The Best Payroll for Small Business of 2024
Stay Tax-Compliant and Streamline Payroll Tasks Easily

Benefits of using a payroll service

A payroll service can help you manage and run your company payroll quickly and conveniently. Small businesses can greatly benefit from the payroll processing features and add-ons offered by these services. They ensure accurate and timely payment of salaries and may even cover the same processes for contractors.

Other valuable features provided by payroll services include benefits administration, tax calculations and filing, compliance support, and integrations for added administrative support and HR functionality. Gusto is our top recommended payroll service for small companies of up to 9 employees.

The payroll process – Simplified

Understanding the complexities of the payroll process is important for small businesses seeking to efficiently manage employee compensation processes. Whether overseeing a modest workforce or a more substantial one, the role of payroll services is important in ensuring accurate and timely pay. Before delving into the specifics, it is essential to comprehend the stages of payroll processing. Here are the key stages:

Determining pay cycle

Selecting the frequency of employee payments, typically on a weekly, biweekly, or monthly basis.

Collecting employee information

Acquiring pertinent documents such as W-4 forms, state tax withholding details, and banking information.

Calculating gross pay

Computing the total amount owed to employees before any deductions.

Determining net pay

Deducting taxes and other applicable deductions to arrive at the final amount disbursed to employees.

Initiating payment

Facilitating payments via traditional paychecks or modern direct deposit methods.

Settling taxes and record keeping

Managing federal and state tax obligations and maintaining meticulous records for regulatory compliance.

Payroll services – which features should I look for?

• Automation – Some payroll services have the capacity to automate a lot of the ongoing payroll processes
• Time and Attendance monitoring – Tracking employee work hours, absences, and related data to ensure accurate payment
• Tax compliance– Automate calculations and filings for federal, state, and local taxes
• Paycheck services – Ensuring proper disbursement of wages through checks or direct deposit methods
• Customer support – Knowledgeable and responsive customer support via chat, phone or email
• Reporting – Generate customizable reports on payroll, deductions, total compensation, annual taxes paid, etc

How much should I pay for a payroll service?

The cost of a payroll service can vary depending on several factors, including the size of your business, the complexity of your payroll needs, and the specific features and services offered by the payroll service provider. Typically, payroll service providers charge a base fee along with additional charges per employee or per payroll run.

For small businesses with basic payroll needs, you might find services that charge a monthly fee starting from around $39 to $79, plus an additional cost per employee per month, which can range from $4 to $10 or more. Larger businesses with more complex payroll requirements and additional services (such as tax filing, time tracking, and HR features) may incur higher costs. Our recommended payroll service for small businesses is Gusto. Pricing for the Gusto base package starts at $39 per month and $6 per employee.