A List of Payroll Services and Their Benefits

A List of Payroll Services and Their Benefits

Payroll is a business function that typically combines a payroll system with payroll staff members to manage it. Let’s take a look at various payroll systems and dive into best practices.

What is a payroll provider?

A payroll service provider is typically a SaaS business that handles certain parts of payroll processing automatically. This is an electronic/online payroll system. The software you choose will still need to be managed by a payroll professional. Providers can allow you to customize the interface, handle different types of tax forms, customize the payroll processing type, and store data in different ways. Certain payroll software providers also have the ability to help with different HR services, such as document storage for employee handbooks, open enrollment, and more. 

List of payroll services.

Payroll services are more commonly referred to as payroll systems or payroll providers. Here a few of the most popular payroll providers:

• ADP
• Deluxe
• Eddy
• Gusto Payroll
• Intuit Quickbooks
• OnPay
• Paychex
• Paycor
• Paylocity
• Rippling
• Square
• UKG
• Zenefits

What are the best payroll services for small businesses?

Milestone specializes in small business payroll management

and processing. We believe that Gusto and Rippling are typically the best payroll services for small businesses. However, each business has different payroll needs, so different providers are better for different processing types. 

Rippling has the best employee interface. Your workers can easily navigate through their menus for open enrollment, paid time-off, or payroll stubs. It also has lots of advanced features and optional PEO. However, Rippling is slightly more expensive than other providers.

Gusto is a cheaper platform that makes payroll management easy. Gusto is great for handling 1099 contracts and W2s. It can handle tax registrations across all 50 states and contracting in 80 countries. This is great for businesses with a remote workforce. Gusto’s overall usability and customizability makes it a great choice for companies looking for a more economical option.

How to manage payroll services in a small business. 

These are the 3 steps to managing payroll effectively in a small business:

Step 1: Deciding needs for a payroll system.

To pick the right payroll system for your business, you need to know what you want out of a payroll system. List out needs with different stakeholders. Think about the management side, accounting, and employee views. Your stakeholders should also consider growth. Changing payroll providers is a hassle and can be expensive, so it’s important to pick the right one from the onset. 

If your company wants to switch payroll systems, step one should still happen. However, someone in your organization should have previous experience switching payroll systems. If that is not the case, bringing on a consultant will help the shift of data to go more smoothly.

Step 2: Picking and implementing a payroll system.

After outlining your company’s needs and priorities, scope out the different systems that can fit your organization. The payroll system you choose should meet your needs, have an easy user interface, have good customer service, and fit your budget. Reading reviews or talking to other companies about their payroll is very helpful when trying to decide on the right system.

Finally, work with the payroll manager and HR professionals to build a training program that helps your employees navigate the new payroll system. Pay is important to employees, so the process around payroll should be simple for them. Internally, build out processes for compliance checks and data capture. Building a process from the onset allows for growth and less retroactive work in the future. 

Step 3: Manage your payroll professionally.

Mishandling payroll can cause a lot of issues, including legal ones. It is important to have an experienced payroll professional managing your payroll. Onboarding and offboarding, final pay, bonuses, and raises, along with normal payroll make for an important chunk of your business. If your business is not compliant with state and federal regulations, it can spell bad news and a ton of extra work in the case of an audit. Payroll mistakes can also cause employees to lose trust in a company.

How frequently should I process payroll? 

At Milestone, we are a mix of accounting, HR, and payroll professionals. We believe wholeheartedly that payroll should be processed quickly, so that employees aren’t stretched, and accounting doesn’t need to do an accrual process. Bi-weekly or semi-monthly are the most cost-effective schedules.

There are certain scenarios where a weekly or monthly payroll process is more practical. For example, hourly workers or contractors may prefer to be paid weekly. In these scenarios, conversations with stakeholders are important to understand the priorities and capacity of your organization. 

How much does it cost to run payroll? 

Running payroll has two main costs. The first is the cost of the payroll system. The second is the cost of hiring a professional to manage the payroll processing. Payroll systems for small businesses range from $20-$100/month, depending on the systems and the usage tier. Gusto, which is one of our recommendations, starts at $46/month. 

According to Indeed, the average payroll specialist salary is $39,680 or about $2,809 a month. Outsourcing your payroll ranges between $10-$25 per employee per month (PEPM) for a bi-weekly/semi-monthly processing frequency. This means on a monthly basis at $25 PEPM, you would need 112 employees for it to be as expensive as hiring a payroll specialist.

When should I hire a payroll professional?

Our rule of thumb for small businesses is that a payroll professional should be hired at around 20-25 employees or if your business has workers in multiple states. Outsourcing payroll is typically cheaper for smaller businesses than hiring a full-time employee. In 2019, 42% of small businesses outsourced their payroll in some capacity. 

Your business should assess how much time is being spent on payroll processing. This will help you know exactly when you should hire a payroll specialist or outsource your payroll. 

Experienced payroll professionals with Milestone.

As a group of entrepreneurs, Milestone knows payroll processing takes time that could be used to focus on your business. Our team has a variety of areas of expertise to be able to handle your specific payroll needs, from basic payroll processing to help with benefit management and state registrations.

Is it time for you to outsource your payroll? Set-up an appointment with our payroll management services team today. We are ready to answer your questions.