12 Best Payroll Software Solutions for SMBs

Payday is everybody’s favorite day of the month–unless you’re the payroll administrator. You’re likely spending half the month making sure the checks and direct deposits you send out are 100% accurate and let’s not even talk about all the calculations that have to be done beforehand. Taxes, benefits, and everything else need to be on point down to the penny.

The right payroll software can take most, if not all, of those tasks off your hands and automate everything into a simple and easy-to-use payroll solution.

This will not only save you lots of time but will also save you from expensive mistakes. In 2020 alone, the IRS handed out more than $4.9 billion in penalties for avoidable issues such as failure to pay and bad checks.

Let’s take a look at some of the best payroll software solutions that can save your small business time and money in the long run.

Our Top 3 Payroll Software Picks

1. Connecteam – The all-in-one best payroll software solution for deskless workers; free for up to 50 users.
2. Paychex Flex – One of the most popular payroll software solutions for small businesses; no free trial.
3. RUN by ADP – An ideal solution for businesses who still want to print, sign and mail physical paychecks to employees; 90-day free trial.

What to Look For In a Payroll Software

When looking for a good compliance software solution, keep an eye out for the following aspects and features:

1. Ease of use: It’s easy to set up and offers an intuitive user experience. 
2. Customizability: It’s customizable to suit your team structures.
3. Reporting: It allows you to filter reports in multiple ways for a more detailed analysis. Reports should also be exportable.
4. Direct deposit: It allows you to directly deposit payroll to your employees. 
5. Integrations: If your operations are divided across multiple employee management software, it should let you integrate these existing systems into one.
6. Employee accessibility: You employees should be able to access and review their personal payroll data. 
7. Tax filing: It helps simplify the process of collecting, generating, and filing payroll taxes. 
8. Notifications: It sends you reminders, alerts, and push notifications, and enables you to notify your employees if they need to perform actions, for instance, review their timesheet. 
9. Price: It is cost-friendly and suits your budget.
10. Support: It comes with good customer support to help you with any issues.

The 12 Best Payroll Software Solutions in 2022

Connecteam is an award-winning all-in-one software solution that allows business owners and managers to handle virtually every aspect of their payroll. 

Whether you need to track your employees’ time easily to ensure they clock in without needing to check in on them, or provide clear timesheets for payroll, Connecteam does it all, and then some.

With Connecteam’s seamless integration with Quickbooks Online payroll software, it’s super easy to guarantee that payroll is smooth and 100% accurate.

All you need to do is lock your timesheets and export them in one click. In a couple of seconds, they are integrated into your QBO software, and you can handle your payroll hassle-free.

Your business can benefit from Connecteam in a variety of ways that are connected to payroll and employee time tracking, in general. These include:

It’s also important to mention that Connecteam is extremely simple and intuitive to use, hence why more than 20,000 SMBs from 90+ industries benefit from its wide range of features.

It will also soon be possible to integrate Connecteam with other popular payroll software solutions such as Gusto and Xero.

Pricing

Paychex is one of the most popular small business payroll software but also one of the more expensive solutions, mostly due to public demand. Rumor around the accounting department’s water cooler is that Paychex is robust but not simple, easy to use, or set up. 

That can be a huge factor for small businesses when they’re looking for the best payroll software. This payroll app for small business requires a lot of personal information to get started and running reports comes with its share of red tape and added costs.

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The solutions offered by ADP, and specifically their small-business oriented RUN, are very similar to those offered by above mentioned Paychex – expensive but popular. This payroll app for small businesses is for you if you prefer to send employees physical paychecks rather than direct deposit as ADP can (for an additional fee) print, sign, and mail paychecks on your behalf.

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One of the cheapest payroll solutions out there for small businesses, Sage Payroll. Now it may lack the bells and whistles that other small business payroll software have to offer, but for many businesses, it is more than enough in terms of functionality. One of its main strengths is security – your payroll information in the cloud is fully encrypted, and user access permissions can be customized to ensure data security and integrity.

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Nothing affects the length of time spent on payroll management like the application user experience. The word on the bookkeeping street is that Gusto is the most user-friendly solution available on the market right now, which makes Gusto one of the front-runners in the category. This is one of the reasons we expect to see Gusto grow its share on the market.

