ADP Review: Pros & Cons of the Payroll Software for Your Small Business

ADP logo

In this ADP payroll review, you’ll see it’s one of the best on the market, with multiple plans, so you can upgrade as you grow. The company offers plans for organizations with less than 50 employees, but it may be a bit complex, so we recommend it for businesses expecting rapid growth. 

We’ve narrowed down the benefits and downsides of the software and you’ll see why it gets such high marks for ease of use, payroll reporting tools, and its employee portal. Plus, if you need HR tools, ADP payroll might replace what you’re using now.

Screenshot of ADP payroll dashboard
Source: ADP

Our Verdict 

ADP is a comprehensive payroll solution that helps companies automate and manage regular employee payments. ADP offers tax services, including automatic payroll tax filing and ensures you stay compliant. There’s also an employee self-service portal, payroll reporting tools, and standard payroll features.

Besides the traditional payroll resources, ADP comes with helpful additional features, such as expanded human resources functions and software integrations. This makes ADP a more robust solution when compared to its competitors—meaning it should continue to meet businesses’ needs as they grow. 

While these exclusive features are what make ADP stand out from other payroll software, it  adds extra costs to the solution, which can become pricey for a small business looking for simpler and more affordable solutions. 

ADP is great for companies that require a broader set of resources beyond payroll. In addition to basic HR features, ADP also includes add-ons that take payroll to the next level, such as time and attendance, retirement, workers’ compensation, and health insurance resources. 

However, its broad set of features makes ADP an improper fit for small businesses. Companies with fewer than 50 employees might find such features unnecessary, disrupting the cost-benefit scale. On the other hand, businesses quickly scaling up might want to choose ADP at their early stages to adjust their needs as they grow. 

  • Automated tax filing 
  • HR features, including employee access, new hire onboarding, and employee discounts
  • 50+ integrations are available (ERPs, accounting, time and attendance)
  • Extra payroll run costs extra 
  • Some users have reported that customer support isn’t responsive at times
  • Feature-heavy for small businesses looking for more straightforward solutions

ADP Payroll at a Glance 

ADP has a variety of resources and features. In addition, its many available integrations make the software an even more robust solution. Companies can integrate ADP with multiple apps, including QuickBooks, Oracle, ClockShark, ZipRecruiter, and Slack.

With ADP, payroll can be set to autopilot, and payroll taxes are calculated, deducted, and automatically paid. Furthermore, all packages include customizable reports. But HR features set ADP apart from completion—all packages include employee access, new hire onboarding, and employee discounts.

When it comes to costs, ADP does not disclose its pricing upfront—businesses should request a quote at the ADP website. The only pricing available is the Essential Payroll package, starting at $59 monthly plus $4 per employee per month. 

However, many users have stressed that some features available on the payroll software are charged extra, which can be a significant hurdle for small businesses on a budget. 

Who ADP is Best For 

Although ADP is available for companies with as few as one employee, extra charges are what set back small companies from choosing this payroll software. This ADP Payroll review will show you why it’s best for established or fast-growing companies rapidly expanding their headcount.

Pricing

Screenshot of ADP pricing plans
Source: ADP

For companies with less than 50 employees, ADP offers four different plans that vary in terms of pricing and features. All price tiers include payroll and tax, HR, marketing and consulting and services modules. 

ADP Run logo

Plans

Essential

Enhanced

Complete

HR Pro

Price

$59/monthly + $4 per employee/month

Pricing available upon request

Pricing available upon request

Pricing available upon request

Payroll: Computer, Mobile App, Phone Call

Direct Deposit

Reporting

General Ledger Interface

New-Hire Reporting

W-2s and 1099s

Tax Filing

Payroll Delivery

Multi-jurisdiction Payroll

Wisely Direct Debit Card

Check Signing: Security

State Unemployment Insurance (SUI) Management

Labor Law Poster Compliance

ADP Payroll Features

We’ve analyzed and detailed the main features in the Essential package that stand out for this ADP Payroll review:

  • Payroll accessibility 
  • Tax filing
  • Employee access
  • Google Ads setup and management 
  • Time and attendance

Payroll Accessibility

ADP is a cloud-based service, so both employees and employers can access it from mobile devices or desktops. The company also allows you to run payroll via its mobile app (available for iOS or Android). Alternatively, companies can also run payroll by phone. 

Tax Filing 

ADP automates tax filing for companies by calculating, filing, depositing, and reconciling payroll taxes. ADP also responds to inquiries from taxing agencies regarding deposits and returns. 

It is worth mentioning that a few users have reported issues with ADP’s tax filing. However, if there are any tax filing errors, ADP will pay the resulting fines or penalties imposed by taxing authorities. 

Employee Access 

HR features make ADP a more comprehensive tool compared to other payroll software. One of the leading resources available in this module is employee access. Employees can manage ADP retirement accounts, check payment history, and enroll in pay statements. 

Google Ads Setup & Management 

Aside from payroll and HR features, ADP plans come with marketing resources. All small business plan tiers offer Google Ads setup and management, allowing companies to launch a campaign and reach more customers. This benefit is a helpful addition for businesses aiming to reach more customers through a Google Ads campaign. 

Time and Attendance 

With the time and attendance add-on, companies can run payroll accurately, include and manage schedules, hours worked, vacations, and sick time for employees. 

Alternatives to ADP 

For small businesses that don’t need such robust payroll software, there are a few alternatives in the market. Here are a few we find might be a better fit. 

Gusto’s starting package includes full-service payroll, employee profiles and self-service, Gusto-broked health insurance administration, employee health and financial benefits, and several integrations. Gusto might be a better fit for small companies as it offers a complete set of payroll features, with pricing more affordable than ADP. Pricing starts at $39 per month, plus $6 per person per month for the Core plan, and $12 per person for the Complete plan.

Compared to Gusto, ADP offers more features in its basic package, especially in the HR module. But as far as payroll goes, ADP isn’t different from Gusto when comparing pricing and main payroll features in its basic plans. Go beyond our comparison of Gusto to ADP in this ADP Payroll review—read the Gusto vs ADP article to learn more about which is right for your business.

  • Affordable package for comprehensive payroll software
  • Easy-to-use platform and beginner-friendly
  • A broad set of integrations 
  • Unlimited payroll runs
  • Limited customer support hours

QuickBooks is another alternative for ADP that covers all payroll services a small business may need. Pricing starts at $35 for the Payroll Core + QuickBooks Simple Start, with a $4 extra charge per employee, per month.

When compared to ADP, QuickBooks offers fewer HR features and employee benefits. There are also few integrations without QuickBooks Online. Payroll is also limited to the US and Canada. However, for businesses looking for more cost-effective solutions, QuickBooks might be a better fit as it’s more affordable than ADP.

  • Unlimited payroll runs 
  • Next-day direct deposit
  • Affordable pricing
  • Limited customer support hours

Paychex Flex is one of the best-known payroll and HR software for small-to-medium-sized businesses. Pricing starts at $39 monthly with a $5 charge per employee per month.

Similar to ADP, Paychex Flex offers 24/7 customer support and automatic tax payroll administration, including calculation, filing, and payment of payroll taxes. Paychex also comes with HR analytics, a free mobile app, and custom reports. Read the Paychex Flex review to learn more.

  • Unlimited payroll runs
  • Pay any kind of worker (full-time, hourly, or contract) via direct deposit, paper checks, or payment cards
  • 24/7 customer support
  • Some users have reported poor user interface 

Frequently Asked Questions (FAQs) for ADP Payroll Review

ADP Payroll software can streamline the way you run payroll in your company. We’ve listed the most asked questions about ADP Payroll to determine whether this software solution is a good match for you.

Bottom Line on ADP Payroll Review

ADP is one of the most comprehensive payroll software out there. It comes with full payroll and tax features that help take off the stress from carrying out employee payments. Additional HR features are what make ADP stand out, along with seamless integration with over 50 platforms that expand the software’s functionalities and benefits. 

However, many of the features available in ADP cost extra. Plus, none of the costs are disclosed by ADP—not even the basic package plans are available on ADP’s website, meaning you should request a quote to make sure about pricing. 

Bottom line, ADP is a robust payroll solution fit for established companies and fast-growing businesses. If your company expects rapid change and quick scaling, we’ve established in this ADP Payroll review that it’s a fine software to meet your needs. However, if you are a small business on a budget, looking solely for payroll solutions, simpler software such as Gusto can perfectly cater to your needs.

Best 5 ADP Payroll Alternatives – 2023

Payroll documents on the desk

Running payroll might look simple, but it’s considered one of an organization’s most complex administrative functions. Using the right payroll software can streamline the whole accounting process. ADP is a popular payroll solution, but there may be an ADP payroll alternative that better suits your company. 

ADP has a strong history of providing solutions for human resource challenges by offering HR and payroll software and services for decades. The company has been on the market for over 70 years, and it’s one of the most popular options for payroll services for small organizations. However, the market isn’t the same, and other companies are here to prove they can do as great a job as ADP.

Best ADP Alternatives 

Product

Pricing

Ease of Use

Tax Filing & Payments

Mobile-friendly

HR Management & Features

Integrations

Starts at $39 per month, plus $6 per month per person + free trial for small business

Excellent user experience

Included in all plan tiers, calculated and paid automatically; no multiple state filing fees

Good. No mobile app but the website is responsive

Excellent. It includes many features and employee benefits

Great. It integrates with any third-party software

Starts at $39 per month, plus $5 per employee, per month

Easy to use, solid UI but inferior to most competitors

Great. The only payroll software allows users to custom fields and stay ahead of extra payments

Good, however, it has some interface issues

HR and benefits admin features are excellent. Benefits managements portal available

Integrations are limited and it can be cumbersome

Starts at $45 per month plus $4 per employee per month and up + free trial for 30 days

User-friendly and intuitive interface

Included in all plan tiers, calculated and paid automatically

Good. Mobile app missing some desktop features

Limited HR features for numerous employees

Limited integrations without QuickBooks Online

Starts at $36 per month plus $4 per month per person + free month trial

Easy set-up and good UX but not as intuitive as others

Includes all tax filings & risk-free payroll compliance

Good. No mobile app but the website is responsive

Excellent. Includes employee self-onboarding and automated employee management

Limited if compared to competitors

Starts at $35 per month, plus $5 per employee, per month

Excellent. Intuitive interface

Tax filing & payment automated

Excellent. App available for Android and iOS and lets you run payroll from your mobile device

Dedicated HR & IT services and functionalities

Great. Integrates IT, HR, finance and other third-party software

Gusto logo

Gusto: Best Overall Alternative to ADP

Pricing: Starts at $39 per month, plus $6 per month per person + free trial for small businesses.

4.8

Gusto is the best overall alternative to ADP, particularly for small businesses. Gusto offers excellent UX, easy payroll processing, and benefits for numerous employees. It’s quick to set up and run, and it’s mobile-friendly. 

It seems that Gusto understood the problems business owners were having when running their payrolls, such as inaccurate payments, staying in the loop with payroll laws, hiring, and data management reports, and decided to solve all of them. Gusto’s all-in-one HR platform solves those issues with tools you need to hire, pay, and manage your team at your fingertips – automated time tools, management onboarding, employees’ performance tools, compliance checklists, law, and regulation alerts.

Gusto’s integrated, easy-to-use system that offers an intuitive navigation system and interface, pleasant design, and plenty of support options. The company has worked over the years to improve the system, adding new features to some areas such as hiring and onboarding, payroll run, and employee paycheck management.

If you run a small company and this is your first time dealing with payroll management systems, Gusto is a good choice due to its smart all-in-one platform that grants small companies everything they need to run and manage their business – from hiring to onboarding to payroll.

