Best Payroll Services in 2022
The Best Payroll Providers
- Payroll processing is necessary to ensure employees and independent contractors are paid what they are owed on time.
- Online payroll software can improve a company's payroll processing, automate payroll tax preparation, and generate useful reports that offer decision-making support for employers.
- As your business grows, your online payroll processing needs may evolve, eventually requiring a broader HR software suite to manage your organization.
- This best-picks page is for small business owners who want to improve their ability to process payroll for employees and 1099 contractors.
Payroll is arguably the largest expense for businesses, and managing it can be a daunting task. The process can be time-consuming, and errors can result in both unhappy employees and fines. To ease the burden, many small businesses are turning to online payroll services. These services handle all of a business's payroll processing and related tax filings and payments.
With so many to choose from in 2021, finding the service that suits your needs can be tough, so we researched more than 70 of the top payroll companies to help you find the best fit for your business. If you are interested in learning more about payroll services, you can check out our guide to choosing a payroll service.
OnPay Payroll Software: Best for Very Small Businesses
OnPay's online payroll services allow small businesses to run an unlimited number of payrolls each month and pay employees by direct deposit or paper check. The online system is user-friendly and manages paid time off (PTO).
When you own a very small business, time is especially precious; running your own payroll would take you away from your business, and a large and complex payroll platform could work against your business's needs. OnPay meets very small businesses at the right level with an easy-to-use solution that emphasizes simplicity without sacrificing value.
OnPay customer service reps are available to help you every step of the way. You can enjoy an intuitive platform that breaks payroll down into a few easy steps. It's simple and straightforward to add employees, set statuses, and run payroll.
One of the best features OnPay offers is the ability to run payroll an unlimited number of times. This is especially useful for businesses that pay employees on a weekly basis, or pay freelancers frequently for various small projects.
OnPay includes a useful payroll tax and benefit deduction withholding system. OnPay also offers payroll tax preparation, tracking up-to-date forms and information from local, state, and federal governments. The company will cover the cost of any fines that are due to errors in your filings or payments.
OnPay offers one pricing plan for businesses of all sizes. The base fee is $36 per month, plus $4 per employee per month. Independent contractors or freelancers count as employees under this model, so you will be charged for any applicable 1099 payments you make.
OnPay also charges a fee for mailing year-end tax forms. It can prepare downloadable W-2s and 1099s for free, but if you want OnPay to send hard copies directly to your employees, you'll pay $5 per recipient plus shipping costs.
February 2021: OnPay has upgraded its reporting capabilities, allowing users to create custom expense reports. The reporting tool offers the ability to add up to 50 data points to key reports, reorder columns to emphasize important data, and save multiple views for different company stakeholders. Businesses that have taken advantage of coronavirus-relief programs can also use OnPay's reporting features to account for their expenses.
Paychex Payroll: Best for Larger Businesses
Paychex also offers multiple payment methods, including direct deposit, paper checks and prepaid debit cards. Every payment method your business uses with Paychex can be branded, keeping your company top of mind for any suppliers or other parties you pay.
Paychex is a cloud-hosted system, so it's accessible online. You can also use the Paychex mobile application to manage your payroll on any iOS or Android device. Using Paychex is as easy as entering your payroll information (such as salaries, hours worked and pay rates) and submitting the payroll for processing. Paychex also offers employee self-service, allowing your workers to log in to the system and see their own pay stubs and year-end tax documents.
Paychex recently announced a new feature, Paychex Pre-Check, that allows employees to review their paystub prior to payday. Employees are notified on their communication channel of choice, such as their email, smartwatch or smart speakers, when their paystub is ready for review. This is designed to help ensure everything is accurate before checks are actually paid out.
Paychex recently added a new labor cost tool to the Paychex Flex platform. The new tool gives users a quick and instantaneous look at their total payroll costs. Further, business owners and financial managers can see how events like future raises or overtime will impact overall workforce expenses.
