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Top 3 Payroll Software: Comparison of Gusto, QuickBooks and OnPay

Category: B2B News
What is the top payroll software?
The top payroll software is Gusto, a complete workforce management solution for small businesses.
It is designed to be flexible, scalable, and affordable, ideal for fast-growing businesses. It gives you features and powerful tools for:
  • payroll
  • administration
  • compliance management
  • time tracking

Would you rather have your payroll built into an accounting solution or HR software? Or would a stand-alone payroll app be more suitable? These are the three options at your fingertips in our top 3 payroll software review here. The rationale is simple: companies either treat payroll as part of their accounting or HR, or they have a dedicated person/team for it. Whatever is your pick, all three are sure to help boost employee productivity and morale.

Among the myriad payroll software solutions in the market,  these three stand above in their respective categories. Gusto is among the leading HR solutions, QuickBooks is among the top accounting tools for small business while OnPay is a top-notch dedicated payroll platform.

In this guide, you’ll get a closer look at their features and match them up, the clearer you can put them into context how they perform key payroll processes from calculating taxes, generating payslips and producing reports, to recording employee work hours and attendance. Use this article to further hone your purchase decision and make sure you end up with a payroll tool that fits you to a tee.

top 3 payroll software

There are lots of reasons why you need payroll software. These include optimizing payroll processes, maintaining records, and saving on time and cost. Even if you just have one employee, you need to be able to properly administer that employee’s financial records which include wages and salaries, bonuses and incentives, deductions, and net pay. Now if you employ several workers, you’ll find payroll solutions such as our top 3 payroll software to be valuable and most useful tools.

Did you know that billions of dollars are paid by small businesses to the IRS every year as penalties for payroll errors? Payroll problems affect more than half of the 82 million-strong U.S. workforce. Aside from income taxes, payroll taxes account for the largest tax bill that small businesses pay. These are some of the burden carried by the sector that makes up 99.7% of all U.S. employer companies. However, it is not surprising that small businesses struggle with tax and payroll management. A QuickBooks survey of 600 American small business owners, bookkeepers, and accountants revealed the major challenges as shown in the visual below.

Top Small Business Challenges for 2018

Taxes

%

Cash flow

%

Payroll

%

Materials costs

%

Project management

%

Labor costs

%

Administration

%

Hiring

%

Regulations

%

Social media/marketing

%

Building maintenance

%

Workforce management

%

Source: QuickBooks Resource Center

Designed by

Small business owners have a lot in their hands. They have to manage every aspect of their business and often have to perform bookkeeping, payroll, and taxes themselves which are time-consuming and ultimately costly when not done right. Payroll management software goes a long way in helping you do everything properly, accurately, and efficiently. Let’s get to know our top 3 payroll software.

1. Gusto

Gusto dashboard example

Gusto is one of the most popular and highly-regarded payroll systems for small businesses, for good reasons. It eliminates the complexities associated with managing payroll, benefits, and human resources. It automates and makes payroll processes error-proof. It gives you complete access to important employee information and HR data, simplifies benefits administration, works with leading external apps, enables paperless transactions, and is available in small business-friendly packages.

The online payroll platform is lightweight and can be run in minutes. It can be left to run payroll processing in the background, letting you focus on other HR tasks. You can rely on the system to handle your calculations, payments, submission of local and federal taxes as well as year-end forms. It lets you extract data from a centralized cloud location and prepare financial reports. The software is offered in three full-service payroll plans with a monthly base price and extra charge for every person enrolled in the payroll.

You can test how this can fit your small business payroll needs. Just sign up for Gusto free trial here.

Key features of Gusto

  • Automated payroll processing
  • Unlimited payroll
  • Automatic tax processing
  • Detailed & customizable payroll reports
  • Digital paystubs & signatures
  • Direct deposit & checks
  • Easy cancellations
  • Flexible payment schedules
  • Health, retirement & other benefits
  • Hourly or salary rates
  • Multiple pay rates & schedules
  • Payroll & worker’s compensation
  • Employee self-enrollment
  • Mobile ready

2. QuickBooks

QuickBooks dashboard example

QuickBooks from Intuit, Inc. is considered the market leader in accounting software, boasting of millions of users and a big share of the accounting software market. Although primarily designed for use by professionals and SMBs, its many versions and offerings give businesses of all types and size a wide range of options to pick the particular solution for their requirements.

