OnPay Payroll for Small Businesses Review 2024

OnPay Payroll for Small Businesses Review 2024

OnPay Payroll for Small Businesses Review 2024

If you pay employees in your business— even if that’s just yourself as an employee— you need to run payroll. There’s a lot that goes into payroll, and payroll services make it easier and faster, and can help you comply with myriad local, state and federal requirements. 

Read our OnPay review to understand whether OnPay Payroll is the right fit for your small business. 

What is Payroll?

Payroll is an essential part of running a business, whether it’s big or small. It’s about more than just handing out paychecks, though. Payroll covers the whole process of paying employees, from figuring out their wages, to taking out payroll taxes, to managing certain benefits.

The basic function of payroll is to pay employees what they’ve earned. This includes their regular pay, plus any extra for overtime or bonuses. But there’s more to it than just adding up numbers. Payroll also involves taking out the right amount of taxes from each paycheck. This includes federal and state taxes, for example, and contributions to Social Security and Medicare. It may involve paying worker’s comp for eligible employees. It’s also about handling deductions for health insurance or retirement savings if you offer those benefits.

Getting payroll right is mission critical to your business. It’s not just a task to check off the list. When employees get paid correctly and on time, they’re happier and more likely to trust you, their employer. Everyone expects to be paid fairly and regularly for their work, and payroll is how businesses make sure this happens.

Payroll is also about following the law. There are regulations that can affect how much you must pay employees and how to handle taxes. Businesses need to know these rules and follow them. If they don’t, they could face costly fines and legal problems. This makes payroll a big deal for any business.

Good payroll management means keeping detailed records and making sure employee information is safe and private. This is really important for keeping employees’ trust and making sure their personal details don’t get into the wrong hands.

Finally, payroll and human resources overlap in many areas, including compensation and benefits. That’s why many payroll providers also offer HR resources to help with compliance and benefits administration. 

In short, payroll is a big part of what makes a business run smoothly. It’s not just about paying people. It’s about doing it the right way, following the law, and making sure employees are happy and trust their employer. 

That’s why many small business owners often turn to payroll solutions. These services can help them run payroll correctly and stay on top of changing requirements at a reasonable cost. 

What Types of Payroll Does Your Company Need?

If you’ve never run payroll before, it may seem straightforward. Just add up the hours employees worked, run payroll, and distribute checks and/or pay stubs. The reality, though, is that there may be many more calculations that go into paying your employees. 

Here are the key types of payroll a small business owner you may need to handle for your employees: 

Regular Wages and Salaries 

This is probably what you think of when you think of payroll. You pay fixed salaries or hourly wages to employees. Salaries are typically paid on a regular schedule, such as bi-weekly or monthly, and are consistent each pay period. For hourly wages, you pay based on how many hours the employee worked in a pay period. 

If you have seasonal employees, keep in mind that you’ll need to be able to add and remove employees who work temporarily, unless you hire through a temp agency.

Overtime Pay 

For hourly employees, overtime pay is an essential part of payroll. According to the Fair Labor Standards Act (FLSA) in the United States, employees must receive overtime pay for hours worked over 40 in a workweek, at a rate not less than time and one-half their regular rates of pay. The Department of Labor has proposed changes to overtime salary thresholds that may affect overtime pay in 2024. 

Bonuses and Commissions 

Do you plan to pay employees for meeting certain sales, productivity or business goals? Then you may need to pay commissions or bonuses and that means you’ll need to know how to run payroll that includes these additional payments. 


If you have employees who are paid with tips, you’ll need to make sure you pay them the tipped minimum wage correctly, and properly account for tips the business collects on their behalf. 


You’ll need to make sure you withhold the proper amount of taxes from your employee’s paychecks, and forward those payments to the taxing authorities on time. You’ll also need to withhold the proper amount for Social Security and Medicare (FICA) and submit those payments as well. Getting this wrong can be very costly. 

Benefits Deductions

If you want to attract employees with benefits like health insurance, retirement plans like a 401K, commuter benefits, gym memberships etc. you’ll have to make sure you properly manage them through your payroll system. You’ll need to deduct employee contributions, make sure those payments get to the right provider, and account for any benefits you pay as the employer. 