For those working hard to retain top employees, Paychex also offers a total compensation summary for employees. In addition to what they receive in their paycheck, this report details their total compensation. This may include health insurance contributions, retirement contributions, bonuses and other benefits. This report gives employees a clear picture of precisely how much they are receiving from their employer.
Paychex recently unveiled a self-service onboarding tool that allows new employees to quickly set up their payroll preferences. From the Paychex platform, new employees can easily sign up for direct deposit, complete their W-4 form, and digitally make any bank and tax selections they require.
The Paychex platform also gives employers the ability to track the vaccination status of their employers. This may be especially helpful as the U.S. is in talks to mandate larger employers to require their employees to be vaccinated. The Flex platform can send employees notifications asking them to upload proof of vaccination. In addition, unvaccinated employees can submit results from COVID-19 tests.
Paychex offers multiple pricing plans that are suitable for businesses of various sizes and needs. Pricing for each plan is based on your specific needs.
- Go: The Go plan is the most basic, lowest-cost plan Paychex offers. It includes payroll processing and payroll tax preparation services, as well as time and attendance tracking and new-hire onboarding reports.
- Flex Select: The Flex Select plan expands on the offerings of the Go plan by adding access to a dedicated payroll specialist to advise your business. It also includes pre-employment screening, onboarding support, wage garnishment services, labor compliance poster kits, and the option to pay employees with paper checks.
- Flex Enterprise: Flex Enterprise adds custom analytics, custom reports and HR administration tools to the package. It is designed for larger organizations with sprawling HR departments, offering the most granular control over every aspect of your business's HR administration. This gives large companies the ability to manage recruiting, hiring, onboarding, compensation, benefits, and offboarding all through Paychex's HR platform.
Gusto Payroll Software: Best for Added HR Services
Gusto handles all payroll and payroll tax responsibilities for both W-2 employees and 1099 freelancers and contractors. The cloud-based system is easy to use and offers a variety of valuable features, including direct deposit, an autopilot tool, new-hire reporting and detailed payroll reports.
A standout component of this payroll service is its vast array of HR tools and features in some of the higher-priced plans. These features include access to HR professionals who can provide advice and guide you through a litany of HR-related issues.
Gusto offers four service plans, which range from $19 to $149 per month plus $6 to $12 per employee per month.
- Core: This is the lowest-cost Gusto plan, with a starting base fee of $19 per month, plus $6 per employee. The base fee increases to $39 six months after sign-up. This plan includes payroll processing services, an employee portal, health benefits, workers' compensation administration, and management tools for paid time off (PTO).
- Complete: The Complete plan costs $39 per month, plus $12 per employee each month. It builds on the Core plan with new-hire offer and onboarding tools, more complete PTO management, and employee directories and surveys.
- Concierge: The Concierge plan is the top tier of Gusto's offerings, starting at a base fee of $149 per month, plus $12 per employee per month. It builds on the Complete plan by adding HR on-demand services (i.e., HR expert guidance upon request). It also includes a dedicated support team that is assigned solely to your account and knows your business well.
- Contractor: Gusto also offers a contractor-only plan for employers who only work with independent contractors or freelancers. This plan has no base fee; it simply charges $6 per contractor paid per month. You can pay contractors as often as you like, generate 1099s, and allow freelancers to update their information in the employee portal.
Gusto makes it easy to bring on employees all across the country and pay contractors from around the world. The Gusto platform now handles tax registration for employees in all 50 states. This ensures a smooth onboarding process when bringing on remote employees from anywhere in the U.S. It also makes it simple to get current employees, who may be moving to a new state, quickly registered with the appropriate state and local tax authorities. Additionally, the platform now supports contractor payments in more than 80 countries. These additions to Gusto's services help support the current work environment, with more employees working remotely and more companies hiring outside contractors for various projects.
Gusto makes running payroll easy and requires minimal training for users to become proficient with the software. To run payroll, all you need to do is log in, click the "Run Payroll" tab, and provide the requested information. When this is complete, simply click "Submit Payroll" and your employees (or contractors) will be paid. Most of Gusto's functions are similarly easy to navigate.
