6 Best Payroll Services for Small Businesses in 2023

Making errors in your payroll can cost your small business. Every year 1 in 3 small business owners get penalized by the IRS for payroll errors. So why not consider a payroll service?

Small business payroll processing helps businesses pay employees correctly, manage tax withholdings and ensure deductions for your retirement, health benefits, and garnishments are taken care of. Online payroll companies offer an easy solution for all your small business payroll and payroll tax needs.

Make sure you pick a payroll service that matches your small business’s needs, and don’t be afraid to cancel if you find that the system is not working for you. Many options are available in the marketplace, but here we have picked five of the top payroll service providers for you to consider.

Key Takeaways

• Small business payroll software offers a quick and easy alternative to managing payroll yourself.
• Ensuring your payroll is accurate is essential to avoiding penalties and keeping your employees happy.
• The right online payroll service will depend on your budget and the size of your small business.
• Consider payroll versatility, tax assistance, digital security, and customer support when choosing your payroll providers.

Here’s What We’ll Cover:

• What Are Payroll Services?
• How Do Payroll Services Work?
• The 6 Best Accounting and Payroll Services for Small Businesses of 2023
• How To Choose A Payroll Service for Small Business
• Benefits of Payroll Services for Small Businesses
• Conclusion
• Frequently Asked Questions

NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas outside of supporting questions about FreshBooks. If you need income tax advice please contact an accountant in your area.

What Are Payroll Services?

A payroll service is a third party that helps your company process payroll and calculate payroll taxes. Payroll services typically keep track of your employee’s hours and worker’s compensation, then help to ensure paychecks are distributed accurately and on time. A payroll service can also help you process payroll taxes and create payroll statements to keep for your records.

Payroll services can take several forms, including individual providers, companies, or software that you can use for your small business. Choosing the right payroll service for your business may depend on your company’s size and budget, and how whether you prefer to entirely outsource the process or conduct your payroll in-house with the help of a payroll software.

How Do Payroll Services Work?

Payroll services take the information you input, like workers’ hours and wages, and process that to provide timely and accurate paychecks. First, your payroll service will integrate with your other business systems to access necessary information like hours worked. It may also integrate with payment systems so that employees can receive their paycheck in the preferred method—by physical check or direct deposit. 

Some payroll services may have an employee access portal so that employees can add their personal information and payment preferences, while others restrict access to managers and business owners. Once all payment information and hours are added, the payroll service will generate and send out paychecks according to the schedule set by the business owner. Typically, your payroll service will make any necessary deductions before releasing paychecks and provide employee tax forms at the end of the year. Some payroll services also offer tax filing support so you can file your payment information online.

Ready to make your time tracking easier? FreshBooks’ time tracking software help you record your and your employees’ hours for a clear and detailed record. Click here to try it free and discover how FreshBooks’ time tracking can make your payroll easier than ever.

The 6 Best Accounting and Payroll Services for Small Businesses of 2023

1. Freshbooks Payroll

FreshBooks helps small business owners process payroll quickly and easily. FreshBooks integrates with Gusto, a straightforward payroll service that provides plenty of perks like unlimited payroll runs, direct deposit payments, automatic tax filing, and more. You can set up the payroll system in minutes and have access to step-by-step support if you have any questions about your new payroll software. 

Save time on accounting so you can get back to focusing on your business. FreshBooks’ payroll software provides automatic tax filing, pulls payroll transactions as an expense, and lets you direct deposit for quick and easy payment. Click here to sign up for FreshBooks’ payroll software to effectively manage your business today.

2. OnPay

While OnPay doesn’t have all the tools and add-ons that Intuit offers, it does provide a simpler pricing setup with straightforward payroll necessities that are especially great for small business needs.

For $47.95 per month, you get up to 10 employees’ worth of unlimited pay runs, tax filings and deposits in one state (with additional states running you extra), and check to print. This mobile-friendly system is easy and quick to use and doesn’t have a steep learning curve.

If you have more employees and need a payroll service that can handle a bigger business, OnPay can still manage that. You can add on extra employees for $1 monthly for each employee after your first 10. Plus, you can add a direct deposit functionality for an additional $8 per month.

3. Gusto

Previously known as ZenPayroll, Gusto is an intuitive payroll solution for all sorts of small businesses.

On top of automatically filing your local, state, and federal taxes, Gusto will integrate with your accounting software. Plus, it will give your employees access to their information, like pay stubs and W-2s, even after that has left the company. All of these features mean fewer data entries for you, more convenience for your employees, and generally an easier time for everyone. 

FreshBooks integrates with Gusto to provide your business with complete accounting and payroll software. Say goodbye to manually transferring information between your two systems, and enjoy the ease of integrated software that can directly pull payroll transactions and record them as a business expense. Click here for your free trial and learn how FreshBooks’ payroll software can support your small business.

4. Namely

Namely is one of the biggest new human resources services in the market.

