Buyer's Guide: How to Choose Payroll Software & Provider

Choosing payroll software that actually does its job is easy when you have this guide by your side. 

Don’t you hate it when you forget to pay your employees on time? AGAIN? It’s not your fault, though. You have so much on your plate, it’s impossible to remember. Plus, it takes hours to calculate their salary. 

You’re not alone in this, however. According to UKG, 54% of Americans have had a paycheck issue. Salaried, hourly, and gig workers have had their own remuneration problems.

The solution? Payroll software, which automatically handles different payroll processes like payment options or taxes. With these automation features, you save time and prevent costly errors.

But before you take the plunge, you need to follow the necessary steps to choose the right payroll software for your business needs. And that’s where this guide comes in handy. 

What is Payroll Software?

Payroll software is an application that automates the payment process for your full-time or hourly employees. It helps you manage bonuses, salaries, and wages but also tracks time off and employee benefits.

In a nutshell, payroll services track all payments, maintain compliance with tax laws and regulations, and monitor time and attendance. As a result, you get transparency into all payroll reports, such as paystubs, and reduce the risk of errors and noncompliance.

Anyone can use this software, from small businesses to large enterprises. But how does it work? Let’s find out.

How Does Payroll Software Work?

Think of a payroll system as a self-service portal. Employees can access it any time they want to view or edit their personal information and set their payment preferences (direct deposit, payment card, or paper check).

Doing this helps employers roll out payments more easily. With all the info they need in a single tool, businesses can automate payments for each employee, regardless of their location or type of contract. 

More accurately, organizations use payroll software and services because it: 

• Simplifies time-consuming tasks and has the power to easily adapt to any change.
• Enables greater transparency in their finances so they can stay on budget.
• Saves tons of time, allowing organizations to focus on more high-level tasks.
• Ensures they pay employees on time, every time. 

Moreover, payroll software integrates with the business systems you already use, such as accounting and finance. This lets you run payroll accurately and on time, building employee trust. Speaking of trust, let’s talk about the benefits of this type of software.

What Are the Benefits of Using Payroll Software?

The most important advantage of a payroll tool is that it frees your human resources (HR) department’s time. Instead of doing the same boring routine tasks, they can focus on more important initiatives. 

But aside from streamlining payroll, what else does it do? Well, it…

• Ensures tax compliance: Did you know that up to 30% of companies misclassify employees? This takes a huge toll on the economy, leading to costly fees. Payroll software can prevent that and help you comply with state and federal laws. Some tools even generate summaries and reports for tax-filing purposes. 
• Saves time and reduces costs: Through automation, HR teams can reduce costly human errors, such as inaccurate payroll data input. As a result, you save time and money, allowing you to focus on meeting your organizational goals. 
• Increases accuracy and transparency: No more guesswork and wasted time. A payroll solution ensures you deliver accurate employee paychecks directly into their bank accounts, and on time, no less. This leads to increased trust and confidence — and happier employees!
• Offers flexibility and customization: New work trends emerge every day. A current one is the pursuit of nontraditional applicants, with 56% of candidates applying for jobs outside their current area of expertise. Which means that you constantly need to adapt and your payroll software should follow your lead. Your chosen solution must offer a range of customizable features that meet your specific requirements at all times. Besides, it should support different pay frequencies and tax deductions, so you can always rely on it when you need it most. 

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So, have these benefits persuaded you to pursue payroll software? 😊 Hope it did or it’ll be awkward. Our next section explores the steps you need to take to choose the right payroll platform. 

How to Choose the Right Payroll Software

To harvest the benefits of a payroll system, you need to own a payroll tool. And while it’s easy to Google search ‘best payroll systems’ and choose the first one that looks kind of nice, you’re going to be sorely disappointed. It might not be what you need. 

So, selecting your payroll solution requires careful planning, just like when choosing any other HR software. It starts with an eight-step process.

Step #1: Assess your business needs

Rome wasn’t built in a day. Choosing the right payroll software is the result of continuous efforts and planning. 

