Payroll software is an essential tool for businesses of all sizes. It automates labor-intensive tasks, such as calculations, tax withholdings, and payments, saving time and reducing errors. According to a report by ADP, businesses that use advanced payroll services and automation cut the time needed to do payroll by 30%. Plus, they have half as many payroll-related inquiries.
The best payroll platforms provide a quick and reliable solution to the modern challenges of running a business's payroll. They ensure accuracy and compliance when managing a payroll calendar and filing a company's taxes. Most of these softwares come with comprehensive reporting across all aspects of payroll, including wages paid, taxes deducted, hours worked, and more.
Choosing the right payroll app can be challenging, but it is essential to consider the features that are most important to a business. Some features to consider when choosing include compliance management, third-party integrations, and automatic alerts. Read on to find out the best payroll softwares in 2023.
What Is Payroll Software?
Payroll software is a helpful tool for managing employee payments and handling taxes. It's designed to make these tasks easier for businesses. According to Symmetrical's 2023 payroll statistics, about 40% of small business owners find taxes and bookkeeping challenging. A good payroll software can change that.
It's way better than homemade payroll solutions because they tend to have more errors, around 11.4%. In contrast, third-party payroll solutions, like payroll software, have fewer mistakes, with an error rate of about 6.1%. So, using payroll services is a smart choice for businesses looking to avoid errors and save time.
Types of Payroll Software
Businesses can use three main types of payroll software: on-premises, on-premises + cloud, and SaaS.
On-Premises Payroll Software
- This type of software is installed directly on a company's computer system.
- It's like having your very own payroll program right in your office.
- Businesses have full control and can manage payroll without relying on the internet.
- It's great for companies that want complete privacy and control over their payroll data.
On-Premises + Cloud Payroll Software
- This is a mix of on-premises and cloud-based solutions.
- The software is installed on the company's computers and connects to the cloud.
- This allows for data backup and access from anywhere with an internet connection.
- It combines the control of on-premises software with the flexibility of the cloud.
SaaS (Software as a Service) Payroll Software
- SaaS payroll software is hosted in the cloud, and users access it online.
- It's just like using a website to handle payroll tasks.
- This type offers convenience, as there's no need to worry about installations or updates.
- Data is stored securely in the cloud; users can access it from different devices.
- It's a popular choice for businesses that want a hassle-free and accessible payroll solution.
What Can Payroll Software Do?
Payroll software is a versatile tool that simplifies managing employee payments and related tasks for businesses. Here's what it can do:
- Time attendance. Payroll software keeps track of when employees start and finish work. It records their attendance, making it easy to calculate their pay accurately. This is important to ensure everyone gets paid for the hours they work.
- E-claim module. Employees can submit their expense claims electronically through this feature. It simplifies the process of reimbursing employees for work-related expenses. This helps reduce paperwork and keep records well-organized.
- E-leave module. Employees can request time off through this module. It streamlines the leave approval process for employees and managers. This ensures everyone knows who's on leave and when.
- E-file statutory report. Payroll software helps businesses generate and submit the necessary reports to government authorities, ensuring legal compliance. It saves time and reduces errors when dealing with statutory reports, which is vital for regulatory adherence.
- E-pay slip. Rather than printing physical pay slips, payroll software helps create digital ones. Employees can access their pay information online, making it eco-friendly and convenient for everyone.
- Salary management. At its core, payroll software calculates employee salaries, including deductions and taxes. It ensures employees are paid accurately and on time, which is fundamental to keeping the workforce satisfied and motivated.
The Best Payroll Software for Your Business in 2023
Below are the top-rated payroll platforms in 2023.
1. Gusto - Best Payroll Software for Small Businesses
Gusto is one of the best payroll softwares designed to make managing employee payments and related tasks super simple. It is user-friendly and packed with features to help you streamline your payroll process. Gusto offers a straightforward and intuitive platform. Setting up your payroll is very easy. You can quickly add your employees and enter their information. It also helps you with the initial hiring and onboarding process.
Top Features of Gusto
Gusto comes with a range of features that make it stand out:
- Basic hiring and onboarding tools. Gusto provides essential tools to help you bring new employees on board easily. This is a time-saver for HR and hiring managers.
- Health insurance options. If you're in one of the locations Gusto serves, you can take advantage of health insurance options through the platform.