ADP Payroll Software: Best for Complex Businesses
ADP is a scalable platform that has all the tools necessary for a complex business, such as one that operates in a highly regulated industry or across state or even national borders. ADP works for many industries and verticals, making it a great tool for businesses with complicated or wide-ranging needs.
This company offers specified payroll platforms for small, midsize and large businesses. Its Run platform is designed for businesses with fewer than 50 employees, while its Workforce Now platform is for businesses with 50 to 999 employees. Organizations with more than 1,000 employees have various options, including the Enterprise platform.
ADP offers four pricing plans for customers:
- Essential: This plan includes an employee self-service portal, direct deposit payment, prepaid debit cards and paper checks. It also offers onboarding and payroll reports, other new-hire onboarding tools, and a small business marketing toolkit.
- Enhanced: This plan includes everything in the Essential plan, plus state unemployment insurance management and the option to have ADP sign and stuff paper checks for you. You also have the option to run background checks on new hires and to post new job openings on ZipRecruiter.
- Complete: The Complete plan includes an employee handbook wizard, job posting and applicant tracking, five background checks per year, HR forms and documents, and HR training and toolkits. Your business will be assigned a team of HR experts who can offer guidance on HR-related issues and answer your questions.
- HR Pro: The HR Pro plan includes HR helpdesk support, more employee handbook support, employer or employee training, and sexual harassment prevention training. Legal assistance from Upnetic is also included.
The breadth of ADP's services alone makes it a standout payroll provider. Payroll processing is especially flexible with ADP; you can manage it on your desktop or mobile device (iOS or Android) as well as over the phone. ADP automates payroll tasks such as calculating an employee's paycheck based on their wages and time off, saving you time and reducing the likelihood of human error.
ADP's payroll software can easily integrate with its other services, like its time and attendance software. If you're interested in a full suite of business solutions, ADP gives you several different packages to choose from.
ADP RUN users also can tap into the platform's smart technology to prevent potential payroll errors. With the help of artificial intelligence and machine learning, the platform can quickly identify possible mistakes in payroll data and alert administrators so they can correct the issues before payroll is processed. In addition to spotting possible errors in payroll data, ADP allows users to receive alerts from state and local jurisdictions about potential payroll tax errors. The alerts include suggestions on how to correct the issues.
ADP Run users now have access to a new time tracking and scheduling solution. Available only to businesses with fewer than 50 employees that are using ADP's Run platform for their payroll, the Timekeeping Plus Scheduling solution gives businesses greater insight into who is working and when. The system allows employees to clock in and out using facial ID. The dashboard gives those in charge a quick look at how their labor is being used, who is missing work and who is working overtime. The scheduling tools allow managers to create and share schedules with employees, while employees can use the system to claim open shifts and let their supervisors know when they are unavailable.
Those on the Workforce Now platform can pay employees who are working overseas. The service allows businesses headquartered in the U.S. and Canada to manage payroll in multiple countries with an integrated system of record. This can be especially valuable to employers working with overseas employees, as it helps eliminate any confusion that may occur when using multiple systems.
Rippling: Best for Ease of Use
Rippling's online payroll software has a user-friendly interface that requires little to no training for new users. Payroll processing is so simple that it can be run in 90 seconds – a testament to the many different sources from which Rippling pulls data. It works with more than 400 applications to improve your payroll processing, payroll tax preparation and accounting.
Neatly organized on the dashboard are key metrics, like time worked by employee, paid time off and total labor expenses. You can manage direct deposits directly in Rippling, or you can use paper checks – whichever method your employees prefer. Rippling automatically deducts tax withholdings according to an employee's filing status.
Plans start at $8 per user per month, but custom quotes are available for businesses with unique needs. Rippling requires all payroll customers to be on its employee management platform, which includes other HR tools that cover areas like onboarding, benefits administration, promotions, offboarding, time and attendance, and device management capabilities.
