Best Small Business Payroll Services of

How we Determined the Best Payroll Services for Small Business

As anyone who owns or works for a small business already knows—the to-do lists never end, and having good help is priceless.

If you’re far enough along to have employees on payroll, you may also know how important it is to not just stay on top of regular payroll payments to your staff, but keep in the loop on compliance, tax filing and labor laws, among other tricky tasks that have penalties if completed incorrectly. 

This is where the benefits of a small business payroll service can really stack up, providing increased efficiency and reduced errors through automated calculations and deductions, compliance with your local tax and labor laws through automatic filing and updates, and unmatched convenience through employee self-service, automated end-of-year documents and more.

A small business owner is often expected to wear many hats, and to do so with great success. But when it comes to the intricacies of payroll, experts agree that this is one area to invest in a professional service, because the peace of mind it provides is priceless.

Keep reading to learn how we evaluated the top payroll companies, and learn what it takes to make our list of the best payroll services for small businesses.

Our Criteria for the Best Payroll Services

We’ve scoured the world of payroll services, carefully combing through product offerings, plan options, services, features and customer reviews. We’ve compared prices to included features, because we know value for money is important to small business owners. And we’ve vetted each brand rigorously, evaluating company reputation and customer perception, to ensure each service does what they say they’re going to—so you don’t have to worry about any of it. 

Here’s how we determined the top brands featured on this page:

Services & Features

This is a broad category that can vary greatly from brand to brand, so we spent a lot of time researching all the various services and features offered by top companies, so you know what’s out there and use that to determine what your business needs. The best payroll companies offer some or all of the following features:

• Variety of Payment Methods: A solid payroll service will allow you to offer different payment methods to your employees. The most common are paper checks and direct deposit, but may include other options like prepaid debit cards that allow employees to access their funds ahead of pay day.

• Payroll Tax Filing: Payroll services can offer the added benefit of automatically preparing, filing and paying your payroll taxes—another time saver for you that is often worth the cost for small business owners. 

• Automatic Compliance: Perhaps one of the strongest benefits to using a payroll service is automatic compliance updates. What this means is that the service, and your software, will automatically stay up to date with the latest federal, state and local payroll and tax regulations and changes, so you don’t have to. The peace of mind alone makes this feature worth it, although it’s also a timesaver, too.

• Self-Service: This feature provides an online portal for owners and payroll administrators to view and make changes to all things payroll related. Some payroll services also offer an employee portal where your staff can update their personal information, deductions and access their payroll records and end-of-year tax documents.

• Reporting & Analytics: At the very least, a payroll service should offer a basic set of reports that allow you to view things like total payroll cost, deductions and taxes paid within a given time period, quarter or full calendar year, as this is vital information that owners need to know to gauge how their business is doing, and make informed business decisions.

• Unlimited Payroll Runs: This feature is helpful for small business owners who have contractors that may be on a different pay schedule than your employees. It gives you the flexibility to pay people at any time, rather than being limited to a certain number of runs per month.

• Software Integrations: Having your payroll software integrated with your accounting service can help you keep an accurate record of your payroll history in case you get audited. Some payroll services can also integrate with time-tracking software and benefits administration software for additional ease, so depending on your needs, current or future, this is another important benefit to consider.

• Variety of Plan Options: Another criteria we look for is availability of plan options. Are there tiers available that allow businesses to start small and scale as they grow, or not have to pay for features they don’t need and won’t use? We find that a one-size-fits-all approach is not the best for most small business owners, who often need flexibility and a service that fits their budget.

Ease of Use

Beyond features and services, the next-highest criteria on our list is ease of use, because you’re busy and you need a solution that doesn’t require a lot of special training. We dig deep into payroll service platforms to rank them through the lens of usability. Is the platform simple, straightforward, user-friendly and intuitive? Is there an app to give users mobile access to payroll tools on the go? These are all things we consider when ranking the best payroll services for small businesses.

Pricing

How much a payroll service costs is determined by a few factors, such as number of employees and whether you need to add on additional features or integrations. 

The pricing structure for payroll services usually starts with a fixed monthly fee for the service, plus a per transaction or per employee fee on top of the base price. 

This essentially means that as your business grows, your payroll costs will too, so be sure to think through your needs and how that impacts your cost, especially if you’re planning to expand your workforce.

Other Considerations

There are factors all small business owners should consider when determining their needs for a payroll service, which we cover in detail in our payroll company reviews, as well as in our criteria for determining the best payroll for small businesses. Here are some of them:

• Business Size: How many employees do you currently have, and how many more do you plan to add over the next couple of years? As we already covered, the number of employees often impacts the price of your service, but you also want to be sure you won’t outgrow the capability of the system or its available features anytime soon, either.
• Employee Type: You may have hourly employees, salaried employees, employees who receive wages plus commissions or tips, independent contractors, or a mix of all of the above. Regulations and requirements differ between each of these employee types, so it’s important to ensure your payroll service can handle all of your needs.
• Employee Location: Payroll regulations are slightly more simplified when your employees are working out of the same location. But if you have hybrid or remote employees working out of different states or countries, or you think you may in the future, this is an important consideration when choosing a payroll service. The same applies if your business is situated close enough to a different state that you could have employees working for you from two or more different states.
• Payroll Tax Preference: Another point to consider is whether you want a payroll service to handle the reporting, filing and payment of your periodic payroll taxes, or if you will choose to handle this yourself. Opting for the latter may result in a lower cost payroll service, but brings a higher margin of error both in accuracy of calculations and compliance with changing rules and regulations.
• Deduction Types: Finally, you’ll want to consider your needs as a business when it comes to deductions. These can range from standard deductions like income tax and social security tax, to more complex deductions like wage garnishments and benefits.