Small businesses need the payroll software to keep their operations running smoothly. From trying to keep track of employee hours, deductions, and tax payments. It
Payroll software is a computer program designed to automate and streamline the process of calculating and managing employee payrolls. It provides an efficient and accurate way to calculate salaries, deductions, and taxes while ensuring compliance with government regulations.
Think of it as a virtual payroll department that takes care of all your payroll needs. Just like how a personal assistant helps a busy executive manage their schedule, payroll software simplifies the complex and time-consuming task of managing employee salaries.
There are generally three types of payroll software:
This type of software is installed locally on your computer or server. So, you have complete control over its usage and data storage. However, it is usually suited for larger businesses that require high levels of customization and security. Meanwhile, on-premise software can be expensive and may require additional IT support.
Cloud-based software is accessed through the Internet and stored on remote servers managed by the software provider. It offers more flexibility, scalability, and accessibility than on-premise software. You can access it from anywhere with an internet connection. It’s also more affordable and requires minimal IT support. However, you must trust the security and reliability of the cloud provider.
Hybrid software combines the best features of on-premise and cloud-based software. It provides the security and control of on-premise software, while also offering the convenience and accessibility of cloud-based software. Hybrid software is a good option for businesses that want the benefits of both types of software.
Payroll software offers several benefits to businesses of all sizes. Here are some of the key advantages:
Payroll software automates the payroll process, saving you time and money. It eliminates the need for manual calculations, data entry, and paperwork. This allows you to focus on other important aspects of your business.
With payroll software, you can avoid errors and discrepancies that can occur with manual calculations. This helps ensure that your employees are paid accurately and on time, which can improve morale and reduce turnover.
Payroll software helps ensure compliance with government regulations, such as tax laws and labor laws. It can also keep track of employee records, such as W-4 forms, I-9 forms, and time-off requests.
Payroll software can generate reports that provide insights into your business, such as labor costs, overtime expenses, and employee benefits. These reports can help you make informed decisions about your business.
Cloud-based payroll software allows you to access your payroll information from anywhere with an internet connection. This can be especially beneficial for businesses with remote employees or multiple locations.
The cost of payroll software varies depending on several factors, such as the type of software, the size of your business, and the features you require. Here are some general pricing ranges for each type of software:
On-premise software typically requires a one-time purchase fee that can range from a few hundred to several thousand dollars, depending on the number of employees and customization options. In addition to the purchase price, you may also need to pay for updates, maintenance, and IT support.
Cloud-based software is typically offered on a subscription basis, with monthly or annual fees ranging from $20 to $200 or more, depending on the features and number of employees. Some providers may also charge additional fees for certain features or services.
Hybrid software typically follows a pricing model similar to on-premise software, with a one-time purchase fee and ongoing maintenance and support costs.
Payroll software is used by businesses of all sizes, from small startups to large corporations. Here are some of the target audiences for payroll software:
Small business owners who may not have an HR department often manage payroll themselves. But a payroll tool can help simplify the process and ensure accuracy while saving time and effort.
Human resources professionals are responsible for managing employee data and ensuring compliance with government regulations. Computer payroll programs can help automate many of these tasks, reducing the risk of errors and saving time.
Accountants may use payroll software to manage payroll for their clients, especially those who are self-employed or run small businesses. This allows them to provide a valuable service while also streamlining their own workflow.
Finance departments may use payroll software to manage the financial aspects of payroll, such as tax filing, deductions, and benefits administration. This can help ensure compliance with government regulations and improve the accuracy of financial reporting.
Out of the pool of software designed to automate payment systems, these are some of the most popular in the market, along with their features, benefits, and pricing:
| Software | Price | Free Trial | Key Features |
|---|---|---|---|
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Starting at $60/month for Plus version and $9/employee/month | Free trial available | Automated tax filing, time tracking, benefits management |
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Pricing available on request | Free trial available | Tax compliance, time and attendance tracking, benefits administration |
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Pricing available on request | Free trial available | Payroll processing, tax compliance, employee benefits administration |
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Starting at $45/month plus $5/employee/month | 30-day free trial available | Automatic tax calculations, payroll processing, time tracking |
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Starting at $10/month for Essential Plan and $8/month for annual plan | Free trial available | Payroll processing, benefits administration, compliance management |
Gusto is an online payroll software that offers features such as automated tax filing, time tracking, and benefits management. It offers a range of pricing plans starting at $60 per month for the Plus version. It’s however made available at $9 per employee per month.
ADP is a cloud-based payroll software that offers features such as tax compliance, time and attendance tracking, and benefits administration. Pricing is available on request (after you request for a quote).
Paychex is also an online payroll software. It offers features such as payroll processing, tax compliance, and employee benefits administration. Like ADP, pricing is only available on request and based on your needs.
QuickBooks Payroll from Intuit is also another exceptional and popular cloud-based payroll software. It offers features such as automatic tax calculations, payroll processing, and time tracking. Its pricing plans start at $45 per month plus $5 per employee per month. It offers a free trial period of 30 days and the premium price is often discounted by 50% for three months.Â
Zenefits is an award-winning cloud-based payroll software that offers features such as payroll processing, benefits administration, and compliance management. The pricing plans start at $10 per month for the Essential Plan. The annual plan is charged at a rate of $8 a month.Â
Here are some key features commonly found in payroll software:
| Key features | Description |
| Payroll processing | Helps in calculating and issuing employee paychecks |
| Tax compliance | Can make automatic tax calculations and filing |
| Time and attendance tracking | Can tracking employee hours and absences |
| Benefits administration | Used in managing employee benefits such as health insurance and retirement plans |
| Automated reporting | Can automatically generate reports on employee wages, taxes, and benefits |
| Direct deposit and payment processing | It also has the ability to pay employees electronically |
| Compliance management | Ensures compliance with local, state, and federal laws and regulations |
| Employee self-service | Allows employees to access and manage their own payroll and benefits information |
| Integration | Also used for integrating with other HR and accounting software, including syncing data across different platforms. |
Despite the many benefits of using payroll software, there are potential issues that businesses should be aware of. Some common issues include
Tips: Businesses can mitigate these issues by choosing a reputable payroll software provider, investing in cybersecurity measures, and providing adequate training for employees who will be using the software.
As technology continues to evolve, so do trends in payroll software. Here are some of the most relevant trends in the industry:
Payroll software is just one component of a larger ecosystem of software and services related to HR and finance. Here are some of the most common software and services related to payroll software:
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