- Additional employee benefits. Gusto goes beyond basic payroll. It offers additional benefits like 401(k) retirement plans, commuter benefits, college savings accounts, and even free financial tools.
Gusto has some significant advantages:
- Affordable. It's budget-friendly, offering good value for small businesses.
- Unlimited payroll runs. You can run payroll as often as you need, which is excellent for businesses with frequent payroll needs.
- PTO tracking. Gusto includes paid time off (PTO) tracking, which is vital for managing employee leave.
- Full-service payroll. It offers full-service payroll options anywhere, so you can rely on it wherever your business operates.
- Basic reports. Basic reporting is included with all tiers, helping you keep track of your payroll data.
While Gusto is great, there are a couple of drawbacks:
- Next-day direct deposit. This feature is only available in the Plus and Premium plans. So, you'll need one of these plans if you require next-day direct deposit.
- Dedicated support. Dedicated support is exclusively for Premium subscribers, which might be a limitation if you opt for other plans.
Gusto offers various pricing options:
- Simple plan. This plan costs $40 per month plus $6 per employee. It's one of the most budget-friendly choices for a full-service payroll plan.
- Plus plan. Priced at $80 per month, with an additional $12 per employee, this plan offers the perk of next-day direct deposit.
- For more advanced packages, such as Premium options with dedicated support and compliance alerts, you'll need to get in touch with the company directly to learn more about their offerings.
Who Should Use Gusto
Gusto is a fantastic choice, especially for small businesses and those who might be new to managing payroll. Its user-friendly interface and excellent support make it a top pick for beginners. However, it's worth noting that Gusto can serve larger companies too. Its scalability ensures that businesses can grow with it.
2. ADP Workforce Now - Best Payroll Software for Large Businesses
ADP Workforce Now is a top-notch payroll software tailored for midsize and large businesses. It's a robust platform that offers a range of features to handle the complex payroll needs of more prominent companies. ADP Workforce Now is designed to cater to midsize and larger businesses' payroll and HR management needs. It's highly customizable to meet the specific requirements of your company. Setting up and using ADP Workforce Now involves a few simple steps. The platform offers extensive support and training resources for smooth onboarding.
ADP Workforce Now Top Features
ADP Workforce Now boasts a range of standout features:
- Multi-jurisdiction payroll processing. This feature is essential for larger businesses operating in multiple locations. It ensures that you can handle payroll across various jurisdictions seamlessly.
- Employee self-service portal. Employees can access their payroll and HR information through a self-service portal. This makes it convenient for both employees and HR teams.
- Employee discounts. ADP Workforce Now provides employees with discounts on brand-name products and at local retailers, enhancing their job satisfaction.
- Robust reporting. The platform offers comprehensive and customizable reporting capabilities. This means you can generate detailed payroll and HR reports tailored to your company's needs.
ADP Workforce Now Pros
ADP Workforce Now offers several significant advantages:
- Global reach. It provides payroll management services in 140 countries, which makes it an ideal choice for large international businesses.
- Extensive integrations. The platform integrates with popular third-party software systems like Trakstar Perform, Oracle®, etc. This helps streamline your business processes.
- Customizable reporting. ADP Workforce Now gives you the power to create customized reports to analyze your payroll and HR data effectively.
- Optional add-on features. It offers a variety of optional add-on features, such as retirement plans, workers' compensation insurance, and employee health benefits. This allows you to tailor your solution to your unique business needs.
ADP Workforce Now Cons
While ADP Workforce Now is a powerful platform, there are some considerations to keep in mind:
- No transparent pricing. ADP doesn't provide clear pricing information online. Interested businesses need to contact ADP directly to obtain a customized quote.
- Learning curve. Some reporting features may have a steeper learning curve for new users, but extensive support and training resources are available.
- Limited features with base plans. Advanced features like State Unemployment Insurance management are only available with higher-priced plans.
Who Should Use ADP Workforce Now
ADP Workforce Now is tailor-made for midsize and large businesses with intricate payroll and HR management needs. It's an excellent choice for companies operating in multiple jurisdictions, including those with a global presence. The platform's customizability and extensive support make it a top pick for businesses looking for a comprehensive payroll and HR solution.