Their prices are undisclosed but Namely offers a full suite of payroll and HR tools to help you cut down on wasted time. Namely will automatically deal with benefits deductions, pay and file all of your payroll taxes, provide year-end reporting and time-tracking, ensure your small business is compliant with regulations, and give employees access to their payment history.

Namely also helps with employee benefits like health insurance, life and disability insurance, wellness programs, commuter benefits, and other plans. Plus, get assistance with hiring and management with onboarding documents and performance reports.

Namely is a modern, comprehensive HR service for small businesses, not just a payroll tool.

5. Intuit Payroll

Whether you are looking for a barebones payroll service or want a fully automated and detailed program, Intuit Payroll has a wide spectrum of options.

The Intuit Basic option for $20 per month plus $2 per employee per month will run your payroll instantly and calculate (but won’t file) your taxes. The most popular Intuit Payroll package is the Enhanced option which costs $31.20 per month and adds tax form completions, filing, and payment on top of the basic services. Finally, their Full-Service option will run your payroll completely, transfer data from other payroll services, and guarantee its accuracy for $79 per month.

Your package depends on how much time and energy you have to input your payroll data. Intuit also offers human resources services for small businesses, like workers’ compensation and compliance assistance.

6. Sage

Sage offers different payroll packages depending on how big your small business is. If you have 10 or fewer employees, Sage Payroll Essentials is just $49.95 monthly. For comparison, Intuit’s Enhanced plan runs around the same price and offers fewer features.

If your business outgrows this stage, Sage has you covered with its Full Payroll Service, which is priced to match the size of your business and how often you run payroll. This package comes with a dedicated payroll agent, a check delivery service, unlimited deductions, custom report-building, and additional benefits administration.

Sage knows how to keep their customers happy. They have the highest customer retention rate in the payroll service industry.

How To Choose A Payroll Service for Your Small Business

Choosing the best payroll service provider for your small business is key to making your bookkeeping easier. Consider the following factors when deciding which payroll service is right for you:

• Does it offer versatile payroll processing? A good payroll setup should be able to manage things like overtime, bonuses, and deductions when calculating paychecks.
• Can it support your tax filing? Your payroll system should offer automatic tax forms and online filing options for you and your employees.
• Is it a secure system? Payroll software handles sensitive information, so they should have strong digital security.
• Can it integrate with your other software? A payroll system that integrates with your accounting system makes it easier to generate clear and detailed expense reports for your records.
• Does it offer good customer service? If you have a question, you want a payroll provider that can answer you quickly at any time.

Benefits of Payroll Services for Small Businesses

Having good payroll service providers can benefit your small business in many ways, including:

• Time Savings
  • Managing your payroll can be a time-consuming process. Outsourcing payroll to an online service can automate this, cutting down on your accounting time so you can focus on your business goals instead.
• Accuracy and Compliance
  • A small mistake in payroll can cost your small business. Whether it’s overpaying an employee or missing tax laws that get penalized by the IRS, it’s worth it to have an automated payroll system that can catch any accounting errors before they become an issue.
• Cost Savings
  • Hiring an expert to manage your payroll is an additional cost for your small business. Payroll services offer an affordable and reliable alternative, and the automated process can manage your payroll quickly and accurately.
• Access to Expertise
  • As a small business owner, keeping an expert on staff for every position can be difficult. Payroll services provide expert knowledge when you need it without the expense of keeping someone on your team.

Conclusion

An online payroll service offers an affordable, accurate, and efficient way to manage your small business’s payroll. Switching to automated payroll cuts down on your accounting time and makes it easy to find required tax forms and digital records of important information.

Reliable payroll services are also important for protecting your business from unnecessary costs. Payroll errors can create challenges for you and your employees and even incur penalties from the IRS. With the expert support of a payroll service, you can automatically produce paychecks and tax forms and enjoy online tax filing for quick and easy payment.

FAQs on Online Payroll Services for Small Business

How much do payroll services cost for small businesses?

The price of payroll services varies depending on the provider and the size of your business. Most payroll services have a base fee starting around $30/month, with an additional cost for every employee you add.

How do small businesses set up payroll?

Setting up an online payroll system is easy for a small business. Your payroll services program will guide you through the necessary steps to input information, but it’s best to come prepared with your employee’s information, employee identification numbers, and work hours to speed the process along.

Can I do my own payroll for my small business?

While you can do your payroll for a small business, it can often be time-consuming if you’re unfamiliar with the process. Having an external support system like payroll processing software helps you do payroll quickly and easily and helps avoid mistakes that could cost your business.

What is the easiest payroll program?

FreshBooks’ payroll software offers an easy way to process your payroll, and it integrates with other accounting software to create clear and accurate records for tax season.

What is the best way to do payroll for a small business?

An online payroll system is one of the best ways to manage payroll as a small business. It automates your payroll process to assist with speed and accuracy and offers an affordable alternative to managing payroll yourself.

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