Payroll Software Buyer's Guide
The Best Payroll Software is About More Than Just Compensation
By Alainia Conrad, Market Research Associate
There are several reasons why companies of all sizes need payroll software. Probably the most significant reason is the cost of the workforce, estimated to be as high as 70 percent of operating expenses (according to the Human Capital Management Institute). Another important reason is the complexity of the regulatory system, with hundreds of rules at different levels of government: municipal, state, national and international. Failure to comply with all these regulations may lead to hefty fines or even lawsuits, which can have a negative impact on the financial stability and reputation of the company.
These are the most obvious reasons why companies need payroll systems, but there are also a few important reasons that may not be so evident. One of them is the relationship between employee satisfaction and compensation or pay. A recent study by the Society for Human Resources Management (SHRM) shows that of all the factors that contribute to job satisfaction, pay and compensation has the most significant gap between importance and satisfaction.
While 61 percent of employees consider pay and compensation to be very important to them, only 26 percent are very satisfied with this aspect of their job. This is not only due to the salaries people are earning, but also how they are being paid and the perks they receive.
- Software allows businesses to adapt to new types of work, such as temporary positions and remote work.
- A payroll system can assist in the management of all financial responsibilities.
- A comprehensive system will keep your business in line with all relevant laws and regulations.
- Analysis of payroll data provides insight into labor costs, compliance and industry changes.
What This Guide Covers
See how the top 10 leaders fare against the most common key requirements
Benefits of Automated Payroll Systems
Adapt to New Types of Work
Different ways of working are gaining traction worldwide, for example, temporary and remote work. While some companies have tried to fight these trends and impose work conditions on their employees, this new reality is forcing companies to adapt and be more flexible in regards to how and where their employees work.
Here are some statistics showing why these new types of work are important and why they should not be ignored:
- Temporary work has been around for decades and it currently represents more than a fifth of the total employment in Spain and the Netherlands, in addition to 15 percent or more of total employment in Finland, France and Sweden. While temp jobs represent only 2 percent of total employment in the United States, that number has more than doubled since 1990. Furthermore, one in 10 jobs created since 2009 in the United States are temporary jobs, according to The Economist.
- Remote work is also on the rise, as 91 percent of UK companies employ at least one employee who works from home. The trend will continue with successive generations. Take millennials, for example — the great majority of them would prefer to telecommute 100 percent of the time, according to CIPHR.
Since many employees will soon either work temporarily or outside of the office, it will become very difficult to track what they work on and for how long. In order to address this issue, companies need to trust their employees and provide them with the tools to easily track their work time.
For organic growth, payroll can become a challenge when the company expands into new geographical locations or diversifies its activities. When new business activities require new types of work (temporary, unionized, etc.), companies need to comply with different sets of rules. More complex activities also require more functionality, such as better time tracking.
When it comes to the number of employees, only a big shift like exponential growth can cause real problems. Most of the different types of systems are fairly scalable and able to adapt to the growth of the company. The challenge comes from the fact that growing companies will inevitably invest in HR or HCM systems that may or may not include payroll functionality.
If the company decides to keep its standalone system because it covers the company’s specific needs, it should make sure that the system can be used together with all the systems it needs to integrate with (ERP, HR/HCM, etc.).
Adapting to Technological Advancements
As technology becomes an increasingly important part of our lives, we expect the software we use at work to be as simple as the tools we use in our personal lives, such as social media platforms. This can be a challenge for companies that are trying to keep up with these new expectations, but also keep data secure. Bring your own device (BYOD) is an important challenge for companies since employees tend to use unsecured devices to access company payroll data. This trend extended to mobile apps and is impossible to control, even though some companies have tried to ban mobile devices at work.
Another challenge that companies experience as they grow is the need for integration between payroll software and other systems. Since many companies in industries like manufacturing and retail continue using on-premise ERP software, integration remains important. Even when companies decide to adopt mostly cloud-based software, silos previously created in on-premise software may move to the cloud. While integration between cloud systems is relatively easy, the more systems that are used, the more complicated integration gets.
