Keep Track of Your Payroll

Everyone loves payday—except, that is, the payroll administrator. Paying employees (and contractors, and freelancers) is the most complex element of any accounting system. It’s also the scariest. Not only do you have to produce checks and direct deposits that are 100 percent accurate, but you also have to make certain that the underlying calculations—taxes and benefits and other withholding—are also correct, to the penny. Furthermore, you have to submit taxes and filings to the IRS and other taxing agencies.

Cloud-based payroll applications can help ensure that all of these obligations are met with precision and timeliness. I reviewed seven of the most popular: Gusto, Intuit Enhanced Payroll, OnPay, Patriot Software Full Service Payroll, Sage Payroll Essentials Plus, Square Payroll, and SurePayroll. All of these have been around for many years, except for Gusto and Square Payroll. And it’s Gusto that wins the Editors’ Choice again this year. It’s the one we recommend small businesses consider first. Sometimes a fresh start can be a real advantage.

Precision Is Paramount

If you’re still doing your company’s payroll manually, you’re well aware of how complex, exacting, and deadline-driven this process is. Your employees count on you to dispatch their paychecks and authorize direct deposits on scheduled paydays. They expect you to know how much to withhold for all the taxes you owe and the benefits you offer.

Taxing agencies can assess stiff fines if payroll filings and taxes aren’t received by the scheduled dates. Benefits providers can cut off services like health insurance if you fall behind on payments.

That’s an enormous amount of detail to track, especially if you’re trying to do it all on paper. Mistakes aren’t tolerated well by anyone involved.

Simplifying the Complex

Cloud-based payroll solutions can help you organize and automate this onerous task. They offer step-by-step wizards to guide you through the time-intensive process of creating records for employees and supplying the information needed for withholding. They let you establish your own payroll schedules. They do all the required calculations, and most actually submit your payroll taxes and filings to the appropriate agencies.

These sites walk you through each payroll run and tell you how much each run will cost you. They provide report templates. They offer online portals for employees that display current and historical paystub data. Not surprisingly, they’re equipped with generous support options. And they’re not overly expensive; they mostly run between roughly $25-40 per month for the base fee, and charge few extra dollars for each employee.

The benefits are obvious. You save time and minimize frustration. You don’t have to keep up with payroll tax tables nor deal with the myriad compliance issues associated with employee compensation. You can modify your records quickly, and you have instant access to the smallest details. You’re much less likely to make errors.

The Setup

Though each payroll site we looked at provides its own unique user experience, they all share similar structures. They begin with the setup process, which is by far the most time-consuming and detail-oriented element of paying your staff. Though the exact order varies, they all walk you through the pages of questions in an orderly, step-by-step fashion. They ask for information about your company, its address and Employee Identification Number (EIN). You’ll have to select your payroll schedule (weekly, semi-monthly, etc.) and name your payroll administrator.

If your business offers benefits like health insurance and retirement plans, you’ll name them and enter information about both the cost to employees and any company contributions. You must also create detailed records about each employee, like contact information, birthdate and Social Security number, salary or hourly pay rate, and number of allowances from the W-4 form. Since most of these sites submit your payroll taxes and support direct deposit of compensation, you’ll be asked for bank account information to make a connection.

You’ll also need to enter any payroll history that exists if you’ve already been compensating employees. This can be an arduous chore, one that may require assistance from the sites’ onboarding specialists.

If you offer additional payroll types like Paid Time Off (PTO) and sick pay, you can define your policies for accruing these benefits; the sites will keep track of them for you. Bonuses and commissions can also be paid during a regular pay run, or you can issue them by creating an “off-cycle” payroll. Need to include garnishments like child support on paychecks? These sites support such withholding. In fact, most offer custom pay types, so you can create your own—sometimes, when you’re in the middle of a pay run.

Running Payroll

Once you’ve completed setup, you generally can’t return to these dedicated setup tools, so get it right the first time. That said every service we’ve looked at has a comprehensive Settings section where you can modify and add to the payroll information you’ve already entered.

Setup done, you’re ready to run your first payroll. This is the easy part. Though there are some differences, these sites function similarly during the actual pay run. When you launch a payroll, they display a list of employees, along with their pay rates. You first check to make sure the pay period and pay date are correct. Then, you simply enter the number of hours worked (where applicable), in the appropriate pay type boxes (regular, overtime, vacation, and so on). Most sites let you add dollars for other earnings types and reimbursements on this same page.

