How to Find Free Tools to Optimize Your Small Business

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Making sure your employees are paid accurately and promptly is one of the most critical elements of running your business. The best online payroll services can simplify the process.

Excellent user interface and navigation system.

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Gusto has a special appeal for small businesspeople new to payroll because of its usability. Even experienced payroll administrators will appreciate Gusto for its solid set of payroll setup, processing, and reporting tools.

Customizable pay types and flexible pay frequency.

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OnPays flexibility and depth make payroll processing understandable and fast. Its an excellent choice for many small businesses, and even those with advanced needs.

Comprehensive benefits administration and plan-building functionality.

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May be overwhelming for very small businesses.

Mobile app doesnt support all admin tasks.

Covering most of the benefits administration needs of startups and SMBs, Zenefits places a range of HR solutions together in an easy to manage platform. A payroll add-on can serve companies with advanced HR needs.

Free benefits administration if you use Rippling as your broker.

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Rippling is an easy-to-use HR platform with solid onboarding and benefits administration functionality that should be a solid choice for small to midsize businesses. Optional payroll functionality adds to the appeal.

Excellent recordkeeping and payroll-processing tools.

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SurePayroll is a thorough, flexible payroll website with good support and excellent reporting. Boasting a new lower price and a free trial, the service is more appealing than in past years.

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Online help files focused on QuickBooks Online.

Mobile apps dont replicate desktop experience.

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QuickBooks Payroll provides the tools required to manage your companys payroll tasks. The software is exceptionally easy to use, but it lacks some functionality and flexibility.

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Square Payroll checks most of the boxes for paying your staff and sports a simple user experience. It integrates well with other Square apps, but lacks the depth and customizability of its competitors.

Offers basic accounting add-on features for a small fee.

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High price, with many add-on fees for standard features.

Doesnt display debit total after payroll run.

Combining payroll and accounting tools is confusing for payroll-only users.

Patriot Software Full Service Payroll offers good features and top-notch support, but its blending of accounting and payroll can be confusing. The user experience is subpar, too.

Built-in time clock that supports geolocations.

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Workful is a new payroll management site for small businesses that lacks reporting tools and doesnt submit payroll taxes, but is still exceptional in some ways.

Cant define employer contributions for benefits; cant deduct a percentage of pay.

Payroll runs confusing and require too many steps.

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Payroll by Wave, available as a standalone payroll website or an integrated element of the Wave accounting suite, has been slow to mature and has drawbacks that make it hard to recommend.

Everyone loves paydayexcept, that is, the payroll administrator. Paying employees (and contractors, and freelancers) is the most complex element of any accounting system. Its also the scariest. Not only do you have to produce checks and direct deposits that are 100 percent accurate, but you also have to make certain that the underlying calculationstaxes, benefits, and other withholdingare also correct, to the penny. Furthermore, you have to submit taxes and filings to the IRS and other tax agencies.

Cloud-based payroll applications can help ensure that all of these obligations are met with precision and timeliness. We reviewed 10 of the most popular, some of which have been around for years, including Gusto, OnPay, Patriot Software Full Service Payroll, Square Payroll, SurePayroll, and Payroll by Wave. Sage Payroll Essentials Plus was sold to a different company, so it doesnt appear this year. Intuit Enhanced Payroll has been replaced by QuickBooks Full Service Payroll. Rippling and Workful are new to our roundup, but theyve been around for a couple of years. Zenefits Payroll has been retooled and is ready to compete in this group.

Even with such formidable competition, Gusto wins the Editors Choice again this year. Its the one we recommend small businesses to consider first. Newcomer Rippling also got high marks. It offers midrange-level features and sophistication for about the same cost as Gusto.

If youre still doing your companys payroll manually, youre well aware of how complex, exacting, and deadline-driven this process is. Your employees count on you to dispatch their paychecks and authorize direct deposits on scheduled paydays. They expect you to know how much to withhold for all the taxes you owe and the benefits you offer.

Tax agencies can assess stiff fines if payroll filings and taxes arent received by the scheduled dates. Benefits providers can cut off services like health insurance if you fall behind on payments.

Thats an enormous amount of detail to track, especially if youre trying to do it all on paper. Mistakes arent tolerated well by anyone involved.

Cloud-based payroll solutions can help you organize and automate this onerous task. They offer step-by-step wizards to guide you through the time-intensive process of creating records for employees and supplying the information needed for withholding. They let you establish your own payroll schedules. They do all the required calculations, and most of them actually submit your payroll taxes and filings to the appropriate agencies.

These sites walk you through each payroll run and tell you how much each will cost you. They provide report templates and offer online portals and mobile apps for employees that display current and historical paystub data and more, in some cases. Not surprisingly, theyre equipped with generous support options. And theyre not overly expensive; they mostly run between roughly $25 to $40 per month for the base fee and charge a few extra dollars per month for each employee.