Staying Up-to-Date with Changes in Regulations
One of the main complexities of payroll is that regulations always change. Most of the time, changes are minor. But they can still create problems if companies don’t keep up with the latest rules. Even though they don’t happen very often, major changes can be much more disruptive. An example is the General Data Protection Regulation (GDPR), a set of data protection laws that will affect the European Union. GDPR will impact any company doing business in the EU, as well as any company that processes data collected in the EU.
Expert recommendations and analysis on the top software
Ensure Proper Compensation
|At its core, payroll software is exactly what the name implies: software to manage payroll. These systems handle attendance processing and salary rates to oversee the essential function of paying employees. Payment options make sure compensation is distributed in the way most suitable to the company and their workforce.|
Analyze Processes and Other Financial Matters
|Business intelligence features provide a data component to corporate payroll services. Companies can use the insights provided by payroll data analysis to make adjustments to salaries, bonuses and other pay-related decisions.|
Provide Employees Access to View and Manage Their Payroll Information
|Self-service capabilities are essential to today’s tech-savvy workforce. Employees want to be able to see their information without asking HR for assistance, saving time across the organization.|
Expert recommendations and analysis on the top software
Basic Features & Functionality
Expert recommendations and analysis on the top software
Advanced Features to Consider
Expert recommendations and analysis on the top software
Online Payroll Services Comparison
Like all software systems, payroll systems aren't just tools that companies can simply install and expect to solve all their problems. First, companies need to understand why they need systems and how it fits into their overall business strategy. Second, strategies and processes need to be translated into features and functions that can support them successfully. And finally, the technical infrastructure needs to be implemented in order for payroll applications to be deployed and maintained, ensuring it can seamlessly exchange data with other systems.
These three components of a payroll software selection initiative (strategic, functional and technical) should be implemented together for optimal results. The order in which these are performed also matters since functionality without strategy is meaningless. Technology can vary a lot depending on the functionality it supports.
Since payroll is so important for companies, there are many vendors that offer some kind of software. The main categories of software providers that offer payroll include software companies that focus exclusively on payroll (obviously), HR and HCM vendors that offer it either as a part of or in addition to their system, and ERP vendors that include a module in their offerings.
Questions to Ask Yourself
- What’s wrong with your current payroll system (if you have one)?
- If your business doesn’t currently use software, why are you interested in adopting a system?
- Which features are most important to your organization?
- Will your current infrastructure be responsive to adoption? If not, what changes should be made in preparation?
- What budget and time constraints do you have?
Questions to Ask Payroll VendorsOnce you have identified your short list of payroll companies, consider asking them the following questions:
- Does the system have mobile capabilities?
- Does the software include analytic functions?
- Is a core HR base included in the system?
- Is the system scalable?
- Does the system support compliance management and adapt to changing regulations?
RUN powered by ADP is a cloud-based payroll solution designed to meet the needs of small businesses (under 50 employees). ADP has other paid options for larger organizations. Basic capabilities, such as benefits administration and hiring, are available besides the payroll module. The vendor also offers professional services to help companies with taxes, benefits and insurance.
Paycom’s software suite automates a variety of the core tasks necessary for attracting, managing and retaining talent. It helps businesses to streamline their processes and relieve the burden of unnecessary paperwork, allowing managers to focus on tasks that cannot be automated. Its cloud-based deployment lets managers access its features from any internet-connected device, enabling them to complete tasks even when they’re out of the office. It facilitates tasks such as benefits administration, reporting, onboarding and learning management.
Paylocity is an all-in-one cloud payroll solution that enables organizations of every size to execute administrative tasks such as talent acquisition, time and labor management, and other core processes. Its functionality includes multiple configuration options that allow companies to customize according to their needs.It contains robust security measures such as encryption, real-time backups and secure data centers. It also has a user-friendly mobile app that is compatible with both iOS and Android devices.
Paychex provides pay processing and general human resource solutions for businesses of all sizes. Users can choose from four different pricing plans, all of which offer core HR and pay processing functionalities. The web-based system assists with hiring, onboarding, tax filing, benefits management, time tracking and more. Users can customize the solution to meet their specific business needs, adding only the features that they will use. This allows all users to get the best system to fit their needs, whether they be simple or complex.