Rippling automatically compiles the necessary data for payroll tax preparation. The system automatically identifies applicable local, state, and federal forms, pulling in relevant data to fill much of them out automatically. You can then file and remit payments directly through Rippling. If your business operates across national borders, Rippling offers international payment support.
You can also use Rippling to track employee paid time off and create a PTO policy for its accrual and use. In Rippling, a PTO request automatically generates when payroll is run, requiring no additional action from the approving manager.
Reporting is critical in payroll software, and Rippling delivers on this as well. With easily understandable visualizations like donut charts and bar graphs, the software allows you to customize your reports and review virtually any metric you choose. Rippling's data-reporting ability is particularly powerful because it integrates with so many other software platforms.
An added benefit of Rippling is its integration with Carta. This integration gives employers a clear view of an employee's total compensation when equity is involved. With equity, it can be challenging to understand just how much employees are being compensated now, as well as how much their compensation will be worth in the future once the equity fully vests. The Carta integration shows it all on one platform.
For companies that want an even closer partner, Rippling offers a PEO service in addition to its employee management platform.
Square Payroll: Best for Payroll Tax Preparation
You may know Square as a payment processing platform, but the company also offers an online payroll service. Square Payroll is easy-to-use software with no frills. It has all the features we looked for in a payroll software company, yet it retains the lightweight feel for which its payment processing counterpart is so well known.
You can use Square Payroll to process payroll for W-2 employees and 1099 contractors. It streamlines payroll by automating the preparation of tax forms based on the data that already exists within your system. It also offers a straightforward payroll processing routine, making it easy to ensure all types of employees are paid promptly.
Intuit QuickBooks Payroll: Best for Small Businesses
Intuit QuickBooks Payroll provides small businesses with scalable payroll services that easily integrate with QuickBooks. The service collects and reports all payroll taxes and offers a variety of helpful tools. It is available in several plans with a range of services and prices.
Among the companies we reviewed, QuickBooks Payroll provides some of the most flexible payroll plan options. The services are broken down into Online Payroll and Desktop Payroll, each of which can have QuickBooks' accounting software added into it. This gives you the opportunity to get more services in one plan.
While some plans focus solely on payroll processing, others include a variety of human resources services, which are valuable for small businesses that don't have the luxury of an in-house HR team. Each plan includes a 30-day free trial.
These are the Online Payroll pricing tiers:
- Core: This is the lowest-cost plan at $45 per month, plus $4 per employee. It includes health benefits, workers' compensation management, next-day direct deposit and automatic payroll options.
- Premium: The Premium plan costs $75 per month, plus $8 per employee. It includes same-day direct deposit, access to an HR support center, mobile time tracking and expert setup review.
- Elite: The Elite plan costs $125 per month, plus $10 per employee. It includes customized setup, project tracking, and a tax penalty protection of up to $25,000. Elite plan subscribers also receive a dedicated HR specialist who can offer guidance as needed.
An added benefit of the Online Payroll platform is access to QuickBooks Early Pay. Available soon, the service will give employees the ability to apply for funds that can be used to help cover any unexpected expenses they may face. Early Pay, which will be included in QuickBooks Online Payroll for no additional cost, will let employees receive funds instantly or within two business days.
These are the Desktop Payroll pricing plans:
- Basic: The Basic plan is for payroll processing only. It includes direct deposit, printable paychecks, support for W-2 and 1099 employees, and live customer support. It costs $29 per month, plus $2 for each employee.
- Enhanced: The Enhanced plan includes state and federal payroll tax preparation, but the responsibility for making payments on time remains yours. This plan also includes a printable version of all year-end tax forms for employees. It costs $45 per month, plus $2 per employee.
- Assisted Payroll: The Assisted plan calculates, files and pays payroll taxes for you. It also provides a tax guarantee that your payroll taxes will be paid on time and accurately. The company will set up all your employee information in its system and handle the preparation and payment of all payroll taxes. The company will also cover any costs of fines or penalties associated with delays or errors. This plan costs $109 per month, plus $2 per employee.
