Sign up for Funding Circle newsletter!
Get our latest news and information on business finance, management and growth.
Updated: March 27th, 2020
Running payroll can be time-consuming and complicated. In fact, one in every three small business owners gets penalized by the IRS for payroll errors. Between tracking hours, signing checks, completing forms, and paying taxes, it’s easy to make errors that can cost your business money or otherwise set you back.
Instead of doing everything yourself, consider using a payroll solution that’ll streamline everything and help you run your business with less stress and fewer wasted resources.
Here’s what you need to know:
Before you start browsing payroll solutions, make a list of your business’ needs, including your budget and must-have features. Think of what you’ll use the system for: do you want a painless way to pay independent contractors? Or do you need extra assistance onboarding new hires?
Once you know what your business needs to operate successfully, you’ll have a better idea of what to look for. Ryan O’Neil, founder of Curate.co, said it’s important to consider the level of assistance a payroll system can offer, as some have minimal features, while others can facilitate complex processes like paying commission or factoring in easily overlooked state tax regulations. “I had the biggest headache trying to figure out how to hire people,” he said, but finding a payroll solution with HR services reduced his hassle.
A payroll system that’s transparent with data, payment processes, and benefits, O’Neil said, is also key. “Having access to all the information up front,” he explained, “saves me from recalculating and allows me to make business decisions more easily.” Other factors to consider include pricing, customer service, additional features, and ease of use.
The best payroll solution for you will depend on your particular business needs and budget, but these six options are some of the best.
Gusto is a one-size-fits-all solution for your business’ payroll, HR, and benefits needs. The intuitive system allows you to run payroll on autopilot for full-time and part-time employees, as well as freelancers and contractors. And it integrates with your existing accounting software, like Freshbooks, QuickBooks, and Xero, to automatically file your state, local, and federal taxes. Gusto also helps you manage additional services, like workers’ compensation, 401(k), health benefits administration, new hire reports, and paid time off management.
The complete payroll package starts at $39 per month, plus $12 per employee per month.
Sage’s services come with a team of certified in-house payroll experts to help you every step of the way. The platform offers a couple different payroll packages depending on your business needs. If you have fewer than 10 employees, the essentials package offers unlimited payroll processing, tax filing, and direct deposit. If your business is larger than 10 employees, you can sign up for the complete package, which covers the same needs as the essentials, plus benefits administration.
Request a quote.
OnPay is a simple, straightforward payroll option for small businesses. The service offers an unlimited number of payroll runs each month for W-2 and 1099 employees, as well as multiple payment options, including checks, direct deposit, and prepaid debit cards. They also handle all payroll tax responsibilities, payroll deductions, and new hire reports for you. Additionally, OnPay has a user-friendly interface that works as well on mobile as it does on your desktop.
Pricing is $36 per month, plus $4 per person per month.
Paychex Flex handles both payroll and HR, making it an ideal solution for growing businesses with fewer than 50 employees. Its services include recruiting, payroll processing, hiring and onboarding, health insurance, health benefits administration, and HR record management. Plus, the service offers an easily navigable interface and a support team that’s available 24/7.
Request a quote.
If you’re looking for a platform that’s fast and easy to navigate, try Square. With Square, you can run payroll or send payments for your hourly, salaried, and contracted employees as many times as you need to in a given month. Square also handles federal and state taxes, new hire reports, post-tax deductions, sick leave tracking, paid time off tracking, and workers’ compensation. Plus, the system offers flexible pricing, so you can scale up or down as your business changes.
Square charges $29 per month, plus $5 per employee or contractor per month.
Wave is dedicated to improving payroll for small businesses. It offers direct deposits, calculations for vacations, bonuses, and benefits, automatic tax payments, and automatic tax filing in select states such as California and New York. The app is particularly good for businesses that have seasonal employees, since you can put employees on hold any time at no additional charge. And, since the platform is cloud-based, you can pay employees any time, anywhere.
Pricing is scalable depending on your employees and usage, but the packages range from $20 to $35 a month, plus $4 per employee per month.
The right payroll system can save you time, money, and sanity. Learn about what it takes to run payroll without hassle, so you can focus on running your business.
Paige Smith is a Content Marketing Writer and Senior Contributing Writer at Funding Circle. She has a bachelor's degree in English Literature from Cal Poly San Luis Obispo, and specializes in writing about the intersection of business, finance, and tech. Paige has written for a number of B2B industry leaders, including fintech companies, small business lenders, and business credit resource sites.