Whether you’re a small business looking at payroll software or simply someone who needs to record the hours they work, there are plenty of options out there. We hope this article has given you some insight into the possibilities that are available with today’s technology and how it can be used to your advantage. Best of luck!
In this guide, we review the aspects of Small Business Software Payroll, best hr and payroll software for small business, Can I do my own small business payroll, and desktop payroll software for small business.
Small Business Software Payroll
Payroll is a complex process, but it doesn’t have to be. Small business payroll software can help you save time and money while offering employees more benefits.
Payroll software is like a muscle that gets stronger the more you use it.
The more you use it, the more you’ll get out of it.
This is a concept that’s often discussed in the context of fitness and exercise, but it applies equally to business software. The more you apply your new payroll system and its various features, the stronger those muscles get. The more time spent working with your new payroll system—learning how to use it and customizing its workflow for your business—the better off your organization will be financially.
Small business payroll software is the most powerful when employees utilize the self-service portal.
When you’re a small business owner and your employees are using payroll software, you won’t have to worry about doing their payroll. They can do it themselves!
That’s right: with self-service options, your employees will be able to set up their own paychecks, review their paystubs, view their paychecks online, make changes if necessary, see their history with the company and more.
Time and attendance systems power many of the benefits of a small business payroll solution.
Time and attendance systems are one of the most important aspects of a small business payroll solution. They power many of the benefits of these solutions, including:
- Easier time-tracking for employees. Employees can use their mobile devices to clock in or out from anywhere, which means that you don’t need to track them down at work to get this information. Your employees’ phones will automatically transmit their location data if they’re on site and allow you to see how long they’ve been at work each day (and where they’ve been).
- Real-time payroll adjustments. If an employee has worked extra hours and you have not yet paid them for those hours, time and attendance systems give you an easy way to make these adjustments quickly after pay period cutoff dates have passed; this avoids late fees for both parties and keeps things running smoothly in general.
Payroll software can help you track overtime and offer workers’ comp.
Payroll software can be a great help in managing overtime and tracking workers’ comp.
For example, you can use payroll software to track how much time employees are working so that you don’t overpay them for the hours they’ve worked. You should also be aware of your company’s legal obligations with regard to workers’ compensation (which is required by law in most states), and make sure that your employees are given time off when they need it. If an employee is injured on the job, or needs time off due to illness or other reasons, payroll software will allow you to keep track of their absences as well as their vacation days and sick leave paychecks.
Automated payments can save your small business time and money.
Automated payments are a great way to save you time, money, and hassle. You can send automated payments via email or text message to your employees’ bank accounts. It’s easy to set up and there’s no charge for sending an automated payment.
You don’t need a CPA to use payroll software.
You don’t need to be an accountant or have a CPA (Certified Public Accountant) on your team to do payroll. While the process can be complicated, there are plenty of tools available that make it easier to manage.
Since this is such an important part of running a business and being able to pay employees on time, it’s worth learning how to do it yourself. Payroll software makes this much easier and cuts down on errors and hassle. You’ll be able to see any errors right away instead of having them slip through until the end of the month when you’re trying to get everything done before payday!
You could also hire someone else to handle all your payroll needs if you don’t want or need this type of software yet but still want help with calculating taxes and other aspects involved in managing payroll at your company
Small business payroll software offers more than just paying your employees.
Payroll software can also help you automate other processes, such as managing time off, tracking employee attendance and absences, and even filing taxes. This way you can focus on other aspects of running your business.
For example:
- Automate payments so employees get paid on time. Payroll software can let you schedule regular paychecks for your employees or even make one-time payments for things like bonuses or commissions.
- Track overtime so you don’t have to worry about paying extra when it’s due! Some payroll programs will automatically track how many hours an employee works in a week—and how many hours they’ve worked during the year—and then notify you when overtime is due. Other programs will let you set up a budget for your company’s overall annual expenses (including overtime costs).
- Automate benefits like health insurance and retirement plans so employees know exactly what they’re owed before their next paycheck arrives in the mail!
best hr and payroll software for small business
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6 Best HR Software of January 2023
The right software can streamline time-intensive human resources tasks, from hiring and training employees to payroll and management.
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here’s how we make money.
Human resources software can save your business time and money. However, not all HR software is the same, which can make it difficult to compare products and find the right one for your business.
We look at some popular platforms to see what features are available for core HR functions: recruiting and onboarding, time and attendance, payroll, benefits administration, employee performance and training.
Human resources software can save your business time and money. However, not all HR software is the same, which can make it difficult to compare products and find the right one for your business.