Paid Leave

You may need or want to pay your employees vacation pay, sick pay, parental leave, bereavement leave, or other time off. You may be legally required to pay for certain types of leave, or you may choose to institute paid leave as a way to attract employees. Either way, this must be accounted for. 

Final Paychecks 

Whether they resign or are fired, you’ll need to manage the employee’s final paycheck. You may have to also pay them for vacation pay or other compensation owed.

Contractor Payments 

If your business hires freelancers or independent contractors, they won’t be paid through regular payroll. (Typically you don’t have to pay any benefits or withhold taxes.) But you do need to make sure they get a 1099 form if you pay them more than $600 in a year. This can be handled through your accounting software, but some payroll services can be used for contractor payments. 

Again, this may seem like a lot, and it can be. Payroll software can help you navigate these tasks more accurately and efficiently and serve as your full-service payroll company at a fraction of the cost of hiring an employee to manage payroll. 

How Fast Do You Need To Pay Workers?

How quickly or often you need to pay employees depends on labor laws, and employment agreements you’ve made with your employees. 

Here’s what to keep in mind: 

Different states or localities may have different payroll requirements. For example, in some states employers must give former employees their final paycheck immediately, but that’s not a federal law. Employers need to understand and adhere to legal requirements to avoid penalties.

Industry Standards

Some industries have standard pay frequencies. For example, if your business is a restaurant or bar, it’s common to pay employees weekly, but a corporate business may pay employees bi-weekly or even monthly. Knowing these standards will help you attract and retain employees. 

Employee Agreements

You’ll want an employment contract that spells out wages as well as when wages will be paid. 

Cash Flow Considerations

Don’t forget to consider your business’s cash flow when deciding on an initial pay schedule. While your employees will often want to be paid quickly, you don’t want to be in a position of having to get a small business loan every time you need to make payroll. Payroll processing services typically don’t allow you to put payroll on your business credit card; you’ll usually need money in the bank to run payroll. 

Payroll Processing Time

It takes time and effort to process payroll. While payroll systems can automate and expedite much of this process, you will still need to spend time (or pay an employee or accounting professional) to spend time reviewing hours, making sure payroll is correctly set up to run, and responding to employee questions. 

It’s important to strike a balance between these factors to comply with legal requirements, maintain good financial health for your business, and keep your employees happy so they continue to work for you.

How OnPay Works

OnPay offers a variety of payroll features many small business owners need, including:

  • Unlimited payroll runs
  • Multiple pay rates and schedules
  • Calculate paid time off (PTO)
  • All tax filings and payments in all 50 states
  • Ability to pay W-2 and 1099 workers
  • Handle multiple pay rates and schedules
  • Pay employees and contractors by direct deposit, debit card, or check
  • Calculate and withhold garnishments
  • Unemployment insurance withholding
  • Accounting integrations (Quickbooks and Xero)
  • Time-tracking software integrations (Tsheets and others) 
  • Integrated workers’ compensation
  • Payroll reports, including customizable reports

Employee self-service tools can reduce the amount of time you spend on setting up new hires, answering employee questions, as well as updating tax forms, contact information, or bank accounts. 

Employees can use the OnPay mobile app to see paystubs, update personal information, request vacation time and clock in or out. 

There is also a variety of HR tools available in OnPay, including:

  • Offer letters
  • New employee onboarding
  • Online I-9 and W-4 forms
  • Organizational charts
  • Company directory
  • Human resources library
  • PTO management tools like policies, calendars and reminders

You can also integrate benefits like health insurance, life, vision and dental insurance, a 401(k), etc. 

Fees for OnPay

Current pricing for OnPay is as follows:

Base fee: $40/month + $6/employee per month

Pricing includes unlimited pay runs, which means you can run payroll several times each month without paying more. 

If you have the following number of employees, here’s the OnPay cost each month: 

Number of employeesMonthly Fee

OnPay pricing as of December 15, 2023, subject to change. 

OnPay offers an easy to use slider on its website that calculates how much you’ll pay, depending on the number of employees. 

What Do Business Owners Like About OnPay?

OnPay has more than 220 TrustPilot reviews (as of the date this article was written), with an average review of 4.3 stars out of 5. 

Favorable reviews mention the ease of use, user-friendly functionality, good customer support, and dependability. Reviews also mention the cost of the service is reasonable, and affordable for a very small business. The few negative reviews posted received responses from OnPay asking the reviewer to reach out to customer support.

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