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Top 5 Cheapest & Best Payroll Software for SMBs

Top 5 Cheapest & Best Payroll Software for SMBsTop 5 Cheapest & Best Payroll Software for SMBs
What's the most affordable payroll software?

Updated: February 20, 2024

Do you feel uneasy every time payday looms ahead - worried that calculation errors, delayed checks, or missed tax deadlines may once again leave your employees ready to jump ship? Small and medium-sized businesses (SMBs) face unique challenges regarding payroll administration. The key is finding a solution with the required features at a price that fits your budget.

In this article, we’ve listed five of the most budget-friendly payroll software programs on the market to help you pick the one that's right for you.

Understanding the Needs of Growing SMBs

What are the essential features of payroll software?

As a small business owner, you simply can’t afford payroll errors. Missed tax deadlines, incorrect direct deposits, or manual data entry errors can increase fees and cause legal problems. You must constantly balance effective management with providing payroll services and HR support to employees.

Many comprehensive payroll solutions are built for large corporations and have excessive features that small to medium-sized businesses simply don’t need. The ideal scenario is finding automated payroll software that simplifies critical processes like tax calculations, direct deposits, and reporting while integrating smoothly with your existing systems.

Transitioning from spreadsheet-based payroll systems to modern automated solutions eliminates manual effort, streamlines batch direct deposit and auto tax filings, and eliminates costly errors. It also applies advanced fraud monitoring and data validation checks to guarantee accuracy as companies scale.

Essential Features to Consider in Payroll Software

How do you evaluate payroll software?

When evaluating potential payroll outsourcing providers, assess the features and functionality of their core payroll software platform. The right solution will streamline processes, ensure compliance, provide robust reporting and analytics capabilities, and deliver a positive user experience for administrators and employees.

Some key payroll software features to prioritize include:

  1. Tax compliance
  2. Flexible pay rules
  3. Customizable reports
  4. Native integrations with HR systems
  5. Employee self-service portals
  6. Quick, accurate payroll runs
  7. Security precautions like multi-factor authentication, data encryption, and audit trails
  8. The ability to add or remove employees without disruption

Evaluating core functionality in addition to the provider's reputation and pricing will ensure the right fit for your payroll outsourcing needs.

Elements That Shift the Value Equation

How much does payroll software cost?

Specific components within payroll solutions can significantly save money and headaches, but they don’t always grab headlines during software evaluations. A few prime examples include:

Geo-modified tax engine: Keeping up with the thousands of municipality-specific taxes across the country proves time-intensive. For multi-location establishments, mapping software automatically applies the correct local taxes based on office geography, delivering peace of mind.

Advanced reporting builder: Canned reports satisfy basic requirements, but custom reporting streamlines data analysis for budgets, summaries, snapshots, etc. Reconfigurable report designers allow non-techies to filter, display, and export custom views minus new requests to the vendor.

Automated labor law compliance: Federal and state laws frequently add new protected classes, requirements around family leave, worker classification tests, exempt vs. non-exempt criteria, pay transparency, and more. Engines that dynamically tune compliance checks against payroll data expose legal risks early while avoiding manual override of default configurations.

API library and ecosystem: APIs ease connections between HR systems to enable single points of entry and unified platforms. However, access to several API options also facilitates links with specialized systems as needs evolve - like applicant tracking software, bespoke training software, gig platforms, etc. API libraries shorten time-to-deploy across unique stack components.

Vendor viability and track record: Seeking cost savings makes sense initially, but vendor stability prevents churn or lost data from interfering with payroll continuity should issues arise. Factors like profitable growth, leadership pedigree, frequency of releases/enhancements, and strategic technology alliances all provide signals for matching payroll lifespans to your own trajectory.

Pricing Structure & Costs of Payroll Software

In addition to weighing features, small businesses must carefully consider payroll software costs relative to their budget and headcount.

Pricing models generally fall under:

1. Tiered pricing - Multiple packages or editions offering increasing functionality at higher prices. Typically, it includes a monthly base fee plus additional per-employee-per-month (PEPM) costs.

2. Percentage of payroll processed - Fees based on total payroll volume, usually a small percentage. It is appealing at first glance but can get expensive fast.

3. Per-payroll fees - Some legacy providers charge per payroll run, which varies by pay frequency and the number of employees. It adds up significantly.

Modern solutions are moving towards simplified tiered pricing with bulk discounts because percentage or per-run models penalize growth.

Features & Functions of Top Payroll Software

What is the cheapest payroll software?

