How much does payroll software cost? A number of factors affect the way payroll software are priced. Different vendors have different pricing models but may share some things in common. Some collect fees based on the number of users while others do it according to the volume of invoices or quotes. However, the pricing of payroll software, in general, comes in several types of plans which include:
In this article, we will seek to determine how much does payroll software cost by comparing the different pricing models currently in the market. The advantages and disadvantages of these payment plans will be discussed in detail with examples of each provided. This is for you to be able weigh the best pricing option for your organization, as pricing is one of the major purchasing factors. But if you’re more interested in comparing features or you want to know to top players in the field, you can consult with our comprehensive top 20 payroll software solutions for 2020 guide.
Payroll administration is undeniably one of the most taxing of human resource management tasks. It takes up a lot of time and should be carried out efficiently as it is not a process that has anything to do with income generation. Being such, it is wise to make this process as time and cost efficient as possible. And payroll software is designed to do just that, allowing businesses to spend less time on payroll runs to focus on more pressing tasks. There are different ways by which companies can save money from using payroll solutions. These include key data verification, penalty avoidance and direct deposit use, among others.
To be more specific, payroll software automates, centralizes, and streamlines payroll processes. It automatically computes wages using a preset schedule which may come as weekly, fortnightly or monthly. Salary-related information such as salary grade, attendance, leaves and advances are likewise consolidated under such system. It also keeps track of corporate expenses, which include deductions, loans and advances. Payroll software can also assist in tax deductions, helping users with compliance.
As businesses have embraced the technology a long time ago, it is no surprise that the market for such platforms has consistently grown. In fact, the global cloud-based payroll software market alone is expected to expand by a CAGR of 12.09% from the year 2017 through 2021. Seen to fuel this growth is the upstick in the demand for integrated human capital platforms.
The prices of payroll software may vary depending on factors such as vendor and business requirements. Here, we present a comparison of payroll software platforms and pricing plans of some of the most popular solutions currently in the market.
Free software comes in three distinct forms. Freeware is as the word implies, comes for free, allowing users to explore a solution’s features without paying a dime. There is also what is called freemium software, which is basically a watered down version of the real thing. If users opt to subscribe or purchase such solution, they will be required to pay for additional functionalities and integration options.
Free versions are ideal for startups and small businesses who lack the budget to invest in expensive platforms. There are tons of free payroll software for small businesses out there. But not all free software offer scalability so users may have to pay for full versions or find an alternative tool as their businesses grow.
Free business solution Wave brings to the table a wide array of functionalities that include payroll, invoicing, accounting and receipt scanning in a single platform. It is highly-recommended for small businesses who have less than 10 workers and professionals who are self-employed such as freelancers, entrepreneurs and consultants. Setup is a breeze while the system’s ease-of-use allows users to immediately explore the software. The dashboard is easy to navigate, enabling businesses to quickly access needed features. Accounting functionalities are quite comprehensive as it can easily monitor expenses, track payments and manage payroll and taxes. This free tool also supports payment by direct deposit or credit card and a number of integrations.
Online HR management platform Zenefits is designed to help small and medium-size businesses handle payroll and other HR processes. It showcases features like employee directory, payroll management, business intelligence and insurance benefits management. The solution effectively combines all HR-related processes, all from a single online dashboard. This provides users with absolute control while giving staff more access to their HR records. Businesses are always updated with regards to deductions, earnings and employee taxes. Other key capabilities include hiring and onboarding, ACA compliance, PTO tracking, a mobile app, 401 (k), life and disability and COBRA,
For businesses who want to subscribe to a platform but do not like the idea of entering into a long-term commitment, monthly subscription is the way to go. In such a pricing model, users get to enjoy all of a solution’s features and capabilities while paying only a minimal monthly fee. This is highly-suitable for small businesses whose budgets cannot meet pricey solutions. It is likewise ideal for those who are still in the process of growing and are still searching for the right payroll tool. The only setback to subscribing to such plans is that costs could run into the thousands in the long-run.