When you compare Gusto vs ADP, you’ll see Gusto offers the best bang for the buck with guided payroll set-up, additional HR features included (even in the lowest tier plan), and automatically generated 1099s for contractors at no extra cost.

Why we chose it: Gusto is an all-in-one HR platform that offers outstanding customer support and various features for different business needs. You’ll get auto payroll tools, direct deposits, tax filings, onboarding management, and unlimited payroll runs at no extra cost.

  • No extra cost for running multiple payrolls
  • Excellent customer service 
  • Quick and easy setup
  • No international payroll 
  • No household employee expenses
  • No mobile payroll app

Pricing: Gusto offers four different plans: Core, Complete, Concierge, and Select

Gusto Core: Starts at $39 per month, plus $6 per employee, per month. What’s included:

  • Full-service payroll including W-2s and 1099s with digital copies for employees and contractors
  • Unlimited payrolls without extra costs
  • Accounting and time-tracking integrations
  • Employee health and financial benefits as well as onboarding and hiring tools
  • Integrations for accounting, time tracking, and more

Gusto Complete: Starts at $39 per month, plus $12 per employee, per month. What’s included:

  • All Gusto Core features
  • PTO management
  • Next-day direct deposit
  • Project tracking and workforce cost reports
  • Team management tools
  • Performance reviews and employee survey

Gusto Concierge: Starts at $149 per month, plus $12 per employee, per month. What’s included:

  • All Gusto Complete features
  • HR resource center
  • Compliance alerts
  • Certified HR pros
  • Dedicated support team

Gusto Select: No monthly based price (contact sales rep for pricing). What’s included:

  • All Gusto Concierge features
  • Full-service payroll migration
  • Health insurance broker integration
  • Direct access to a dedicated customer success manager
  • Waived fees and exclusive pricing
Paychex logo

Paychex Flex: Best for Mid-to-Large Businesses 

Pricing: Starts at $39 per month, plus $5 per employee, per month

4.0

Paychex Flex has been on the payroll market for decades, similar to ADP. Paychex Flex is the best fit for mid-to-large companies or fast-growing businesses, because it’s robust, scalable, and it has a high level of customization – though they also provide services to small-size firms. 

The dashboard is easy to use and navigate, with a customizable interface, and pretty clean. Paychex Flex offers a variety of price points, plans, and additional services such as HR consulting to guide pressing and timely HR issues, compliance services, customizable reports, and e-learning services to employees. Employees can have access to their pay stubs and tax documentation on the software’s dashboard.

The downside of Paychex Flex is that pricing isn’t really transparent, so you might get surprised with extra fees if you run a biweekly payroll schedule, or when you issue W-2 forms and 1099 filing. 

Why we chose it: The well-established company offers a number of helpful features and customizable services essential for growing businesses while combining digital and human-based services. Read the Paychex flex review if this software sounds like the best fit for your business.

  • A mix of automated and human-powered solutions
  • High level of customization and extra features
  • Established in 1971 – Market experience
  • Charge per payroll period 
  • Pricing isn’t really clear 
  • Lowest-tier plan limits features

Pricing: Paychex Flex offers three plans: Essential, Select, and Pro. 

Paychex Flex Essential: Starts at $39 per month, plus $5 per employee, per month. What’s included:

  • Payroll taxes are calculated, paid, and filed
  • Free integration with employee’s compensation insurance
  • Payment can be done via check, deposit, or prepaid paycard
  • Employees have access to the payroll dashboard
  • Import timesheet data from Paychex Flex Time
  • Mostly recommended for companies with 1-9 employees

Paychex Flex Select: Custom Pricing. What’s included:

  • All features from Essential plan
  • Payroll specialist
  • Submit payroll on the go – mobile app for both employer and employees
  • Offers a range of standard reports, including new hire reporting and general ledger report
  • Employee training, and financial wellness program

Paychex Flex Pro: Custom Pricing. What’s included:

  • All Select features
  • Automatic deduction and emit garnishment wages
  • Creation of customized reports and data visualization 
  • Paycheck integration and HR services, and employee handbook
QuickBooks payroll logo

Quickbooks: Best ADP Alternative for Self-Employed

Pricing: Starts at $45 per month plus $4 per employee per month and up.

4.0

Intuit Quickbooks offers a plan tailored to independent contractors, freelancers, and sole proprietors. It combines accounting and payroll to simplify your finances. However, it also works perfectly well as a stand-alone tool. 

When it comes to features, Quickbooks is quite similar to most payroll software – it also offers payroll tax calculation, time-tracking, and expert support. Quickbooks often runs promotions, so it’s a good idea to keep an eye on its prices. If you want to give Quickbooks a try, it offers a 30-day free trial. 

Besides the native integration with Quickbooks’ accounting system, another highlight worth mentioning about Quickbooks’ payroll system is the tax penalty protection. This means if you get fined by the IRS for any reason, Quickbooks will cover the cost of your penalty until a certain amount; besides, the Tax Resolution team will help you make sure mistakes won’t happen again. The user experience is smooth as most of the data and tools you need are found in the dashboard. 

Why we chose it: For smaller businesses or self-employed people, Quickbooks offers an intuitive interface, accuracy guarantee in the Elite plan, and next-day direct deposit in the lowest-tier plan.

  • Supports projects, payroll, and many add-ons and integrations
  • Special service tailored to freelancers and self-employed people
  • Tax penalty protection and Tax Resolution team support
  • More expensive when compared to others
  • Some features are available only on higher-tier plans
  • Limited integration

Pricing: Quickbooks offers three plans: Core, Premium and Elite. 

Quickbooks Core: Pricing starts at $45 per month plus $4 per employee monthly. What’s included:

  • Full-service payroll including automated taxes and forms
  • Automatic payroll
  • Option to offer 401(k) plans and employee health benefits
  • Next-day direct deposit
  • Unlimited 1099 e-filing

Quickbooks Premium. $75 per month plus $8 per employee per month. What’s included:

  • Same-day direct deposit
  • HR customer support
  • Workers’ compensation administration
  • Tax penalty protection and Tax Resolution team support
  • Mobile time tracking

Quickbooks Elite. $125 per month plus $10 per employee per month. What’s included:

  • Pay out-of-state employees with no extra cost
  • QuickBooks Payroll provides an expert to set up the software for you
  • Personal HR advisor
  • Call back support
  • Tax penalty protection up to $25,000 per year
Onpay logo

OnPay: Best Alternative to ADP for Usability

Pricing:  $36 per month plus $4 per person per month

4.6

Two main advantages to choosing OnPay are running unlimited payroll without paying any extra fee, not even for corrections or cancelations, and its flat-rate pricing of $36 per month plus $4 per person monthly. That means no hidden costs for extra features. 

OnPay has integration with other platforms too – you can sync up with other software like time tracking, 401(k), and retirement software you might already be using to run your business. The downside is that OnPay doesn’t offer an auto-payroll option, which means you’ll have to do it manually every payday. This could become time-consuming if you have a large team for which you need to run payroll

Why we chose it: OnPay makes running payroll an easy task – from an effortless setup to a fully automated payroll process, including taxes. It is also one of the most affordable payroll software on the list. Read our review on OnPay for more details on its pricing and features.

  • Affordable 
  • Run unlimited payrolls with no extra fee
  • Transparent pricing
  • No auto-payroll option
  • Limited integration
  • Mobile version missing some functions

Pricing: OnPay offers flat pricing of $36 monthly plus $4 per person per month. What’s included:

  • Unlimited monthly pay runs
  • All tax filings and payments
  • W-2 and 1099 workers
  • Pay by direct deposit, debit card, or check
  • Multiple pay rates and schedules
  • Garnishments
  • Unemployment insurance withholding
  • Report designer with custom reporting
  • Accounting and time tracking integrations
  • Multi-state payroll
  • Available in all 50 states
Rippling logo

Rippling: Best ADP Payroll Alternative for Customization

Pricing: Starts at $35 per month, plus $5 per employee, per month

4.8

Advertised as a tool to magically simplify IT and HR, Rippling is considered one of the best alternatives to ADP due to its affordability, good setup tools, in-depth reports, and customization. Despite being relatively affordable for small businesses, the software can be quite complex and overwhelming for first-time users. So, it’s recommended for those already used to running their payroll using a platform but wish to get an upgrade.

If you’re an advanced user and are looking to migrate to a more robust system, Rippling lets you import your employee’s data from your current payroll website – no competitor from this list offers this feature. Also, Rippling’s dashboard is so intuitive and simplified that it looks like an app menu from a mobile device. 

Rippling is an excellent unified platform for companies of any size but is not a good choice for micro-sized businesses. This software comes with several admin benefits – Rippling easily integrates HR, finance, and IT, all in one place; but it also lets you integrate any third-party software you might be using. It generates various in-depth reports and is effortlessly customizable with an intuitive interface. 

Why we chose it: Affordable for small businesses offering midrange payroll features – Rippling is a robust payroll software with an exceptional dashboard, detailed set-up, and unified analytics.

  • Superior user interface
  • Pay international employees and contractors without hustle
  • Smooth transition from another payroll provider
  • It can be pretty complex for small businesses
  • Mixed reviews about customer support

Pricing: Rippling pricing works differently from its competitors. It generally starts at $35 per month plus $8 per employee per month for payroll services, but each module costs extra. 

  • Core Rippling Unity platform: $10 per employee monthly ($8 per employee if billed annually).
  • Full-service payroll: $8 per employee/ month
  • Employee benefits: $6 per employee/ month
  • Flex HSA/FSA and commuter benefits: $6 per employee/ month
  • HR help desk: $100/ month
  • App management: $8 per employee/ month
  • Device management: $8 per employee/ month

Methodology for the Best ADP Payroll Alternatives

We know how overwhelming payroll can be, especially for small business owners who are new to it. It takes a lot of time, effort, specific knowledge, and accounting skills to do it right. But with the right tool, running payroll doesn’t have to be a chore.

Choosing the right payroll system can make or break success. Therefore, we’ve used the following criteria to choose the best options for you – we considered pricing, ease of use, and features of these alternatives to ADP. We gave more weight to those that offer affordable plans but room for growth. 

  • Pricing: We’ve evaluated the cost of the main payroll platform for small businesses and what is the best bang for the buck for small companies. 
  • Ease of use: We’ve analyzed how user-friendly, intuitive, and automated software can be, granting your business bandwidth to handle payroll. 
  • Management and features: Employee management can be daunting, particularly for remote workers and independent contractors. Having the right features and management tools working in your favor can save you time and money.

Frequently Asked Questions (FAQs) for ADP Alternatives

We’ve listed some of the most common questions about payroll and about ADP payroll alternatives here.

Bottom Line on ADP Alternatives

When comparing ADP with all the alternatives listed here, there are several factors to consider. Most payroll systems reviewed here offer similar options and are functional; before you choose which one is the best fit for your business, it’s important to consider your business needs. Gusto tops our list of the best alternatives to ADP, as it offers exceptional features, such as easy setup, excellent customer interface, unlimited payroll, and numerous innovative tools.

OnPay Payroll Review — Features, Pricing, Pros & Cons

Onpay Payroll Review

Payroll software like OnPay automates each step of the payroll process, making it easier to manage employee payrolls. The program allows you to set aside taxes and other deductibles, automate direct deposits and even maintain accurate and well-organized payroll records. In this OnPay payroll review, you’ll see how it can simplify an otherwise complex process.

Our Verdict

OnPay Payroll view on iOS or Android smartphones
Source: OnPay

OnPay is a comprehensive and data-heavy payroll software with one of the most user-friendly interfaces you’ll find. It is a cloud-hosted service, meaning your company will not be responsible for maintaining the servers.

