Choosing the right payroll software is a critical component of running a successful business. The software you choose should help your internal compensation processes run smoothly, saving you time and money. It should also help to enhance your employee experience. And this is vital given that, according to a study conducted by Career Builder, 78% of Americans are living paycheck to paycheck, so they cannot afford to wait for late payments.
But how do you know which software is best for your business?
There are a few key factors you need to consider, including the features it offers, if it can be integrated with your existing platforms, and whether or not it aligns with your budget.
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What is payroll software?
Payroll software is a form of people management software, also known as an HRIS. Put simply, it is an on-premises or cloud-based HR SaaS application that you use as part of your human capital management strategy in order to manage, maintain and process payments to employees at the end of each payment period.
Managing payroll is about so much more than simply calculating paychecks, though. You also need to take into account tax compliance, onboarding new employees onto the system (and offboarding leavers), reporting, storing personal employee data, and planning budgets and future costs. This means that when it comes to setting up payroll for small business, the right HR solution has the potential to transform your HR processes so that your company works more efficiently and effectively. It can also help to ensure you stay compliant with tax laws and other employment regulations. You can, of course, do all this manually, but the right payroll software for small business can streamline your processes, enabling you to focus on more strategic tasks for the benefit of your overall company goals.
Here are a few other benefits of using payroll software:
- Work out payroll calculations and deductions quicker
- Generate accurate payslips
- Calculate bonuses, expenses, holiday pay, etc with minimum effort
- Automated reporting features
- Increased fiscal compliance
- Secure storage of payslips and employee files
- Features for accurate expense management
- Access to reporting and predictive analytics features
- Integration with existing platforms such as an employee clock-in system, onboarding software or applicant tracking systems
Payroll software functions
Now that we’ve seen what payroll software is, let’s take a look at some of the features you should be looking for in a payroll software services solution. The right solution should enable you to manage all the features we’re about to see, with the right HRIS training, of course.
Managing and processing payroll
The most critical feature of any payroll for a small business solution is managing and processing payroll. This means ensuring each and every employee is paid the right amount, at the right time, and by their preferred payment method. And this is the absolute minimum you should be looking for in a payroll software application.
You also, ideally, should be looking for a solution that you can integrate with your time and attendance software so that you can automatically transfer data relating to hours worked to the system and calculate owed amounts at the click of a button.
Another important feature of software for payroll relates to reporting and analytics. The best solution is one that can generate insights in terms of basic payroll data and hours worked. This gives you a wealth of insights so that you can analyze factors including staff costs and performance, both individually and across the business as a whole.
For example, with Factorial’s solution, you get access to a dashboard with a set of predefined reports that you can use to gain valuable insights into your payroll. Companies that subscribe to the Enterprise plan are also able to customize and apply a different time frame filter to all payroll reports.
Storing personnel records
Some payroll software programs also include features for storing personnel records or integrating with existing employee database software. This makes it much easier to cross-reference data so that you can be sure all information you include on your payslips is up to date.
Direct deposit is another most important payroll feature that you should look out for. After all, the main purpose of a payroll system is to make sure your employees get paid. Direct deposits help you automate all your transactions so that your employees can rest assured that they will be paid on time.
As an employer, you are responsible for ensuring fiscal compliance and deducting and filing the right taxes for all your employees. To help with this, many payroll systems offer tax filing features. This helps you avoid potential miscalculations or issues with federal, state, or local taxes.
The same goes for filing tax documents like W-2s and 1099s. The best payroll software solution helps you automate and file the right forms with the appropriate agencies, helping you stay compliant at every level.
Planning budgets and future costs
If you choose a payroll system program with features for reporting and forecasting, then you can use this data to manage your expenses and plan staff costs, such as calculating the total cost of an employee per annum. This can help you stay on track and reach your business objectives.
Finally, the best solutions also include an employee self-service portal. Self-service employee portal software allows employees to access a wide range of HR-related information and services. This not only minimizes confusion but also puts the control of some HR tasks, such as managing time-off, in the employees’ hands.
For example, employees can access, manage and update:
- Employee personal data, such as banking and contact information
- Payslips, W-2 forms and paid time off balance
- Time off requests and scheduling changes
- Payroll and benefits information
Employees can also use an ESS portal/HRIS to communicate directly with HR. This saves your team a great deal of valuable time as employees can manage basic processes by themselves. However, it should be noted that these features vary from software to software.
What is the best payroll software for small business?
If you have decided that now is the best time to invest in HRMS with integrated payroll software, or even in a basic payroll computer software solution, then you are probably wondering which of the many options on the market would be the best payroll program for your business.
With that in mind, let’s take a look at some of the payroll applications that you might be considering to help you decide.
Factorial’s payroll software
Factorial’s payroll software is a solid SaaS solution with a strong emphasis on data security. With Factorial, all database information is encrypted and GDPR-compliant. The application uses a Single Sign-On system and vulnerability diagnostics are performed regularly. This makes it a great HR software solution for small and medium-sized businesses looking to protect their data and stay compliant, without breaking the bank.
At Factorial, we understand that payroll management is a complex process. That’s why we want to provide you with a solution that centralizes all of your tasks on one, simple platform.
Features of Factorial’s payroll software include:
- Variables and supplements
- Employee and supplement observations
- New hires and termination notifications
- Sick leave notifications
- Contract update notifications
- Payroll folders
- Customized payroll reports
- Custom notifications and automation
- Payslip templates
What’s more, rather than being a stand-alone payroll software for small business, Factorial’s payroll solutions software forms a part of a larger all-in-one application, helping you streamline all your HR processes and centralize your data.