A robust financial management solution that is capable of managing payroll, HR, benefits administration and compliance, Gusto is targeted at small businesses who are keen on providing all their employees’ HR needs. Thousands of businesses have been relying on the software’s powerful payroll features, simple user interface and automation functionalities. The product can automatically compute, pay and submit any business’ local, state and federal payroll taxes, allowing them to make payments by direct deposit and checks. If you want to try the features at no cost you can easily sign up for Gusto free trial here.
The software is available in three enterprise plans. The Core Plan, which comes as a full-service payroll, costs $39/month plus $6/month per person. The Complete Plan has all Core features, along with advanced HR tools and comes for $39/month and $12/month per person. Lastly, the Concierge Plan has everything in Complete and certified HR advisors. It comes for $149/month plus $12/month per persons.
Popular payroll software Intuit is designed to cater to the needs of any business. The product comes in three packages, which allow for the efficient and accurate payment of staff. Tax computation is automated by the system, which is also capable of unlimited paycheck generation. The platform can seamlessly integrate with QuickBooks, giving it robust accounting capabilities. Business cash flow is improved with the app’s use as it ensures that workers are accurately compensated. Aside from being a payroll solution, Intuit Payroll can also help businesses manage talent recruitment and calculate employee taxes.
Intuit comes in a variety of pricing plans. The Basic Plan, which can instantly run payrolls and compute taxes comes for $20/month. An Enhanced Plan, which is sold for $31.20/month has all Basic features plus automatic tax form filling and electronic tax filing and payment. Its Full Service Plan has everything in Enhanced with the vendor setting up and running payrolls, data transfers and offering error-free guarantee. It is sold for 79.20/month. Lastly, Assisted Payroll for QuickBooks Desktop comes for $79.20/month. All plans entail a $2 fee per employee per month.
OnPay is a complete payroll system that is ideal for SMBs who require scalability in any platform. It is deployed via cloud and can streamline processes that come with payroll preparation while automating the tax payment and filing process. Payroll data such as work hours, tips, reimbursements, bonuses and even compensation insurance and benefits for pay-as-you-go staff are automatically entered by the system. The app is so powerful that it can handle unlimited payroll runs for 1099 contract staff and W-2 employees. Users can likewise pay workers through either direct deposit or check. Want to try the features before committing to a plan? You can easily do so when you sign up for a OnPay free trial here.
OnPay has a transparent pricing plan. The vendor offers the software for free for the first month. Staff and salary data migration also comes for free. The online payroll comes for $36/month with each user charged with an additional $4/month. Requests for W-2 come for $5 each. Total monthly fee depends on the number of employees.
Payroll products that are sold on a per-user basis are those that charge fees depending on the number of individuals who will use a platform. Such plans, most of the time, come complete with all the software’s features. The good thing about this pricing model is that companies can easily forecast their ROIs and revenues. However, it could also result in high costs for growing enterprises and those who have large number of employees.
Employee management solution PayrollHero is popular for its use of facial recognition technology in tracking employee attendance, seeing to it that the right employee is present at the right time, everytime. The software’s other key features include scheduling, time tracking and analytics, which are all managed from a singular console, doing away with manual reconciliation and preventing time-theft. Analytics and data aid facial recognition in ensuring accurate clocking. Time and attendance information are also collected from different locations. The system gives a variety of useful add-ons, which include highly-secure communication and access, backup recovery and unlimited storage.
PayrollHero’s pricing plans cater to both SMBs and large enterprises. Its Small Business plan comes for $3.5/user per month plus a $100 one-time implementation fee. This includes selfie clocks, Facebook selfies sharing, flex schedules, worksites, attendance reports, and iOS and Android apps. The Enterprise plan comes for $4.5/user per month and a $500 implementation fee. This feature includes all Small Business features and selfie verification, customizable scheduling, attendance resolution, email templates and notifications, analytics, smart counts, shifts, schedule templates, separation codes, time zone per employee, flag wall and leave applications. For those who prefer annual subscriptions, they are also available and come with a free-of-cost 13th month.