Because of these flexible payroll options for small businesses, we chose QuickBooks Payroll as the best payroll service for small businesses.
Deluxe: Best for Consultative Approach to Payroll
In addition to its online payroll software, Deluxe offers a customer service team to provide support whenever you need it. This team is dedicated to your account, so it will know your business and its needs inside and out, helping you to improve your payroll department and realize new efficiencies.
Pricing is fully custom and depends on the features and services your business requires and the size of your business. Deluxe develops a singular approach for each client, given the consultative nature of its team, so it can be difficult to understand the full scope of services Deluxe offers. To understand exactly how Deluxe can fit into your workflow and budget, you'll need to contact a sales representative for a custom quote.
Zenefits: Best Payroll Module in HR Software Suite
Zenefits offers easy-to-use payroll software that enables you to run payroll in four easy steps. Making manual adjustments, such as including bonuses, is also easy when running payroll. Zenefits Payroll offers unlimited payroll processing, wage garnishment support, direct deposits, tips reporting, multiple pay schedules and rate tables, 1099 contractor payments, general ledger reports, and mobile pay stubs.
Zenefits Payroll seamlessly integrates with other Zenefits HR modules, including Time and Scheduling, Benefits, and HR. Zenefits Payroll works best in this environment, because these integrations expand its functionality and it leans heavily on the data in other modules to run payroll.
Paycor: Best for Employee Self-Service
Paycor offers very easy-to-use online payroll software that has an employee self-service portal for reviewing compensation data and updating personal or financial information. Employees can also use the portal to request paid time off, monitor their payments, review their benefits, and access their pay stubs.
Paycor offers three pricing plans, each with a flat monthly rate. This is somewhat unusual in the online payroll software industry, where most companies charge a monthly base rate plus a monthly per-employee fee. Paycor's model might prove cost-prohibitive for smaller businesses, but it could save midsize and large businesses some money as they continue to expand.
COSTS TO IMPLEMENT PAYROLL SERVICES
Small business payroll services typically have a monthly or per-payroll cost structure. With monthly plans, you pay a base fee and a per-employee fee. Base fees are usually $30 to $150 per month, and per-employee fees range from $2 to $15 per month.
With a monthly fee structure, you can run payroll as often as you like for one flat fee. With a per-payroll fee structure, companies charge anywhere from $10 to $100 per payroll run, plus per-employee fees of $2 to $15 per month. In addition, some payroll companies charge extra for year-end tax service and initial setup fees.
Most online payroll services offer free trials of one to two months, giving you the chance to try out the software for at least a couple of payroll runs to see if it meets your needs.
HOW DO PAYROLL SERVICES WORK?
Payroll services handle all of your payroll processing and payroll tax needs. An online payroll service calculates how much each employee should be paid based on their pay rate and required deductions.
Most employees have a choice to be paid by direct deposit, paper check or prepaid debit card. It is important to note that the money the payroll service uses to pay the employees comes out of the employer's bank account. Typically, the money is withdrawn from the business's account on selected days before the final payments are made to employees.
The other critical task payroll services handle is ensuring a business's adherence to payroll tax requirements. Payroll services withhold the proper amounts from each employee's paycheck and determine how much payroll tax the employer is responsible for. The payroll service also fills out and files the necessary paperwork and makes the payroll tax payments directly to the proper federal, state and local agencies.
Payroll services can also handle other tasks, such as filing new-hire reports with the state, managing PTO and overseeing benefits administration.
PAYROLL SOFTWARE FEATURES
Payroll services offer a variety of features and tools that streamline payroll processing for small businesses. Here are some of the most valuable features:
- Unlimited payroll processing. Some payroll services allow you to run payroll as many times as you want each month, giving you the freedom to determine the pay periods that make the most sense for your employees. This flexibility also lets you pay independent contractors whenever they complete a project without paying extra for additional payroll runs.
- Payment options. Most online payroll services allow you to pay employees by direct deposit, paper checks and prepaid debit cards.
