Table of Contents
- Essential Features
- Software Integrations
- Other Important Considerations
- What Is the Size of My Business?
- What Types of Employees Do I Have?
- How Do I Pay My Employees?
- How Often Do I Pay My Employees?
- Are All Employees Based Out of the Same Location?
- Who Is Responsible for Processing Payroll?
- What Are My Local/State Payroll Laws?
- How Do I Want Payroll Taxes Handled?
- What Deductions Do I Need to Plan For?
- What Is My Budget?
When it comes to managing payroll for your company, having the right tools and services in place is essential. The best payroll services offer a range of core capabilities, software integrations, and other key features that can streamline your payroll processes and meet your specific needs. In this article, we will review the essential features of payroll services, discuss the importance of software integrations, and provide a list of important considerations to help you evaluate your payroll needs.
Payroll software provides several essential features that make it a significant improvement over manual payroll processes. These features include:
Variety of payment methods
Payroll software should offer various ways to pay your employees, such as paper checks, direct deposit, or prepaid debit cards. This flexibility allows you to choose the method that works best for your employees and your business.
Payroll tax filing and payment
A crucial feature of payroll software is the ability to automatically prepare, file, and pay taxes based on the location of your employees. This feature becomes even more critical if you have employees in multiple U.S. states or in other countries, as it helps ensure compliance with tax regulations.
Unlimited payroll runs
If you have employees and contractors who are paid on different schedules, a payroll solution that allows for unlimited payroll runs offers the flexibility you need. This feature allows you to process payroll as often as necessary to accommodate different payment schedules.
Payroll software and services often provide an online portal that allows HR staff, payroll administrators, and employees to view and make changes to payroll-related data. This self-service feature empowers employees to access their pay information and make updates as needed, reducing the administrative burden on HR and payroll teams.
Payroll software generates a variety of reports that provide valuable insights into company-wide and individual payroll metrics. These reports may include information on total compensation, deductions, and taxes paid in a given quarter or tax year. Access to these reports helps you analyze payroll data and make informed decisions.
Automatic compliance updates
Keeping up with the latest payroll and tax regulations can be challenging. Payroll software and services automatically update to stay in line with the latest requirements, saving you time and effort in ensuring compliance.
In today’s mobile-centric world, it is essential for HR staff, payroll administrators, and employees to have access to payroll tools on the go. Payroll software should offer a mobile app that allows employees to view their pay history and pay stubs conveniently.
Integration with other software is an important consideration when choosing a payroll service. The payroll software you use should be able to integrate with your accounting software, such as QuickBooks, to maintain an accurate record of payroll history. It should also integrate with benefits administration software to ensure accurate deductions and with time tracking software to streamline the payroll process further.
Other Important Considerations
To evaluate your payroll needs fully, consider the following questions about your business and its payroll system:
What Is the Size of My Business?
The size of your business is a key factor to consider when choosing a payroll platform. You want to ensure that the payroll service can support your current number of employees and any future growth. Consider how many employees you currently have and how many more you anticipate adding in the next one to two years.
What Types of Employees Do I Have?
Understanding the types of employees you have is crucial for evaluating your payroll needs. Determine if you have regular employees, independent contractors, or a combination of both. Additionally, consider the different payment structures and taxation requirements for each employee type.
How Do I Pay My Employees?
Consider how you currently pay your employees and what methods you need the payroll software to support. Determine if you need to make direct deposits, issue paper checks, or handle international payments through platforms like Stripe or PayPal.
How Often Do I Pay My Employees?
Evaluate your payroll schedule and determine if you pay all employees at the same time or if you have different payment schedules for different categories of employees. Consider if you pay employees weekly, biweekly, or on another schedule. Additionally, assess if you need the payroll system to handle off-cycle payments such as expense reimbursements, bonuses, or commissions.
Are All Employees Based Out of the Same Location?
If your employees are spread across different states or countries, you need to account for additional regulations and compliance requirements. With the rise of hybrid and remote work, consider if you may have employees working from different locations in the future.
Who Is Responsible for Processing Payroll?
Determine if you have a dedicated person or team responsible for processing payroll. If you do, a DIY payroll solution may be sufficient. However, if you don’t have dedicated payroll staff, investing in an outsourced payroll service may be necessary to ensure accurate and timely payments.
What Are My Local/State Payroll Laws?
Payroll laws vary depending on the locality, state, and countries where your employees reside. It is essential to understand the specific payroll laws you need to comply with. If you are unsure, seek guidance from a payroll professional in your area.
How Do I Want Payroll Taxes Handled?
Decide if you want the payroll software to handle payroll taxes or if you prefer to handle them separately. If you choose to have the software handle taxes, consider the cost associated with year-end calculations. Alternatively, if you opt to handle taxes independently, ensure you have a reliable tax professional to assist you.
What Deductions Do I Need to Plan For?
Before disbursing payments, consider the deductions you need to withhold for taxes, wage garnishments, and benefits. This includes deductions for income tax, Social Security tax, wage garnishments for unpaid loans or support payments, and deductions for benefits such as health insurance.
What Is My Budget?
Consider your budget when evaluating payroll services. Determine the amount you are willing to pay monthly or annually to meet your payroll needs. It is important to find a balance between cost and the features and functionality that are essential for your business.
Choosing the right payroll services for your business requires careful consideration of several factors. By evaluating the essential features, software integrations, and other important considerations, you can select a payroll solution that meets your company’s unique payroll needs. Whether you have a small business or a growing enterprise, finding the best payroll services can help streamline your payroll processes and ensure compliance with payroll and tax regulations.