For example, aside from managing payroll, you can also use software for time off and absence management, time tracking and shift planning, organization chart and team management, employee and company documents, reporting and analytics, employee onboarding, talent acquisition, and much more. Plus, the solution includes an intuitive employee self-service platform, helping you to improve the overall employee experience.
In terms of pricing, access to Factorial’s HR platform starts at $60 per year, then it’s $4 per additional user. This makes it much cheaper than most solutions offered by our competitors. Plus, there is a 14-day free trial, and custom enterprise pricing is available for bigger teams.
UltiPro Payroll is a cloud-based payroll service offered by Ultimate Software. Built to also act like an HRIS, UltiPro offers payroll, human resources, talent management, and HCM services. The company aims to provide a well-rounded HCM system that helps the human resources departments of large-scale companies run more efficiently.
UltiPro provides payroll, benefits administration, talent management, compensation management, onboarding, tax management, performance management, as well as a range of other HR services.
UltiPro Payroll offers a wide array of payroll features. However, pricing is a significant drawback with this solution, and there is a lack of transparency in this regard. For instance, there is no pricing information on the company’s website. Instead, you have to contact the company and request a quote. The more features you include in your package, the higher the price. Many users also report that the interface is not very user-friendly, which can be a big issue.
OnPay payroll software
OnPay is a cloud-based payroll solution that helps small businesses automate tax filing and payment workflows. Key features include employee self-onboarding, new hire reporting, automated payroll taxations, scheduled pay runs, federal and state tax filings, HR and benefits support, customer care, and free payroll account migration. You can also design custom forms to meet the unique needs of your business, such as employee records, organizational charts, HR information, training documents, and performance reviews.
Unlike many other solutions, OnPay only offers one plan. This plan has a base rate of $36 per month, plus $4 per month per employee. At $40 a month for one person or $436 a month for 100 people, the cost of payroll services remains the same every month, unless you hire or terminate an employee. OnPay also offers a free trial period of one month to new users.
However, there are a few downsides to this payroll solution.
For one thing, the application doesn’t have a mobile app, so users can only access the website from their smartphone or tablet using a web browser. Also, OnPay doesn’t work for companies that employ people outside of the U.S. This means that it wouldn’t be suitable if you are an international company.
Papaya’s automated, SaaS platform provides an end-to-end global workforce management solution. Papaya Global offers a suite of solutions to simplify global payroll and workforce management. It has an extensive partner network that can help you hire and onboard employees in more than 160 countries and multicurrency payments and benefits management tools. It also has solid compliance support to keep you up to date with local employment and tax regulations. If you need to pay your global staff, Papaya Global offers international payroll services for $20–$100 per employee monthly.
The downsides of this solution are that Papaya Global’s payroll solution has been specifically designed to handle international pay processes. This means that if you are a small business or a large national business, then you are unlikely to use many of the features that you are paying for, such as cross-border payments. The software can also be quite pricey too.
Another downside is that the solution lacks advanced HR solutions to help you monitor performance reviews and training programs. If you’re looking for an all-in-one system to manage the entire employee lifecycle, then Factorial’s integrated platform is a much better option.
Deel payroll software
Deel is a cloud-based payroll and compliance software that provides global payroll & compliance for remote businesses of all sizes. The platform offers features for automated onboarding of employees or contractors with Deel as your EOR (employer of record). You can create, send and sign employment contracts based on laws in specific countries. You can also automate the document collection process to ensure compliance and pay the entire team in any currency. There are also features for automated invoicing, helping you increase accounting accuracy with auto-generated digital invoices.
However, a number of users have reported that payouts often fail as the process is complex and it’s difficult to determine and resolve issues when they arise. In terms of fees, each service is included as an add-on, so monthly subscriptions can become pricey. Customer service also leaves a lot to be desired according to online reviews.
Patriot payroll software
Patriot Software offers online payroll to small business owners in the US with under 100 employees. Payroll software options include Basic Payroll (base price $10/month + $4 per employee/contractor), and Full Service Payroll (Base price $30/month + $4 per employee/contractor). You can also use Patriot for filing taxes, plus the platform offers free direct deposit or print paychecks. There is a free employee portal and a simple 3-step payroll process. Additional features include Pay-as-You-Go workers’ compensation integration, free Quickbooks Time Integration, and free accounting integration.
Pros of the software include good customer service, an intuitive interface, and simple payroll administration processes. However, there are a few reported drawbacks. These include slow response when issues arise, a lack of integration with bookkeeping software, and the fact that the platform does not support 401K plan integration. Users also report that the software can be a bit pricey once you start adding features. This means that it may not be the best option if you are a small business with a limited budget.
Personio payroll software
Personio is an all-in-one HR software for small and medium-sized businesses with 10 to 2000 employees. The solution includes human resources, recruiting and payroll and supports all key HR processes. Personio covers human resources, recruitment, payroll, and onboarding, so you can do all your core people-related tasks in one place. Having accurate human data in a single record system enables human resources to gain insights and streamline processes. Templates and workflow automation minimizes manual overheads such as creating job certificates, calculating vacation entitlements, or rejecting candidates. Plus, integrated task management and reminders help your team stay up to date on tasks and priorities.
Pros of the solution include that you can automatically include data such as monthly salaries, hourly rates, and incentive payments in your payroll. Employees can also download final payslips directly from their digital employee records. The company provides good implementation support, and there is a range of features that can be customized to your business needs.
Reported drawbacks of the Peronio payroll software solution include that reporting features are somewhat lacking. What’s more, the tool for calculating vacations often requires manual adjusting. Users also report that features are limited in the basic version of the software. Plus, access to all features can be quite costly. An alternative like Factorial’s payroll software solution is probably a better option in terms of the range of features and competitive pricing.