Unfortunately, the OnPay Payroll service does not have a dedicated mobile app. However, users enjoy a desktop-like experience and can access most features on their iOS or Android smartphones. You can review the payroll history, enter employee hours, and even submit payrolls from your smartphone or tablet.

  • User-friendly
  • Modestly priced with no hidden fees
  • Simplifies payroll reporting and tax obligations
  • Lacks an automated payroll submission option
  • No quick direct-deposit option
  • Mobile version can be better

You can depend on OnPay for automated calculations of payroll taxes. The software also offers HR support for other work-related items like workers’ compensation, health insurance, and retirement plans. Also, you get features that simplify hiring processes, including automated onboarding, e-signing, offer letters, etc.

Onpay Payroll at a Glance

OnPay Payroll is a pocket-friendly online payroll software ideal for startups and small businesses. It is headquartered in Atlanta and has branches spread out in all 50 states. This fully automated payroll service has over 10,000 clients and offers unrivaled assistance to small and medium businesses. 

Who OnPay Payroll Is Best For

OnPay has numerous attractive features, although it is not a fully automated software. It is still necessary to click on a few screens, confirm pay schedules, and approve employee payments during each payroll run. This makes it best for small and medium businesses that need affordable payroll software that offers just enough features to make their investments worthwhile.

OnPay Pricing 

OnPay offers a no-tiers plan with no hidden fees. Once you pay a base rate of $36 monthly, you will only be required to pay a flat rate of $4 per employee. The payment structure ensures that you only spend as much as the level of assistance you need.

Monthly Base Rate

Flat Rate Per Employee

Automated Payroll

Automated Tax Filing

HR Features

Weekend Support

$36

$4

Yes

Yes

Yes

Yes

OnPay Payroll Top Features

OnPay is a superior cloud-based payroll tool that simplifies employee payments, tax obligations, and HR processes. It enhances accuracy and generally ensures risk-free payroll compliance. This software comes with a host of attractive features. The most notable ones include the following:

Smooth User Interface

Running payroll can be detail-heavy and complicated payroll software can make things worse. OnPay offers a clean interface designed for ease of use. While the platform has aesthetically pleasing graphics, fonts, and colors, its sole purpose is to reduce your scrolling time by making it easier to identify key features.

Moreover, it’s never necessary to leave your current screen to review other areas of interest like the employee timesheets or profiles. The software’s design allows you to slide a panel on the original screen for smoother navigation.

It’s also worth mentioning that navigating through HR, company, and payroll links is fast and straightforward. The toolbar contains nine navigation icons for easy access to the dashboard, employee screens, hour worksheets, worker files, payroll section, and HR content.

Also, the software allows easy integrations with other programs. For instance, it only takes a few minutes to link QuickBooks Online, TSheets, America’s Best 401k, Guideline, Humanity, PosterElite, and Xero with OnPay.

Unlimited Scheduled Payroll Runs

OnPay Payroll may be ideal for small businesses because of its modest cost and user-friendliness. However, it is also perfect for larger companies because it can support the data of over 100 employees. 

An unlimited payroll capacity, coupled with time tracking features and easy to access employee inputs, makes it dead simple to manage the payroll processes of more than a handful of employees. Furthermore, you can set up different pay cycles for company contractors, freelancers, and full-time and part-time employees.

Screenshot of OnPay Payroll dashboard page showing scheduled payroll runs
Source: OnPay

Fast Payroll and Tax Processing

OnPay Payroll does all the calculations for you – here are a few things to note if processing payroll yourself. Just visit the payroll tab and access the sheets of the employees you want to pay. Add other details such as their pay rate, hours clocked in, bonuses and commissions earned, and tax or insurance deductibles. The rest is a breeze, as the software will do all the necessary calculations.

The software will withhold all deductibles, including taxes, retirement plan contributions, health insurance plans, 401(k) plans, and contributions and workers’ compensation based on an employee’s category. Each entity receives an exact amount in a timely fashion to avoid IRS tax fines and other penalties. You could even dictate the specific deductions based on dollar amounts or percentages.

Payroll Payment Options

OnPay does not dictate your systems of paying employees. Once you process the payrolls, you can make direct deposits where the software automatically deposits into employees’ bank accounts or prepaid debit cards. 

Another option is to make payments through paper checks, although this remains an exclusively manual process. Irrespective of your choice, you can enter commands for the software to notify employees of deposited monies.

Paid Time Off

Depending on your company’s policies, you can create a customized paid time off (PTO). This allows the OnPay software to track your employees’ sick days accurately and paid leave days. Moreover, employees can log into the self-service portal to request time off. Managers with access to the admin portal can then approve the requests to ensure that they will automatically reflect on the paychecks.

Screenshot of OnPay Payroll employee time off page
Source: OnPay

Employee Portals

OnPay features employee self-service portals where workers can sign in to update personal information, review their payroll data, access year-end tax forms, or even communicate time-off requests. The employee portal feature can help save time, mainly because employees enjoy lifetime access to their accounts.

Screenshot of OnPay Payroll Workers page
Source: OnPay

HR Features

OnPay has a range of helpful time-saving HR tools. The most notable is the new-hire reporting feature that automatically sends an employee’s information to the relevant government entities right after a hire. 

New hires can input their basic personal information through their employee accounts and add their names, birthdates, addresses, hire dates, and bank details. You can then add their pay rates, payment schedules, and deductibles.

Other useful HR features include customizable checklists and PTO tracking. OnPay also allows sending of offer letters without spending on third-party programs.

Screenshot of OnPay Payroll HR Overview page
Source: OnPay

Customer Service

OnPay offers free account setup services. You will also not spend a dime integrating your account with other programs like T-Sheets and QuickBooks. 

OnPay’s customer service representatives are super helpful, and you can reach out to them via chat, email, or phone from 9 a.m. to 8 p.m. EST Monday to Friday. Also, urgent email support is available during the weekends.

Alternatives to Onpay Payroll Software

Unfortunately, OnPay is not ideal for all businesses. Other top alternatives that offer equally comprehensive payroll processing and HR solutions include the following.

One of the best alternatives to using OnPay is Gusto. The award-winning payroll service offers a comprehensive HR platform where you can manage payrolls, taxes, insurance coverage, and new employees.

Gusto Pricing

Gusto provides tier-based pricing ideal for small and midsize businesses. The core plan has a base rate of $39 and a $6 flat rate for each employee. 

You could also opt for the Complete Plan, which comes with the extra convenience of next-day direct deposits. This plan is available at a base rate of $39 and a flat rate of $12 per worker. If your business requires dedicated support and could benefit from compliance alerts, Gusto offers the Concierge Plan. The base rate here is $149, while the flat rate per employee is $12.

Who Is Gusto Best For?

Gusto works perfectly for small businesses in just about any industry. It is perfect for companies with less than 100 employees that only hire contractors. The payroll service offers more freedom of integration with third-party programs and provides a commendable array of payroll processing and HR features.

How Gusto Compares To OnPay

Both OnPay and Gusto are superior payroll services that provide automated tax filing and payroll functions. Both companies offer an employee access portal and employee management benefits. Moreover, they provide user-friendly interfaces and excellent live support.

However, Gusto offers better employee self-service and third-party software integrations. On the other hand, OnPay wins in its Onboarding and HR features, payroll management, and paid time off management. Read the Gusto review to learn more about the software or read the Gusto vs OnPay article.

  • Streamlined HR and payroll processes
  • Automated tax filing and paperless onboarding for new hires
  • Easy integration with popular software
  • Top-notch customer support and pleasant user experience
  • No same-day deposit
  • Time tracking not available in lower tiers

If you run a large business with 50 to 1,000 employees and need complete Payroll and HR services, ADP is your best bet. The extra features and functions come at a higher fee, although users can choose from several scalable plan options. 

The basic package offers full-service Payroll and HR features, direct deposits, an employee self-service portal, and more. You have to spend a little more to access the mobile app, payroll reporting tools, new-hire reporting, time tracking, talent management, wage garnishment assistance, and other advanced features.

ADP Pricing

ADP offers a personalized quote based on the individual needs of your business. The software setup fee ranges between $25 and $200. Other factors that may influence your quote include the size of your workforce, the frequency of payroll runs, and the additional features you need.

Who Is ADP Best For?

ADP payroll services are flexible enough to meet the needs of any business with between 50 and 1000 employees. It offers a range of plans ideal for small, midsized, and large companies. The software comes with all the bells and whistles of a premium service, making it unsuitable for businesses with tight budgets.

How ADP Compares To OnPay

OnPay and ADP Payroll are reliable software for businesses that need help with Payroll, HR, and Tax compliance services. While OnPay is best for startups and midsized companies, ADP is best for large, well-established enterprises.

Both companies offer ease of setup, quality support, unlimited payroll runs, and data management and reporting, among other features and functionalities. However, OnPay seems to gather higher user ratings, and it is more affordable and has more transparent pricing. Unless you are a large business, OnPay will likely offer you better value for your money.

  • Full-range payroll and HR features
  • Easy tax filing
  • Mobile app available and excellent technical support
  • HR features come at an extra fee
  • No pricing transparency online

QuickBooks Payroll offers fully-automated payroll processing. The software also provides tax filing assistance with unrivaled accuracy. It’s one of the easiest payroll software to set up, and it allows quick integrations with a decent number of third-party programs.

However, QuickBooks Payroll provides a limited array of HR features that you must pay extra fees to access.

QuickBooks Payroll Pricing

There are three pricing tiers to choose from. The Basic plan goes for a base fee of $45 per month and a flat rate of $4 per employee. The base fee for the Premium plan is $75 plus a flat rate of $8 per worker per month. If your company can benefit from extra tax penalty protection and round-the-clock support, you could opt for the Elite plan, which will set you back $125 and $10 per employee.

Who Is Quickbooks Payroll For?

QuickBooks payroll is mainly ideal for companies that require all-rounded payroll services. The software allows you to file payroll taxes, pay your employees, and manage their benefits. Generally, it is pretty advantageous to startup businesses and first-time payrollers because of its intuitive interface and overall ease of use.

How QuickBooks Payroll compares to OnPay

OnPay and QuickBook go toe to toe in terms of their payroll features. However, OnPay provides better HR services and customer support. You need to decide which service makes better sense for your business.

  • User-friendly with an intuitive display
  • Convenient/quick same-day or next-day direct deposits
  • The QuickBooks Elite plan provides extra tax penalty protection
  • Smooth integration with QuickBooks Time, and Quickbooks Online
  • Added fees for tax filing and HR features
  • Limited third-party integration without Quickbooks Online

Frequently Asked Questions (FAQs) for OnPay Payroll Review

OnPay Payroll Review – Bottom Line

If you need automated payroll solutions, we hope this detailed OnPay Payroll review puts you a step closer to finding the best payroll software for your business. While there are dozens of options available, OnPay Payroll is a top option for small and mid-sized companies looking for affordably priced software. 

Onpay is user-friendly and comes with plenty of features that simplify HR and Payroll processes. The main downside is that it lacks fully automated payroll processing, making it an ill-fit for large companies with hundreds of employees. However, it is worth trying if your employee count is below 100.

Paycor Payroll Review: Human Capital Management & Payroll Software

Paycor logo

Paycor is a human resources (HR) software that features comprehensive human resource management and payroll tools. This software handles the bulk of employee recruiting, onboarding, management, benefits administration, and payroll.

Labeled as a human capital management (HCM) software, Paycor is ideal for companies that want a solution that offers more than what free payroll software does. It’s for companies who seek efficiency and optimization. In this Paycor payroll review, we’ll discuss its key features, who it’s best suited for, and close competitors.

