Our content is reader-supported, which means that if you click on some of our links that we may earn a commission.     X

The Best Payroll Companies for Small Businesses in 2021


Discover the best payroll companies for small businesses to outsource payroll processing and employee compensation.

The Best Payroll Companies for Small Businesses_

You’ve built your small business and you now want to switch to PEO services to take care of your payroll management? Payroll companies are the solution.

There are many payroll service providers offering powerful features including HR features at different costs. However, the best option may not necessarily be the most expensive one as different payroll service providers cater to different needs.

You may feel overwhelmed with the wide array of payroll solutions available but fear not. In our guide below, we reviewed the 6 best payroll companies accessible for you along with what features you need to look for when choosing your payroll company.

Let’s dive in!

Best Payroll Companies for Small Business Owners

1. Gusto

Best overall payroll company for small businesses

Gusto is the Best overall payroll company for small businesses

Gusto is renowned for its reliability and benefits from the unprecedented reputation of being the best payroll company on the market. You also get a 30-days free trial period to test out their features and tools.

Gusto has four programs that are all full-service, which means they measure and file your payroll taxes for you. Through the incredibly friendly interface, Gusto automates payroll tax filing and allows you to run payroll in minutes. 

It provides comprehensive workers’ compensation, benefits, and PTO support, and integrates seamlessly with leading accounting applications such as Xero and QuickBooks.

Another distinctive feature is that customers are regularly sent PDF reports on bank transactions, payroll history, payment of taxes, and more. The regular reports ensure good communication and a feeling of trust between Gusto and their clients.

For those paying child support or wanting to give money to charity, Gusto comes in handy. Through the website, there is the option of deducting money directly from the payslips for targeted liabilities such as donations to charity, payment of child support or even car loan repayment.

With their trustworthy customer support, you can get your questions answered through phone calls and online chats. Gusto also offers a vast knowledgeable database based on the most frequent questions and some useful tips to understand how to use their simple, user-friendly interface.

Security is also of utmost priority for payroll. All data used by Gusto are encrypted with a 256bit SLS protection to prevent any fraudulent hacking into the system. Furthermore, the company is bonded and insured providing further protection.

In case you’re busy, you may use autopilot mode to take care of everything for you without having to worry. You will have your employees’ salaries directly paid into the bank and taxes delivered soundly to the federal and state administrations.

Pricing 

Gusto Pricing Plan

Gusto offers a 30-day trial to test out their features. Gusto is now more affordable than ever thanks to its latest Basic package: payroll solutions start at $19 a month, a whopping $20 less than its previous cheapest plan.

The Core plan at $39/month per person plus $6 per person offers clients the best payroll for small businesses, which provides them with full-service payroll and modern employee management.

Available at $39/month with an additional of $12/month per person, the Complete plan offers customers that need more robust tools and processes to effectively scale their companies. The Complete plan includes all aspects of the Core plan, with the addition of a full suite of HR features to grow and manage their teams.

However, the Concierge plan, at $149/month with a further $12/month per person offers advanced services such as live help from certified HR pros for complex issues or providing guidance on staying compliant.

For those hiring self-employed workers, there is also the Contractor plan at $6/month that can make you happy.

Customer Review

Gusto Customer Reviews
Source : g2.com

Pros

  • Unlimited payroll runs
  • User-friendly
  • Inventory Tracking
  • Automatic filing of taxes
  • Free trial period
  • Wage garnishment and workers compensation assistance
  • Autopilot option

Cons

  • Limited customer support hours
  • Only available in the US
  • No mobile app
  • Four-day payroll processing with the cheapest plan

2. Paychex

Best payroll service for labor law abiding features

Paychex is the Best payroll service for labor law abiding features

Paychex is the ideal payroll software for medium to big businesses. Payroll requirements for larger businesses are more complex than those for small businesses because of various features for labor law requirements. The requirements are applied to businesses with 15, 50, or more full-time equivalent (FTE) employees. 

Paychex is a comprehensive payroll service provider for both W-2 employees and 1099 contractors. With a 50-year history, the company is equipped to handle any payroll compliance issue – from local taxes to customized reports and shift differentials.