Paycor is a full-service HR system designed to meet the needs of small and medium-sized businesses. Paycor provides solutions that assist with a variety of core HR tasks, including hiring, learning and development, time tracking, and payroll.The cloud-based system is suitable for businesses across all industries. However, solutions can be customized to benefit a variety of specific industries including restaurant and healthcare industries. Ximble features are now integrated after its acquisition in 2019.
UltiPro, a cloud-based solution from Ultimate Software, brings together core HR, talent management and payroll into a unified HCM suite. Allows users different levels of access that can be customized based on business needs.In addition to these capabilities, the software is equipped with a robust set of business intelligence and predictive analytics tools. Powered by AI and machine learning, they provide data insights to drive intelligent decisions.
Gusto offers a web-based payroll system that meets the needs of small and medium-sized businesses. This vendor provides assistance with a variety of processing tasks such as payroll filing and direct deposit. Gusto also offers accounting and time-tracking integration options.This product features workers compensation, 401K and other HR tools to streamline all parts of the process. The system is also able to assist with tax filings. It enables users to check more than 50 states to assist with properly filing both state and federal taxes.
QuickBooks Payroll is an Intuit solution designed to meet the needs of both small and growing businesses. There are a variety of plans, starting with small packages built for independent contractors and self-employed individuals. The variety of products and packages enables users to find a solution that fits their business's unique needs. This product offers specialized features for companies in a variety of fields, including manufacturing and retail.
Dayforce HCM combines all major HR components into a cloud-based, unified solution. Suitable for smaller companies that need to manage over 100 employees to enterprises with thousands of employees, this program helps businesses tackle every aspect of the employee lifecycle. Companies can take advantage of professional services, payroll tax filing and standardized implementation processes via Dayforce Activate.
Zenefits is a cloud-based suite of tools that enables companies to manage HR, payroll and benefits from a central platform. The solution is targeted at small and mid-sized businesses.Users can view the company’s structure via a dynamic org chart, which gives a real-time picture that shows changes to titles, contact info and other system updates. An employee directory centralizes information to facilitate easy collaboration.
Xero is an online accounting software designed to meet the needs of small businesses. The easy-to-use interface helps companies visualize their financial position and monitor performance based on real-time data. The system is designed to connect businesses with third-party advisors and services in order to increase collaboration. This vendor offers a variety of integrations, making the system capable of handling a variety of tasks associated with accounting.
Workday HCM is a SaaS solution that unifies all aspects of managing the employee lifecycle in a single system. The suite of modules allows organizations to operate globally, run payroll, administer benefits, manage talent and facilitate learning, among other things.While designed for medium and large enterprises, the platform can support the needs of smaller businesses as well. A business process framework provides control for all internal processes. The system is also equipped with audit tools and built-in security capabilities, and it offers mobile apps for flexible access.
Kronos Workforce Central is a full-service HR suite designed to meet the needs of businesses of all sizes, regardless of industry. Based in the cloud, it is fully scalable, giving users the flexibility to use the most important features on the go no matter how big the organization grows to be. With a variety of features and functionalities, managers can automate and streamline many core HR tasks. It facilitates managing the entire team, driving employee engagement and helping bolster business processes.
Designed to meet the needs of small and medium-sized businesses, APS Online is a cloud-based workforce management product. It provides features to help users automate and streamline a variety of core HR tasks including processing payroll, tracking time and attendance, hiring the best talent, managing employee benefits, and creating analytic reports based on user data. Users can access their account from any internet-connected device to conveniently complete tasks. Built with scalability in mind, it is able to grow with businesses. Additionally, each organization has access to a dedicated support team and account lead that can assist with tech support and field general assistance inquiries.
SurePayroll is a web-based solution suitable for small businesses with less than 100 employees. Paychex Inc. acquired the system in 2011, providing users with access to more resources than ever before.Users can choose from two versions of the software — one is suited for small businesses while the other is designed for the needs of individual households that employ a nanny or other caretakers. The full-service solution assists with managing benefits and workers’ compensation. The system can also help with processing pay, employee screening and more.