Once you complete everything necessary on that screen, you advance to the next to see a preview of your payroll. Everyone handles this slightly differently, but you’ll be able to see each employee’s gross and net pay, withholding for taxes, benefits, and their net pay, along with any company contributions. You should also see on this page—or the next—the total amount of money the site will take from your bank account for direct deposits and taxes, along with the exact date it will be debited.

After you approve your payroll, you’ll have access to additional tables or reports that display absolutely every detail of the pay run.

If you have few employees or a very simply payroll, it shouldn’t take more than a few minutes to do the actual processing. Depending on which site you’re using, you may be able to let payroll process automatically (assuming, of course, that there are no changes from the previous run).

What’s Not Included

Though many of these sites offer HR support in addition to payroll, we only looked at their payroll capabilities for these reviews. Zenefits Z2, however, which recently won an Editors’ Choice for Benefits Administration, offers payroll processing, but it’s considered an add-on. In fact, Zenefits supports integration with other payroll websites in addition to providing its own.

Unlike the other solutions reviewed here, you can’t isolate Zenefits’ payroll capabilities, because setup and administration of elements like benefits and time off are handled on other parts of the site. Everything is intertwined, which can be a good thing: You only enter employee data, for example, once, and it’s used throughout the website.

The core payroll features are handled in an isolated section of the website. Here, you can view your dashboard and timeline, work with employee records, run a payroll, and link to the Time Off and Time and Attendance add-ons. You can also set up taxes, pay schedules, and pay types. But you have to visit other areas of Zenefits to set up benefits and deductions.

Zenefits offers an exceptional user experience and an impressive set of tools for managing benefits and payroll. But if you’re looking at it as a payroll-only solution, there are better options, like Editors’ Choice winner Gusto.

In larger companies, payroll and human resources/benefits administration are usually handled by separate departments. In your small business, though, both of those responsibilities may land on your desk or that of another employee or two. Fortunately, there are several online HR services that integrate with payroll applications to manage tasks like:

To learn more about these and to see which ones were designated as Editors’ Choices, click the links above to read roundups of services dedicated to those services, or go straight to our HR software roundup to read about services that round up all of the above.

Many Similarities

The Payroll services reviewed here all come from reputable companies with years or even decades of experience behind their tools. I wouldn’t hesitate to trust any of them with this complex task. They all share similar parts, though their user experiences are very different, and each has a slightly different set of extras.

They’re all designed for general small business use, though SurePayroll goes above and beyond by offering versions designed specifically for use by, for example, restaurants, nonprofit organizations, and churches. Sage Payroll Essentials Plus supports households and nonprofits in addition to more typical companies.

But Gusto takes the top spot again this year. It hits the sweet spot for payroll, offering enough functionality to please a wide variety of small businesses, while not overwhelming with additional features and fees. Its user interface and navigation system are among the best, and its new three-tiered pricing structure gives potential users new options. In a tough group of competitors, it’s the best choice.

And once you get your payroll running smoothly, take a look at our online accounting services and tax software roundups.

  • Gusto Review


    MSRP: $39.00

    Bottom Line: Gusto offers a solid set of payroll features, an unusually well-designed user interface, and impressive innovation and automation. It’s our top payroll choice for young, small businesses.

     Read Review

  • OnPay

    OnPay Review


    MSRP: $39.95

    Bottom Line: OnPay has improved features, usability, and flexibility since our last review. It’s not quite the cream of the crop, but this excellent payroll service has risen up from the middle of the pa…

     Read Review

  • SurePayroll

    SurePayroll Review


    MSRP: $30.95

    Bottom Line: SurePayroll is a powerful, flexible, and customizable way to pay your staff, and it offers good support and top-notch reporting. It’s also expensive, however, and its interface is dated.

     Read Review

  • Intuit Enhanced Payroll

    Intuit Enhanced Payroll Review


    MSRP: $39.00

    Bottom Line: Intuit Enhanced Payroll is a capable and reliable service for paying your employees, but it hasn’t kept up with the the competition in terms of design or filing payroll taxes.

     Read Review

  • Patriot Software Full Service Payroll
  • Sage Payroll Essentials Plus

    Sage Payroll Essentials Plus Review


    MSRP: $49.95

    Bottom Line: Sage Payroll Essentials is affordable and detailed, and it offers a rich collection of reports, too. Unfortunately, its unfriendly interface complicates the process of paying your staff.

     Read Review

  • Square Payroll

    Square Payroll Review


    MSRP: $25.00

    Bottom Line: Square Payroll checks all the basic boxes for paying your staff, while offering an exceptional user experience. But this nascent service lacks the depth and customizability of its competitor…

     Read Review



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