Our Verdict

Our Paycor payroll review concludes that this software offers a wide range of HR and payroll tools, along with additional add-ons like recruiting tools, time and scheduling, and benefits administration. If your company needs an extra hand to manage employees, Paycor is an excellent option.

The IRS levies billions of dollars per year from businesses due to payroll errors and violations. Automation through payroll software reduces the risk of errors and is critically important to set-up.

  • User-friendly interface with effortless onboarding 
  • Easy to track time and vacation requests
  • Businesses can choose between several plans
  • Slow customer support responses
  • Somewhat limited integrations
  • Potentially too expensive for small businesses

Paycor Payroll at a Glance 

Paycor starts at $99 per month, plus $5 per employee, per month, which is higher than most competitors. However, this higher price is warranted because its software offerings are a cut above other players in the space. Paycor is feature-rich, with dozens of ways to improve and optimize your business. 

Who Paycor Payroll is Best For 

Paycor is best suited for small to mid-sized companies that can’t afford to hire a full-time HR team. These are businesses where HR and payroll tasks fall upon other employees as secondary responsibilities. Instead of employing an entire HR team, Paycor offers a set of tools that help companies manage all aspects of their payroll and HR administration. Here’s an in-depth analysis on how to do payroll for small businesses.

Larger-sized businesses also benefit from Paycor’s complete human capital management toolkit. However, you’ll need to inquire with Paycor to get a quote on the cost for your specific company.

Pricing 

If your company has fewer than 50 employees, Paycor payroll has four defined price tiers shown in the table below. 

Companies with over 50 employees will need to discuss pricing plans with a Paycor solutions specialist. Furthermore, companies with over 50 employees will receive a three-month free trial, while companies under 50 employees will receive a one-month free trial.

Paycor logo

Basic

Paycor logo

Essential

Paycor logo

Complete

Paycor logo

HCM

Price

$99/monthly plus $5 per employee/month

$149/monthly plus $6 per employee/month

$199/monthly plus $7 per employee/month

$99/monthly plus $12 per employee/month

Payroll & Tax Service

Online Reporting

Onboarding & E-Verify

Workers’ Comp

360° 401(k) Integrations

Automated Workflows

The Basic plan is suited for businesses who want to pay employees accurately and quickly. In contrast, the Essential plan simplifies payroll processing on a scalable level. Additionally, the Complete plan offers more insights compared to the previous two tiers to enhance your business, and the HCM features everything you need in human capital management software.

Paycor Payroll Features

Paycor is a major player in the HR and payroll software space because of its robust offerings and features. Here’s a breakdown of each of Paycor’s key software offerings.

Screenshot of Paycor Payroll Features
(Source: Paycor)

Payroll Software 

Paycor’s payroll software ensures your employees are paid accurately and on time. Best of all, you don’t need to be a payroll expert or keep up with tax compliances. The software handles everything for you, including your payroll audits.

Screenshot of Paycor’s payroll software page
(Source: Paycor)

Paycor Payroll will calculate payroll taxes based on each employee’s Form W-4. All you need to do is enter the employee’s salary and choose the pay interval.

Features include:

  • Precise recordkeeping
  • Tax processing
  • Worker’s comp

HR Software 

With the innovation of new technology, HR, in general, is moving toward automation through software. Rather than hiring a team of HR employees, you can utilize all the tools Paycor provides. 

These tools include:

  • Employee recordkeeping
  • Employee self-service
  • Paperless document management
  • Automated workflows
  • Reporting & analytics
  • Performance management

Using HR software reduces the time spent on repetitive, low-impact administrative tasks. This allows your HR team to focus on more productive tasks and longer-term projects. HR software also reduces human error and offers more accurate analytics, as well as an improved organization of employee data.

Recruiting Software 

To keep up with the ways candidates in modern times are applying to jobs, Paycor’s recruiting software strengthens your company’s ability to find top talent. This is achieved with Paycor’s software that reduces hiring barriers and allows applicants to apply on any device and from any location.

The recruiting software’s tools include:

  • Candidate dashboard
  • Custom hiring workflows
  • Remote hiring
  • Interview scorecards
Screenshot of Paycor recruiting software page
(Source: Paycor)

In essence, you can optimize and streamline every part of your recruiting and hiring process. The powerful analytics system also allows you to see where the top candidates are coming from and if there are any bottlenecks in your hiring process. You can also automatically list job postings on LinkedIn, Glassdoor, ZipRecruiter, and Indeed.

Time & Attendance Software

Paycor’s time and attendance software manages time off and tracks hours worked. This allows you to effectively keep track of labor distribution with accurate and automated timekeeping.

Screenshot of Paycor’s time and attendance software page
(Source: Paycor)

If you’re entering time cards manually, it’s time to take advantage of more efficient solutions. The time and attendance software fully integrates with Paycor’s payroll software to offer a comprehensive bundle that eliminates duplicate data entry and improves payroll accuracy.

The time and attendance software tools include:

  • Mobile logging
  • Overtime insights
  • Time dashboard
  • Compliance checks
  • Attendance management

Accurate timekeeping is essential with the rise of U.S. labor costs. As such, there’s no room for error and your company needs to stay on top of its payroll. Read our article on how to convert minutes for payroll for a more accurate calculation.

Learning Management Software

Paycor also offers learning management software that gives employees the opportunity to learn and build new skills. The learning management software combines classroom, virtual, mobile, and social capabilities on one comprehensive platform. This allows employees to learn at their preferred pace.

Paycor’s visibility offers real-time reporting and automated alerts for course completions or achieved milestones. 

The learning management software’s tools include:

  • Mobile learning
  • Gamification through leaderboards and badges
  • Detailed recordkeeping
  • Specialized compliance training programs

Alternatives to Paycor Payroll 

Here are a few alternatives you can compare this Paycor review with:

Paychex

  • Paychex is another payroll and HR software company that services any sized business. Read the Paychex review to find out more on its features.
  • This software is best for medium-sized and growing businesses with 50 to 1,000+ employees
  • Both software offer remarkably similar features with Paychex providing better customer support while Paycor offers better performance management
  • Starts at $39/month + $5/employee

Gusto

  • Gusto is a full-service HR, benefits, and payroll software which serves over 100,000 small businesses in the U.S. Read our Gusto review to learn more.
  • It is optimal for new payroll managers and very small businesses that have one to ten employees
  • Gusto focuses more on payroll services than HR whereas Paycor focuses on both
  • Starts at $39/month + $6/month per employee

Paylocity 

  • Paylocity is an HR and online payroll provider
  • The software is suited for mid-sized to large businesses that need an all-in-one payroll and HR software
  • Nearly identical in features offered, Paylocity’s user-interface is slightly more complex than Paycor
  • Starts at $45/month + $4/employee

Frequently Asked Questions (FAQs) for Paycor Payroll Review

We cannot finish our Paycor payroll review without answering a few lingering questions that might be on your mind. Here are a few questions we commonly get asked about Paycor and the answers that follow.

Bottom Line on Paycor Payroll Review

Paycor is an excellent human capital management software that offers extensive HR and payroll tools. Based on the different pricing tiers, Paycor is suitable for any sized business that wants to optimize and automate its HR and payroll processes. The best recommendation we can give is to sign up for Paycor’s free trial. You’ll quickly learn if the software is right for your business and if it can improve it.

How to Do Payroll Yourself in 15 Steps

How to do payroll yourself concept

Payroll is an essential part of any business, whether you have one employee or 10,000. Do-it-yourself payroll can lead to costly mistakes and delays without the right know-how. This article explains how to do payroll successfully in 15 straightforward steps.

You should check out these payroll tools to make your life easier!

 

How to Do Payroll Yourself In 15 Steps

Running payroll is not simple, with many pieces to consider. Having an understanding of each piece is paramount to an issue-free result. Below we take a detailed look at each step that makes up the process.

Step 1: Acquire an Employer Identification Number (EIN)

Before thinking about payroll, you need to legitimize your business with the federal government. While sole proprietorships can get by using the owner’s social security number for tax purposes, any venture paying employees requires an employer identification number. This nine-digit number is unique and differentiates your company from all others.

To acquire an EIN, simply pay a visit to the IRS site to check eligibility and submit an application. The process is free, and you’ll receive your number shortly after completing the process.

Step 2: Register Your Business in Your State

Every state is different when it comes to requirements for registering a business. Some states require a state-level EIN, while others mandate registration with specific agencies. Be sure to check in with your state to see what’s required.

Step 3: Understand Local, State, and Federal Laws

Federal, state, and sometimes local governments have labor laws that you as a business owner have to comply with. When laws differ across government levels, you’ll have to use the one that best benefits your employees.

Payroll Laws can vary significantly from state to state or city to city. Here are some important payroll items you should look out for:

  • Minimum wage
  • Timeframe for delivering paychecks
  • How to calculate overtime
  • If there is local income tax
  • Worker’s compensation requirements
  • Information required on pay stubs

Step 4: Figure Out Who You’re Going to Pay – and How

This may seem like a no-brainer, but your team may not have defined roles in a new enterprise. You’ll need to assign hourly rates or a salary for individuals working for you, and pay may not be the same if someone wears several hats. Make sure there aren’t any assumptions or miscommunications that could spell disaster when payday rolls around.

You also need to decide who is an employee and who you’re keeping on as an independent contractor. Independent contractors pay their own taxes, and you only need to pay them a flat rate for their services each week. You’re not required to include independent contractors on your payroll, but you do need to keep all employees on the books.

It’s illegal to misclassify employees as independent contractors, so be very careful when assigning these titles to anyone you work with. Mistakes here can lead to issues involving fines or worse. There are differences between the two roles to help you make proper designations.

Step 5: Have Employees Fill Out Forms

After you’ve identified who your employees are, each one will need to fill out a W-4 form to document their filing status. This document tells you as an employer the tax rate you need to use for each employee. Your workers also need to complete an I-9 form to confirm eligibility to work in the United States. Be aware that some states may have forms of their own as well.

Step 6: Decide on a Pay Schedule

With your team in place, you need to decide how often you pay them. Whether it’s once a week or twice a month, it’s important to be transparent with this information up front and stick to it. Failing to do so can result in upset employees or a high turnover rate that can affect the success of your business.

Step 7: Track Employee Hours

Salaried employees aside, you’ll need to keep tabs on how much time each hourly team member spends working each day. Most companies do so through time cards employees use to identify when they’re on or off the clock. Knowing to the minute how long your employees work each pay period is essential for calculating accurate wages. Read our article on how to convert minutes for payroll for a more accurate calculation.

Step 8: Calculate Gross Wages

At the end of a pay cycle, you’ll calculate gross wages from an employee’s hourly rate and the number of hours they worked, up to 40 hours. You’ll have to factor in overtime for any work beyond that, which usually amounts to 1.5 times the base rate. Salaried employees are easier to calculate, as each should have a set amount earned for each pay interval.

Step 9: Deduct Amounts for Tax Purposes, Retirement Accounts, Insurance

Calculating gross wages is necessary, but this is not the amount you’ll pay your team. It’s crucial to know which payroll deductions to remove from each employee’s paycheck and subtract those from gross pay.

Payroll deductions come in many forms, but the most common is for tax purposes on both the state and federal level. Employees filled out W-4 forms to declare the rate you need to tax them, and you’ll need to make this unique calculation for each team member. The IRS created an Excel spreadsheet to make the process a little easier.

Some deductions are pre-taxed, and you’ll need to remove these before calculating payroll taxes. Typical examples of pre-taxed deductions are employee contributions to a health insurance plan or a 401(k).