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The jury is still out on SurePayroll’s ability to faithfully serve the needs of small businesses. While some claim it has a user-friendly and intuitive interface, others complain that the user experience is clunky and it takes a while before processes are properly streamlined.

In addition, some users are happy with the broad pre-defined set of fields and variables in the application database, and others despise the complex and long employee registration process. We’re not telling you this to provide you a wishy-washy review that’s neither here nor there. Payroll software has to be flexible and this payroll app for small business demonstrates its ability to be flexible through their user experience, which is a sign of a good payroll solution. 

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If you’re looking for the best-rated service and support, you should really check out what Wagepoint’s offering. And since they’re Canadian, you can probably trust their claim to have the friendliest support and service staff around. In addition to clear and affordable pricing, Wagepoint offers a free trial period to let you try before you buy.

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Like many other small business payroll software solutions, PayCor is about much more than just payroll. It is a modular system that can be used for payroll alone, or use additional modules offered on the platform to manage all employee “lifetimes” within the company, from recruiting to departure. Did we already mention that flexibility is important to a payroll app for small businesses?

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Bamboo HR is another great payroll software solution for small businesses. While specifically made for US-based employees, BambooHR provides an easy, 3-step solution to payroll. This payroll app for small businesses saves employee information like wages, hours, bank account numbers, employee benefits, deductions, or withholdings and automatically transfers to the payroll process. Additionally, they have an employee portal so employees can access their payroll information (paystubs, direct deposit accounts) at any time. Lastly, they provide over 100 exportable payroll reports. 

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Rippling is another good payroll software solution for small businesses. Rippling boasts that their small business payroll software can run payroll within 90 seconds, completely automatically. The payroll software provides automatic compliance and automatic tax filing. 

Additionally, they provide payroll services for employees all over the world. Rippling payroll software for small businesses allows users to create reports from pre-built templates or fully customizable. Lastly, Rippling’s payroll app for small businesses integrates with over 400 different apps to make your HR manager’s life easier than ever!

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Paycom, another payroll software, allows employees to manage their timecard, expenses, PTO, benefits, and payroll as well! “Beti”, the digital payroll checker, checks the payroll to ensure there are no errors and helps employees fix mistakes. Paycom can even write paper paychecks! Paycom also provides garnishment administration and tax management.

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Intuit Quickbooks is a great payroll software solution. With Quickbook’s payroll app for small businesses you can easily manage expenses, send invoices, and even track inventory. Managers can even set payroll to run automatically so they can focus on the bigger picture. 

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Compare the Best Payroll Software

What Is a Small Business Payroll Software Solution?

Small business payroll software is a modern solution for small business owners to automate and streamline payroll processing, instead of having to invest hours of their time or hire HR or accounting personell for this task.

Payroll software automates data entry and often includes modules or integration options for employee attendance and time tracking, payroll tax filing, and benefits management.

There are a large number of payroll solutions which are suitable for different business sizes. Small businesses usually need a payroll software solution with basic capabilities such as payroll processing, time tracking, and tax filing.

How Does Small Business Payroll Software Work?

With payroll software you can entirely automate payroll processing. 

It automatically calculates the amount you need to pay each employee based on factors, such as the amount of hours they worked, their hourly pay or salaries, and whether they took time off during the pay period, and calculates and deducts taxes and other withholdings from gross wages.

It can usually also generate detailed payroll reports and pay slips each pay period and allows you to deposit payrol to your employees directly or through integrations.

What Are The Benefits of Small Business Payroll Software? 

Shifting to an small business payroll software solution from running payroll manually has many benefits. 

The main ones are that it: 

• Automates teadious tasks: Rather than manually managing payroll tasks and filing taxes, small business payroll software helps speed up and simplify the entire payroll process. 
• Saves time and labor costs: It frees up the time that business owners or their hired HR and payroll personnel spend on managing payroll, and so also cuts down on the labor costs associated with the processing of payroll. For some businesses, a small business payroll software may even replace the need for a full-time payroll employee. 
  • This means that the time, money and effort once invested in manually managing payroll can now be invested in more important aspects of the busines.
• Increases accuracy and ensures compliance: Automated payroll processing eliminates inaccuracies and the possibility of other human-made errors throughout the process. Payroll software also helps small businesses streamline processes and better fulfill compliance requirements, expecially those related to taxes.
• Generates reports: Detailed payroll reports will offer you valuable insights and allow you to analize you processes.