With its full-featured software, Paychex covers a range of demands, namely payroll processing, tax preparation, custom user features, integrations, and human resource. Moreover, you can schedule your payroll with different options: monthly, semimonthly, biweekly, or weekly.

Paychex also supports numerous payment formats, such as paper checks, payroll cards, or direct deposits. If you choose the higher-tier pricing, you have access to payroll documents, including year-end tax forms. 

With its Pay and Deduction feature, the software calculates the appropriate salary for your employees based on their pay rate and work hours. Paychex also accounts for additional income streams, including bonuses or commissions for each employee. You can also tweak the software for any deductions such as health insurance. 

You do not have to worry about your taxes as Paychex can manage them, from payroll taxes to 1099 and year-end W-2 forms. The software precisely calculates, files, and pays your taxes for you. The company assures accurate service with its guarantee to pay any penalties for tax errors from the software.

Having 160+ payroll reports, Paychex offers an array of information regarding your employees’ salaries. If you are not satisfied with the 160+ reports, you can also customize your own reports. Besides Paychex manages all state-mandated new-hire reports for you, regardless of your monthly plan. 

Moreover, for the HR aspect, Paychex provides add-on tools that can manage employee training and performance reviews. With additional features such as time, attendance, benefits, and workplace compliance, Paychex allows you to focus on other aspects of your business. 

The cloud-hosted software has intuitive dashboards that can be accessed from any web browser. From the dashboard, you are notified of the due date for the next payroll and provides direct access to other features, including payroll reports. 

A 24/7 customer service is available via live chats or phone calls, you get fast and efficient replies in case of any problems. For Paychex Flex users, the company offers a dedicated payroll specialist to help with any issues. 

The Paychex mobile app allows you to manage payrolls on the go. However, only Paychex Flex users have access to the mobile app. Another drawback is that Paychex has limited features for small businesses compared to other competitors. 

Pricing 

Paychex Pricing plan

Paychex provides three monthly plans, namely Paychex Go, Paychex Flex Pro, and Paychex Flex Enterprise. Each plan comprises the core payroll processing and payroll tax features. Apart from the Paychex Go plan, Paychex provides customized pricing per employee.

Paychex Go has a monthly base plan of $59 and an additional fee of $4 per employee. The plan offers new hire reports, automated 1099, W-2, and HR forms, direct deposits, and labor law compliance.

While Paychex Flex Pro offers dedicated payroll specialists, paper check options, a free mobile app, and income verification features, Paychex Flex Enterprise provides additional services, such as workforce analytics and paperless onboarding. 

Customer Review

Paychex Customer Reviews
Source : g2.com

Pros

  • Good retirement plans
  • Knowledgeable customer support
  • Efficient payroll features
  • HR services
  • Automated tax forms

Cons

  • Only higher paid plans have access to mobile app
  • Limited features for small businesses
  • Expensive customized plans

3. ADP TotalSource

Best payroll company for combined payroll, HR and PEO services

ADP TotalSource is the Best payroll company for combined payroll, HR and PEO services

ADP TotalSource partners with small and medium businesses to provide top-notch human resource and payroll services. The monthly plans include several features such as payroll, risk management, and employee benefits. 

Additionally, ADP TotalSource offers personalized Professional Employer Organization (PEO) services for businesses across all 50 states. The company also supports international client transactions through its collaboration with Globalization Partners. 

With ADP TotalSource plans you get several PEO features ranging from payroll solutions to HR management. You have access to payroll processing software that handles the salaries of your employees. With the mobile app, ADP TotalSource offers time management and customized payroll reports. 

The company also provides HR services to handle all federal and state labor law compliance, recruiting, and onboarding of employees. The HR software also manages termination contracts and dispute assistance. 

If you are interested in employee benefits, ADP TotalSource provides benefit packages such as 401(K) plans, wellness programs, and medical assurance. PEO packages also offer regulatory compliance for labor and health laws. 

Along with the compliance features, ADP TotalSource provides OSHA compliance, reports, and claims specialists to ensure that your business is compliant with the law. You can also access any risk training and resources to encourage your employees to be healthy and safe at work. 

All training packages are standard resources related to a PEO. ADP TotalSource offers safety training and onsite inspection for employees and specific online classes for your HR team. The classes cover different topics such as conflict management. The classes can be in-person or online.