You’ll need to take out other deductions after calculating payroll taxes. Amounts removed in this way are typically Roth IRA contributions, life insurance policies, and wage garnishments.

This area can get a little tricky, especially when it comes to pre-and post-tax deductions. It may be easier to list each deduction on a separate line when running calculations to reduce errors.

Step 10: Finalize Employee Net Pay

With a complete list of gross wages and deductions in hand, you’ll calculate net pay, the actual amount that will go on an employee’s paycheck. To reach an amount for net pay, you need to subtract all deductions from the gross pay amount. 

Step 11: Determine Amounts for Employer Taxes

After you’ve figured out how much you’re going to pay each employee, you still need to deal with employer taxes. As an employer, you’re required to pay two different taxes on the federal level. The Federal Insurance Contributions Act (FICA) tax covers social security and Medicare, whereas the Federal Unemployment Tax Act (FUTA) goes toward federal unemployment insurance.

You’ll have to calculate these taxes based on each employee’s taxable gross wages. Rates on each of these taxes change from time to time, so check with the IRS to ensure you’re paying the correct amounts.

Similarly, states mandate you pay a state unemployment tax (SUTA) to help fund unemployment programs. Each state has its own tax rate that can vary depending on how much you pay employees and those you’ve laid off.

Step 12: Double Check All Your Work

We all make mistakes, but in the world of payroll any error can be a costly one. You’ll have to make up the difference any time you underpay an employee, which can cause a panic any time budget numbers are tight. On the other side, you can reclaim overpayments made to an employee, but likely not without hurt feelings and damaged relationships.

The same holds true when submitting payroll taxes to the government, although they may be less forgiving. Miscalculations can result in fines that your company can’t afford to pay. 

It’s always best to double-check all your calculations before submitting any payments to help avoid these issues. Even though looking over the numbers again requires time, it can save time in the long run instead of locating and fixing mistakes after the fact.

Step 13: Send Out Payments

Once you’re happy with the numbers, it’s finally time to send out some checks. The most common methods for doing so are direct deposit into a bank account or with paper checks. No matter which route you go, be sure to attach a pay stub that explains how you came to this amount. Don’t forget that some states require certain information to appear on a pay stub.

Step 14: File Tax Forms and W-2s

Checks are out the door, but your work isn’t quite finished. You’ll need to pay those FICA taxes to the government quarterly using Form 941. These taxes are due on the final day of the month following the end of a quarter.

You’re responsible for FUTA taxes once per year using Form 940 on January 31st for the previous year. Lastly, business owners must fill out a W-2 form for each employee by January 31st, containing yearly wages and deductions for the previous year.

Step 15: Document Everything

As you perform your payroll, be sure to document everything you do. Not only is this beneficial for your records, but federal and state governments require having this information on hand. You’ll need to keep the documents for whatever duration state and federal governments require. Moreover, to perform a payroll audit, you need comprehensive and accurate payroll documentation.

Using Payroll Services to Run Payroll

Do-it-yourself payroll can be a very time-consuming process, especially as your company grows. You’re more likely to make mistakes in a manual process that can lead to delays in payment or more headaches down the road. Fortunately, payroll services can help alleviate the strain of running the numbers every pay period. Below are some of the ways using a payroll service can make life easier.

1. Save Employee Information

Payroll services typically use the power of the cloud to securely save important payroll information. Not only can you access this information from anywhere, you won’t have to re-enter the same data each time you sit down to crunch numbers. The platform keeps track of salaried or hourly pay as well as tax rates and the like.

2. Knowledge of Federal, State, and Local Laws

As you register payroll software for use, you’ll need to share your business’s location. In doing so, the software can look into payroll laws relevant to you specifically. Knowledge of these laws can prevent issues with paychecks and ensure you’re providing the information you need to the government and employees.

3. Reduce Errors

It is better to use a computer that won’t make mistakes when calculating payment amounts for each of your employees than by hand. These payroll services can automatically calculate deductions from information you provided when you hired the employee.

Unless you use a service with built-in time tracking, you’ll still have to log employee hours each week. However, the amount of work required of you each week goes significantly down.

4. Does Taxes for You

Since these payroll systems are aware of current tax rates, it can make normally challenging math a breeze. You won’t have to think twice about coming up with amounts for quarterly and annual employer taxes. Some software will even generate forms to send the government and employees as required.

5. Regain Lost Time

Payroll services automate much of the process, giving you back all the time it would take to perform do-it-yourself payroll. The challenge will be figuring out which other area of your business to spend this newfound time in.

6. Payment Reminders

When the time comes to pay your employees or the government, payroll services can leave you a reminder to that effect. These services can automatically send out direct deposits for you or leave paper checks stacked on the printer. Even in the busy shuffle of work life, you shouldn’t miss a payment that could leave you in hot water.

7. Generate Checks and Pay Stubs

Payroll tools also have the ability to create paychecks printable with the click of a button. It’s also possible to generate customizable pay stubs with information required from state or federal governments.

8. Log Employee Hours

You will need to log hours for non-exempt employees to know how much to pay them each cycle. Payroll services may include a means to track hours through a digital time card or by having employees log hours manually. The information gets logged right into your payroll system so you don’t have to transfer it over from elsewhere.

9. Customer Support

In the event of an issue, most payroll services have a customer support line you can reach out to deal with the problem quickly. When you’re under a time crunch, it’s essential to have others on hand that can walk you through a process or clear up a discrepancy.

10. Cost

Some payroll software options charge for their services, but many of these are still cheaper than paying an employee or outside company to do the work for you. Others have free payroll features at least as the base level to get your payroll up and running.

Frequently Asked Questions (FAQs) for How to Do Payroll Yourself

There are many questions surrounding do-it-yourself payroll. This FAQ aims to tackle some of the more common ones.

Bottom Line on How to Do Payroll Yourself

Do-it-yourself payroll is an option for any business but requires a significant amount of time to complete, especially as you bring on new staff. The increased risk of error in the manual process can lead to delays and fees that any company is better off avoiding. Payroll services such as Gusto and Square can remove the strain of payroll by automating calculations and saving time.

How to Convert Minutes for Payroll in 3 Steps + Free Conversion Chart

Materials for converting minutes for payroll

If you own a small business with multiple hourly workers, it’s essential to convert minutes for payroll when your employees work partial hours. Converting their time worked to exact minutes prevents a lot of payroll problems in the future. It also provides accurate wage distribution to ensure your employees aren’t overpaid or underpaid.  

How to Convert Minutes for Payroll in 3 Steps  

There are two strategies when you want to convert minutes for payroll. You can either use the actual hours worked or round the hours to the nearest quarter. 

We recommend using the actual hours worked because rounding can lead to overpaying or underpaying your employees in the long run. No matter which method you choose, learning how to convert minutes for payroll involves three quick and easy steps.

Step 1: Calculate Total Working Hours and Minutes

Decide if you want to use actual hours worked or rounded hours worked in your payroll conversion calculations.

Actual Hours Worked

To calculate your employee’s actual hours worked, you’ll need the total hours and minutes they worked for the payment period. You can find these exact numbers by gathering timesheets or time and attendance records for each of your employees.

Let’s go over an example timesheet for a weekly hourly wage employee. In this example, the employee doesn’t take lunch breaks, so he doesn’t clock in and out for lunch.

Key Features

Monday

Tuesday

Wednesday

Thursday

Friday

Clock-in & out times

9:00 AM – 5:15 PM

9:10 AM – 5:30 PM

9:00 AM – 5:00 PM

9:15 AM – 5:25 PM

9:05 AM – 4:55 PM

Total Time Worked

8 Hours & 15 Minutes

8 Hours & 20 Minutes

8 Hours

8 Hours & 10 Minutes

7 Hours & 50 Minutes

To calculate total hours worked, add up the total number of hours across the five days. Only add the hours, you will add the total minutes separately.

  • Total hours: 8 + 8 + 8 + 8 + 7 = 39 hours

Next, add up the total minutes the employee worked.

  • Total minutes: 15 + 20 + 10 + 50 = 95 minutes

Convert 60 minutes of the employee’s total 95 minutes to equal one hour.

  • 95 minutes – 60 minutes = 1 hour and 35 minutes

As such, the employee worked a total of 40 hours and 35 minutes for the week.

Rounded Hours Worked

You also have the option to convert minutes for payroll by using rounded hours. If you choose this method, federal law states that you must practice accurate rounding or risk violating FLSA minimum wage and overtime pay requirements.

With rounded hours, you can round the employee’s time to the nearest quarter of an hour. A quarter of an hour is 15 minutes so you can round to :00, :15, :30, or :45.

Employee time from 1 to 7 minutes past the previous quarter can be rounded down. For example, if an employee works 8 hours and 6 minutes, their rounded hours would be 8.

Employee time from 8 to 14 minutes past the previous quarter must be rounded up and counted as a quarter-hour of work time. For example, if an employee works 8 hours and 27 minutes, their rounded hours would be 8.5. 

Rounding guidelines:

Round Down

7 minutes or less past the previous quarter (1-7, 16-22, 31-37, 46-52)

Round Up

8 minutes or more past the previous quarter (8-14, 23-29, 38-44, 53-59)

Step 2: Convert the Minutes to Decimals

The next step is to convert only the minutes worked to a decimal. 

For example, let’s say your employee worked 40 hours and 15 minutes during the week. You would divide only the 15 minutes by 60 minutes to receive your decimal.

  • 15/60 = 0.25

This means that the employee worked 40.25 hours during the pay period.

You can also use our time conversion chart to convert minutes for payroll quickly:

Payroll Minutes to Decimals Conversion Chart

Minutes

Hour Decimal

Minutes

Hour Decimal

Minutes

Hour Decimal

Minutes

Hour Decimal

1

0.02

16

0.27

31

0.52

46

0.77

2

0.03

17

0.28

32

0.53

47

0.78

3

0.05

18

0.30

33

0.55

48

0.80

4

0.07

19

0.32

34

0.57

49

0.82

5

0.08

20

0.33

35

0.58

50

0.83

6

0.10

21

0.35

36

0.60

51

0.85

7

0.12

22

0.37

37

0.62

52

0.87

8

0.13

23

0.38

38

0.63

53

0.88

9

0.15

24

0.40

39

0.65

54

0.90

10

0.17

25

0.42

40

0.67

55

0.92

11

0.18

26

0.43

41

0.68

56

0.93

12

0.20

27

0.45

42

0.70

57

0.95

13

0.22

28

0.47

43

0.72

58

0.97

14

0.23

29

0.48

44

0.73

59

0.98

15

0.25

30

0.50

45

0.75

60

1.00

Step 3: Multiply Calculated Time by the Wage Rate

Once you convert the employee’s time, it’s time to calculate how much you need to pay them. Take the employee’s hourly wage rate and multiply it by their decimal time.

For example, if the employee worked 40.25 hours and earns $20 an hour, you would take 40.25 and multiply it by 20.

  • 40.25 hours x $20.00 =  $805.00

The employee’s total wages before payroll taxes and deductions are $805.00.

How to Track Converted Minutes for Payroll

One of the most common issues with payroll processing is finding a way to convert minutes for payroll when you have many hourly workers. Converting each employee’s total hours worked by hand is time-consuming and prone to human error.

There are two better solutions we recommend for your business.

1. Payroll Software

The best way to track your employee hours and convert them to decimals is through payroll software like Gusto. Gusto will sync your team’s hours automatically, convert the hours to decimals, and pay your employees. 

You can also use Gusto to track your team’s hours. Employees can log their hours using Gusto’s desktop website or mobile app. To avoid misuse, you can designate office sites and specific locations where your employees are allowed to clock in and out. 

