The cost of payroll services varies, but the pricing structure is pretty standard:
There is typically a flat base fee that is charged per month or per pay period. With per-pay-period providers, you are charged each time you run payroll, while per-month providers allow for unlimited payrolls each month.
Some providers offer multiple pricing plans for different levels of service. For example, a basic plan might only include the running of payroll, while more advanced and expensive plans might also include paying taxes and printing forms for employees.
Some services also have added costs to use direct deposit, to complete year-end tax services and to set up the system.
What to Look For in a Payroll Service
Not all payroll providers offer the same level of service. The experts we spoke with said there are some specific services and tools small businesses should look for from a payroll provider, including:
Besides payroll processing and the handling of all tax obligations, LaMarche said businesses should inquire if the service offers direct deposit, multiple wage rates, garnishment payments, paid-time-off management and detailed payroll reports.
2. Ease to use.
The payroll service should not be too complex to understand. It should have a clean and easy-to-use interface that allows you to run your payroll and add employees into the system in a matter of minutes, as opposed to a matter of hours.
Businesses want to find a service that they can afford.
"Small businesses should make sure that the cost of the payroll service fits into their budget scheme before committing," Rietsema told Business News Daily.
In addition to cost, you also need to determine if a contract is required. Many services operate on a month-to-month basis with no long-term contracts, while others require yearly commitments.
4. Proven provider.
LaMarche said it is important to find a provider that has an established track record.
"I don't typically recommend that a business be the first user with a new payroll system," LaMarche said. "Payroll is a critical part of the business to get right. Without accurate payroll, employees won't stay; no employees equals no business."
You want a payroll service that integrates with the programs you are already using. Ralph Matlack, director of product management for Intuit's Small Business Payroll, said there are several payroll integrations that can simplify the financial lives of small business owners.
"Some of the most popular ones include integration with accounting software, which allow payroll solutions to sync data in the accounting general ledger," Matlack said.
Another important integration is with time and attendance systems.
"With time tracking functionality, small businesses don't have to manually enter employee hours – it's automatically updated based on the hours recorded by the employee," Matlack said.
Regardless of how easy the system is to use, there are times when you may run into trouble. That's why you want a payroll service that provides help when you need it.
LaMarche said it is important to find out what kind of support is available and when. Do they offer one representative who serves as your go-to contact? Or, do you have to call a main number and speak with someone who isn't familiar with your business and how it operates?
Online payroll services are cloud-based, which puts businesses at the mercy of the payroll provider to keep it up and running. LaMarche said you want to ask what the system's uptime is and how frequently it is down for maintenance or other reasons.
Not all businesses have the same payroll needs, which is why Rietsema suggests businesses look for a service that can be tailored for its specific requirements.
"Since small businesses usually do not need the comprehensive payroll services that larger companies may need, it is important for small businesses to make sure a selected vendor offers services that can be scaled down or customized to its needs," he said.
9. Employee self-service.
Your payroll service should allow employees to log in on their own in order to view digital pay stubs and year-end tax forms.
"Employers like the ability for employees to have self-service access to payroll, but this will vary with each system," LaMarche said
10. Added services.
Businesses may find it beneficial to find a payroll provider that offers a variety of additional services, such as benefits and retirement plan administration. Another important one is workers' compensation, Matlack said.
"Some payroll solutions offer convenient services like pay-as-you-go workers' compensation, helping clients manage cash flow by having them pay monthly on their actual labor force, instead of annually based on an estimated labor force,"
Now that you've got the basics, you might be ready to make some decisions about which online payroll service is right for you. If you want to see our recommendations, check out our Top of Best Payroll Services for 2017
(Business News Daily)