- Payroll tax. Online payroll services determine how much your business owes in payroll taxes; complete and file the paperwork with the appropriate federal, state, and local tax agencies; and make the required payments.
- Year-end tax forms. Payroll services prepare all of the necessary year-end tax forms for your workforce, including W-2 and 1099 forms, and provide them to your employees and independent contractors.
- On-demand pay. Some payroll providers offer on-demand pay services that allow employees the flexibility to choose when they are paid. There is still a regular pay schedule (bi-weekly, semi-monthly, etc.), but employees can get paid before their actual payday if a need arises. In these situations, employees are only paid for the days they have already worked within that pay cycle.
- PTO management. Some payroll services handle some or all of your PTO management. This includes tracking how much paid time off employees earn and use, as well as allowing employees to request time off and managers to approve or deny those requests.
- Employee self-service. The software has an online portal that employees can access to view their pay stubs and year-end tax forms.
- New-hire reporting. Many payroll services can complete and file the required paperwork each time you hire a new employee. This paperwork needs to be filed in the state where your business operates.
- Mobile access. Most payroll services provide either a dedicated mobile app for iOS and Android devices or a mobile-friendly website, ensuring the payroll software is accessible from smartphones and tablets.
- HR services. In recent years, many payroll services have started offering additional HR services, such as onboarding tools, employee benefits management and HR compliance. Additionally, some payroll services give your business access to a dedicated human resources professional who can help you navigate HR issues.
FREQUENTLY ASKED QUESTIONS
Here are the answers to some of the most common questions about payroll software and services.
What is online payroll software?
Online payroll software and online payroll services are essentially the same thing. The payroll software is the cloud-based solution provided by the online payroll service company; in other words, it's the interface you use to run the payroll and add new employees to the system. Most online payroll software is easy to use and allows you to process payroll in minutes.
What other benefits does payroll software provide?
There are several big benefits of using comprehensive online payroll software. One major plus is its efficiency. You don't have to hire someone to handle all of your payroll needs, because pretty much anyone can use the software. In most cases, all you need to do when running payroll each pay period is to enter the hours each employee worked and any bonuses or commissions they earned. The software does the rest for you: It calculates the pay amounts, withholds the proper deductions, and automatically deposits the money into each employee's bank account.
Another benefit is that the payroll company takes care of the tax filings and payments for you. Most offer a tax guarantee, so if the payroll service makes a mistake when filing or paying your taxes, it will fix the problem and pay any fines you incur.
What type of payroll service is right for my small business?
When you're choosing an online payroll service for your small business, there are several factors to consider. First and foremost, make sure it can handle all of your payroll and payroll tax needs. Can you run payroll as often as you like? Will the service make the deductions you need? Does it give your employees self-service access?
Also consider whether the payroll solution is easy to use. The online interface should be simple to understand, and it should allow you to run payroll in a matter of minutes.
Depending on your business's needs, you may benefit from a payroll company that offers additional services, such as a time and attendance system or HR solutions.
What is unique about comprehensive payroll companies?
Comprehensive payroll companies do much more than prepare your business's payroll; they also handle your payroll tax needs, manage your employees' paid time off, report your new hires to the proper agencies, and offer workers' compensation insurance. Many comprehensive payroll solutions also offer HR management, benefits administration, time and attendance services, and 401(k) and college savings programs.
Why are payroll services important for small businesses?
Many small businesses don't have a dedicated HR team that knows the ins and outs of payroll, so they rely on payroll companies to manage those responsibilities for them. They depend on these services to ensure that their employees are paid properly each month and that their payroll taxes are filed and paid appropriately.
Online payroll services give small businesses the peace of mind that, with just a few clicks, their employees will get the money they are owed and the proper payroll taxes will be withheld. This way, you don't have to worry about whether you filed the tax documents correctly and are paying the right amounts. In fact, online payroll services are so confident in handling these tasks that most services offer an error-free guarantee.
What's involved in implementing payroll software?