Justworks is a professional employer organization that helps businesses automate and streamline multiple administrative functions. By automating tasks such as payroll, benefits administration and reporting, it saves organizations both time and money. Ensuring compliance and providing administrators with access to robust benefits options, it elevates traditional administrative practices and provides the support users need to make the most of its capabilities. Designed with small and medium-sized businesses in mind, it offers multiple pricing plans and can scale with the growth of any business.
Patriot Payroll is a full service software that offers a variety of integrative add-ons to users. The system’s core functions assist with core compensation tasks, while the add-on features enable the system to function as a full HR suite. This web-based solution processes earnings and calculates taxes automatically. It also offers assistance with set-up and makes support available to clients via multiple channels.
Namely is a cloud-based platform for mid-sized businesses. A suite of connected modules allows organizations to manage payroll, time and attendance, benefits, and talent. Also equipped with additional features for general HR activities, such as document storage and management, customizable dashboards, and audit trails.
Fingercheck is a cloud-based human resources system. The system provides tools that help to streamline hiring, time tracking and payroll tasks along with various other HR management tasks. Provides benefits to users at all levels, allowing both employees and employers to streamline workflows. Users can easily automate their processes.
OnPay is designed to address core payroll needs for small businesses and handles basic HR functions as well. The system integrates with a variety of other HR systems to enhance processes such as time tracking, accounting, benefits and compliance software integrations. The system only requires a few minutes to set up and features an easy-to-use interface. The solution also offers assistance with data migration for new users, making the transition from older or existing systems simpler.
Square Payroll is a cloud-based solution that is suited for businesses of all sizes. The solution offers two pricing packages, one of which is designed specifically for organizations that only hire contractors. The solution offers features that assist with processing pay, filing taxes, employee self-service and more. The system assists with switching from an old system or provides assistance and resources to users who are processing pay for the first time.
ADP Vantage HCM, a cloud-based, on-premise and open architect solution, brings together core human resources services through integrated modules that help manage payroll, time and attendance, workforce management, talent management and more. It helps organizations of all sizes across the U.S. improve employee engagement and gain real-time insights to enhance workforce processes and workplace operations. It simplifies office administrative operations, minimizes risks, reduces expenses and provides dedicated guidance to enhance operational efficiency. Talent managers can streamline the onboarding process and synchronize performance with pre-set goals on a monthly and yearly basis. It also offers a mobile application.
BambooHR is an HRMS designed for small and medium-sized businesses and provides solutions for organizations in all industries. Based in the cloud, it streamlines data collection throughout the employee lifecycle, warehousing relevant information in a centralized database making it easily accessible to both managers and individual employees. It facilitates hiring, onboarding, compensation administration, performance management, provides employee self-service capabilities and everything in-between. It allows organizations to make customizations, set multiple administrators and maintain inactive employees.
Sage Payroll is an HR system used by businesses of all sizes across all industries to process pay in-house. It streamlines tasks such as tallying hours worked, calculating tax and managing data. Its single platform approach lets users streamline their pay processes and ensure employees receive accurate paychecks at the end of each pay period. If you integrate with a full suite, users can automate a variety of tasks in relation to processing pay, including tasks like time and attendance tracking, benefits management and recruitment.
SuccessFactors HR combines a set of integrated products to form a complete suite for HCM. The HR portfolio enables companies to execute basic HR functions as well as expand to strategic initiatives and planning to remain competitive. Based in the cloud, uses technology such as AI and machine learning to solve pressing human resources demands. In addition, SAP offers consulting and professional services to help companies implement integrations, deploy HR solutions and more.
Viventium, a cloud-based solution for small and mid-sized organizations, enables talent managers, executive leaders and organizations to manage general human resources, payroll, recruitment, time and attendance. It offers flexibility, expert guidance, easy customization and usage, and other facilities to aid HCM needs. Employers can track employee data, run mock audits, create custom action plans, save employment data, run data analysis, develop employee surveys, accept or reject leave requests, add essential candidate information to dedicated profiles and more.
SyncHR is a comprehensive human capital management (HCM) platform that delivers benefits, payroll, time and attendance, talent management, and core HR capabilities to mid-market companies. The cloud-based system automates common tasks and can integrate with other business systems to provide real-time insights across an organization.