In essence, Gusto handles all of your payroll processing tasks accurately and quickly. You’ll be able to manage your team from a single location rather than using multiple software and apps. Read the review on Gusto to know more about this payroll tool.

2. Spreadsheet

Another way to convert minutes for payroll is by using spreadsheets such as Microsoft Excel or Google Sheets. This is the best option for businesses that don’t want to invest in payroll software but also don’t want to calculate wages by hand.

Create a payroll processing spreadsheet and list out the appropriate columns with each of your hourly employees. Then, input their hours worked after each pay period and run a simple formula to convert minutes for payroll.

Frequently Asked Questions (FAQs) for How to Convert Minutes for Payroll

At this point, you should fully understand how to convert your employees’ minutes for payroll. However, let’s discuss a few additional questions that business owners commonly ask us.

Bottom Line on How to Convert Minutes for Payroll

Although it’s straightforward to convert minutes for payroll, it can be extremely time-consuming if you have a large workforce. You’ll need to run separate calculations for each employee and double-check them to ensure they’re accurate. Nonetheless, your goal is to translate each employee’s hours worked into decimal form. Then, you multiply it by the employee’s pay rate.

If you’re interested in optimizing your payroll process, Gusto tracks employee working hours and calculates their decimal number automatically. You’ll receive a detailed cost report of wages and taxes each pay period without having to complete any manual calculations.

Payroll for Specific Jobs: Best Payroll Software By Industry

payroll software by industry concepts on a desk

Different industries have different needs and payroll obligations, so it’s essential to find the best payroll software for your industry. You may need specific payroll software that makes it easy for you to pay contractors or full-time employees, for example.

1. Nanny Payroll

Whenever you hire a nanny, it counts as adding a household employee and puts you on the hook with the Internal Revenue Service (IRS). You’ll need to file Schedule H (household employment taxes) payroll taxes. Failure to do so may result in large fines. There are many nanny payroll software solutions that can simplify and automate the majority of the nanny payroll process.

The best software for nanny payroll includes:

Each of these software solutions offer nanny payroll services that help you file taxes correctly and avoid IRS penalties. By using one of the nanny payroll solutions, your only job will be to enter your nanny’s hours or salary, preview the taxes, and approve the payroll. The software will handle everything else.

2. Construction Payroll

Construction projects involve large teams and an extensive hierarchical structure. Dealing with all the different employee hours, salaries, and taxes for a big group isn’t easy or enjoyable. However, construction payroll software can automate most of the process and provide error-free payroll processing.

A construction payroll solution ensures your payroll runs smoothly. Construction projects have special union requirements that present unique payroll challenges. Furthermore, you need to keep track of all of your contractors and make sure their 1099s are filed correctly. 

Construction payroll offers time-tracking features that allow you to create schedules by shift or job. Your workers can easily log their hours online for you to approve in just a couple clicks. Payroll software also automates your worker’s comp coverage payments with automatic, pay-as-you-go premiums. 

General contractors (GC) are also responsible for paying wages all the way down the chain. Even if you fully pay your subcontractors, if the subcontractor doesn’t pay their subcontractors, you are still liable as the GC. A comprehensive construction payroll software confirms everyone down the chain is paid fairly based on the completed work.

In essence, construction payroll keeps your employees and managers happy so that the entire team can focus solely on the construction project at hand.

Here are the best payroll software for construction companies:

3. Restaurant Payroll

Running a restaurant requires you to manage a lot of moving pieces. Payroll can be particularly complicated because workers tend to be paid differently than most full-time employees. You must track hundreds of shift hours, shift changes, tip splits, and overtime payments. On top of that, you have to file taxes for each employee that works in your restaurant. 

Restaurants have an even more significant challenge compared to other industries because of the minimum wage requirement. Unlike standard employees, restaurant employees who collect tips as part of their income may also earn a unique minimum wage from other employees. This also depends on which state your restaurant resides in because different states have different minimum wage requirements.

Fortunately, there’s payroll software that specifically aims to help restaurant owners. The software included below ensures that your employees are always paid accurately and on time.

Here are the five best payroll software by industry for restaurants:

4. Payroll Software for Manufacturing Companies

Manufacturing companies face unique challenges and obstacles. This is because manufacturing companies have a variety of roles with different pay scales. Whether it’s machine operation, assembly work, packaging, shipping, or supervising, businesses in this industry need a payroll solution that can handle all of its complexities. 

Every minute is crucial on the manufacturing line. Shutdowns or delays caused by employee absences, miscommunications, or safety violations results in loss of productivity and revenue. Modern payroll software solutions provide enhanced visibility and reporting capabilities that give payroll managers a clear picture of the process and labor costs. 

Here’s the three best payroll software for manufacturing companies:

Read our Gusto review and Paychex payroll review to know more about their pricing and features.

5. Payroll Software for Retail Stores

Managing payroll obligations for a retail store is a challenge. From managing inventory, hiring new employees, and keeping current employees satisfied, running payroll duties adds even more stress and difficulties.

Luckily, there are payroll software solutions for retail store owners that facilitate and streamline all of your payroll responsibilities. The software options in our list ensure that your employees are paid punctually in the correct amount.

Payroll software helps you track the W-4, I-9, W-2, and other withholding forms for each of your employees. It will also track time and attendance records as well as automatically pay your employees upon approval. Whenever tax laws are updated, the software will ensure your retail store stays compliant to avoid tax penalties.

Here are our top five payroll solutions for retail stores:

Not sure which to go for? Check out the OnPay payroll review or Gusto vs Onpay review.

6. Payroll for IT companies

Your IT company needs payroll software that keeps managers and lower-level employees satisfied and happy. Without a payroll solution, your company is vulnerable to wage and tax filing errors.

IT companies are unique because you may have employees located in different states or even different countries. Due to the nature of IT companies, remote work is gaining momentum in the industry. This brings new payroll and tax challenges that can be difficult to navigate without a modern payroll system.

Choose software solutions that are reliable and easy to configure. They ensure your employees receive accurate, on-time payments via direct deposit or a paycheck. Payroll software also allows your staff to efficiently navigate complex payroll flows while complying with tax laws and financial regulations.

The best payroll software for IT companies include:

7. Payroll for the Education Industry

The education industry faces many complexities that have hindered a smooth rollout of regulations, employee obligations, and transactions. Daycares, early childhood centers, schools, universities, and online education programs all face the pressure of achieving compliance with government regulations, employee certifications, and accurate pay obligations.

There are several payroll software solutions that specifically cater to companies that operate in the education industry. The solutions on our list offer comprehensive HR solutions in addition to their payroll features. This allows you to effectively recruit new educators, train your employees, and simplify the scheduling process. 

For instance, Rochester University and Baptist Bible College use Paycor as their payroll solution. Paycor offers extensive tools for education operators, such as employee self-service, tax compliance, payroll automation, and I-9 and W-4 form filing. Read the Paycor review if you’re interested in knowing more about this software.

The best payroll software for education companies include:

8. Payroll for Healthcare Industry

The healthcare industry is one of the fastest-growing industries worldwide. As such, it’s imperative that your employees can work seamlessly without worrying about being paid fairly and on time.

Every hospital is equipped with a union of workers that include nurses and healthcare professionals. Your payroll solution should be able to handle the salaries of permanent staff members and those with temporary shifts. Payroll software keeps you in line with union regulations so you can create a healthier relationship with the workers and the union.

It’s also vital to implement payroll software to ensure your workers stay with your healthcare company. Hiring competent employees is a challenge in itself, so it’s essential to keep them satisfied. 

Here are the best payroll software for the healthcare industry:

9. Payroll for the Public Sector

Choosing the best payroll software for public sector organizations doesn’t need to be challenging. The right payroll solution allows you to maximize opportunities despite all the public sector’s complexities.

Furthermore, payroll software empowers your organization to deal with the constant pressures and government changes to create operational efficiencies within your payroll processing. These solutions enhance your regulatory compliance and optimize your organization’s public spending. This way, your organization can focus on innovation and improvement without needing to stress about payroll obligations. 

The best payroll software for public sector organizations are:

10. Payroll for Farms and Ranches

If you run an agricultural business like a farm or ranch, you’re aware that you deal with unique tax rules. For example, as a farm or ranch owner, you must file an annual Form 943, which shows how much money you withheld from each employee’s pay for federal income tax. Non-agricultural businesses file a quarterly Form 941. Payroll software will ensure your employees are paid accurately and that your business follows every tax rule and payroll law.

The best payroll software by industry for farms and ranches include:

11. Payroll for Remote Workers

Due to the COVID-19 outbreak in 2020, many companies have shifted to remote work and allowed their employees to work from home. Furthermore, many new startups have operated entirely remotely. For this reason, you need a payroll software dedicated to handling payroll obligations for remote workers.

Additionally, if your small business relies on spreadsheets to track payroll, your business may be  vulnerable to many payroll issues. Using payroll software can help you avoid miscalculations, delayed payments, and data mismanagement. 

Here’s the best payroll for remote workers:

Bottom Line on Payroll Software by Industry

We understand how important it is to find the specific payroll software for your type of company. Different payroll software specializes in different industries, and choosing the right software can significantly enhance and optimize your company. 

To better understand how payroll works, we recommend learning how to do payroll. This way, you’ll have an easier time navigating your payroll software and ensuring everything runs smoothly.

How to Calculate Payroll Taxes in 5 Steps 

Businessman filling out a payroll tax form

As a business owner, learning how to calculate payroll taxes are one of the most daunting tasks to tackle. Among all the other aspects of your business that you manage, it’s also essential you calculate your taxes correctly. Without accurate tax calculations, you can face legal and financial penalties if the IRS investigates your business. 

Payroll taxes are entirely your responsibility as a business owner so let’s dive into how to calculate them.

How to Calculate Payroll Taxes in 5 Steps 

Payroll taxes are taxes employers pay on behalf of their employees. The exact amount of tax is determined by each employee’s salary, wage, and tips. These taxes are used to finance social security programs, including Medicare and Social Security. 

The most significant portions of the social insurance taxes are the federal payroll taxes, which appear as Medicare (MEDFICA) and Federal Insurance Contributions Act (FICA) tax on the employee’s pay stub. 

As a business owner, you may be surprised to learn that employees effectively pay around half of the whole payroll tax with their wages, with a smaller contribution from you. Payroll taxes are directly deducted from each employee’s earnings and sent to the Internal Revenue Service (IRS). 

Before you start calculating payroll taxes, your employees need to complete these documents:

  • Form W-4: Employee’s Withholding Certificate
  • State W-4 (as applicable)
  • Direct Deposit Authorization Form
  • Form I-9: Employment Eligibility Verification
How to calculate payroll taxes in 5 steps

Step 1: Calculate Gross Pay

The first step to calculate payroll taxes is calculating the wages earned by each employee and the amount of taxes that need to be withheld as part of running payroll. You also need to make deductions for items such as retirement benefits, health insurance, and garnishments. Expense reimbursements will have to be added back as well.

Gross pay is calculated differently for hourly salaried employees.

Calculating Gross Pay for Hourly Employees

You calculate gross pay for hourly employees by multiplying the number of hours they worked during the pay period by their hourly rate. For example, if the employee worked 40 hours in the week at $30 an hour, their gross pay is $1,200.

Remember to include overtime pay, which is typically 1.5 times the normal hourly rate if the employee works more than 8 hours a day or 40 hours a week. Here’s a comprehensive process of how to do payroll for contractors and freelancers.