It doesn't take a lot to get payroll software up and running. Once you prove your business is legitimate, you can connect your business's bank account to the payroll service. Next, you enter your employees' information. In addition to the basics – including their names, addresses and Social Security numbers – you must input their pay rates and withholding information. Employees who want to be paid by direct deposit can enter their banking information in the system's online portal.
With that information, you can set your pay schedule and start processing payroll. Although it's easy to enter the details yourself, some payroll services handle it for you. Some charge an additional fee for this, while others include this service in their base fees.
Do payroll service providers offer mobile applications?
Yes, most payroll providers offer mobile apps for iOS and Android devices. Most of these apps allow administrators to run payroll, review past payroll runs and pay payroll taxes. Additionally, employees can use the mobile apps to review their pay stubs, pay history and PTO accruals.
How long does payroll take to process?
This varies by payroll provider, but many payroll services complete the process within two days. This means that payroll administrators need to submit the final payroll numbers two days before payday.
Are there any free payroll software solutions?
There are several free payroll software solutions, including Payroll4Free.com, Wave Payroll and eSmart Paycheck. However, before choosing a free program, make sure it meets your company's basic needs. A free program is great for a business that's just starting out; it can help you manage tax calculations, wage garnishments, and Social Security and benefits deductions. However, when using a free service, you may have to sacrifice a few features, like customer service or security tools.
Should you use a payroll service or hire an accountant?
You should hire an accountant if you need help managing the collection and reporting aspects of payroll processing. Accountants can analyze your payroll and provide valuable guidance for your business.
However, hiring an accountant can be expensive. The average hourly fee for an accountant is $33.89 per hour, and certified public accountants charge an average of $160 to $275 per hour. Payroll services, by comparison, usually cost about $29 to $150 per month, with an additional fee of $2 to $12 per employee per month.
How can you save money on payroll?
To save money on payroll, consider outsourcing your payroll tasks. When managing it yourself, you may not do it correctly or on time – and mistakes or late processing can result in hefty penalties and fines. You may also consider looking for a free payroll service. However, most free payroll services don't offer all of the features and tools paid offerings do.
Using a time and attendance system is also a way to save money on your payroll, because it helps ensure you aren't paying employees for time they didn't work. When using a paper timesheet, employees can easily add a few minutes that they didn't actually work. Paying employees for those few minutes might not seem like a big deal, but if this becomes a habit, the costs can really add up. A digital time and attendance system forces your team to input exact times, which keeps you from overpaying your staff.
What are unpaid payroll tax penalties?
Unpaid payroll tax penalties apply when an employer fails to pay the Internal Revenue Service the proper amount of payroll tax funds they owe. Failure to complete Form 941 or to provide proper documentation, like W-2s or 1099s, is another problem. To avoid fines, you also need to make sure your deposits are on time.
What is an example of a payroll tax?
An example of payroll tax is the Federal Insurance Contributions Act (FICA) tax. This is a mandatory payroll deduction that employers pay to the IRS to cover Social Security retirement benefits and Medicare for employees.
What do you do with unclaimed paychecks?
If you are in possession of unclaimed paychecks, this does not mean you get to keep them. According to escheat laws, unclaimed paychecks become abandoned property and must be signed over to the appropriate state's treasury agency after a certain amount of time. This means that, if someone who works for you never claims their paycheck, you need to return it to the state where that person last worked. When submitting these documents to the appropriate agency, be sure to disclose all of the attempts you made to contact the employee about their check.
What is a pay period?
A pay period is the recurring length of time during which an employee's wages are calculated for payment. Pay periods can be weekly, biweekly, semimonthly or monthly. Learn about the pros and cons of each schedule and issues to keep in mind so you can choose the best schedule for your business.
What is the difference between payroll and salary?
Payroll is the system a company uses to record wages (and salaries), pay employees and track payments (and the payroll taxes you've paid). A salary, on the other hand, is a fixed, consistent payment, usually listed as an annual figure, that you give to specific employees. Learn whether it's best to pay your employees a salary or an hourly wage.