We look at some popular platforms to see what features are available for core HR functions: recruiting and onboarding, time and attendance, payroll, benefits administration, employee performance and training.
Best HR Software
on NerdWallet’s secure website
Rippling
on NerdWallet’s secure website
Rippling offers all the core HR features we would expect plus additional IT functions and automation that can help streamline manual processes.
Single platform for employee data.
Payroll in all 50 states and outside the U.S.
Employee app and device management.
Lacks pricing transparency.
System may be more than the average small business requires.
on Gusto HR’s secure website
Gusto HR
on Gusto HR’s secure website
Gusto offers a winning HR platform for businesses that prioritize full-service payroll but also want to access core HR features.
Transparent pricing and plan details.
Upgrade, downgrade or cancel plans anytime.
Benefits administration not available in all 50 states.
Employee training provided through third-party apps.
Namely
Namely is an all-in-one HR platform that works well for companies with 25 to 1,000 employees and who value employee engagement tools.
Employee engagement tools.
Vast library of training and compliance courses.
Offers a monthly webinar to demonstrate the product.
Lacks pricing transparency.
Not the best fit for businesses with fewer than 25 employees.
Businesses focused on analytics
BambooHR
BambooHR has a strong focus on analytics, including a library of useful HR reports, while not losing sight of the benefits of employee engagement options.
Focus on analytics and reporting.
Strong employee engagement tools.
Lacks pricing transparency.
Payroll is considered an add-on.
Enhanced new hire features
GoCo
Quote-based pricing. Plus $5 per person.
GoCo works hard to automate the hiring and onboarding process with software and tools that let you collect documents and data before new hires start work.
Paper-free hiring and onboarding process.
20% discount for annual and multiyear contract payment.
Product tour with preloaded demo data.
Limited employee performance features.
TriNet Zenefits
with annual subscription to HR packages.
TriNet Zenefits offers core HR tools, and it includes access to a unique hub in every plan where announcements can be posted, information can be shared and employees can collaborate.
Employee self-onboarding that can be completed before the start date.
People Hub for employee engagement and collaboration.
Free payroll for 12 months for businesses that meet promotion terms.
Minimum charge for five employees totaling $40.
Payroll is an add-on feature at an added cost.
Rippling: Best overall
Rippling’s HR products are packaged as a cloud-based HRIS, or human resources information system, that will accommodate from two to 2,000 employees. All employee data is stored in one workforce platform, thus allowing you to automate many manual HR and IT processes. Businesses can customize their plans based on their needs.
Price
Plans start at $8 a month per employee plus an additional $35 monthly base fee. After purchasing the Rippling Unity Platform, additional HR and IT products can be purchased separately based on your business needs. A custom quote will be provided based on the services you select.
Core features
Recruiting and onboarding: Systems to post openings, track applicants and onboard.
Time and attendance: Automated time tracking that integrates with payroll and paid time off.
Payroll: Full-service payroll in all 50 states; federal, state and local tax filing; and W-2 and 1099 forms.
Benefits administration: Medical, dental, vision, health savings accounts, flexible spending accounts and 401(k) plans.
Employee performance: Integrates with 15Five performance management app.
Training: Pre-built courses and training with progress tracking and alerts.
In addition to the HR package, a business can also purchase IT services from Rippling that include remote employee app and device setup and management, including the shipping and retrieval of devices.
Gusto HR: Best HR and payroll combo
Gusto’s all-in-one HR platform can be used by businesses of any size. Well-known as a top-notch payroll services provider, Gusto also offers expanded HR features that include employee benefits and employee management options, plus insights and reporting tools.
Price
Gusto’s Simple plan starts at a base monthly fee of $40, plus $6 per person. Businesses can upgrade to Plus at $80 a month and $12 per person for more advanced features. A quote-based plan is also available to larger businesses. Additional fees apply for add-on features such as HSAs, FSAs and 529 college savings accounts.
Core features
Recruiting and onboarding: Job postings, onboarding checklists and e-signature docs.
Time and attendance: Automated time tools, tracking paid time off and sync with payroll.
Payroll: Full-service payroll in all 50 states with federal, state and local tax filing and payment.
Benefits administration: Health insurance plans, 401(k) plans and more with licensed brokers. Health benefits aren’t available in all states.
Employee performance: Manager reviews, self-evaluations and automated workflow.
Training: Syncs with Engagedly, EasyLlama, Ethena and other learning management apps.
Gusto also offers employee engagement tools that include employee surveys and the ability to do trend analysis. Plus, you can get compliance alerts for state and federal law changes and access to certified HR professionals.