You can choose from the product’s many editions – online, three versions of desktop, advanced, for self-employed, POS, for enterprise, starter, essential, plus. Whatever product iteration, they all carry the characteristics QuickBooks is known for – simple but powerful features, ease of use, affordability, reliability, and world-class support. It offers wide integration with other QuickBooks products and Intuit industry-specific solutions such as those for manufacturing, retail, construction, and professional services.

The solution also connects with QuickBooks applications like Payroll and Payments. The great thing about QuickBooks is that whatever edition or plan you choose, you get an add-on option for a self-service payroll or a full-service payroll. For example, you get a Starter plan for your new business and when you hire new employees, later on, you simply select an add-on for a small extra monthly charge for using the service and additional fee per employee you include in the payroll. It’s like having a full-featured accounting and payroll system working seamlessly under one platform.

You can test QuickBooks to see for yourself how it works. Simply sign up for QuickBooks free trial here.

Key features of QuickBooks Payroll 

  • Works directly inside QuickBooks
  • Run payroll in minutes
  • Choice of self-service or full-service payroll (QuickBooks handles the payroll for you)
  • Run payroll on the go with mobile apps
  • Update books automatically
  • Fast & free round the clock direct deposit right up to the day before payday
  • Automatically apply latest federal and state taxes
  • Ready to go tax forms
  • Electronically file and pay taxes (or have QuickBooks do it for you)
  • Error-free tax filing
  • Expert help with payroll setup
  • Payroll for employees & contractors
  • Calculate paychecks
  • Unlimited payrolls
  • Online employee setup
  • US-based payroll support
  • W-2s filing & submission
  • 100% penalty-free guarantee (QuickBooks resolves tax filing errors, if any, and pays the penalties)
  • Mobile apps

3. OnPay

OnPay dashboard example

OnPay is a cloud-hosted, full payroll service solution intended for self-employed professionals and SMBs. OnPay is used to process more than $2 billion worth of payroll annually for companies all over the U.S. Its comprehensive system provides full automation for payroll processes, payments, and tax filing. It lets you run your payroll, implement benefits, and even keep your HR compliant with regulations in all 50 states. It allows you to process W-2 and 1099 forms; pay by check, debit card, or direct deposit; and sync with time tracking and accounting software.

OnPay offers just one simple pricing plan. You pay a budget-friendly base fee every month for the online payroll service then add a small monthly fee for every active employee that you include in the payroll. The transparent and straightforward even gives you a free first month and a zero-cost migration of wage data and employee information. The plan gives you all the payroll tools you need as well as employee management, compliance management, integration, and unlimited pay runs.

You can take the software for a spin when you sign up for OnPay free trial here.

Key features of OnPay

  • Automated tax filings & payments
  • Custom payroll reports
  • Digital paystubs
  • Employee self-onboarding
  • Export payroll data
  • Free phone, chat, email support
  • Integrated 401(k) & integrated health benefits
  • Integration with Quickbooks & Xero
  • Lifetime accounts for employees
  • Mobile friendly
  • Multiple permission levels, PTO accrual rates & state payroll
  • No charge for cancellations
  • Online employee portal
  • Several payment methods
  • Print checks on site
  • Reimbursements & wage garnishment
  • Tax accuracy guarantee
  • Time off tracking

Comparison of Payroll Software Features

Setup and ease of use

Gusto and OnPay which are both online platforms have generally straightforward setup. They walk you through the steps of payroll workflow through demo files and help prompts to ensure that you properly set up the system.

The self-onboarding feature of Gusto and OnPay is a great time saver. This allows you to request the vendor’s personnel to complete the setup process for you. You can then validate what they’ve done by double-checking their inputs. In the case of Gusto, they send out a bank sync test to ensure that your payroll system is properly connected.

For OnPay, their staff can enter all your employee data and wage history as a freebie. They have payroll professionals that you can contact anytime to correct things if you see any mistakes. You’ll also be notified for each pay run, and then automates everything else. What OnPay offers is quite cost effective since you don’t have to shell out extra for multiple pay runs and cancellations since these come as part of the plan.

QuickBooks, on the other hand, can be confusing for first-timers. But once you hurdle the initial steps, running payroll is a breeze. Remember that you have many options with QuickBooks – there are many different products and editions (cloud or desktop or a combination of both, starter, pro, advanced, and enterprise). You can opt for a standalone QuickBooks Payroll or QuickBooks Payment solution that you integrate with your QuickBooks accounting software or get a payroll add-on (self-service or full service) which can work with any QuickBooks product. Once you’re settled with your options and everything is set up, you can actually run payroll with QuickBooks in three simple steps.