Despite being quite pricey, quote-based priced software is known to be very cost-efficient. This kind of payment model provides businesses with the option of optimizing their solution by letting them avail of the features they need, resulting in more cost-effective subscription. Vendors most of the time ask prospective users the features and functionalities they will need and their business’ type and size. This ensures that vendors charge subscribers only for the features that they require.
Web-based HR software ADP Workforce Now is specifically designed for small to midsize companies. The solution can collect and automate just about any HR process there is, all from a common dashboard. This results in staff being able to better coordinate and manage multiple HR tasks. Notable capabilities include payroll, benefits, time and attendance and holidays management. The app is also able to come up with reports from which insights may be generated for use in coming up with intelligent decisions. A benefit plan also comes with the system, which can be aligned to company policies and processes.
Cloud-based HR management application Dayforce HCM offers businesses a plethora of functionalities that include payroll and tax, workforce, document, talent and HR management. Using the software, you get to access human capital management information in real time. This allows for the processing of payroll, benefits enrollment and compliance management, keeping of HR records and restoration of work-life balance by efficiently scheduling employees. The system consolidates all staff records with all HCM processes. In addition, Dayforce HCM also helps managers with onboarding and administering employee benefits. It is highly-flexible and can run on all known browsers.
Aside from subscriptions, payroll applications are also being marketed on a one-time licensing basis. This pricing model is usually applied to on-premise solutions and is ideal for those who have large budgets for software procurement. Albeit a bit expensive at a glance, this pricing plan is far cheaper in the long-run as users do not have to pay long-term for a single platform. The downside, however, is that users of such systems, most of the time, do not get to enjoy regular updates and technical support.
Compensation management platform CompensationXL is popular for both its flexibility and reasonable pricing. It is configurable and assists businesses in the automation of their processes without having to overhaul entire systems. It reduces cycle times of tasks such as incentive and merit increase management and total compensation statement creation. These cycles are not only accurate, they are also user-friendly and much faster. The platform is quite easy to use and does not require too much training. It can likewise perform tasks like equity awards, pay-for-performance and bonus allocation.
CompensationXL comes in two pricing models. The Team Edition starts at $5,000 per year and the Professional Edition at $10,000 per year.
For businesses who require a payroll application and then some, software bundles are the perfect choice. Many such plans combine functionalities like accounting, HR and benefits management, among many others. Some, on the other hand, can integrate with other business tools to provide more benefits. This is a sound investment as these additional solutions can handle aspects of a business other than payroll processing.
A complete HR management suite, Namely has numerous capabilities that include payroll and talent and benefits management. It is deployed via cloud and can streamline paychecks computation and reflect benefits contributions and tax deductions. The product is quite popular, serving around 400 businesses, along with some 60,000 employees around the world. Key functionalities include time off tracking, team planning, staff performance review and reporting. The system is configurable to suit any business’ requirement and enables layered access levels so that users may view specific reports, information and functions.
The vendor does not publicly disclose its pricing plans. You may contact the company to request for pricing information and other platform details.
Xero is a financial management software that is targeted at businesses of all types and sizes. The tool makes the most complicated financial tasks as simple as can be. Notable functionalities include invoicing, bills payment, cash flow and expense claims management. Financial reporting, multi-currency, online payment, performance dashboard and sales tax computation are also supported. Xero has all the accounting and payroll features you’ll ever need. Proof of this is the fact that around half a million sole accountants and businesses have been using the platform.
The software is available in three pricing models. A Starter plan, which includes 5 invoices and quotes, 5 bills and 20 bank transactions comes for $9/month. Its Standard plan comes for $30/month and comes with invoices and quotes, bills, bank transactions and 5 payrolls. Lastly, the Premium plan comes for $70/month, featuring invoices and quotes, bills, bank transactions, 10 payrolls and multi-currency support.
Regardless if you’re searching for a payroll software for the first time or just needs an upgrade of your existing system, choosing such solution need not be difficult. If you’re a small business, go for free platforms as they will give you what you need without hurting your budget. For growing businesses, scalability should be the focus. For these organizations, monthly subscription and per-user pricing are ideal as they can provide required features as the need arises. Finally for large enterprises, quote-based and software bundles are the pricing plans of choice as they come customized and have more features that big companies need.
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