Online payroll services all provide essentially the same services though there are some that only prepare tax filing returns in signature ready condition and provide them to the employer for actual filing. Some also offer the option of filing the returns on the employer s behalf or just preparing the forms. Some also just give notification of required deposit amounts and dates rather than making the deposits.

Choosing an online payroll service then comes down to finding a pricing plan that best meets a specific business' needs and customer service. Because charges are based on formulas that each payroll service uses, it s not possible to say categorically that one is less expensive. The details of each individual business have to be considered in arriving at specific pricing. Also be careful of additional costs that may be applicable beyond the standard payroll processing fee. Some providers include essentially everything in their base price while other add costs for things such as direct deposit, new employee reporting or W-2 processing as they become needed.

The other issue that separates the best from the rest is customer service. All claim to provide optimal service but the reality is that some outshine the others. Our reviews point out the customer service champions as we experienced them, but ultimately, each business will have to contact the payroll providers for themselves to compare. We suggest perusing our reviews of Intuit Online Payroll and ONPAY as well as other providers that seem to fit the bill as an initial guide then contact your preferences for the final decision. At TopTenREVIEWS We Do the Research So You Don't Have To. 

Let the Accountant Do It

Even the smallest of businesses tend to need outside help when it comes to administrative chores such as accounting and payroll. There are just too many different rules to keep track of and they change frequently. Also, if a business owner or manager is spending time on such ancillary tasks, he isn t spending where it really needed on making the business prosper.

That s where bookkeepers and accountants come into play. Businesses have been transferring these functions to outsiders for a very long time and though outsourcing has become a dirty word in these difficult economic times, this is one group of functions that really lends itself to getting professional help. By transferring accounting work generally, and payroll processing specifically to someone else, both employer and employee are freed to make the business work and a specialist can make sure that the myriad administrative, technical and legal details are handled properly. Even the smallest of businesses have recognized this necessity.

Technology to the Rescue

Though tough to argue with the logic of having a professional take care of payroll work, paying for the service can be fairly expensive. As the personal computer became ubiquitous, among the first, and still most popular, applications were accounting programs. They ve become more and more versatile and easy to use and most businesses now perform at least some of their accounting work, including payroll, using this type of software. 

Be that as it may, the software in and of itself isn t the answer to the greatest payroll pitfall of them all, namely filing quarterly and annual federal, state and often local returns and making the obligatory deposits. Even businesses that use payroll software often turn over this function to an outside payroll service.

Online Payroll Services Take Center Stage

Online payroll services allow businesses of any size to easily enter payroll information each time a payroll needs to be processed. Once set up, generally only information that has changed from one payroll to the next needs to be entered. Then with the click of a mouse, information is transmitted securely over the internet to the payroll service. They make all the necessary calculations of gross pay as well as mandatory deductions like federal and state income tax withholding and FICA. They also make voluntary deductions like insurance premiums and contributions to retirement plans and Flexible Spending Accounts. Then they provide direct deposit of net pay into employees  bank accounts, print checks and forward them to the employer for distribution, or feedback the necessary information for the employer to print them locally.

The online payroll services also file all federal, state, and when required, local quarterly and annual tax returns and make required periodic deposits to accounts for payroll taxes withheld, employers  contributions to FICA, unemployment insurance and workers  compensation funds where required.

The top performers among online payroll services make exporting payroll data to other accounting software packages nearly automatic eliminating the need for duplicate data entry as well as the risk of error.

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