QuickBooks Payroll

While they are not quite as basic as SurePayroll, they're still a simple and affordable option - mainly if you already use QuickBooks accounting software. QuickBooks Payroll packs a powerful punch for restaurants seeking core payroll capabilities without a ton of frills. Their prices start at $22.50/month base fee + $4 PEPM. Some of their main features include:

  • Seamless integration with Quickbooks accounting software simplifies the process for those already using it. It also reduces the potential for errors during data transfer
  • Automates tax calculations and filings, saving time and reducing the risk of penalties for incorrect tax submissions. This feature is particularly beneficial for budget-conscious businesses that cannot afford dedicated tax professionals
  • They support various payroll schedules, providing flexibility for businesses with different pay periods without incurring additional costs
  • Offers essential payroll reports, which are crucial for businesses to monitor payroll expenses and comply with regulations

This innovative platform was built from the ground up to handle the complexities of paying staff in the food and beverage world. If you want payroll to be a piece of cake at your eatery, look no further than the effortless solutions from OnPay. Their pricing structure is a $36/month base fee + $4 PEPM. Their main features include:

  • Unlimited payroll runs without additional fees, which is cost-effective for businesses that need to process off-cycle payrolls
  • Similar to QuickBooks, OnPay integrates with other accounting software, making it versatile for businesses using different systems
  • Managing all aspects of payroll taxes can save businesses the cost of hiring a tax specialist
  • Multistate payroll capabilities are beneficial for businesses with employees in multiple states, as the software can handle varying state tax regulations without extra charges
  • Although their HR functionality is limited, for businesses focused solely on payroll, this could mean a more streamlined service at a lower cost

SurePayroll delivers a simple, straightforward solution that is perfect for small restaurants. This platform simplifies staff payroll management with accuracy and punctuality. Their base price is $32/month base fee + $5 PEPM. Some of their famous features are:

  • SurePayroll delivers a simple, straightforward solution that is perfect for small restaurants. This platform simplifies payroll management, ensuring accurate and timely payments for your staff
  • Automated payroll processing is a cost-saving measure for businesses, as it saves time and reduces errors
  • SurePayroll offers guarantees on tax compliance, which can prevent costly penalties for businesses
  • Mobile apps allow for payroll management on the go, which can reduce the need for dedicated payroll staff
  • The open API allows for integration with various other business systems, potentially reducing the need for additional software purchases

This innovative platform automates time-consuming tasks, allowing you to focus on delighting customers rather than crunching numbers. If you want payroll to be a breeze, give Gusto a whirl. The starting price for this provider is a $39/month base fee + $6 PEPM. Some of their features include:

  • An interface that is easy to use can help businesses save costs on training and reduce the time it takes for employees to learn
  • Gusto provides an all-in-one solution, including integrated payroll and HR, which can be more cost-effective than purchasing separate systems for each function
  • Salary comparison tools to help businesses make informed compensation decisions without the need for external consultants
  • Customizable access/permissions allow for tailored access for different users, which can improve security and efficiency without additional costs

Paychex Flex
This powerful, flexible platform delivers comprehensive services through an intuitive interface. Paychex Flex covers you from start to finish if you need enterprise-grade capabilities with top-notch compliance expertise. They are a quote-based provider with a starting price estimate of $80+/month. Some of their features include:

  • Similar to SurePayroll, automation in Paychex Flex can save time and decrease the likelihood of mistakes
  • Paychex Flex also offers tax compliance guarantees, providing peace of mind and potential savings on penalties
  • The availability of mobile apps for both iPhone and Android devices allows for payroll management on the go
  • Their open API facilitates integration with various business systems, which can save money on additional software

Each of these companies offers payroll solutions that have the features restaurant owners need. They also provide value for the money, making them suitable for clients with a smaller budget in any industry. Small to medium-sized businesses can streamline their payroll processes without adding additional costs by balancing functionality and ease of use.

The Best Cheap Payroll Software for SMBs

Ultimately, the “best” payroll software is whichever platform provides the highest return on investment through seamless payroll runs, happy talent, avoided penalties, insightful metrics, and integrated HR workflows. However, cost remains a crucial factor for bootstrapping small businesses.

If seeking maximum value for minimal spending, QuickBooks Payroll is arguably the top budget choice thanks to their unbeatable integration with popular QuickBooks software, low PEPM rates, solid customer satisfaction ratings, and proven payroll features.

However, OnPay merits strong consideration as the best “pure play” payroll software solution tailored to SMBs. Their smooth interface, agile product development, quality support, affordable tiered pricing, and constantly expanding feature set give QuickBooks a run for their money.

For small businesses willing to spend slightly more in exchange for unlocked HR functionality like organization charting, applicant tracking, custom onboarding, and employee self-service, Gusto delivers superb bang for the buck even at its marginally higher price point.

Regardless of your chosen platform, taking the time to analyze your current challenges, accurately project future needs, thoroughly research multiple contenders, and leverage free trials results in intelligent purchasing decisions that balance immediate cost savings with long-term scalability. To better understand Payroll providers, visit our review, blog post, and comparison pages before making your final decision. 

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