And it all begins with assessing your payroll needs. Since every business is unique, you should answer the following questions: 

• How many employees do you have? Payroll systems have different capacities. Be careful not to pay for more features than you need. 
• How often do you pay your staff? Does it vary from role to role? Your payroll software should take care of multiple pay frequencies while maintaining accuracy. 
• Do you employ international workers? If you do, your payroll systems should be able to handle international payments. And prevent surprise payroll taxes. 
• Do you have different employee types? Maybe your team employs hourly, salaried, and contract workers. The app needs to streamline the complexity of your workflows. 

By figuring out your main goals, you’re one step closer to choosing the right payroll software. 

Step #2: Make a list of your desired features

So, you’ve identified your needs and know them by heart. Now, it’s time to make a checklist of your ‘must-have’ features. Do you need seamless benefits administration? Or time-tracking features? Does the tool have software integrations with the tools you use daily? 

For example, maybe you do all team communication in Slack. If your payroll system doesn’t integrate with this tool, it’ll make your life harder and more frustrating.

So, think hard about the top features the payroll system should have to meet the business needs stated above. Try to prioritize functionalities like pay frequency or automation that’ll do the heavy lifting for you. 

Step #3: Assess your budget

You don’t wanna spend all your money on payroll software that has plenty of features if you’ll only ever use half of them. So, set a budget that allows you to get the features you want. 

Later on, you can consider additional features if needed. Be careful, though, as each tool’s pricing varies from vendor to vendor. Plus, they have different charging models. For example, many offer a monthly subscription with a base fee but an additional charge per employee. 

Take this into account when evaluating payroll software. 

Step #4: Create a list of possible providers

Now this is where the fun begins. Take your list of features, budget, and goals, and start researching the best payroll software providers for your particular needs. It might be hard to get started at first, especially since this market is likely to continue to grow –– from $7.3 billion in 2022 to an estimated $15.43 billion by 2030. But here are some questions that’ll greatly aid your quest: 

• What is the tool’s main feature?
• Does the software meet your requirements? 
• Is it suitable for small or large organizations? 
• Does it have a free trial or demo? 
• What do people say about it? 
• What is the maximum number of employees it can handle? 
• Does it have integrations with your favorite tools? 
• Is the tool’s price within your budget? 
• Does it have multiple pay frequencies?

Keep these questions in mind when you’re creating your list — it’ll definitely help make this process easier.

Step #5: Consider security capabilities

One feature you should never skimp on when selecting payroll software is data security functionalities. 

This tool plays with sensitive financial and personal employee data; you can imagine how an unwanted cybersecurity breach can be ruinous for your business’s reputation. 

So, select a solution that has strong security measures in place, such as data encryption or two-factor authentication. For reassurance, you can contact the vendor’s customer support and ask how they’ll protect your information in case of a breach. 

Security usually comes paired with tax and labor compliance. If not, you should make sure the chosen payroll management tool also updates its software frequently to reflect new income tax laws. 

Step #6: Consider add-ons and integrations

If you’re tired of disconnected systems and switching tabs back and forth, then you should look for payroll platforms that integrate with your existing tools. 

Plenty of payroll software offers third-party integrations with your accounting software or other core HR processes that help you streamline your workflows and make your HR team’s life easier. 

For example, Guru — our enterprise AI search, intranet hub, and wiki tool — integrates with over 40 HR tools, including payroll software. Why is this extra helpful?

Because you can create a single powerful source of truth that keeps your knowledge and employee data consistent across all boards. And connects it with documented information. 

Step #7: Create a shortlist

You’ve probably already uncovered a few solutions that might mix well with your workflows. But these gems might get lost in the myriad of other tools currently on your list. 

It’s time to get trimming. 

Compare your list of vendors with your list of must-have features and narrow them down to three or five good options. The secret to doing this is to: 

• Read reviews on trusted sites like TrustRadius or G2 to see what users have to say about the tool.
• Ask for recommendations from colleagues as chances are that they already use a good payroll tool. 
• See case studies that show how a certain vendor solved people’s problems. 

By the end of this step, you should have a list of the tools you most wanna test. Which brings us to our final phase…

Step #8: Request demos and start free trials

With your shortlist in hand, you now need to go to each vendor’s site. And see if they have free trials or demos you can try out.

Chances are most of the software providers do have 14- or 30-day trials you can take advantage of to test the platform. By seeing the payroll software in action, you can evaluate its ease of use, how well it performs, and its services. 