Wagepoint is an online payroll solution that tracks and manages income. Designed for small businesses, it can compensate salaried, hourly or contracted workers. Users have easy access to W2s and pay stubs, even after termination. It also handles new hires, multiple forms of payment, direct deposit, extra income, tax forms and more.
PrismHR offers flexible, customizable and efficient solutions to support the comprehensive payroll, benefits and HR management requirements of small businesses and HR service providers. It provides assistive capabilities through the six key modules: platform, payroll, talent, time, employee portal and benefits. Its marketplace offerings include tools for financial wellness, identity protection, time and attendance, voluntary insurance, compliance, consulting services, taxes and more. These add-on capabilities are pre-integrated and give HR providers validated connections.
The PeopleStrategy HR suite enables small and medium-sized businesses to manage all aspects of HR from one cloud-based platform. Its modules cover core HR (performance, comp planning, onboarding), workforce management, payroll, benefits administration and talent acquisition. Capabilities include applicant tracking, self-service, analytics and reporting. It automates many parts of the administration process and stores information in a single database to eliminate double data entry.
Payroll by Wave is a web-based, best-of-breed system built with small companies of 10 employees or less in mind. A simple, paperless solution to help pay workers and the government accurately and on-time, setup can be completed in just 10- to 15-minutes
WebHR is a full-service, cloud-based HR solution with payroll capabilities. It standardizes, manages and automates recruitment, hiring, payment and more. Through it, administrators and employees alike can complete enrollment, onboarding, benefits, background checks, attendance and more.Serving over 25,000 companies and around 200 countries, there’s a free version with limited functions that serve five or fewer users. For regular, paid subscriptions, it can support up to 1000 workers. It uses AI to streamline the entire process.
Engineered for small businesses, CheckMark Payroll software for Macintosh and Windows is a comprehensive solution for small business owners, accountants, and payroll professionals. Our program is packed with high-end features including direct deposit, MICR encoding blank check stock printing and you can process as many payrolls as you want for all of your employees and companies for one low price.Use it as a stand-alone program, or import your payroll information to most popular accounting systems, including CheckMark's own MultiLedger.Up-to-date Federal and State tax withholding tables and printable IRS forms are included, and there are NO monthly fees. Processing your payroll in-house will save you money and keep employee and payroll records safe and secure. Download our CheckMark Payroll software free trial and check it out for yourself! Calculate payroll, print payroll checks, and pay employer taxes in just a few minutes. Satisfaction guaranteed!
Optimum HRIS is a completely integrated solution with one master database, so you can update employee records once across all systems. No more duplicated entries to maintain! Not only is our software developed in-house, we also support it ourselves. With Optimum, you’ll get to know your dedicated, highly trained support representative by name. Our HRIS software is designed to suit your specific needs. We provide web-enabled in-house software for both Windows and IBM i (AS/400, iSeries, and System i) as well as a cloud-based SaaS solution.
Criterion's Human Capital Management (HCM) is a user-friendly, intuitive system that provides smoothly integrated Human Resources Benefits, Payroll and Talent Management. Regardless of your role, Criterion HCM provides the capabilities needed to effectively manage the entire employee lifecycle. Criterion's human resource management solution significantly reduces the time your HR department spends on administrative tasks and allows them to focus on strategic initiatives that impact the growth of your business. Following HR best practices and incorporating streamlined workflows, the system simplifies the administration of employee benefits and open enrollment, compliance reporting and tracking employee details and events.
BerniePortal is a cloud-based solution for all talent acquisition, onboarding and management related needs. It helps with applicant tracking, employee onboarding, benefits administration, PTO tracking, time and attendance, compliance, performance management, COBRA administration and 1095-C reporting. Small and mid-sized enterprises can use it to optimize human resources, enhance employee experience and productivity, and spend time on essential tasks. It also provides payroll integration that enables employers to integrate with several payroll offerings and employee benefits data in payroll. A network of healthcare advisors and brokers nationwide are available for integration.
Pricing & Cost Guide
See the Price/User for the top payroll systems… plus the most important considerations and questions to ask when shopping.
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