The benefits are obvious. You save time and minimize frustration. You dont have to keep up with payroll tax tables nor deal with the myriad compliance issues associated with employee compensation. You can modify your records quickly, and you have instant access to the smallest details. Youre much less likely to make errors using one of these services.

Though each payroll site we looked at provides its own unique user experience, they all share similar structures. They begin with the setup process, which is by far the most time-consuming and detail-oriented element of paying your staff. Though the exact order varies, they all walk you through pages of questions in an orderly, step-by-step fashion. They ask for information about your company, its address and Employee Identification Number (EIN). You select your payroll schedule (usually weekly or semimonthly) and name your payroll administrator and signatory.

If your business offers benefits such as health insurance and retirement plans, you name them and enter information about both the cost to employees and any company contributions. You must also create detailed records for each employee, such as contact information, birthdate, Social Security number, salary or hourly pay rate, and number of allowances from the W-4 form. Since most of these sites submit your payroll taxes and support direct deposit of compensation, youll be asked for bank account information to make a connection.

Youll also need to enter any payroll history that exists if youve already been compensating employees. This can be an arduous chore, one that may require assistance from the sites onboarding specialists.

If you offer additional payroll types like Paid Time Off (PTO) and sick pay, you can define your policies for accruing these benefits; the services keep track of them for you. Bonuses and commissions can also be paid during a regular pay run, or you can issue them by creating an off-cycle payroll. Need to include garnishments like child support on paychecks? These sites support such withholding. In fact, most offer custom pay types, so you can create your ownsometimes even when youre in the middle of a pay run.

Once youve completed setup, you generally cant return to the dedicated setup tools, so its important to get it right the first time. That said, every service weve looked at has a comprehensive settings section where you can modify and add to the payroll information youve already entered.

Setup done, youre ready to run your first payroll. This is the easy part. Though there are some differences, these sites function similarly during the actual pay run. When you launch a payroll, they display a list of employees along with their pay rates. You first check to make sure the pay period and pay date are correct. Then, you simply enter the number of hours worked (where applicable), in the appropriate pay type boxes (regular, overtime, vacation, and so on). Most sites let you add dollars for other earnings types and reimbursements on this same page.

Once you complete everything necessary on that screen, you advance to the next to see a preview of your payroll. The various services handle this slightly differently, but youll be able to see each employees gross and net pay, withholding for taxes, benefits, and net pay, along with any company contributions. You should also see on this pageor the nextthe total amount of money the site will take from your bank account for direct deposits and taxes, along with the exact date it will be debited.

After you approve your payroll, youll have access to additional tables or reports that display absolutely every detail of the pay run.

If you have few employees or a very simple payroll, it shouldnt take more than a few minutes to do the actual processing. Depending on which site youre using, you may be able to let payrolls process automatically (assuming, of course, that there are no changes from the previous run). Some even offer same-day payroll.

Though many of these sites offer HR support in addition to payroll, we focused in on payroll capabilities for these reviews. Zenefits, for example, which recently won an Editors Choice for Benefits Administration, offers payroll processing, but that capability is considered an add-on. In fact, Zenefits supports integration with other payroll websites in addition to providing its own. Rippling employs a similar structure and emphasis.

Unlike the other solutions reviewed here, you cant isolate Zenefits payroll capabilities, because setup and administration of elements like benefits and time off are handled on other parts of the site. Everything is intertwined, which can be a good thing: You only enter employee data once, for example, and its used throughout the website. But you have to visit separate areas of Zenefits to set up benefits and deductions.

In larger companies, payroll and benefits administration are usually handled by separate departments. In your small business, though, both of those responsibilities may land on your desk or that of another employee or two. Fortunately, there are several online HR services beyond Rippling and Zenefits that integrate with payroll applications to manage tasks such as the following:

To learn more about providers of these services and to see which were designated as Editors Choices, click the links above to read roundups of solutions dedicated to those services, or go straight to ourHR softwareroundup to read about services that round up all of the above.

The payroll services reviewed here all come from reputable companies with years or even decades of experience behind their tools. I wouldnt hesitate to trust any of them with this complex task. They all share similar parts, though their user experiences are very different, and each has a slightly different set of extras. Theyre all designed for general small business use, though SurePayroll goes above and beyond by offering versions designed specifically for use by, for example, restaurants, nonprofit organizations, and churches.

But Gusto takes the top spot again this year. It hits the sweet spot for payroll, offering enough functionality to please a wide variety of small businesses, while not overwhelming with additional features and fees. Its user interface and navigation system are among the best, and its three-tiered pricing structure gives potential users new options. In a tough group of competitors, its the best choice.

And once you get your payroll running smoothly, take a look at ouronline accounting servicesandtax softwareroundups.

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Kathy Yakal has been writing about PC applications since 1983, when she joined the editorial staff of COMPUTE! Publications. She began specializing in financial solutions in 1989, writing a newsletter for CPAs who were exploring the use of personal computers in their firms. Since then, she has contributed to numerous print and web-based publications, including Barrons and Kiplingers Personal Finance Magazine. She also ghostwrites client content for accountants.

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