3. SurePayroll - Best Value Payroll Software
SurePayroll offers affordable plans and a range of features that make payroll management easy. SurePayroll is designed to be user-friendly and straightforward. Setting up and using it involves minimal hassle. It's an excellent choice for businesses looking for a cost-effective and efficient payroll solution.
SurePayroll Top Features
SurePayroll offers a set of features that bring exceptional value:
- Optional health benefits. SurePayroll provides the option for health benefits backed by Paychex, its parent company. This is an attractive feature for businesses looking to offer employee benefits.
- Budget-friendly plans. SurePayroll offers both full-service and self-service plan options. The self-service plan is particularly budget-friendly, which makes it a cost-effective choice for businesses.
SurePayroll offers several advantages:
- Free months for new customers. New customers can enjoy up to six months free, which is an excellent perk for businesses looking to try out the platform.
- Extended customer service hours. SurePayroll provides extended customer service hours and maintains a better-than-average response time. This ensures you can get the support you need when you need it.
- Tax calculation guarantee. The self-service plan comes with a tax-calculation guarantee, and the full-service plan includes an industry-standard tax-filing guarantee. This feature gives peace of mind regarding accurate tax calculations and filings.
- Optional employee benefits. SurePayroll offers an add-on feature for employee benefits administration, which is valuable for businesses looking to provide additional employee benefits.
While SurePayroll offers excellent value, there are a couple of considerations:
- Limitation on scalability. With only two plans, it may limit scalability for growing businesses that need more advanced features or customization.
- Limited HR features. SurePayroll provides fewer HR features compared to HR-focused competitors like ADP. This might be a limitation for businesses with complex HR management needs.
- No pricing. SurePayroll doesn't provide specific pricing information. To get pricing details for their Not Tax Filing and Full-Service payroll plans and any optional add-ons, you'll need to request a quote directly from SurePayroll.
Who Should Use SurePayroll
SurePayroll is an excellent choice for companies looking for a value-driven payroll solution. It's particularly attractive for small to midsize businesses that want to keep payroll costs in check while still having access to essential payroll features. The option to add health benefits and the budget-friendly pricing make it a solid choice for businesses looking to provide employee benefits without breaking the bank.
4. QuickBooks Online - Best Payroll Software for Reporting
QuickBooks Online is a robust payroll software that shines when it comes to reporting. It's a powerful platform designed for businesses looking for in-depth reporting capabilities. QuickBooks Online is known for its user-friendly interface. Setting up and using the platform is easy. Businesses can quickly onboard and start using it to manage their payroll.
QuickBooks Online Top Features
QuickBooks Online offers a range of features to support your payroll and reporting needs:
- Automatic payroll runs. This feature is available for businesses that pay salaried employees only. It simplifies the payroll process by automatically running payroll for salaried workers.
- Optional 401(k) plans and healthcare benefits. QuickBooks Online offers businesses additional benefits like 401(k) plans and healthcare benefits.
- Built-in time tracking. You can track employee work hours accurately through QuickBooks Time, an additional fee-based service.
- HR support center. QuickBooks Online offers access to an HR support center with more expensive plans, which can be valuable for businesses looking for HR resources and assistance.
QuickBooks Online Pros
QuickBooks Online review. Source: Quickbooks
ALT: QuickBooks Online review.
QuickBooks Online has several advantages:
- User-friendly. It provides a simple and understandable user experience. This makes it accessible to users at all levels of expertise.
- Flexible setup. QuickBooks Online offers flexible and thorough setup options. This allows businesses to tailor the software to their specific requirements.
- Deep integration. It deeply integrates with QuickBooks Online accounting software, providing a seamless all-in-one system for companies using the accounting platform.
- Improved employee profiles. QuickBooks Online offers improved employee profiles. This allows for better management and organization of employee data.
- Customizable reports. The software provides a variety of customizable reports to meet your reporting needs.
QuickBooks Online Cons
While QuickBooks Online is powerful for reporting, there are some limitations to consider:
- Expense. It's more expensive than many competitors, which could be a concern for businesses on a tight budget.
- Slim employee portals. Employee portals in QuickBooks Online are not as robust as some other options.
- Time tracking. Time tracking is not available in the Simple Start version, which could be a limitation for businesses needing this feature.
- No employer mobile apps. QuickBooks Online lacks mobile apps for employers, which could be a drawback for companies looking for on-the-go functionality.