Pricing

While ADP TotalSource offers its services to small and medium businesses, small businesses must have at least five employees to access ADP TotalSource services. One benefit of using ADP TotalSource is its short-term contract and no cancellation fees. 

However, the company requires a 30-day notice letter to end your contract with ADP TotalSource. The 30-day notice is a standard requirement across all PEOs companies. When subscribing to a plan, you are mainly investing in a PEO package. 

Therefore, all basic PEO services are included in the monthly package. The pricing of your monthly plan is customizable depending on the size of your business and its field. From the website, ADP TotalSource states that the pricing will depend on the workforce management, services needed, 401(k) benefits, time, and attendance.

Customer Review

ADP TotalSource Customer Reviews
Source : Consumeraffairs

Pros

  • PEO features
  • Offers training and resources for OSHA
  • International client support
  • Advanced payroll processing
  • No cancellation fees

Cons

  • 30-day letter notice to stop plans
  • Mostly PEO features 
  • Limited payroll tools

4. OnPay

Best cloud-based payroll company for unlimited and flexible payrolls solutions

OnPay is the Best cloud based payroll company for unlimited and flexible payrolls solutions

OnPay is a cloud-based payroll company that provides functionality and flexibility to small businesses. On the website, you get a comprehensive payroll solution to help you conduct unlimited payrolls for each month and manage employee records. 

OnPay also provides numerous reports that can be easily customized to your preferences. Moreover, OnPay calculates and handles all payroll tax forms. With its new dashboard feature designed to add additional HR and PTO (Personal Time Off) tracking, OnPay is among the most competitive payroll providers. 

However, the setting up process is labor-intensive and can be difficult for small businesses. For first-time users, you get a seven-step setup wizard that guides and prompts you to fill out all your company details correctly. 

After the extensive setup process, OnPay provides a variety of advanced payroll features, including scheduled salary pays. You can set up numerous, unlimited schedules customized for each employee. With OnPay, you get a more flexible payroll feature compared to competitors. 

OnPay provides customized benefits and deductions that are added to individual employees. When setting the accounts for your employees, you can add details about their compensation, deductions, time off, or personal files.

Along with a detailed customer record, for new employees, OnPay provides customized forms that are easy to create and contain numerous data-entry options, such as drop-down lists, date fields, and text boxes. Details like work hours and sick time can also be added to employee records.

OnPay teams can help you choose and set up your employee insurance benefits. The team will research and generate quotes for different insurances.  Besides, you can also integrate QuickBooks Online or Xero in your OnPay account for powerful accounting tools.

The third-party services come with additional charges but provide consistent account structures to help you manage your finances. With advanced built-in connections to productivity and accounting applications, managing a small business becomes easier. 

Moreover, OnPay provides a clean and intuitive interface to improve user experience despite the detail-heavy process. OnPay has two dashboards with specific functions, namely the payroll and HR dashboard. 

You can have all the important data in a quick glance at the dashboard. Links to payroll features such as payroll tax forms and reports are accessible in one click. In contrast, the HR dashboard includes personnel tasks, onboarding tools, time-off data, and pending employee offers. 

While the HR dashboard is not extensive as the payroll one, you can access HR guides and contracts when browsing through the dashboard. Additionally, you can easily create customized workflows and assign tasks to your employees’ accounts. 

However, one downside of OnPay is that there is no mobile app but the company supports mobile browser access. The mobile access is limited as not all desktop functionalities are accessible by phone. Yet, OnPay provides 24/7 customer service via email, phone calls, and live chats for all users. 

Pricing

OnPay Pricing Plan

OnPay services cover both small and big businesses as they can support up to 1000 employees per business. Additionally, OnPay provides a flat price of $36/month with $4/month per employee

You can test Onpay services with its one-month-free discount for first-time users.

Compared to other payroll competitors, OnPay provides all the tools and features to all of its users, regardless of the business’s size. 

