Small Business Online Payroll Services Review
When Do I Need Payroll Services?
Payroll services are designed to help you stay in compliance with all of the policies and regulations involved in payroll, taxes and IRS reporting. These services are most useful if you are concerned about compliance or your company has been fined in the past for payroll mistakes.
When it comes to managing payroll, you may be using your own accounting software like QuickBooks or FreshBooks. This kind of accounting software offers the features necessary to comply with payroll regulations, but the overall process can be time consuming and complex as you hire more employees. It can be easy to miss things here and there, but a mistake, even a simple one, may result in hefty fines due to the IRS. You don't want to find yourself in legal trouble. Our articles about online payroll services can help you further understand the expenses behind processing payroll in house instead of outsourcing it.
In the end, you may find that online payroll services bring peace of mind and are cost effective because they help you avoid noncompliance issues and their associated fines. Purchasing accounting software is much cheaper and can save you money if you are confident in your bookkeeping skills. However, having a service that handles the reporting for you can save you both time and money when you aren't confident in your bookkeeping skills, or when you just aren't available to spend the lengthy time it takes to process payroll for multiple employees.
The Benefits of Using an Online Payroll Service
Being compliant with major laws and regulations like the Affordable Care Act (ACA) – which comes into play when you have 50 or more full-time or full-time equivalent employees – is one of the biggest benefits of having a dedicated company manage your payroll processing. These regulations typically require you to file certain forms, and if you don't file them correctly, you could incur fines. While compliance with the ACA is only required if you have over 50 full-time equivalent employees, other regulations, like paying your employees on time and correctly, are always required of you, regardless of how many employees you have.
These regulations and compliance laws are all important because they apply to each company, which is why online payroll services are useful for any company with multiple employees. However, there are lesser-known regulations and other processes involved with payroll that not every company handles on a regular basis. Payroll providers take care of these for you as well to keep things running smoothly.
Pay Distribution Options
All payroll services we profiled include three options for paying your employees: direct deposit, pay cards and live checks. If you pay employees by check, you can choose to distribute them in whatever manner you like. However, several states require employees to receive pay through direct deposit. If those employees don't have bank accounts, you can use pay cards. Instead of cutting a check or depositing money into a bank account, you can load paychecks directly to the pay card, which your employees can then use just like a debit or credit card.
The payroll service you hire knows the ins and outs of your state's requirements, and it can help you pay your employees in the correct manner. It's best that the provider you hire offers all three options so your employees can choose how they receive their paychecks.
The best payroll companies offer workers' compensation insurance with their services. All businesses are required by law to ensure employee compensation should anyone be injured while working. You can hire a third-party broker to handle this insurance for you, or you can have the payroll services take care of it for you. Companies like Intuit include workers' compensation as part of their payroll services, which means you won't have to hire a separate entity to cover you.
Integration with Other Business Solutions
Payroll is the last step of a long process. Gathering the important information for payroll can be complex, and many common business solutions integrate well with payroll companies to help the process run smoothly. For example, many time card software solutions automatically convert the hours employees worked into a CSV file. The payroll provider can then use these files to determine how much pay each employee should receive.
Most POS systems also integrate well with online payroll services, which is a big help if your company depends on tips as part of your employees' compensation. Likewise, integration with eCommerce and CRM solutions makes it easy for the payroll service to track sales tax and commissions. You need to accurately track and report both groups of data as part of your overall payroll responsibilities.
These are just a few examples of how payroll services can work with other business solutions you may already have in place to ensure you are reporting payroll properly to the IRS. Each payroll provider we profiled is willing to create a customized solution for any situation.
Value is More Than Just Price
Price is obviously a significant factor for any company looking to hire a professional payroll service, but value encompasses more than just price. Two companies may charge you the same amount every pay period to process payroll, but one company might offer more services than the other.