How much does Small Business Payroll Software Cost? 

The cost of a small business payroll software solution varies strongly per provider and is often dependant on the size of your business and the amount of users. Most small business payroll software providers also offer different feature bundels, ranging for instance from Basic to Expert, for different fees. 

When choosing the best payroll software solution for your business, it is important to make sure that it is both budget friendly and offers you the features you need. Some payroll software options for instance are affordable when you have less than 10 employees, but are get very expensive when your team grows. Others may be expensive all together while lacking certain important features. 

Out top pick, Connecteam, offers a fixed price of $39 per month for the first 50 users. This is a fair pricing and includes all important features for payroll management and everything related to it such as time tracking, making it a worthwhile investment.

Frequently Asked Questions About Payroll Software

1. Do small businesses need payroll software?

Yes. In order to ensure there are no payroll errors and discrepancies, it’s important— even for small businesses to invest in payroll software. 

Just consider:

With numbers like these, it is no wonder employers and bookkeepers are pulling their hair when it’s time to manage payroll. 

After all, payroll is the last thing you want to deal with, but it is the first thing you should get right. It’s a double-edged sword!

And every small or medium business owner also knows that payroll is indispensable, just like human resources and time tracking. 

You just can’t keep your business moving forward without payroll. 

On top of that, even the most dedicated and loyal employees want a steady paycheck so you really can’t afford mistakes. Plus, the amount of time you need to dedicate to payroll is insane and that’s putting it lightly. 

You need to invest time to calculate checks, properly manage withholdings, enter all the payment amounts picture-perfect, and process direct deposit and checks – yeah, that can take you the whole pay period to complete. And complete properly, without mistakes. Yikes.

With all that time spent on payroll, you would think that payroll would be bulletproof and immune to mistakes but, unfortunately, payroll is very prone to mistakes. 

• In fact, 33% of employers report making habitual payroll mistakes. 
• The American Payroll Association shows an error rate of between 1-8% of total payroll in companies that use traditional timecards.
• Roughly 40% of small businesses incur an average of $845 a year in IRS penalties as a result of mismanaged payroll processes.

So what do we do? 

We turn to automation and increasingly sophisticated payroll and time and attendance software solutions. 

The issue isn’t a lack of available, and often effective, payroll management applications but rather the challenge of picking the right one.

2. Can payroll software help with issues such as tax compliance and workers compensation?

Yes! A robust payroll software will be able to calculate payroll while simultaneously calculating taxes, workers compensation, wage garnishments, PTO, and more. Not all payroll software services provide this though, so make sure that the payroll software you choose supports these features. 

3. Are payroll softwares hard to use?

That depends on which payroll software you choose is the best fit for your business. Not all payroll softwares is easy to use. Some payroll software tools listed above allow you to request a guided tour with a customer support agent who can help show you more about their software. After a demo, you’ll have a better understanding if it will be easy for you and your HR manager to use. 

The Bottom Line On The Best Payroll Software For Small Business

Payroll software is the first to enter the HR cycle in any business. Without payroll software, you cannot pay your workers or comply with tax laws without investing a great deal of time in paperwork. So it’s no wonder there’s such a broad selection of payroll management and automation solutions out there – there’s something for everyone, and everyone needs something.

Usually, but not always, the person choosing the payroll solution will be a bookkeeper or an accountant because they are the ones charged with producing payroll that is both compliant and accurate. Therefore, many will choose a payroll solution based on the accounting software they use because, well, it’s easy. But, that’s not always a great idea.

Though it can be more complicated in the short run to choose payroll software that is different from your accounting software it could actually end up saving you time and money. That’s why shopping around is always a good idea, especially if you have your best interest at heart, and hey, why wouldn’t you?

Now, on the odd chance that you want to run payroll but are not a bookkeeper or accountant then, once again, you need to consider a different set of criteria for your search. Simply remember to start by outlining what it is you hope to accomplish using this software. What are its must-haves, and then use this article to make your choice?