- Post-payroll wrap-up. Some users feel that the post-payroll wrap-up process could be improved for greater efficiency.
Who Should Use QuickBooks Online
QuickBooks Online is ideal for businesses that prioritize robust reporting features and require deep integration with their accounting software. It's well-suited for companies that want a comprehensive payroll solution and have the budget to invest in its more expensive plans. While it's an excellent choice for reporting, businesses looking for standalone payroll services or integrated solutions with other accounting applications may explore more budget-friendly options.
QuickBooks Online Pricing
QuickBooks Online Payroll provides transparent and upfront pricing.
- QuickBooks Payroll Simple Start. This plan costs $18 per month plus $5 per employee.
- QuickBooks Payroll Essentials. Priced at $27 per month plus $8 per employee.
- QuickBooks Payroll Plus. This plan costs $38 per month plus $10 per employee.
QuickBooks Online Payroll's straightforward pricing allows businesses to select a plan that aligns with their budget and payroll requirements.
5. Workful - Best Payroll Software for Customer Service
Workful is a standout payroll software known for its exceptional customer service. It's a user-friendly platform that caters to the needs of businesses while providing top-notch customer support. Workful offers an intuitive and straightforward platform. Setting up and using Workful is super easy. This makes it an ideal choice for businesses looking for an easy-to-use payroll solution.
Workful Top Features
Workful offers a range of features to support your payroll and HR needs:
- Unlimited payroll runs. Workful allows unlimited payroll runs, making it convenient for businesses with varying pay frequencies.
- Built-in time tracking. The platform has built-in time tracking, helping businesses accurately track employee work hours.
- State and federal tax forms. Workful provides support for state and federal tax forms, simplifying tax compliance for businesses.
- Benefits deduction. Companies can manage employee benefits deductions seamlessly through Workful.
- W-2 & 1099 preparation. The platform includes W-2 and 1099 preparation, making year-end reporting a smooth process.
Workful offers several advantages:
- Affordable. It's a budget-friendly choice, which makes it ideal for small businesses looking to manage their payroll without breaking the bank.
- Easy to use. Workful is known for its user-friendly interface. This makes it accessible to companies with various levels of expertise.
- Expense tracking. It includes employee expense tracking, which can be valuable for businesses managing employee reimbursements.
- Geolocation time-clock tracking. Workful offers geolocation time-clock tracking, which is helpful for companies with remote or field-based employees.
- Document storage. The platform includes document storage, simplifying record-keeping, and document retrieval.
While Workful has numerous strengths, there are some limitations to consider:
- Limited reporting features. Workful provides limited reporting features, which may be a drawback for businesses looking for advanced reporting capabilities.
- Setup process. Some users find the initial setup process a bit clunky, which could be improved for a smoother onboarding experience.
Who Should Use Workful
Workful is an excellent choice for businesses that prioritize exceptional customer service. It's suitable for businesses with hourly workers who use time clocks and can also accommodate salaried workers. Workful's simplicity and affordability make it an excellent choice for novice payroll managers and small businesses on a budget. However, it's not the best fit for larger companies with extensive employee numbers. Small businesses looking for personalized customer support will find Workful to be a valuable payroll solution.
Workful offers a straight $35 per month plan plus $6 per team member.
Benefits of Using Payroll Software for Your Business
Payroll softwares can benefit companies and businesses of different sizes in so many ways. Some of these benefits are:
Using payroll software for your business can save you money. The National Small Business Association's Taxation Survey found that 33% of small businesses spend 5 to 6 hours each month processing payroll. Payroll software streamlines this process, helping reduce the time and effort required, which translates to cost-effectiveness for your business.
Payroll software makes generating payslips easy. With this software, you can quickly create payslips for your employees. It's a simple and efficient process that ensures your workers get accurate and timely records of their earnings and deductions. Payslip generation is a crucial feature of payroll software, helping businesses keep their financial records in order and employees informed about their income.
Payroll software prioritizes data security. It ensures that your sensitive financial information, as well as your employees' data, is well-protected. This software employs various security measures to guard against unauthorized access and data breaches. It helps in keeping your business and employee information safe from potential threats. Data security is a crucial aspect of using payroll software to maintain the confidentiality and integrity of your payroll and financial records.
