Top 10 Payroll services 2024

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Buying Guide for Payroll Services

Regardless of how efficient and experienced your staff is, payroll remains one of the most time-consuming and complex of all administrative functions. Even if you dot every i and cross every t, there still remains the potential for error - which can include hefty fees during tax season.

This is behind the drive to outsource payroll services in many companies today. Not only will you save funds (overhead, staff training, staff hours), but you are guaranteed to get personnel working on your payroll who are trained in the very latest processes and up to date on the newest regulations.

Late payments during the year can generate fees up to $1,000 per incident. Small businesses account for nearly 40 percent of all penalty payroll fees paid annually, even though these companies are the least likely to have the extra float to afford them.

However, regardless of your company's size or maturity, there are still significant benefits to be realized by outsourcing your payroll needs to a dedicated service. If you are considering this transition, you can use the information in this Buying Guide to inform your choices.

Business Benefits of Payroll Services

Taking a look at what the average business must have in-house to do their own payroll can be eye-opening. First, you need to have the right software. Next, you need a staff that has been specially trained for payroll procedures and will receive ongoing training as needed. And you must have a core staff whose time is solely devoted to payroll (the moment one payroll period ends, the next begins).

As well, payroll employees must meet all tax deadlines, keep employee files updated and resolve any payroll discrepancies.Contrast this with outsourcing your payroll services. You no longer need to pay for special equipment or software. You don't need to pay for pricing initial and ongoing training. You can say goodbye to tax filing penalties for late payment. And you can downsize or transition your payroll staff into other positions more useful to growing your bottom line.

For many companies, the choice to outsource boils down to these three key benefits:

• Payroll accuracy.
• Payroll efficiency.
• Expert customer service.

As well, for any company with payroll in different states and 10 or more staff members, outsourcing payroll can feel like the only sane decision to make.

Choosing a Provider

While it can be tempting to just pick a provider who offers the lowest price, there are other facets of equal importance to consider.

Customer service. Is the provider's staff available when you need them and will you have a dedicated point person who is on call for you?

Easy to use. How easy is it to make employee database and records updates?

Accurate and speedy. This is the only thing standing in between your company and hefty fines.

Industry and payroll-specific credentials. Is the provider well-versed in the mechanics of your industry and are they licensed and certified?

You also want to know what you get for the price you are paying. Different payroll providers often structure their menus of fees differently, so be sure to ask these questions.

• What do I get for basic payroll service?
• Does it cost extra to run payroll again if there is an error?
• How quickly can payroll be re-run if there is an error?
• Can I integrate your records with our accounting software?
• How long have you been working in the payroll industry?
• On average, how many years do clients work with you?
• If I hire you and am assessed a penalty, do you pay?
• What is the extra charge if I need to file payroll in additional states?
• How long is my rate guaranteed (one year, two years, et al)?
• Do you provide assistance at tax time?

Pricing

Because payroll services is a highly competitive industry, you will likely find vendors eager to negotiate with you. However, what a vendor charges will also depend on their method for processing payroll, and the method can also affect whether you get more or less for what you pay.

Here is a general pricing guide you can use as reference:

• If you pay weekly: $12.00 plus $1.50 per check.
• If you pay bi-weekly: $25.00 plus $1.75 per check.
• If you pay monthly: $40.00 plus $1.50 per check.

You can also expect to pay additional fees for account setup, W2 processing, employee changes and reports. However, the more you need the more competitive you will find the prices becoming. So start with the best case scenario and work your way backwards when you are negotiating. Once a provider sees what you want, they may be willing to give a little more on price in exchange for the extra business.

Buying Tips

These final buying tips will help you select just the right payroll services provider for your company's payroll needs.

• Look for a payroll provider knowledgeable about your industry.
• Pick a provider who has some longevity in their industry.
• Take a good look at customer service - are they patient, professional and kind?
• If the provider waives a charge initially, ask when that waiver expires.
• If the quote seems really low, be wary. You want a provider who is wise enough to charge at least what is required to do the job well.
• If you are switching providers, wait until the end of the quarter or, ideally, the end of your business calendar year, to make the switch.
• For navigating switches between payroll providers, check their math very carefully to ensure you won't end up paying penalty fees or extra charges to re-do the payroll...or worse yet, you may be audited.