Calculating Gross Pay for Salaried Employees

For salaried employees, simply divide their salary by the number of pay periods in a tax year. For instance, if an employee earns an annual salary of $60,000 and receives a paycheck twice a month, their gross pay for each pay period is $2,500 ($60,000/12 months/2 monthly pay periods)

Make sure to add on commissions, tips, and bonuses the employee earns to calculate the total gross pay.

Step 2: Calculate Employee Tax Withholdings

The next step is to calculate the employee’s tax withholdings. Once you have the employee’s gross pay and the number of allowances from their W-4 form, you can begin to calculate how much you need to withhold to cover their taxes.

For the majority of states, you’ll need to withhold both state and federal taxes as well as FICA taxes from each paycheck.The information on the W-4 states how much income tax needs to be withheld from the employee’s paycheck each pay period. The employee will claim their marital status and the number of allowances they have on the W-4 form. You need this information to calculate their FICA, federal, and state taxes.

Calculate Federal Income Taxes

Assuming the employee completed the W-4 in 2020 or later, you would use the updated tax tables found in Publication 15-T, Federal Income Tax Withholding Methods.

This process involves:

  • Adjusting the employee’s wage amount
  • Determining the tentative withholding amount
  • Accounting for tax credits
  • Tallying the final withholding amount

Calculate FICA

You and the employee both contribute 7.65% to FICA, including 6.2% for Social Security and 1.45% for Medicare. The first $137,700 of an employee’s wages are subject to the Social Security tax. Employees earning more than $200,000 are subject to an additional Medicare tax.

Let’s follow the example from above with a gross pay of $2,500 per pay period:

  • Social Security: $2,500 x 6.2% = $155
  • Medicare: $2,500 x 1.45% = $36.25

The employee’s total FICA withholding is $191.25 (155+36.25).

As the employer, you are responsible for the same amount in FICA taxes.

Calculate State and Local Tax

The next step is to calculate any state taxes the employee is responsible for. Some states, like Texas, have no state income taxes. The other eight states without an income tax are Alaska, Tennessee, Wyoming, New Hampshire, Florida, South Dakota, Nevada, and Washington. So check your state’s income tax guidelines and follow them accordingly.

Let’s follow the example from above and imagine that your business is based in New Mexico.

For New Mexico, the wage withholding table states that you need to deduct $64.67 along with an additional 4.9% of the surplus amount over $2,183.

We calculate this by:

  • $2,500 – $2,183 = $317
  • $317 x 4.9% = $15.53
  • $64.67 + $15.53 = $80.20

You will need to deduct $80.20 from each paycheck to withhold for New Mexico state income tax.

Step 3: Handle Deductions

After you calculate the employee’s tax withholdings, the next step is to take out any applicable deductions. These are voluntary pre- and post-tax deductions such as 401(k) plans, health insurance premiums, or health savings account contributions. 

Certain employees will have involuntary deductions like wage garnishments or child support that need to be considered. You’ll receive an order from the state, the IRS, or a judge which tells you to withhold these items. 

It’s important to be cautious and accurate here because pre-tax deductions like 401(k)s are taken out of gross income in step 1. This means that tax withholding calculations in step 2 will be reduced and pre-tax deductions save the employee more on taxes. Post-tax deductions are calculated after step 2. 

Step 4: Add Expense Reimbursements

If an employee paid for company expenses with their own money, they need to be reimbursed. As an employer, you can either pay reimbursements by combining them with payroll or separately from payroll.

Expense reimbursements are not included in gross wages. This means they are not subject to tax withholding. All expenses you reimburse to employees should be paid in full and added on to net pay at the end of your calculation.

Step 5: Total Everything Up

After you’ve completed all the calculations to determine gross pay, tax withholdings, deductions, and reimbursements, you’ll be ready to calculate the paycheck:

  • Begin with gross pay
  • Subtract employee tax withholdings
  • Subtract deductions
  • Add expense reimbursements
  • Arrive at net pay

Net pay is the amount of money you need to send to the employee come payday. 

Following the example above, let’s walk through the calculation:

Summary of how to calculate payroll tax:

Gross Pay

$2,500

Federal Withholding Tax

Calculated from W-4 and Publication 15-T form

Social Security Tax

-$155

Medicare Tax

-$36.25

New Mexico Income Tax

-$80.20

Net Pay

$2,228.55 – Federal Withholding Tax

The employee’s net pay is $2,228.55 minus their specific federal withholding tax.

Calculating Employer Payroll Taxes

Now that you know how much of the employee’s paycheck to withhold for taxes, it’s time to calculate how much you’re responsible for as the employer.

FICA Matching

You must match the employee’s FICA tax withholding, which means your business will also pay 6.2% for Social Security and 1.45% for Medicare. Using the previous example, you would need to match the employee’s $191.25 FICA obligation.

Unemployment Taxes

As the employer, you also have to pay federal and state unemployment taxes. These taxes are only paid by the employer and not the employee.

Federal Unemployment Tax (FUTA)

FUTA is 6% of the first $7,000 in wages you pay to each employee every year. If your company is subject to state unemployed tax, you’re also subject to a federal tax rate credit of up to 5.4%. This makes the effective tax rate 0.6%. When an employee earns more than $7,000 in a calendar year, you stop paying FUTA taxes for that specific employee in that tax year.

Following the example from above, federal unemployment tax: $2,500 x 0.6% = $15

State Unemployment Tax (SUTA)

SUTA varies from state to state. We recommend you consult with your state’s Unemployment Revenue or Department of Labor for tax rates, filing requirements, and wage bases.  

Paying the IRS

Once all the heavy calculations are complete, your next step is to send the tax payments to the proper taxing authority. For federal income tax and FICA, you send this to the IRS. Payments need to be sent to your state’s withholding tax agency for state and local income taxes.

Make sure you send both the taxes you withheld from the employee’s paycheck and the taxes you owe as the employer.

The comprehensive way to calculate payroll taxes include:

  • Federal withholding
  • Social Security (employee portion)
  • Medicare (employee portion)
  • State income tax (if applicable)
  • Social Security (employer portion)
  • Medicare (employer portion)
  • FUTA
  • SUTA

This adds up to the total payroll taxes you must pay.

How to Calculate Payroll Taxes with Gusto

Although it’s manageable to calculate payroll taxes manually, this isn’t recommended. Taxes require accuracy, and a small mistake in your calculations can lead to disaster in the future.

This is especially true if you have a lot of employees. It’s not only time-consuming to manually calculate payroll taxes for each of them, but you are also putting yourself at an increased risk of making a mistake.

We recommend using Gusto, a payroll software that automatically calculates payroll taxes for you. It also automates payroll, includes an employee self-service portal, and offers some human resources (HR) tools. It regularly tops lists of the best payroll software for small businesses.

Gusto has a free employer tax calculator which provides an accurate estimate of how much you’ll have to pay in payroll taxes over a year.

Screenshot of How to calculate payroll taxes in Gusto
(Source: Gusto.com)

To completely calculate your payroll taxes, you’ll need to register for an account and enter each employee’s Form W-4 details.

Frequently Asked Questions (FAQs) for How to Calculate Payroll Taxes

We understand that payroll taxes are confusing, so here are a few common questions and answers to provide more clarity.

Bottom Line on How to Calculate Payroll Taxes

Calculating payroll taxes is entirely manageable as a business owner. As long as you know which numbers to use and what steps to follow, you’ll end up with an accurate number. The overall goal is to start with the employee’s gross pay and end with their net pay. The difference between the two is the employee’s withholdings you need to pay as payroll taxes on behalf of the employee.

Gusto vs OnPay Payroll: Who Wins?

Gusto vs OnPay Payroll: Who Wins?

When comparing Gusto vs OnPay, you’ll find both full-service payroll processing software feature a variety of valuable HR and customer service tools. Although they offer similar functionalities, there are a few key differences between these payroll solutions. This means that one of these options is a better fit for your company. 

We compare payroll processing, pricing, HR benefits, and much more in this in-depth Gusto vs OnPay Payroll comparison guide. Once you pick the right payroll software, it’ll be easy to process each payroll run while tracking the essential data and assembling the reports needed to run your company.

Gusto logo

Gusto: Best for Overall Value

Gusto is a robust payroll processing platform that combines HR and benefits administration into a single, convenient package. Over 200,000 businesses and teams use Gusto because of its impressive feature set and functions. Gusto is excellent for growing businesses with over 50 employees because of its automation tools.

In essence, Gusto is a comprehensive payroll service that manages every aspect of your payroll and reporting process. Each pricing tier features automated payroll and direct deposit for unlimited monthly payroll runs. You will also receive tax filings for each level of government for both 1099 contractors and W-2 employees. Read the Gusto review to learn more about this software.

  • Unlimited payroll runs
  • State tax registration in all 50 states
  • Direct deposits
  • Calculating employee deductions is burdensome
  • Business owners can’t run payroll through the mobile application
  • No customer support during the evenings and weekends

Pricing

Gusto offers four different packages to choose from:

  • Core: $39 per month plus an additional $6 per employee
  • Complete: $39 per month plus an additional $12 per employee
  • Concierge: $149 per month plus an additional $12 per employee
  • Contractor: no monthly fee and $6 per person
Onpay logo

OnPay Payroll: Best for Small Businesses

Similar to Gusto, OnPay is a cloud-based payroll service that offers scalable solutions for small businesses. Some of its core features include automated tax filing and payment workflows as well as unlimited payroll. However, OnPay lacks integration capabilities and an auto-pay option.

OnPay is payroll for small businesses looking for an affordable and simplified approach to payroll management. It’s easy to insert payroll data such as reimbursements, tips, hours, and bonuses with OnPay. Furthermore, you can administer benefits and compensation insurance to employees who work on a pay-as-you-go basis. Read our OnPay review to learn more about its features and pricing.

  • Free W-2 and 1099 processing
  • Unlimited monthly pay runs
  • Quick and efficient employee management protocols
  • Not ideal for businesses with over 25 employees
  • Limited integrations
  • Doesn’t offer fast direct deposit

Pricing

OnPay’s pricing uses a sliding scale based on how many employees you have:

  • $36 per month, plus $4 per person per month

Pricing & Features Comparison 

Simply put, Gusto is designed for businesses with over 50 employees, whereas OnPay is optimal for small businesses with fewer employees. Both payroll solutions feature extensive payroll and HR tools that make your life much easier.

However, it’s essential to look at the features each software offers and how much each one costs. We compare all the key features and factors you should consider when making your decision in the table below.

Key Features

Price

Starts at $39 per month plus $6 per employee

Starts at $36 per month plus $4 per employee

Tax Filings and Payments

Yes, Gusto automatically calculates your taxes when you run payroll

Yes, OnPay withholds taxes when you run payroll and makes the necessary payments

Managing Employee Benefits

Ability to build customized benefits packages for employees

Ability to offer 401(k) plans, life insurance, health and dental benefits

Ease of Use

Simple and intuitive interface

Organized and convenient design

Live Customer Support

Weekdays from 9am to 8pm EST

Weekdays from 9am to 8pm EST

Integrations

100+

~10

Winner: OnPay Payroll. OnPay is slightly more affordable than Gusto if you’re looking for the cheaper option.

Payroll Processing Breakdown

Payroll processing is the most important feature to compare because you’re looking for the best payroll software for your business. The right payroll solution should let you run unlimited payrolls, customize pay rates and pay schedules and pay employees with direct deposit. Luckily, both software feature these tools. Read more on how to do payroll here.

Gusto

Gusto provides faster direct deposit than OnPay and gives you access to Payroll on Autopilot. With this enabled, payroll will automatically run one day before your company’s payroll deadlines. Furthermore, Gusto will withhold and file local taxes for you. OnPay doesn’t offer this feature.

