Payroll Service Options for Small Businesses

To select the best payroll service for you, consider your needs.

A Payroll Service Can Save TimeIf you employ individuals to support your business or your home life, you know that payroll can be complex and time-consuming. Without a payroll service, you must:

  • compute the correct pay
  • calculate the appropriate taxes
  • make timely deposits of withheld taxes to state and Federal governments
  • file the correct payroll forms on time

Some experts say that you should sign-up for a payroll service as soon as you hire an employee. This may be a little extreme. If you use QuickBooks Pro on your desktop and subscribe to the software’s enhanced payroll-for-three module, you can handle up to three employees with a little effort.

If you don’t want to take the effort or have more than 3 employees, you may want to consider a payroll service. The key to selecting your ideal payroll service is matching the service to your needs.

List your specific needs such as:

  • How frequently do you pay employees (weekly, monthly, or sporadically)?
  • How many employees and contract employees do you need to pay?
  • Do you need to pay employees in several different states (MD, DC & VA)?
  • Do you need to pay bonuses or commissions?
  • What benefits do you offer (401K, health insurance, etc.)?
  • Do you need HR services as well as payroll?

Compare your needs to each of the payroll services you consider.

Select an Established Service

If you use a comprehensive payroll service, which pays your payroll taxes for you, make sure your service pays your taxes on time. If your company is late paying your Federal or State withholding taxes, you will incur penalties and interest charges. You are responsible for paying these taxes, even when you pay through a service.

When you are considering different payroll services, be sure to research each company’s reputation and history. Check online reviews and the better business bureau.

Highly rated Payroll Services

You will find hundreds of payroll services available on the market. Industry reviewers consistently rate the following services highly.

Gusto (formerly Zen Payroll)

Gusto received the editor’s choice award from PC magazine and Nerd Wallet ranks it #1. This is a good service for companies with 10 or fewer employees. The service handles auto tax payments and integrates with a variety of accounting software packages (including QuickBooks and FreshBooks).

You can manage your HR functions including health insurance and 401(k) payments with Gusto. The system also provides great flexibility for paying employees. You can pay them by check, with direct deposit or on a debit card.

This is a great package for sole proprietors and S Corps. The software’s fees start at $39/month + $6/employee per month. The company charges per month (not per paycheck run). If you run payroll inconsistently, a monthly fee approach will help keep your charges down.

Paychex Flex

Paychex Flex (owner of Sure Payroll) is one of the oldest companies in the payroll services business. This service offers payroll and HR solutions (including benefits administration). The system has a sleek easy-to-use design and is very scalable.

Most experts believe Paychex Flex is best for companies with less than 50 employees. The company provides top-notch support with 24-7 live support. The company also provides an employee portal, which allows employees to see their pay stubs and to check their available time-off days and even to request vacation time.

All of this great design, support and flexibility come with a higher price. Paychex Flex charges per pay period and $60/mo plus additional fees for set-up and per employee. The service also charges for processing year-end w-2s and 1099s. One reviewer estimated that a company with 10 employees would pay about $105/month, which included a discount. Without a discount, the fee would be about $280/mo.

Intuit Online Payroll

Intuit is a very well established company. Millions of small businesses have used the company’s QuickBooks product. If you have a small business (three or fewer employees), you can subscribe to Intuit’s enhanced payroll service. This service is an add-on to QuickBooks Pro. If you are a larger firm, you can subscribe to one of Intuit’s online payroll services.

Intuit’s online payroll services are very capable and the interface will be familiar to any QuickBooks user. It does seem to be lacking in payroll tax support and only handles this at its highest fee level.

The company offers its online payroll service at three different levels.

At the basic level, Intuit charges of $25/mo + fees for additional services (direct deposit, W-2 publishing etc.) For this level, the service will calculate payroll taxes. However, you will need to complete and file the forms separately.

The Online Enhanced version charges $39/mo + $2/employee. At this level, Intuit will complete the tax forms, w-2s and enables you to e-file through the service.

The Full-Service level handles all filing for you. Intuit charges $99/mo + $2/employee for the full service.


ADP has been in the payroll services business for a long time. ADP calls its cloud-based payroll service RUN. This is a payroll service, which offers good flexibility and provides several reports. The service also handles filing your tax forms for you.

If you are experienced in managing a payroll process, you will find RUN easy-to-use. If you are new to payroll, you will need some help from ADP’s customer support. The company provides 24/7 support.

RUN will integrate with the most common accounting software programs, such as QuickBooks. Your employees can access an individual portal to see their pay stubs and to complete timecards.  You can also give employees access to their portal through a mobile app.

You can sign-up for one of three online payroll service levels on RUN. The Essential Payroll service, which is similar to Intuit’s offering. RUN’s two other services (Enhanced Payroll and Complete Payroll) offer more comprehensive payroll and HR services.

You can have ADP print and send checks or you can print them on your printer. You can pay employees via direct deposit or debit card for no additional fees.

A company with 15 employees would pay $284/mo for the RUN’s Essential payroll service and $370/mo for the Enhanced level of service.  If you want employees to use time tracking, RUN will charge $57/mo (for a 15-employee payroll).

If you pay employees in several states, you will not incur an extra fee for a multi-state payroll.

Final Thoughts

As you can see, the market offers a wide range of payroll services. The key is to define your needs and subscribe to a service that best meets your needs.

If you need help in determining your best fit, please contact us.

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