This is a very critical step before making a purchase. A tool might look good at first glance, but maybe it’s challenging to understand and your employees hate it.

That’s why you should also ask other people from different departments to take the tool for a spin. They can tell you which solution is the right fit for your organization and overall offer a more objective perspective.

Now that you know how to choose the right HR software, what else is there to do?

Look at the payroll system’s most wanted features!

What Features to Look for in Payroll Software

Not all payroll solutions are created equal. Each tool has unique features that make it good; you only need to know what to look for. So, let’s explore some of the most common features of a full-service payroll solution: 

• Time tracking integrations: A time-tracking capability is highly useful if you have hourly employees, as it allows you to automatically enter the data and ensure its accuracy during a pay period. 
• Direct deposit options: Your employees, new hires, and even potential candidates expect you to give them instant access to their payslips. Not only does it help them get their payments on time, but eliminates the need for distributing paper paychecks. 
• Compensation management: Your ability to handle workers’ compensation will make a significant difference in this ruthless work landscape. It’ll allow you to attract and retain top talent by rewarding them based on merit without too much hassle. 
• Integrations: You’re probably bored of hearing so much about integrations, but they’re definitely a lifesaver. Your chosen payroll tool should easily plug into your ecosystem, kind of like Guru. Guru connects all the apps in your tech stack—including  your payroll software—and makes all of your tools’ disparate information instantly accessible from one place: wherever you’re currently working. 
• Employee self-service: This feature allows employees to access vital information, such as PTO, W-2 forms, or pay slips whenever they want. This significantly reduces the HR team’s workload and gives workers more accountability. 

There are plenty of features you should consider when evaluating payroll tools, such as tax calculator, deposits, etc. If you followed the steps above, you know it depends on your needs. 

But what are the best payroll software tools? We surfed the web for you and made a list. 

10 Payroll Software Services to Consider

If you’ve done your research, you know how many payroll software tools are out there. There’s OnPay, Deel, BambooHR, QuickBooks, Dayforce — the list can go on and on.

But are they any good? 

Depends on what you want and what you need. That’s why we’ve carefully selected different tools for unique needs, so you can get a full view of the payroll software market. 

1. Gusto

Gusto is an online payroll software program that helps HR teams fill out their tax forms, process payroll, and ensure compliance with industry laws.

But Gusto is not just about payroll. “The comprehensive reporting tools are user-friendly and offer a variety of options to access the exact information we need,” says a reviewer. Moreover, Gusto has a simple onboarding process that lets you run the tool in minutes, not weeks.

2. Rippling

Rippling, a modern workforce management tool, allows teams to manage different aspects of their HR department, such as payroll, benefits, expenses, and more. 

“It requires little to no training to understand and navigate through it,” writes one reviewer. Your HR team will have no problem running payroll without errors and on time. 

Rippling automatically calculates and files your payroll taxes, even if you have international employees. Besides, it has a mobile app where employees can see their paystubs or request time off. 

Surprise, surprise! Rippling integrates with Guru. 

3. Square

Square is a business technology solution that enables HR departments to easily run payrolls while staying compliant.

Used by small business owners every day, this tool has reliable payments and integrates with your POS system. This means you can pay employees directly from your dashboard and process payment faster. 

Moreover, if you’re struggling with filing taxes, Square helps you stay up to date on compliance through expert advice. 

“Square POS has enabled us to keep track of our customer base as well as keep track of our inventory and sales.”

And Square integrates with Guru! What more can you want?

4. OnPay

OnPay — a full-service online payroll tool — gives HR teams everything they need to streamline payroll and benefits.

“All the work involved in running payroll and reporting to the state is done for a reasonable price, dependably, and without a lot of confusion and extra forms.” 

Since it automates all the time-consuming tasks and reduces your monthly bookkeeping, OnPay allows you to focus more on what’s important. Plus, it integrates with popular accounting, time tracking, and other business tools, including Guru. 

5. ADP Payroll

ADP Payroll is an HR and tax service that makes sure your payroll runs smoothly, without too much hassle.

If we had to describe ADP Payroll in a sentence, it would sound like this review: 

“One of the most useful advantages of ADP is to access, download, and save the payslips of previous months very easily, with just a click.” 

