If you’re shopping for a payroll solution, your business is probably at a pivotal stage. If you’re a small business getting ready to pay workers for the first time, adding payroll is a momentous first step — congrats! And if you’re already paying workers, then researching and comparing providers means you’ve come to the point where you need a new payroll company that can keep up with your growing needs.
No matter what stage your business is in, it can be hard to choose the right way to do payroll, so we’ve provided some general advice and a printable checklist you can use to compare the payroll solutions you’re considering. Click here to skip to the checklist.
Finding the right payroll should make it easier to pay your team, handle finances and taxes, and organize other people-management duties, but there are a few functionalities you’ll want to compare to make sure you get everything your business needs at the right price:
- Onboarding and paying workers: Do you need to pay W-2 employees, 1099 contractors, or a combination? Your payroll solution should be able to handle all your workers and support annual tax filings for them, too. Also make sure you understand who will be responsible for onboarding employees and filing the right new hire paperwork in your state.
- Calculations and tax filings: Each state and locality can have its own payroll tax rate and filing requirements for employers. Correct calculations are crucial to make sure that federal, state, and local payroll taxes filed and paid on behalf of your business are accurate.
- Pay items and frequency: Whether you have one pay schedule or multiple, you’ll need a payroll platform that supports the right pay frequency for your business. You’ll also want to consider any special pay types — like tips, commissions or bonuses — that you’ll need to make.
- HR and compliance: Your payroll app can also store important employee paperwork, allow for employee self-service, manage PTO accrual and approvals, and more. You should also ask whether the solutions you’re comparing can help with workers’ comp and employee benefits
- Data management and reporting: Do you need payroll to align with our accounting, time tracking, or expense-management software? And do you need reporting capabilities that help you analyze employment costs? From bookkeeping to managing cash flow, the right payroll solution can help you get all the numbers right.
And don’t forget about how much it all costs. Some providers cost two to three times as much for very similar sets of services, so you’ll want to ask carefully about what’s included and how often you’ll be billed.