Customer Review

OnPay Customer Reviews
Source : g2.com

Pros

  • Unlimited payroll 
  • Flexible functionality
  • Detailed employee records
  • Payroll listing reports
  • Updated HR features

Cons

  • No mobile app
  • Mobile access to OnPay is limited
  • Third-party services come at additional charges

5. Square Payroll

Best payroll company associated with an efficient payment gateway

Square Payroll is the Best payroll company associated with an efficient payment gateway

While Square is best known for its payment-processing features, Square Payroll has added new features such as an Employer Identification Number (EIN) assistant and records both Personal Time Off (PTO) and sick pay. 

Square Payroll is user friendly and supports all basic payroll administration features, ranging from setting up salaries to payroll taxes. However, since Square Payroll started in 2015, the young service company lacks some flexibility in customization compared to its competitors.

If you are already using Square POS (Point Of Sale), then Square Payroll is ideal for you since time cards can be imported to your payroll account. Square Payroll also stands out from the competition with its contractor-only option for small businesses. 

Similar to other payroll companies on our list, setting up your account can be a tedious process. Besides, the payroll services are only available after your account registration is complete. To facilitate your task, Square Payroll uses a comprehensive step-by-step process.

Employee records feature provides detailed information fields, including hourly or monthly salary payments, their pay rate, Point Of Sale, and timecards. You can also assign a password to each employee to record their attendance and performance. 

Additionally, small companies can benefit from third-party benefits administrators that help you manage employee’s retirement plans and health insurance. Both benefits and deductions can be added for each employee for an accurate payroll process. 

Square Payroll also alleviates the tax processes for your company as they include tax rates for all 50 states. Besides, if you do not have an EIN yet, Square Payroll has a new feature to guide you in acquiring one. 

All payroll runs are automated once you have set up your account. By linking Square Payroll to your bank account, the service will directly withdraw funds for salaries and tax payments. Moreover, Square Payroll can run the payroll on the same day as your account registration.

However, Square Payroll does not provide a sleek and user-friendly interface. Since all data fields are designed on one long screen, the layout requires time-consuming scrolling to find specific information.  

Additionally, other competitors have separated employees’ information into different tabs to ease the initial creation and subsequent edits. The dashboard also integrates links to other Square services. Therefore, your Square Payroll services are not instantly accessible

While the dashboard provides a three-month graph of total labor costs, it only has a few navigation links. Besides, the dashboard and payroll features have limited customization and provide basic payroll tools, including reports, payroll team, and tax forms. 

By downloading Square Payroll mobile app, you get access to a similar browser-based interface but with a few limitations. The dashboard does not provide the labor costs graph and has no links to payroll history. However, you can easily access employee records and run payroll using the mobile app. 

Pricing

Square Payroll Pricing Plan

Square Payroll is perfect for small businesses with few employees or contractors. You get a flat rate of $29/month and an additional $5/month per employee. Additionally, if you are dealing only with contractors, the contractor-only plan is designed for you. There is no subscription fee and you are not charged for the months you did pay anyone. 

Customer Review

Square Payroll Customer Reviews
Source : Capterra

Pros

  • Low pricing
  • Unlimited payrolls
  • Contractor-only option
  • Automated payroll runs
  • Third-party benefit providers

Cons

  • Limited reports templates
  • Basic payroll features
  • Mobile app has limited tools
  • Lacks customizable features

6. CloudPay

Best payroll company for global payroll services

CloudPay is the Best payroll company for global payroll services

For international businesses with employees in different countries, CloudPay is a perfect payroll service for you. With CloudPay, you can manage treasury and payroll services using a single SaaS (Software as a Service) solution. 

CloudPay has profound expertise on the multinational payroll process acquired for over 20+ years. CloudPay also ensures real-time visibility for accurate payroll processing, dynamic Human Capital Management (HCM) integrations, and unified information model

With its proprietary cloud platform, CloudPay stands out from the competition with its payroll processing across 130+ countries. Multinational organizations can use CloudPay for an adaptable and accurate payroll solution that covers any legislative changes. You can also minimize total payroll processing time and errors with CloudPay. 

Besides, managing payroll over several time zones and payroll systems can be a nightmare. CloudPay offers collaborative payroll calendars, standard workflows, and global task management for seamless administration. 

You also get a more efficient payroll cycle with CloudPay auditable processes and compliance management that follows regulations from all countries. CloudPay has an end-to-end compliance framework for complete transparency in statutory guidelines and tax requirements around the world. 

