Payroll Services for All Types of Business
Payroll services are used to keep track of employee hours and payments. Discover some of the top payroll services for all types of businesses.
Business owners have many responsibilities. The moment you get an employee, you are responsible for setting up a payroll. Businesses use payroll to track employee payments. A good payroll system makes sure all your employees are paid on time and receive the correct payment. It is also an important part of your record keeping, since it shows how much you spend on employee wages. When you pay taxes, you need this information to correctly report your earnings. It is also a good way to keep track of how many hours each employee works.
There are several different ways to track payroll. Some companies appoint a payroll manager, while others assign payroll duties to HR. Tracking payroll has become much easier thanks to advancements in technology. Many of the tasks are now automated through payroll software. Software makes tracking information much easier, as well as more accurately counting hours. A large portion of payroll services is done through software, but it still requires an administrator to oversee the general process and keep the software running correctly.
What is Required to Setup Payroll Services
Many payroll services are automated, but there is still information that must be entered manually, especially when setting up the software for the first time. First, you must obtain an Employer Identification Number (EIN). You can get an EIN online or through the IRS. Your EIN is not only for tracking payroll, but also for paying taxes. Depending on your state or local laws, you may also need a business ID number. Before you can add an employee to your payroll, he or she must complete Federal Income Tax Withholding Form, also known as a W-4.
Once you get all the forms file, the next step is to choose a pay period. Most businesses pay bi-monthly, but some choose monthly or even weekly. In some states, there may be laws governing what pay periods you can use.
Selecting a Payment Method
After deciding on your pay period, you must select a payment method. There are three payment methods available, paychecks, direct deposit and pay cards. Each one has their own strengths and weaknesses to consider.
Paychecks used to be the preferred method of paying employees. Many businesses still issue pay checks, but it is starting to become replaced by direct deposit. Checks are convenient for both employees and employers because it creates a visible paper trail. Since not all banks have convenient direct deposit options, some employees prefer it over other methods.
One downside of checks is it takes time to deposit. This is balanced out by an increasing number of banks offering apps that allow you to scan your checks directly, as opposed to going to a physical branch to make a deposit. It is also possible for the check to be lost or damaged before it is deposited. When this happens, the employee can request a new check, but it is still a hassle to have to wait for the new check.
With direct deposit, money is placed right into an employee’s bank account. Most payroll software includes an option to automate this process. Whether or not direct deposit is available and how long it takes to setup varies on the bank. It typically takes several days for a direct deposit to process. Additionally, some banks offer incentives if you setup direct deposit, such as waiving maintenance fees. While there are some downsides to direct deposit, most of them relate to the bank. Unfortunately, this means as an employer there is nothing you can do besides offer up an alternative payment method.
The final method is to issue a payment card. Payment cards utilize a pre-paid debit card, which receives funds through payroll software. One of the advantages of payment cards is the payment is processed quicker than other methods. Payment cards are usable at ATMs, so employees are not required to have a bank account to get their payments. This can also be a downside, since withdrawing money involves paying ATM fees each time. Depending on the bank, transferring money from a payment card to the account is a difficult process. Payments cards are typically used by smaller businesses or to pay part time employees.
Paychex is a human resource software with a number of options, including payroll services. It also handles employee benefits and business insurance. The program is mostly used by small and medium-sized businesses. It has multiple options for tracking payments and will also automate the majority of payroll filing, including state and federal tax forms. It also has separate functions to track retirement funds and 401k plans. It is not compatible with as many other business software as other options, but because it has so many functions, most small businesses can use it for the majority of their needs. There are several subscription tiers available. A basic account costs $59 each month, plus an additional $4 for each user.
Gusto is another payroll software designed for smaller and medium sized businesses. As of writing, it supports checks and direct deposits, but does not have options for payment cards. There are multiple subscription plans available, with the lowest plan costing $39 a month, plus an additional $6 per employee. Higher tiers include extra features, mostly for HR. Gusto has one of the quickest direct deposits and excellent customer support, no matter what your subscription plan.
In terms of affordability, OnPay is one of the best payroll services. It includes a free 30-day trial, and only $36 per month, with an additional $4 per employee. Unlike other software, there is only a single subscription tier. OnPay does not have as many perks as other payroll services, but it has everything you need to track and quickly process payments.
QuickBooks offers a number of business software, especially for HR and financing. If your business already uses QuickBooks software, it is a good idea to use the Payroll system as well. QuickBooks Payroll can integrate with your existing software, making it easy to share data and learn the program. QuickBooks has multiple subscriptions, with the least expensive starting at $45 each month, plus an additional $4 per employee.