OnPay Payroll

Like Gusto, OnPay automatically calculates, pays, and files taxes on your company’s behalf. However, OnPay doesn’t offer local tax filing and it doesn’t have a similar feature to Gusto’s Autopilot. With an autopay option, running payroll with OnPay can be tedious and time-consuming.

Winner: Gusto. The clear winner for the most important feature of payroll software is Gusto.

Onboarding and HR Tools

Onboarding tools are vital to your company as your employees will need to learn how to use the software. As such, let’s take a closer look at each of the onboarding and HR tools Gusto and OnPay offer.

Gusto

In terms of Gusto vs Onpay Payroll, Gusto offers a few premium features that OnPay doesn’t. These include anonymous employee surveys, survey trend analysis, and access to professional HR agents. Gusto is easy to learn because of its friendly user interface and your employees shouldn’t have any issues getting used to the software. 

OnPay Payroll

OnPay includes an impressive set of onboarding and HR tools, such as customized HR documents or built-in templates, organizational charts, custom onboarding documents, document e-sign features, and an HR resource library with hundreds of templates and guides. All of these features allow you to onboard employees in a smooth and seamless process.

Winner: Tie. Although Gusto offers more features, these are only in the higher pricing plans whereas OnPay offers all of its HR tools in its single plan. 

Time Management Features

Since both software include HR tools, it’s important to compare how they face up against each other. Time management is a critical task within every company and your employees need a system that simplifies absence requests and approvals.

Gusto

Gusto offers comprehensive HR time management features but only in the Complete or Concierge plan.

OnPay Payroll 

Onpay lets you create custom paid time off (PTO) policies. Furthermore, your employees can request time off using their accounts and the PTO hours are automatically subtracted if the request is approved by a manager. 

Winner: OnPay. All of OnPay’s HR tools are included within its single rate. 

Integrations Breakdown

There are so many crucial tools businesses use to stay afloat nowadays. As such, app and software integrations are essential to have on every piece of software.

Gusto

Gusto offers integrations with over 100 different tools across various categories: tax preparation, hiring, legal and compliance, point-of-sale, performance management, and business operations.

OnPay Payroll

In terms of OnPay Payroll vs Gusto, OnPay only offers 10 integrations, a few which include QuickBooks, Xero, Guideline, and Mineral.

Winner: Gusto. With over 10 times the amount of integrations as OnPay, Gusto is the clear winner for integration support.  

Gusto vs OnPay Payroll Customer Service

Both payroll software solutions offer live phone and chat agents from 9am to 8pm EST from Monday to Friday. Furthermore, both options have email support agents too.

Gusto

Gusto offers unlimited support through phone, live chat, and email. However, it doesn’t provide any support on the weekends. 

OnPay Payroll

OnPay also offers unlimited support through phone, live chat, and email. The difference between OnPay payroll vs Gusto is that OnPay provides emergency email support on the weekends.

Winner: OnPay. Since OnPay provides support on the weekends, the customer service features are more comprehensive than Gusto. 

Gusto vs OnPay Payroll Customer Reviews

Gusto and OnPay are both established and reputable payroll software solutions with great customer reviews. However, Gusto is more popular and has a higher quantity of reviews among all software review platforms.

Gusto Customer Reviews

The majority of Gusto reviews are positive and the customers thoroughly enjoy Gusto’s payroll services, easy-to-use dashboard, and HR features. Many reviewers state that Gusto has the easiest payroll system and a highly affordable price tag. The most common complaint reviewers have about Gusto is its lack of effective customer support. There have been cases where Gusto’s customer support ignores and doesn’t respond to emails.

OnPay Payroll Customer Reviews

OnPay users love how easy it is to run payroll with the software. Users appreciate how once the initial setup is complete, all they need to enter are the weekly hours. Then, the pay is automatically calculated and the direct deposit is automatically sent. There have been mixed reviews about OnPay’s customer support because some customers have had a great experience while others have been ignored.

Winner: Tie. Both Gusto vs OnPay Payroll have excellent reviews and thousands of satisfied customers. 

Alternative Payroll Processing Software Options

If you’re interested in alternative options, here are a few more competitive choices for you to consider.

Paychex Flex is suited for startup businesses that are in the early stages of growth. We recommend this software for multi-state companies and restaurants. Read the Paychex flex review to learn more.

  • Provides payroll via debit card
  • Offers helpful employee self-service features
  • Features Employee Assistance Programs (EAP) to employees as an included service
  • Doesn’t support companies that use independent contractors
  • Year-end tax forms and time tracking cost extra
  • Software known to be slow at times

Pricing

  • The standard base service costs $39 per month plus $5 per employee. Upgraded service plans must be individually quoted by a salesperson through a phone call.

QuickBooks Payroll is ideal for small businesses that already use QuickBooks accounting software. If your business is already familiar with QuickBooks, using QuickBooks Payroll will be extremely easy. Read our QuickBooks vs Gusto payroll to find out which is the better choice for your business.

  • Excellent user interface
  • Great mobile application
  • Simple to file taxes and other financial details
  • Long wait times to speak with customer service representative
  • Pricing may be out of reach for smaller businesses
  • Users have reported glitches with computer and mobile application

Pricing

  • Core: $22.50 per month plus $4 per employee
  • Premium: $37.50 per month plus $8 per employee
  • Elite: $62.50 per month plus $10 per employee

Businesses that already use Square’s point-of-sale software should use Square Payroll. This payroll processing solution provides a seamless integration between the two products. Read the Square payroll review to learn more about its services and pricing.

  • Offers an instant and next-day payroll processing option
  • Great ease of use on app
  • Features an inexpensive pricing plan
  • Lack of HR tasks within the app
  • The included standard payroll processing is four days
  • Costs may rise as your business hires more employees

Pricing

  • $35 per month plus $5 per person paid

Patriot Payroll is another budget-friendly payment processing software solution that’s best suited for smaller businesses. The main difference between Patriot Payroll and Gusto vs OnPay Payroll is that Patriot Payroll doesn’t offer HR tools.

  • Great for small businesses and nonprofits
  • Easy to set up
  • Offers essential payroll features at a low price
  • Isn’t intended for companies with over 100 employees
  • Lacks HR tools and features
  • Doesn’t have a dedicated mobile app

Pricing

  • Basic Payroll: $10 per month plus $4 per employee
  • Full Service Payroll: $30 per month plus $4 per employee

Bottom Line: OnPay Payroll vs Gusto

Overall, OnPay Payroll and Gusto are effective payroll processing solutions that can optimize your business. Gusto is better for mid-sized and large businesses while OnPay is suited for smaller businesses.

As for the winner of this comparison, Gusto takes the crown. Even with Gusto’s basic tier package, you get access to all the essential payroll features. These include direct deposits to your employees, tax filing, and unlimited payroll runs. 

Furthermore, the basic tier package lets you administer your company’s health benefits and manage worker’s compensation. Since Gusto is marginally more expensive than OnPay Payroll but offers more features, we recommend using Gusto as your payroll processing software solution.

What Is a Payroll Card?

Person holding a payroll card and a tab

A payroll card is much like a prepaid debit card, but an employee doesn’t need a bank account to receive funds. Many people no longer regularly carry cash, so having your paycheck directly deposited onto a card is more convenient. It’s an ideal paycheck alternative for employees who may not qualify for a bank account.

The payroll card is one option for allowing greater flexibility and convenience to people without bank accounts. However, not all employers are able to offer paychecks through payroll cards. 

What Is a Payroll Card?

A payroll card is a way of receiving a paycheck from your employer. However, instead of handing you a paper check or depositing money directly into a bank account, a payroll card is similar to a prepaid debit card or gift card. It carries a balance which you can spend down, and which can then be topped up by your employer on payday. Additionally, like a prepaid card, a payroll card isn’t linked to a bank account. 

As a result, rather than being issued by a bank or credit card company, payroll cards are issued by a third party. Employers can work with those providers, who may offer payroll cards to employees as an option to receive their paycheck. 

The issuer may be a payroll service provider or an employer may work directly with a card issuer like Visa or Mastercard. Some of the best payroll software options are also starting to offer payroll cards.

Prepaid General Use Cards

Payroll cards are one of several types of prepaid cards, specifically belonging to the general use category. Rather than being similar to gift cards or store credit cards, which are limited in use, they can be used anywhere a debit card can be used. In fact, in practice they are very similar to a standard debit card.

Modern payroll cards offer many of the same features as a debit card, including the ability to track your balance online and draw cash from an ATM. On the other hand, payroll cards don’t require you to obtain a bank account or meet the requirements for one. For some people, particularly in lower income brackets, it can be difficult to qualify for a standard checking or savings account. Of course, some people also opt to do without a bank account for a variety of other reasons. 

Not having a bank account can present a number of challenges. In particular, without one, only cash transactions or transactions using money orders are possible. Payroll cards allow people who aren’t able to get a bank account, or who would rather do without one, the convenience of using a card rather than depending on cash. 

Benefits and Disadvantages of Payroll Cards

Payroll cards offer some advantages to employers, saving the fees for printing checks or direct deposit. However, it remains a relatively uncommon choice among employees, with most preferring direct deposit. A quick comparison of the potential pluses and minuses to employees might reveal why.

Benefits

The benefits of payroll cards include:

  • Allows online shopping: One of the primary limitations of cash in the modern age is you can’t use it to buy stuff online. A payroll card can be used just like a debit card, including for online shopping.
  • Flexibility: You can use your card or get cash out at an ATM to use, if that’s your preference. 
  • Convenience: Getting a check and cashing it takes time and potentially a trip out of your way. A paycheck is deposited immediately to a payroll card, without the delay.
  • No prerequisites: Unlike a bank account, there’s no need to have a minimum balance. Problems with previous accounts also don’t present a barrier.

It’s worth noting that bank accounts share all of the same benefits, with the exception of the last.

Disadvantages

There are only a few disadvantages to payroll cards, though they are significant:

  • Fees: Payroll cards usually come with a range of fees, including activation fees, inactivity fees, ATM fees, fees for paying bills, and potentially a long list more. In particular, there’s a fee for replacing a lost card.
  • Fewer Safeguards: Most bank accounts come with protections against fraud and identity theft. Payroll cards don’t have those same safeguards, which may make using them online less attractive.

Who Uses Payroll Cards?

In general, payroll cards are used by relatively few employees, despite being made available by more employers all the time. There are a number of reasons that might be the case, but the higher potential for incurring fees is probably a significant barrier to adoption. Payroll cards are more likely to be offered to lower income employees and any potential fees would end up taking a bigger bite out of their pay.

What Is Flexible Payroll?

Flexible payroll refers to a feature some payroll providers are just beginning to implement. The underlying idea is that, instead of having a fixed payday, employees can bank work and then receive pay when it’s convenient for them. 

At the moment, there is still a regular pay schedule and flexible pay is deducted from a future paycheck, more-or-less like an advance. That may be at least partly because of payroll laws. However, it’s easy to imagine a future where the calendar of paydays is abandoned entirely.

Anyone who knows how to do payroll may wonder how that’s possible. However, payroll providers, such as Gusto, that use computers and cloud-based systems for managing time keeping means that they can keep a running tally, instantly transfer money, and still track deductions.

Frequently Asked Questions (FAQs) for Payroll Cards

Looking for the answer to a specific question? Check out our answers to common questions below.

Bottom Line on Payroll Cards

Payroll cards offer a number of advantages. However, they’re unlikely to be widely adopted when fees are liable to cost an employee an appreciable part of their paycheck. While payroll cards may remain uncommon, flexible pay has the potential to become a popular and common feature.