The payroll company also manages all tax form payments and filings. You are also equipped with internal risk management and issue tracking functionality to prevent any potential mishaps. Additionally, CloudPay has an unparalleled filing schedule and status tool for abiding by regulatory guidelines. 

Moreover, all your payroll runs are supervised with an advanced Robotic Process Automation (RPA) framework to prevent any payroll processing issues before sending out payments. In fact, the RPA feature verifies your payroll data at every stage of the payroll process.

The RPA framework can also be customized according to specific requirements and compliance policies for each payroll. To help you throughout the process, CloudPay provides on-demand payroll experts to help you meet all complex multi-country requirements. 

Along with the innovative RPA framework, CloudPay provides powerful real-time intelligence for complete transparency. Combined with standardized data, and the RPA framework, you are guaranteed a 99.99% error-free payroll each month. 

Pricing

CloudPay provides customized pricing based on the size of your business, the countries involved and your payroll goals. After entering all your information and project details, their customer service team provides a monthly quote that includes features adapted to your business goals.

However, CloudPay may not be suitable for small businesses with few employees. Small businesses may also feel overwhelmed with the high monthly prices and extensive range of advanced tools.

Customer Review

CloudPay Customer Reviews
Source : g2.com

Pros

  • Global payroll features
  • Compliance policies for over 130+ countries
  • Advanced payroll features
  • Access to global payroll experts
  • Automatic calculations

Cons

  • Not suitable for small businesses
  • Longer response time from customer support

How To Choose The Best Payroll Company

While payroll services can greatly help you to manage your business, not all payroll companies provide the same services. They are different and offer different packages. But, here are some things to look for in a payroll company for small businesses:

1. Adaptive Features

You should ask whether the service provides various payment options, such as direct deposit, paper checks, and prepaid debit cards, in addition to payroll processing and the management of all tax obligations. 

You can also check whether it provides multiple wage scales, garnishment fees, PTO management, workers’ compensation administration, unemployment insurance administration, and comprehensive payroll reports. From our list, Gusto offers different features that are useful for small businesses.

2. User-friendly

The payroll service should not be overly complicated. It should have a simple user interface that allows you to quickly run payroll and add workers to the system without constantly having to call tech support. PayChex and Gusto have the best user-friendly interface, with their intuitive dashboard.

3. Reasonable Price

Businesses, understandably, tend to look for a service that they can afford. You must also decide whether a contract is needed over the cost. Many programs are month-to-month with no long-term commitments, while others need yearly commitments. 

It’s also crucial to consider whether you’ll pay by the month or by the pay period. The pricing system you chose may have significant cost consequences depending on how often you run payroll. For small businesses working with contractors only, Square Payroll offers a contractor-only option at $5/contractor.

4. Credibility And Reputation Of The Company

Find a company with a proven track record and positive online reviews; you’ll feel more comfortable knowing that they’ve dealt with similar payroll problems before. You can check out the customer reviews for a genuine picture of the payroll company. Gusto is known for its efficient payroll feature and good customer support.

5. Customer Support

Good customer support is vital. Look for a payroll service that can assist you when needed. You can inquire about having a dedicated support agent as your primary point of contact. Some payroll companies offer support via live chats, emails and phone calls. 

Make sure your payroll service company has a customer care team that will guide you through the immersion process and answer your questions for years to come. Gusto and PayChex offer dedicated payroll specialists that help you in your issues.

6. Employee-friendly Format

Employees should be able to access their automated pay statements, PTO and year-end tax forms on their own through the payroll service. Square Payroll offers employee accounts with assigned passwords for added security.

7. Security

Look for security features that protect against data tampering when choosing a payroll system. It is also recommended to deal with payroll companies that are bonded and insured. Besides, your payroll accounts should be secured due to their connections with your bank accounts. ADP TotalSource updates their security system regularly to prevent any breach from cyber attacks.

8. Customer Reviews

Customer satisfaction is a crucial aspect of a payroll company. It englobes the different facets of the services you get, from payroll tools to customer support. You can determine customer satisfaction with customer reviews as they provide deeper insights on the payroll companies. From our list, Gusto has the highest customer satisfaction with a 4.5 star review on G2.com.

