Payroll System: What It Is And How It Works
August 30, 2022
Your workforce is often the heart of your company, and a reliable and accurate payroll is part of what keeps that heart beating. Payroll systems have been around for thousands of years and are a vital part of any business.
They are designed to manage all aspects of employee compensation, from tracking hours worked to calculating and issuing paychecks and withholding taxes. They also offer a variety of other benefits, which we will discuss in this blog post.
We also have done the research for you and narrowed down the search with a list of the top ten payroll providers available. So read on to learn more.
What Is A Payroll System?
A payroll system is a computerized system used to calculate and track employee paychecks. It offer businesses several benefits, including improved efficiency, compliance with government regulations, and reduced labor costs.
Payroll systems have been around for millenia, with the first known system dating back to ancient Mesopotamia. While the modern payroll system has come a long way since then, the basic principle remains: Payroll systems automate the process of calculating employee pay, managing deductions, issuing paychecks, and filing tax forms. This can save businesses a significant amount of time and money. Payroll systems also offer several other benefits, which we will discuss in this blog post.
How Does Payroll Software Work?
A payroll system typically has four main components: Payroll, Timekeeping, HR, and Benefits. Payroll systems automate the process of calculating employee pay, managing deductions, and issuing paychecks. Timekeeping systems track employee hours worked and help businesses calculate overtime pay. HR systems manage employee information such as job descriptions, performance reviews, and benefits enrollment. And, benefits systems help companies manage employee health insurance and retirement plans.
Benefits Of A Payroll System
1. Improves compliance with government regulations: Payroll systems help businesses comply with government regulations such as the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). Also, following a consistent payroll process for every employee can minimize errors and keep your business compliant with relevant tax laws.
2. Reduces labor costs: Payroll systems help businesses reduce labor costs by automating payroll processing. This can save companies a significant amount of money.
3. Helps with tracking: Payroll systems offer the ability to track employee hours worked and vacation time accrued. This information can be used to improve employee productivity and efficiency.
4. Other benefits: Payroll systems offer several other benefits, such as the ability to automate payroll processing, generate detailed payroll reports, integrate with accounting software, and provide support for multiple languages.
The Top Ten Best Payroll Software Solutions
There are a number of solutions for processing payroll on the market today. Here are ten of the best:
1. Paychex Flex
In recent years, Paychex has risen in popularity among small businesses. Paychex is one of the most popular and widely used small business payroll software. However, because of public demand, it is also one of the more expensive solutions. It offers a variety of features, including online paystubs, direct deposit, and tax filing. Paychex Flex also provides a mobile app, which allows employees to view their paystubs and request time off from anywhere.
2. Gusto
Gusto is currently the most user-friendly service available on the market, making it one of the front-runners in its field. It was formerly known as ZenPayroll. Gusto makes it easy for users to set up their accounts and add employees. One of Gusto’s most popular features is its online portal, which allows employees to view their paystubs, request time off, and enroll in benefits. They also have excellent customer service.
3. Paylocity
Paylocity has been a payroll software on the market for over 20 years. Paylocity is an American company that provides cloud-based solutions and human capital management software.
Paylocity has a long history of providing quality payroll services to businesses of all sizes. It offers a variety of features, including online paystubs, direct deposits, and payroll taxes. Paylocity also provides a mobile app, which allows employees to view their paystubs and request time off from anywhere.
4. ADP
ADP is a small-business centered, quite expensive but widely used software solution. This payroll mobile app is perfect for you if you would instead send physical paychecks to your employees instead of direct deposit. It also offers a timekeeping feature, which can be very useful for businesses with remote employees.
5. Intuit QuickBooks
Quickbooks is a great payroll software solution. It is one of the most popular accounting software solutions today. With Quickbook, you may quickly handle costs, send invoices, and keep track of your inventory. QuickBooks also offers a mobile app, which allows employees to view their paystubs and request time off from anywhere.
6. Paycor
PayCor is the right payroll software solution for businesses with many employees. The payroll module can be used by itself, or you can add additional modules to manage all employee information for your company. This includes recruiting new employees, tracking their progress, and even when they leave the company.
7. Sage Payroll
Sage Payroll is one of the oldest payroll software solutions on the market. It has been around for over 30 years and is used by businesses of all sizes. It is best known for handling complex payroll for companies with many employees in small, medium, and enterprise businesses. It provides automated labor data and deductions to help with reporting, analysis, and tax compliance.
8.OnPay
OnPay is a newer payroll software that has quickly become one of the most popular solutions on the market. OnPay offers a variety of features, including online paystubs, direct deposit, and tax filing. OnPay has a very user-friendly interface and a mobile app, allowing employees to view their paystubs and request time off from anywhere.
9. Patriot Software
Patriot Software is a great payroll solution for small businesses. It offers a variety of features and also provides a mobile app, which allows employees to view their paystubs and request time off from anywhere.
10. Bamboo HR
Bamboo HR is another great payroll solution for businesses of all sizes. This payroll app saves employee information like wages, hours, bank account numbers, employee benefits, deductions, or withholdings. The app then automatically transfers this information to the payroll provider, where it can be used to generate paychecks or direct deposit funds.
Do Small Businesses Need Payroll?
Small businesses often have limited resources, making it difficult to manage payroll in-house. Payroll systems can help small businesses save time and money by automating payroll processes. Several payroll providers offer solutions for small businesses, some of which are listed above.
When choosing a payroll system for your small business, it is essential to consider your specific needs. Payroll systems vary in features, price, and ease of use. Choosing a payroll system that will work well for your business is essential.
Factors To Consider When Choosing Payroll Software For Your Business
The following are some tips for choosing the right payroll software for your business:
Ease of use: Ensure that the payroll system you select is simple to use. To assist organizations in getting the most out of their payroll systems, good payroll system providers often give training and support.
Cost: It is crucial to consider how much the payroll system costs. Before choosing a payroll system, compare pricing as they differ. Payroll system providers frequently give discounts to companies who come highly recommended by current clients.
Features: Make sure the payroll system you choose offers the features you need. Payroll systems vary in features, so compare features before making a decision.
Scalability: Another vital factor to consider is the scalability of the payroll system. As stated above, payroll systems vary in features and price, so it is essential to choose a system that can be easily scaled to meet the needs of your business.
Customer support: Effectively confirm that the payroll system you select provides client service. Payroll systems are intricate, so it’s crucial to pick one with customer assistance if you have any queries or issues.
Compliance with government regulations: While there are several factors to consider when choosing a payroll system for your business, the most important factor is compliance with government regulations. Payroll systems are subject to several laws and regulations, including the Fair Labor Standards Act (FLSA), the Social Security Act, and the Internal Revenue Code.
Choosing a payroll system that complies with all relevant laws and regulations is essential. Payroll systems that are not compliant with government regulations can result in significant fines and penalties.
Integration with other business systems: Another essential factor to consider is integration with other business systems. The software you choose should integrate natively with your time and labor, compensation, financial management, absence management, and other business systems.
Mobile accessibility: Another vital factor to consider is mobile accessibility. Payroll systems should be accessible from mobile devices like smartphones and tablets.
Also, consider asking for recommendations from other small business owners. They will be able to guide you to the best payroll system for your business.
Need Help With Payroll Software? Contact Us
GSI has experience managing payroll in all 50 states, Canada, and the United Kingdom. On the platform of your choosing, we run payroll. We help you remain compliant while reducing the administrative strain that payroll causes. Our team members are experts on the majority of major payroll platforms, as well as smaller, more affordable regional payroll solutions.
Contact us to discuss your specific needs. Let us take the burden of payroll management off of your shoulders!