Payroll software saves time by automating manual payroll processes. It calculates employee wages, deductions, and taxes automatically, eliminating the need for manual calculations. Also, it streamlines time and attendance tracking, reducing the time spent on recording work hours. Payroll software also generates payslips, reports, and tax forms with just a few clicks, speeding up the document creation process. Moreover, it simplifies tax compliance by automatically handling tax calculations and filings. All these features combine to make payroll management faster and more efficient, freeing up your time for other essential business tasks.
Payroll software significantly reduces errors. When you use this software, it automates many payroll tasks, which means there's less room for human error. It calculates wages, taxes, and deductions accurately, so you don't have to worry about mistakes in employee payments. Automated timekeeping, in combination with payroll software, can cut error rates by nearly 67% compared to businesses that rely solely on manual processes. This error reduction ensures that your employees receive the correct compensation, and it simplifies tax compliance, reducing the risk of costly mistakes in payroll management.
Drawbacks of Using Payroll Software for Your Business
Payroll software offers many benefits, but there are drawbacks to consider. One concern is cybersecurity and the risk of fraud. While the software enhances data security, it's not immune to cyber threats. According to a report by the University of Northern Georgia, small businesses are the target of 43% of cyber attacks. 64% of businesses have been subjected to web-based attacks. This shows that hackers may attempt to breach your system to access sensitive payroll data, potentially leading to fraud or data theft. Vigilance and strong security measures are crucial to prevent these risks.
Another drawback is related to information access, quality, and control. Payroll software relies on accurate input, and errors can occur during data entry. This can lead to inaccuracies in employee payments, taxes, and deductions. Maintaining data quality requires diligence. Also, software limitations can affect control. While it automates many tasks, it may not accommodate all unique business needs, potentially leading to constraints in customization and control.
To mitigate these drawbacks, it's essential to invest in robust cybersecurity measures and provide training to staff to prevent fraudulent activities. Regularly reviewing and verifying data can help maintain data quality. Careful consideration of the software's features and limitations is crucial to ensure it aligns with your business requirements.
Features to Consider When Choosing Payroll Software
When selecting payroll software for your business, several key features should be on your radar to ensure that it meets your needs effectively.
- Employee calendars. Look for payroll software that includes employee calendars or scheduling features. This enables you to manage employee work hours and shifts efficiently, making it easier to calculate payroll accurately.
- Notifications and updates. Notifications and updates are crucial for staying on top of payroll tasks. The software should alert you to important deadlines, such as tax filing dates or payroll processing schedules. This feature helps you avoid missing critical payroll-related activities.
- User-friendly interface. Ensure that the software has a user-friendly interface. A straightforward and intuitive design makes it easier for you and your staff without a steep learning curve. This enhances productivity and minimizes errors.
- Payslip generation. The ability to generate payslips is fundamental. Payslips provide employees with a clear breakdown of their earnings, deductions, and other financial details. This feature ensures transparency and keeps your workforce well-informed.
- Data automation. Look for software that automates data management. Automation reduces the manual input required, minimizing the risk of errors and saving you time. It should handle tasks like tax calculations, employee deductions, and benefit contributions.
- Tax computation. Payroll software should have robust tax computation capabilities. It should automatically calculate and withhold the correct taxes from employee wages, ensuring compliance with tax laws. This not only reduces the risk of errors but also simplifies the tax filing process.
Choosing the Right Payroll Software for Your Business
Choosing the right payroll software for your business is a pivotal decision, and it requires careful consideration. Begin by assessing your business's unique needs, taking into account factors such as the size of your company, the complexity of your payroll processes, and the number of employees you have.
Once you have a clear understanding of your requirements, prioritize the features that are most important to you. Whether you need robust reporting, excellent customer support, or specific integrations, make sure the software aligns with your specific demands.
Budget is another crucial factor. Determine what you can afford while ensuring you don't compromise on essential features. Many payroll software providers offer free trials or demos; take advantage of these opportunities to get a firsthand experience of how the software functions.
Additionally, read user reviews and seek recommendations from other businesses in your industry to know more about the software's performance and user satisfaction. Whether you choose Gusto, ADP Workforce Now, SurePayroll, QuickBooks Online, or Workful, ensure that the software aligns with your business's unique payroll needs and make the best choice to streamline your payroll processes with confidence.