Payroll services comparison tool
August 27, 2020
For SMBs, hiring a service to handle payroll calculation, processing, and documentation can save valuable time and resources. This comparison chart, with sample information, provides a framework for comparing potential services.
More on choosing a service:
The are several basic payroll services that all vendors should offer regardless of cost or additional services or features:
- Payroll processing: This is the primary reason a business will contract with a payroll vendor. The system should accept input and then calculate how much employees should be paid for each pay period. Systems should be able to account for shift differentials, overtime, holiday pay, taxes, and benefits. Once the calculation is made, the payroll service will deliver the paychecks to employees via paper check, direct deposit, or debit card.
- File and pay payroll taxes: This is also a primary reason for a business to hire a service. Payroll service vendors will collect employee withholding taxes and then file and pay quarterly payroll tax reports with proper on-time payments to federal, state, and local agencies. This service will also include the filing and issuing of year-end W-2 and 1099 forms.
- New hire reporting: The better payroll services will report new hires to federal and state governments on your behalf. This is a legal obligation and is therefore an important service that businesses should insist upon.
- Bookkeeping integration: Some of the larger vendors will offer payroll processing services as part of their complete accounting or bookkeeping package. With these services, businesses can expect payroll to automatically and seamlessly integrate with the rest of the bundled package.
- Paid-time-off management: Falling into the “convenient but not absolutely necessary” category, many of these payroll services will manage paid time off for employees by tracking vacation and sick hours earned and paid.
- Employee self-service: A potential timesaver for your business, many of the payroll service vendors will offer an online web portal where employees can access pay stubs, paid time off balances, and essential year-end tax forms.
- Mobile access: Many of the more sophisticated payroll services now offer mobile apps or mobile-friendly websites that let businesses manage and run their payroll systems from smartphones or tablets.
- Payroll reports: A well-run payroll service should be able to provide detailed wage and labor reports for your business. This data could be used to provide a deeper insight into how your business operates through internal business intelligence applications.