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How to determine the best payroll system for business?

There are several important things to consider before choosing a payroll service:

What features do you need? Consider if you need multiple payment options, garnishment payments, paid-time-off management, workers’ compensation administration, unemployment insurance and detailed paycheck records. One of the most critical features is multiple payment options, which means you can pay employees through paper checks, direct deposits or pay cards.

Which cost structure works best for your business? If you’re running payroll on a biweekly or semimonthly basis, paying per payroll run may be more cost effective for your business. If you run payroll several times each month, it may be better to pay a monthly fee.

Do you need to integrate your payroll software with time and attendance or HR software? Some solutions offer open APIs or more prebuilt integrations than others. Look for a flexible solution if you need your payroll software to integrate with other platforms you rely on, such as your current accounting software.

Does the payroll solution provide employees with self-service access? Employees should be able to log in and view pay stubs, end-of-year tax forms, and some payroll reporting features.

Do you need your payroll provider to manage time off for your employees? Some payroll systems include time-off features, which will correspond to your employee time-off policy. For example, you may want to allow your employees to request time off directly in the system.

Do you need your payroll provider to report new hires to the government on your behalf? Many payroll software platforms offer compliance-reporting tools that make it easy to keep state and federal government agencies apprised of your workforce as it changes and grows.
Once you have a better idea of the type of service you need, research some major players. Business News Daily reviewed more than 70 payroll providers to determine which were the best for small businesses. Check out our OnPay review, QuickBooks Payroll review, Gusto Payroll review and SurePayroll review to learn about companies we identified as the best payroll providers for small businesses.

Tip: If you’re looking for a broader overview, check out our in-depth reviews of the best payroll software providers. Compare their features and determine what solution is right for your company.

How should my small business complete payroll?
The payroll process can seem daunting, especially if this is your first small business. However, after you’ve partnered with a payroll provider, purchased payroll software or otherwise set up a payroll system, you won’t have to manually complete as many steps.

Check out these options for completing your company’s payroll:

In-house payroll: In-house payroll is when your company establishes its own process for completing payroll and keeping records. Either you or your firm’s HR representative usually handles in-house payroll. All information is processed manually, with no automated services or programs.

Payroll software: There are countless payroll software options – both free and paid – available online to help streamline your company’s payroll process. These programs automate the process by paying employees on set schedules and accurately determining how much should be taken out of wages for tax purposes.

Payroll provider: Payroll providers offer services to help other companies manage their payroll. Depending on your needs, a payroll provider can monitor your employees’ time off, run scheduled payroll, report new hires and file taxes on your company’s behalf. While an expensive option, most payroll services provide peace of mind by offering 100% accuracy protections in case your documents or taxes are filed inaccurately.

Professional accountant: An accountant can manage your company’s finances while offering business advice and guidance when needed. Accountants can run payroll on your company’s behalf, manage employees’ insurance and 401(k) benefits, and file taxes for your business while keeping you compliant with local laws.
You may find that less expensive payroll options suit your small company’s needs. However, to ensure you’re filing taxes accurately and efficiently, larger companies will want to consider looking into a payroll provider or software.

Tip: If you’re leaning toward hiring an accountant, learn how to find an accountant with the skills your small business needs.

What are some free payroll options?
While the best payroll companies charge for their services, free solutions may be ideal. Some options are, Wave and eSmart Paycheck.

Before deciding to use a free payroll provider, assess your needs and choose a service that meets your business and industry requirements. Many free providers are situation-specific – providing services to international companies, businesses employing independent contractors and very small organizations.

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