If you have employees, you have the task of paying them on time, tracking their vacation time, and making sure they have employee benefits. You can certainly hire payroll professionals to manage that job for you, but if you have only a handful of employees, you can likely take the job on yourself and save a little money.
Small business payroll software is designed for business owners who don’t have human resources or payroll experience with easily and quickly processing payroll.
Benefits of Payroll Software for Small Businesses
Managing employees and paying them adds a layer of complexity you didn’t have when you were a one-person operation. But maybe your needs aren’t so great that you need a human resources department for your company or want to outsource the task. Payroll software serves as a nice in-between: you don’t have to be an HR expert to use it, and it’s great if you only have a few employees.
Another benefit of running payroll through online software is that it’s much more affordable than hiring payroll professionals. And because the software knows how to categorize employees or contractors and take out taxes and employee benefits from each paycheck, you reduce the odds of making a manual calculation error.
You can also automatically calculate sick and vacation time accrued and taken, which removes yet another hassle from your list.
Additionally, some software offers income tax filing services. Rather than pay an accountant to do this for you, you can have the software take the payroll data it has and submit the appropriate tax forms to the IRS on your behalf.
How Small Business Payroll Software Works
When you hire a new employee, you enter his or her information into your payroll processing software. The employee will need to fill out a W-4 form so you know how much in taxes to withhold. Only you and any other payroll administrators you have will have access to this sensitive data.
You’ll enter information about employee benefits and any insurance, 401k, or HSA amounts that need to be deducted from each paycheck.
You’ll establish the employee’s pay rate, whether that’s an annual salary or hourly rate. Each week, two weeks, or month (however you prefer to pay), you can generate a payroll report based on how much the employee worked, and then you can pay employees, whether that’s by check or direct deposit.
Most payroll software offers other features, such as filing payroll tax documents for you, onboarding services, or time tracking. Most will integrate with your accounting software, which makes it easy to track payroll expenses with your other account activities.
What Does Your Business Need In A Payroll Software?
Every business is different. Yours might have full-time employees, part-time employees, contractors, or freelancers…or all of the above.
You might want help with filing payroll tax in addition to payroll processing, or you might want to keep tax filing separated if you already work with a CPA.
Consider what features matter to you and how much time you (or whoever will be the payroll administrator) will have to dedicate yourself to learning and using the payroll software. It should be so simple to use that it doesn’t require much time to use.
Things To Consider When Choosing A Payroll Software
Let’s look at different features of payroll solutions so you know what to look for in your search.
Do your employees work on an hourly basis? If so, it may be handy to have time tracking included in your payroll management tool. Employees can download an app to “clock in” when they work.
Employment Tax Filing
If you don’t have an accountant who manages your payroll tax, it can be helpful to have this feature built into your software.
Flexible Ways to Pay
Many companies are moving away from issuing payroll checks in favor of direct deposit. You want online payroll services that let you pay your staff the way you prefer.
Connect to Accounting Software
Many payroll services let you connect to accounting software you already use. Make sure the ones you consider offer this as an option.
Some platforms charge a flat fee, while others charge a fee per employee that you need to manage.
The Best Payroll Software
We recommend the following online payroll software solutions for small businesses.
Small Business Online Payroll by Gusto
Small Business Online Payroll by Gusto is intuitive to use and offers many features beyond payroll processing.
This payroll provider offers hiring, onboarding, and engagement tools like offer letters and onboarding checklists. It also offers employee benefits management and a payroll app for employees, as well as time tracking features.
And if you have a question, its Concierge services give you access to HR experts.
Online Payroll by Intuit
Online Payroll by Intuit offers three packages based on your payroll needs. In addition to offering unlimited payroll runs, health benefits, and worker’s compensation, you can get same-day direct deposit, expert setup review (or white glove customized setup), time tracking, and a personalized HR advisor.
This Quickbooks online payroll system will automate tax and forms, manage garnishments and deductions, and provide you with payroll reports.
Payroll Services by Newtek
In additon to offering payroll management services, Payroll Services by Newtek focuses on providing access to the help you need to get set up and manage your payroll. The company’s specialists will get you set up and trained on the software, and its tax management and payroll experts who will review your individual payroll account and manage your tax payments and reporting needs on the state, local, and federal levels.
You have the option to pay employees via direct deposit, paper check, or even a payroll card if employees don’t have a bank account.
You can add on features like:
- HR Online Support Center
- with HR Consulting on Demand
- Time Labor Management Solutions
- Workers’ Compensation
- “Pay-As-You-Go” Insurance
- Group Health Insurance
Nav’s Verdict: Payroll Software
As a busy business owner, you need one less worry on your mind. Choosing the right online payroll solution that makes it easy to pay employees and file employment tax forms will free you up to do what you do best: focus on growing your business.