Namely: Best for midsize businesses
Namely is an all-in-one human resources platform focused on midsize companies, which it defines as ranging from 25 to 1,000 employees. In addition to HR capabilities, it offers features meant to help unify your workplace by engaging employees, encouraging their development and making them feel appreciated.
Price
Pricing isn’t provided on the Namely website, so you’ll need to contact the company to get a price quote. Businesses are required to purchase an HR Fundamentals package and then have the option to add other core features like payroll and recruiting.
Core features
Recruiting and onboarding: Job posting, applicant tracking, background checks and onboarding.
Time and attendance: Time tracking, online timesheets, scheduling and managing paid time off.
Payroll: Unlimited payroll runs, tax filing, employee self-service, and W-2 and 1099 forms.
Benefits administration: Benefits management features that include an enrollment wizard, plan configuration and payroll integration.
Employee performance: Goal tracking, performance reviews and feedback from managers, coworkers and direct reports.
Training: Over 300 training courses with option to upload your own.
Namely’s focus on employees includes a company news feed, appreciations and employee directory. Employees are encouraged to log in to Namely, where the company has designed the layout to look similar to popular social networks.
Can I do my own small business payroll
Processing payroll by yourself can be complex, and if you’re doing it for the first time, it’s crucial to consult an expert before you get started.
The challenge of processing your payroll is what you may miss. For example, if you enter deductions or file payroll taxes incorrectly, you could expose your business to severe liability. However, you can still process payroll manually – in eight steps – and if you’re a small business owner who employs only a few people, it may be worth learning how to do payroll on your own.
How to do payroll: 8 easy steps
Step 1: Find your employer identification number.
Your first step is to set up an EIN with the IRS. The IRS issues this number so it can identify your business. If you’re a new business, you’ll have to apply for an EIN. You can read about how to apply for an EIN and learn more about the EIN program and process on the IRS website.
Applying is free, and the IRS prefers that you apply online, though you can also apply by fax or mail. International applicants may also apply by phone. Online applications, if approved, result in instant EIN assignment, whereas fax and mail applications take four business days or one month, respectively.
You’ll also need to check with your state and local (city and/or county) for those tax ID numbers.
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Step 2: Collect employee tax information.
Once you have your EIN, you need to collect relevant tax information from your employees. This means having all employees fill out a W-4 and an I-9. If you have contract or freelance workers, you’ll have to collect 1099s. On these payroll forms, employees provide legal information about their work status, elect to take out certain deductions, and fill out other important information.
You can’t process payroll without the details provided on these forms. There are laws on when you have to submit this paperwork to the IRS, depending on the information your employees provide. You can read more about submitting W-2s and I-9s to determine what’s required of your business.
Keep in mind that 1099s have a different set of rules for how to prepare them and submit them to both the IRS and your employees. Since the majority of work done for these forms falls to the employees, your business will only spend a short time – 15 minutes at most – distributing these forms to your employees and contractors, collecting them, and submitting them to the IRS.
Step 3: Choose a payroll schedule.
Once you’ve established all the relevant tax information for your business and its employees, you have to decide how you want to pay your workers. There are four types of pay schedule: weekly, biweekly, semiweekly and monthly. All four schedules have their advantages. Carefully consider how often you’ll pay employees, but don’t take so long that your employees go without pay for unreasonable periods. You should devote 15 to 30 minutes to looking up state laws about your payroll schedule.
FYI: Most companies choose either a biweekly or semimonthly pay period, depending on how they want to approach their yearly schedules, though some states require hourly workers to be paid weekly.
Step 4: Calculate gross pay.
Calculating gross pay is simple: Just multiply the number of hours an employee has worked in a given pay period by their hourly rate.
The easiest way to track employee hours is via spreadsheet. Once you have the total hours for a pay period, multiply that by the employee’s hourly rate, and you’ll have that employee’s gross pay. You must complete all of the steps discussed here for each employee in your company.
Here’s a quick example: An employee has worked 85 hours in your biweekly pay period and is paid $10 per hour. Your pay period this time around is 80 hours.
If you use a spreadsheet to determine your employees’ gross pay, you can likely make all the required calculations in just a few minutes with your software. If you plan to calculate all your employees’ gross pay by hand, you may need a few minutes for each calculation, and this time adds up quickly when you have an entire team of workers.
Step 5: Determine deductions, allowances and other withholdings.
One of the most important steps to processing payroll is determining each employee’s deductions and allowances.