9. Free Trial

When looking for a payroll service, look for one that allows you to try the service to see if it’s right for you. A free-trial period ensures that you understand the features and services ideal for your business. 

Your team will be able to test drive the new software and see if they are comfortable with it. Many payroll providers have online portals where you can practice using their services. Gusto and OnPay offer a 30-day free trial for first-time users to check out their services.

10. Adapted To Your Needs

Every company’s payroll service requirements are different, as are the tasks involved. The payroll service you select should be able to produce personalized reports and be adaptable to your business’s specific requirements. 

As your company expands, the right payroll service should be flexible as well. It should be able to grow with your company so that you can reap the anticipated benefits. From our list, PayChex stands out with its scalable, flexible and customizable tools.

11. Tax Calculations And Filing

Paying workers is just a small part of what businesses must do when it comes to payroll processing. Payroll tax calculation and filing is one of the most difficult and significant HR tasks for any company. 

Payroll taxes are not only time-consuming, but they can also result in hefty IRS fines if done incorrectly. When outsourcing payroll processing, it makes sense to outsource payroll taxes as well. Fortunately for you, most payroll companies are including tax forms and reports tools with already classified information.

Some services even offer advanced tax tools that categorize, fill and send the tax reports directly to the IRS. You do not have to worry about your taxes with CloudPay, Gusto and PayChex advanced tax tools. Paychex also offers a guarantee that covers any tax penalties caused by its software.

Benefits of Using Payroll Companies

1. Effective Data Processing

When using payroll companies services, less time is spent by the Human Resources Office trying to fill the payroll information for employees whilst in the midtime briefing employers. Not to forget that in a few clicks, you can obtain valuable information such as your employee’s salary or sick leaves. 

It enables businesses to cut costs while still providing improved transparency to workers in a more timely and effective manner. You can get access to the data to view invoices, look at payroll reports, communicate with employees and so on. Employees can on their side see their vacation and sick leaves, benefits information and work hours calculated for their salaries.

2. Accurate Tax Information

By using a payroll company, for both small and medium enterprises, we can be sure that the taxes are paid on time to the government. Payroll companies like Gusto, PayChex and CloudPay have advanced software that will file and pay your taxes for you. There is therefore no risk of fines or legal prosecutions for late tax payments.

Moreover, these payroll companies ensure that their software provides accurate information during tax seasons. PayChex even has a guarantee that covers any possible errors made by the software. The company claims that it will pay for all the penalties caused by their tax software.

3. Data Security

Data security is crucial when confiding your business’s information to a third party payroll company. The data of your employees are personal information that may result in privacy issues if data security is breached.

Moreover, your bank account is directly connected to your payroll account. The funds for payroll runs and tax payments are deducted from your bank account. Yet, payroll companies like ADP TotalSource are equipped with data protection systems that alert you if any fraudulent activities are detected on your account.

4. Reduced Costs

The tremendous advantage of payroll providers is the affordable services that they offer. Through the payroll company, you will have access to state-of-the art services at a competitive price. This can prove to be successful in small companies who cannot hire different professionals. 

Since no money is spent in financing the hefty salary of a professional, a large amount of your finances can be allocated to other aspects of your business. Moreover, the fierce competition among payroll service providers have resulted in competitive packages with advanced payroll and HR features.

5. The Support Of A Network Of Professionals

When using a payroll company, there are a plethora of qualified people assisting you. The most valuable payroll firms include a team of professionals who manage various aspects of HR, taxes, and payroll runs.

A wealth management department will manage the benefits and deductions in the payroll systems, including retirement plans, health insurances and commissions for employees. Employee compensation experts will handle the adjustment of class codes if an employee decides to change jobs. 

In contrast, human resource professionals will assist with the employee-related problems and the best HR strategy to maintain a productive environment for the company. You will even get the support of tax professionals ensuring the correct filing of taxes during the complex tax process.

6. Effective Direct Bank Transfer

If a corporation does not use an outside payroll department, providing direct deposit to workers is challenging. Small companies are increasingly recognizing that their employees prefer direct deposits to their bank accounts. 

