets.
And free software often has the same features as its paid counterparts and even offer open-source options as well as third-party integrations.
According to a study conducted by Alan Boulanger that was published in the IBM Systems Journal, free software and proprietary systems are roughly equivalent in terms of security and reliability. Meaning, choosing a free platform over a paid one does not necessarily equate to compromising quality to cut on operating costs.
In another study, researchers found out that users feel that there are many advantages to using free and open-source programs. And has low licensing fees, independence from major software vendors and higher stability.
However, these platforms are not without their shortcomings. Some programs do not provide regular updates or customer support and can sometimes be vulnerable to hacking or malware due to the lack of security features.
Overall, while freeware is a cost-cutting option that can help start-ups maximize their profits, these still pale in comparison to their paid counterparts in the long run as seen in the chart provided.
Gusto is the best payroll software for small business, primarily because of the fact that it offers a free payroll plan. However, the features and functionalities that the tool offers are not limited to payroll, it can also take care of processes such as benefits administration and HR management, to name a few. Its easy-to-use interface gives you all the needed tools to manage both payroll and HR processes while making sure that you comply with tax rules.
Your company’s budget should not hinder you from implementing different software solutions that optimize your payroll processing. With the large selection of payroll software tools out there, you are sure to find one that best suits your company’s needs. And gusto is the obvious choice, with all the advantages that it offers besides payroll processing.
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Now that you are familiar with the best payroll software for small businesses in 2019-20, it is time to start deciding which of these five options will be the best fit for your payroll needs and preferences. But with all of these options at your fingertips, how are you to decide on the best payroll software for your business?
Each payroll software option has its own pros and cons, but at the end of the day, you will need to think primarily about how much help you will need with your taxes and payroll setup and balance that with how much you are willing to pay every month for your payroll software.
Do not forget to allow for the additional monthly cost that each of your pay-rolled employees and future pay-rolled employees will mean for your payroll software.