ADP also has an employee and manager self-service platform, which you can use both online and via a mobile app. If you need help with anything, ADP has experienced payroll professionals available 24/7.

Regarding integrations, ADP Payroll plays nicely with Guru.

6. Paychex

Paychex offers automated payroll processing tools in a simple, all-in-one HR solution.

This solution makes paying your employee on time easy in just a few clicks. It does so through flexible processing, an employee self-service portal, and automated tax administration. 

“We have been with them for 2 years now and this system has cut hours out of my processes so that I can attend to other things I need to do.” 

Moreover, Paychex integrates with Guru, so you’ll get everything you need in a single tool. 

7. Intuit QuickBooks

Intuit QuickBooks, an accounting software solution at heart, tracks, organizes, and manages a small business’s finances.

“[...] The live accounting function is simple to use, especially for beginners in accounting.” Which makes it a perfect option for those unfamiliar with such tools.

Intuit QuickBooks helps you track expenses, run insightful reports, and customize invoices from a single platform. Plus, it keeps track of where your money goes by automatically saving your transactions on the platform.

You can also connect your favorite apps with QuickBooks; even Guru!

8. Sage Intacct

Sage Intacct is an online accounting platform for freelancers or medium-sized businesses.

Bringing core features like accounts payable, cash management, and invoicing to the table, Sage One can meet all your needs. It’s easy to set up and you can access it 24/7, as long as you have an internet connection. 

“The most helpful part of Sage Intacct is how easy it is to process or correct every aspect of it. The amount of time saved entering AP, AR & journal entries changed the game in our office.” 

Sage also integrates with Guru. 

9. Deel

Deel is a payroll solution catering to global teams, able to handle filings, tax deductions, and compliance wherever your workers are.

Deel is great because it offers a complete view of your workforce without switching apps. Moreover, managers, leaders, and even employees can use Deel’s self-service portal to update withdrawal details, oversee total payroll spending, and do plenty of other tasks. 

“The system seamlessly handles the transfer process from my employer to my local bank account, saving me time and effort. The fact that I don’t have to manually initiate or track the transactions is a huge plus.” 

Ready to make a deel? Take Guru with you: they work together!

10. BrightPay

BrightPay, based in the United Kingdom, is a cloud-based payroll system that fosters real-time collaboration and reduces delays in the payroll cycle.

“[...] The UI is simple to use, and entering salary data is a breeze. The program automates regular payrolls by rolling over numbers month after month and generating variation indications.” 

Furthermore, it has a self-service portal where employees can access the info they seek, such as payslips, withholdings, annual leave, etc.

BrightPay integrates with plenty of other tools, such as BrightBooks, Sage, Xero, and — you’ve guessed it — Guru!

Over to You

See? With this buyer’s guide, it’s not so hard to learn how to choose payroll software that does its job. We dare say it makes you feel more confident that you’ll choose the right solution — finally! 

One more thing before you go. Let’s talk about Guru, an enterprise AI search and knowledge platform that keeps all of your company information at your fingertips.

Guru integrates with your existing tools, so you can search all of your apps, chats, and docs instantly, without switching tabs or tasks.

Learn more about Guru by signing up today.

Frequently Asked Questions (FAQs)

How much does payroll software cost?

The price varies depending on different factors, such as organization size, pricing model, and number of employees. 

Usually, most service providers have a monthly subscription varying from $8/month to $49/month. If you want to add new users, you’ll have to pay an additional fee. 

Others might have custom pricing where you’ll have to request a quote and consult with the vendor. 

Is there free payroll software?

Yes, some payroll software solutions offer a free plan, like Square and Deel, but most have paid subscription plans. 

If you opt for free plans, you might get limited access to functionalities, which will probably not help you in the long run.

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How do I choose a payroll provider for a small business?

Here are some helpful tips for small businesses: 

• Assess your needs: What are you trying to solve? Do you only need payroll tools for time tracking? Or for more than that?
• Consider your budget: How much are you willing to spend on the payroll tool? 
• Ensure it's scalable: Choose a payroll option that grows with your business. 

Check reviews: See what other small teams have to say about a particular tool.

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