Direct deposit, most specifically for company owners, reduces time-consuming and error-prone document processing as well as the monthly reconciliation of individual payroll checks. By minimizing the use of paper checks, which may be changed or counterfeited, direct deposit eliminates the possibility of theft. 

Unlike a paper check, which displays your account number for anyone to use, your account number is kept private by your financial company or payroll provider while you use direct deposit. Another advantage of outsourcing payroll is confidentiality.

Payroll Service FAQ

Since you now have a better idea of the functions and benefits of payroll companies, you may have questions that are still resounding in your mind. We have gathered the most frequent questions that may help you in choosing the perfect payroll company for you.

What’s the difference between self-service and full-service payroll?

To put it simply, the main difference between the two is that with a full-service payroll, an external company is managing the payroll services unlike a self-service where a person or team within the company manages the payroll. 

During self-service payroll, there is often an accountant or members of the HR team who work in an office in the company to fill tax forms, pay slips etc. On the other hand, with full-service there are no direct employees. The chosen payroll company is paid as per the contract and the work will be done by a team hired by the given company.

Should I use a payroll service or hire an accountant?

Accountants despite being very knowledgeable are unfortunately not experts in all fields. With payroll services, there are numerous experts, such as audits and HR experts, working on your files, reducing likelihood of errors. In contrast to some accountants, payroll companies are familiar with both state and federal regulations of all 50 states and can ensure that you follow them. 

This will save you the trouble of dealing with legal cases and the costs that come with them. While using a payroll company, you will not have to fill tax documents for employees as unlike for accountants, it forms part of the service provided. A major headache will therefore be avoided.

On the other hand, with an accountant there is an in-person interaction where you can discuss any issues. You also have a control over who works on the company’s private financial documents. The cost of hiring a full-time accountant (starts at $52000/year) will generally be more than using a payroll company (starts at $40 per month for basic services). 

However the price may vary depending on the scope of services demanded by the company. In the end, hiring an accountant or using a payroll service will be based on the type of business you are operating.

Online payroll software can save time and money for small and medium-sized companies with relatively basic payroll needs while larger companies with more complex needs may find that accountants provide better in-person advice and services. Therefore, in our case payroll services are the way to go.

How much do payroll services cost for small businesses?

The cost of payroll services vary depending on the scope of services required by your company. A base fee of $29 to $150 is usually charged with an addition of $2 to $12 per employee

You should note that the figures are variable and are susceptible to changes and may vary from company. Some payroll firms may also charge an implementation fee, which is a one-time charge to cover the expense of entering the employees’ and business’ tax information into the system.

According to a survey by the National Small Businesses Association, 70% of  small businesses pay between $1 and $500 for payroll services. The mode payment was observed with 36% of small companies spending between $101- $500 followed by 19% of the businesses spending between  $51- $100.

Which Payroll Company Should I Pick?

Now that you reached the end of our guide, the last step is to decide which payroll company will suit your business demands the most. Fear not, below you will find the best payroll company associated to a category of small businesses.

For small businesses with less than 5 employees, we recommend OnPay. OnPay provides a cheaper option for startups thanks for its fixed rate of $36 for the services and an extra $4/employee.

Small businesses with more than 5 employees will benefit from Gusto Core Plan at $39/month and $6/employee. You get a full-service payroll with modern HR management features that covers all the needs and demands of small companies.

PayChex is ideal for growing small companies since the basic monthly plan provides more advanced features than its competitors. Besides, you can also upgrade your subscription later to PayChex Flex plans to get dedicated payroll agents and mobile app access.

If you have an international company with employees across the globe, CloudPay is the perfect payroll service provider for you. Spanning over 130+ countries with dedicated multi-national payroll experts, you are assured a smooth payroll run each month. 

Lastly, if your business works only contractors, Square Payroll designed a contractor-only plan to facilitate payroll runs. You only have to pay $5 for each contractor account and the company does not charge you for the months where its services were not used.

Written by
Anastasia Belyh
Join our Free 7-Day Email Course for Beginners to
MAKE MONEY BLOGGING FAST
FREE 8,000 word email course. FREE WordPress blog launch checklist. FREE plan to $10k in 90 days.
JOIN NOW!
We respect your privacy. You can unsubscribe at any time.