What is Payroll Software?
Payroll software is a program that automates your payroll process. Well-designed payroll software will automate clerical tasks such as calculating hours worked, tracking overtime, calculating deductions for state and federal taxes, incorporating any paid time off and, of course, paying your employees. It will also provide support and resources for tax filings, workers’ compensation and other payroll related duties.
The Benefits of Using a Payroll Software
The best payroll software has many benefits. Some of the most important benefits for HR professionals include:
- Time. Time is extremely valuable for busy HR offices. HR payroll software saves hours of time by automatically calculating hours worked, payments, and deductions.
- Accuracy. Payroll software ensures accuracy by removing the possibility of human errors caused by manual entry.
- Legal Compliance. The best payroll software will help you ensure your payroll system and schedule is compliant with state and federal tax laws, workers’ compensation laws, and other pay related laws.
- Record-Keeping. Payroll software improves record-keeping by creating a centralized location for important compensation and tax related records.
What Great Payroll Software Looks Like
Great payroll software should have certain features and capabilities. Below are some of the most important things you should look for in a payroll software.
Payroll Processing and Integration
Every payroll software must be able to process payroll. Good HR payroll software will integrate with other software, like timekeeping software, so that payroll can be processed smoothly. Luckily, some payroll software (like Eddy HR’s payroll software) can be included as a part of a full-service HR software. This makes integration unnecessary.
Businesses have to keep track of their own taxes and tax deductions for their employees. The best payroll software system will calculate appropriate state and federal tax deductions and have tax filing capabilities. It should also provide you with pre-filled tax forms, like W-2, W-4 or 1099 forms.
Regardless of the size of your company, your payroll software should have direct deposit capabilities. Since it’s an automated process, direct deposit will ensure that your employees are paid on time. You also won’t have to invest company resources in printing and issuing checks.
User-Friendly Employee Self-Service Interface
A common complaint that all HR offices receive from employees is that the self-service portal is too complicated or difficult to navigate. The best payroll software should have an intuitive, user-friendly self-service portal to help employees complete tasks, like reporting their sick leave or changing their home address.
Great payroll software will be able to provide you with customized reports to help you and other stakeholders analyze and understand payroll and benefits data. Solid reporting capabilities can help you identify trends, understand your costs and budget, and set goals for the future.
The Top Five Payroll Software of 2021
Eddy HR is a full-service HR software company that provides recruitment, payroll and HR process solutions for small to medium-sized companies. Founded in 2017, Eddy HR has proven to be the top payroll software on the market, recently receiving the 2020 Top Vendor award by Shortlister for its payroll software.
Why we like it: Yes, this is our company, and yes, we think it’s the best. We love Eddy HR because, unlike so many of our current competitors, we’ve invested in creating software that is powerful, user-friendly and intuitive. With our software, you’ll spend less time learning how to use it and less time training other employees on how to use it.
We also love our product because we’ve focused on creating solutions for every aspect of HR management, not just payroll. Eddy has solutions for recruitment, timekeeping, people management, training and other HR processes.
OnPay is an HR payroll software for small businesses focused on helping businesses with their payroll and tax filing needs. Because OnPay only provides payroll solutions, companies looking to purchase OnPay should first make sure it can integrate with their existing HR software. OnPay can integrate with QuickBooks, Xero and Vestwell, among others.
Why we like it: If you don’t need a full-service HR software solution, OnPay is a great option for your company. We like OnPay because it’s easy to set up and relatively affordable for small businesses.
SurePayroll is a simple payroll software for small and medium-sized businesses. It has been in business since 2000 and is responsible for creating the first completely online payroll and tax filing software solution for businesses with 1-100 employees.
Why we like it: We like SurePayroll because it has the most experience of any payroll software on the market. They know payroll. SurePayroll also provides some additional solutions for processes that often impact payroll, including workers’ compensation and health insurance.
Hourly is an HR payroll software company and also a workers’ compensation insurance provider. Hourly provides strong payroll solutions that will keep you compliant while also offering flexible pay-as-you-go workers’ compensation plans that are predictable and don’t have unnecessary fees.
Why we like it: Hourly is a payroll software for businesses who need a better solution for their worker’s compensation insurance. Their pay-as-you-go workers’ compensation plan is helpful to business owners who want their insurance costs to be more predictable and less complicated.
Patriot is a payroll software for small businesses with plans that start at $10 a month. Their software is mobile-friendly, easy to set up and able to integrate with their time and attendance software and Quickbooks Time.
Why we like it: We like Patriot because it’s affordable and it’s mobile-friendly. This software is perfect for busy HR professionals who need to take care of payroll on the go.
How to Pick the Software that’s Right for You
There are countless payroll software companies available online. Although many of them are good solutions, the best payroll software for one company may not be the right software for you. Which payroll software is best for you will depend on your payroll needs, whether you will integrate your software with other software and your budget.
1. Determine Your Payroll Needs
How many employees do you have? Are they paid by the hour? Are they seasonal? Do you sub-contract? Do you have employees abroad? Answer these questions to determine what your payroll needs are. Understanding your needs will help you determine which software is best for you and which pricing structure is best based on your company size.
2. Consider Integration Capabilities
When it comes to HR software, you can either invest in a full-service software that has everything you need or you can invest in multiple software providers.
If you decide to use more than one software provider, it’s extremely important that you confirm your new software can integrate with any new software. If one of your software solutions can’t integrate, you will lose hours of work having to manually enter data.
3. Choose Your Budget
Before choosing a payroll software solution, you’ll have to determine how much you can invest. When considering your budget, remember that pricing for most payroll software is based on how many employees your company has. A realistic budget has to match your workforce. Otherwise, you’ll end up with a software that doesn’t do what you need it to do.