Value considers what services are included versus what services you would need to purchase separately. The services included with the package price vary greatly from company to company, but the best online payroll providers include nearly all services in their package pricing. For example, services like end-of-year processing and forms, direct deposit and check printing and stuffing are all important processes, and all payroll providers offer them, but some – like Intuit and MyPayrollHR – include most of them in their full-service packages, where others charge extra for them.
Comprehensive Administrative Support & Services Simplify the Process
Helpful and convenient administrative support is crucial for those times you need to resolve problems on your end in a timely manner so you avoid delays and costly fines. Therefore, consider how easy it is to reach the service's support teams.
In addition to great administrative support, it's important to know the company will perform services during payroll smoothly and without any errors. If either you or your provider makes a mistake in filing the proper forms or paying your employees, you can face huge fines from the IRS that accrue interest. Most payroll providers offer some sort of guarantee to ensure these mistakes aren't made on their end. These guarantees often cover both the incurred fines and the accrued interest. ADP goes an extra step and reimburses your payment for any pay period in which it made the mistake.
Once you have submitted your information to the service, most payroll providers take two business days to disburse funds. Exceptional distribution happens in 24 hours, which is how long it takes for ADP to process payroll and pay your employees in the manner they desire. Companies like OnPay include direct deposit, live checks and pay cards in the price of their full-service packages, whereas many other companies charge for printing and delivering live checks.
Reliable Administrator Portals Help You Avoid Mistakes
Either you or your accountant will be using an administrator portal, which can be a separate website or a secure login where you upload employee hours and other information, on a daily basis to ensure everything is running smoothly. As such, it's vital that the portal is stable and consistently operates without a hitch.
The security of the administrator portal is also very important, especially since the payroll company is handling you and your employees' hard-earned money. Only you and a list of authorized people should have access to your account information, and most companies require a two-step authentication process that includes being an authorized user as well as providing identifying information. Some companies, like Paychex, allow you to determine the number of steps for the authentication process.
The security of the payroll company's servers is also crucial. Each company we profiled has firewalls and security-monitoring techniques in place, but the best companies use 256-bit secure sockets layer (SSL) encryption to prevent hackers from stealing your information.
Simple Employee Portals Free Up Your Time
Your employees typically won't play a major role in your online payroll service, but they still need some access in the form of employee portals so they can view paystubs, paid time off, and other personal information.
The best payroll providers, like BenefitMall and APS, have the simplest employee portals and allow your employees to function independently when it comes to changing personal information and passwords. A good employee portal also allows your employees to change personal information at work without numerous approvals or complex paperwork. All of this helps free up your time because you won't have to deal with helping your employees make constant changes.
Good Support Helps You Avoid Headaches
Payroll is a time-sensitive process, and you don't want to have to pay government fines for not paying your employees on time. Support is an important factor in both the administrator and employee experience, and it starts with thorough training during the initial implementation phase of your payroll services. If you're not trained well from the beginning, you run a higher risk of providing your payroll service the wrong information. Each online payroll service we profiled provides administrator training, but the best companies provide more than basic training. For example, BenefitMall walks you through two of your own pay periods rather than just showing you how to do it, and Paychex sends a local representative to your office to train you in person.
Employee training is also important, even though the employee portals aren't as extensive as administrator portals. The best companies offer you and your employees some sort of walkthrough on using the employee portal. Most payroll companies only provide support for administrators. There is no employee-level support beyond training, so employees will need to direct their questions and support needs through you, not your payroll service.
Online Payroll Services Summary
If you're worried about tax compliance and avoiding hefty fines, finding an online payroll service can be a good move, especially if you're approaching the 50-employee mark, where you are required to comply with ACA.
Top performers provide the most services for the price as well as excellent administrator and employee support. Some payroll services specialize in certain industries, like SurePayroll, which can customize a plan for nannies and other household workers. If you're prefer local customer service, you might consider Paychex. This provider will send a representative directly to your office to get you set up, if there is an office available in your area.
Each online payroll provider can give you a customized quote quickly. This quote includes all the services included in each package. We advise getting quotes from all of the online payroll providers you are considering to better understand what they can do for your specific situation so you can make the best decision possible for your company.