As a quick refresher, exemptions and allowances are the same things: They refer to how much money is taken out of your paycheck during the year. Allowances are specified on a W-4. Deductions, which are specified by the employee on a 1040-EZ form, are the things you can deduct from your income when you do your taxes. This is where you have to pay close attention to how employees fill out their tax-related forms and withhold the proper amounts.
On top of deductions and exemptions, factor in other aspects of payroll processing and withholdings from each paycheck. Depending on your business’s situation, you may have to consider the following:
Since the rate by which you must multiply your employees’ paychecks for each of these deductions and allowances varies by category and employee, this step can be quite time-consuming – potentially on the order of hours – if done by hand. However, if you’ve stored and meticulously organized all your information in a spreadsheet, it takes mere minutes.
Tip: Storing and organizing employee tax deductions and withholdings with a spreadsheet or payroll software can expedite this process.
Step 6: Calculate net pay and pay your employees.
After tallying the deductions, allowances, and other taxes, subtract what’s being withheld from each employee’s gross pay. The resulting number is net pay.
Gross pay – deductions = net pay
Net pay is what each employee is paid at the end of each pay period. This is also known as take-home pay. Create a pay stub for each employee and track what you’re withholding. Tracking payment and maintaining the right records benefits your business in the long run. It also helps you keep track of how an employee is progressing at your company.
Once you’ve calculated net pay for each employee, pay each one by their preferred payment method, if you can.
Payroll is a big expense for businesses, and while using a payroll solution costs money, it can cut down on the time required to handle all these steps. It also means that your employees can receive their paychecks in various forms, including checks, direct deposits, and payroll cards.
As the prominence of payroll solutions suggests, calculating net pay – like determining deductions and allowances – can take hours by hand. Even if you can quickly determine net pay using a spreadsheet, delivering your payments to your employees without an automated system in place can likewise take hours.
Step 7: Keep payroll records and adjust to fix mistakes.
Maintaining honest and organized payroll records is essential. You want to be able to reference your records if there’s ever a discrepancy between an employee’s net pay and what they expected to receive. It’s also important from a tax perspective to have these records on hand, in case you have to work with the IRS. Mistakes happen, and as long as you correct them quickly and honestly, you’ll recover quickly.
Recordkeeping is also essential for payroll taxes you have to pay out on a regular basis. Most electronic methods of gross pay, deduction, and net pay calculation generate automatic records as long as you upload the files you used to cloud storage. Make sure to save a separate copy of any spreadsheets you used after executing your payroll.
For paper calculations and paychecks delivered by postal mail, you’ll need to keep written, tangible ledgers and mailing receipts. While each of these steps can take mere seconds, the time adds up when you handle these processes for several employees.
Step 8: Withhold, report and pay payroll taxes.
Part of processing your own payroll is calculating the payroll taxes that you have to withhold from employee paychecks. This includes income taxes, Social Security, and Medicare taxes. Your business may also need to pay federal unemployment tax (FUTA), state unemployment tax (SUTA), state unemployment insurance (SUI), and Federal Insurance Contributions Act (FICA) taxes without deducting these funds from your employees’ paychecks.
These are all important aspects of payroll. Luckily, there are online calculators that let you crunch FUTA, FICA, SUTA, and SUI numbers. Find out when you have to issue payroll tax payments in adherence with your state laws. Also, you must report new hires to the IRS and file your federal business taxes on a quarterly and annual basis. These steps, combined with the calculations involved in withholding, reporting, and paying payroll taxes, can take several hours per pay cycle, especially when the process isn’t automated.
Why do you need a payroll system?
The most obvious reason is that you need to pay people who work for your company. It’s easy to pay employees once a job is complete, but having a proper system in place mitigates risk and vastly improves your business operations.
It may sound counterintuitive, but payroll systems aren’t just about paying employees. Payroll processing is a detailed documentation system that tracks who is working for your company, how long they’ve worked for you, and how much money you’re spending on labor. Terms like “payroll processing” and “payroll system” can make this sound complicated, but it’s quite simple.
If you work with a payroll provider, your “system” is automatically set up through the company. If you’re on your own, you’ll have to set up your own system. The point of this system is documentation.
desktop payroll software for small business
Products classified in the overall Payroll category are similar in many regards and help companies of all sizes solve their business problems. However, small business features, pricing, setup, and installation differ from businesses of other sizes, which is why we match buyers to the right Small Business Payroll to fit their needs. Compare product ratings based on reviews from enterprise users or connect with one of G2’s buying advisors to find the right solutions within the Small Business Payroll category.
In addition to qualifying for inclusion in the Payroll Software category, to qualify for inclusion in the Small Business Payroll Software category, a product must have at least 10 reviews left by a reviewer from a small business.