Gusto gives you a checklist walkthrough for easy payroll onboarding and set up.

Feature set

Gusto, QuickBooks, and OnPay are all designed to automate and simplify the payroll process. The slight edge of QuickBooks is that it’s an accounting software with a payroll solution. Payroll is an operational expense that needs to be entered in the books and QuickBooks can do this on auto-pilot directly within its computing environment. But if you only need purely payroll solutions to work with your existing accounting system, Gusto and OnPay are more than capable platforms.

  • Interface. Gusto and OnPay have simple interfaces with basic payroll features immediately noticeable since they are dedicated payroll platforms. Their layouts allow transparent navigation and at-a-glance views of essential features and tools. Once you’ve configured and set up your payroll system on QuickBooks (as we’ve explained in the earlier section), running payroll can be done in a few simple steps facilitated by a clean interface and easy to reach menu. Of course, automation does much of the heavy lifting in streamlining the process – from connecting employee information to calculating taxes and deductions.
  • Payroll tools. Gusto provides multiple pay rates, automated payroll, tax processing, payroll reporting, and flexible schedules. QuickBooks offers an array of payroll tools that come with your subscription, including paycheck calculator, self-employment tax calculator, timesheets, and schedules, among others. OnPay’s payroll features include export payroll data, unlimited pay runs, and custom payroll reports. All payroll solutions have benefits administration functions that let you manage various compensation packages for employees and new hires.
  • Dashboard & Reporting. Gusto maintains a modern and neat dashboard for easy viewing of tasks, reminders, and important activities. The payroll reporting feature of QuickBooks helps you keep track of payroll history and details such as past paid taxes and previous paychecks. Meanwhile, OnPay keeps a tight and clean dashboard for effortless navigation and easy performance of tasks like entering payroll information, selecting and adding employees, and reviewing and approving payroll.
  • Pay distribution. Having computed the payroll, the next step is to distribute payment to your employees. All three have direct deposit capabilities, allowing you to remit funds to your employees’ bank accounts. Gusto provides “personalized with check on top” and “blank with check on bottom” printing. OnPay has a similar feature with Gusto, allowing personal check printing and on-site printing of checks. QuickBooks gives you 24-hour direct deposit for paying employees on the same day as payday to avoid delays.

QuickBooks’ same day deposit payroll feature allows you to pay your employees faster.

Integration

Integration extends the functionality of your payroll software. Gusto connects two dozen external software and services including leading accounting tools like QuickBooks, Xero, and FreshBooks as well as other apps for time tracking and HR. Being the core accounting solution of Intuit, QuickBooks integrates with all other Intuit products and QuickBooks add-ons as well as several third-party systems. OnPay integrates with the three accounting software earlier mentioned and also with time tracking, HR, and compliance software.

Compliance

QuickBooks keeps a tab of the latest federal and state tax rates and automatically calculates and applies these to payroll computations for accurate tax filing. It even organizes your expenses into their respective deduction categories to let you maximize deductions. It also provides a receipt capture tool that allows you or your employees to take photos or screenshots of receipts and auto-match them to your expenses for easier recordkeeping. Gusto allows you to put in the necessary info during the initial setup, including FEIN, EIN, business type, state requirements such as SUI as well as the forms you use. We think this is smoother—as you can do this while you’re viewing employee data—than asking for similar info at a later stage. OnPay also supports state and federal tax requirements like SDI, SUI, SUTA, and SUTA SC. All three products have the capability to manage local taxes, where applicable, and give you the option to use automated default settings or enter tax rates manually.

OnPay updates you of federal and local taxes and applies these on your payroll.

Scalability

Gusto, QuickBooks, and OnPay can all scale to your operation and number of employees. While all of them can handle the needs of small businesses with fewer employees since those are the target users of the three products, QuickBooks has the advantage of industry-specific solutions. QuickBook’s payroll system can be integrated and enabled for QuickBooks Enterprise solutions for construction, manufacturing, production, and retail which are extensive large-scale business activities that employ hundreds or thousands of employees which require a robust payroll system.

Get the Ideal Payroll Software Right from the Start

Payroll software is not something you change in an instant when it’s not meeting your requirements and you’re not satisfied with it. Like accounting, payroll is a continuing activity and a tedious process with no room for error. This is why you need a reliable and capable system in place right from the onset. For those starting out, there are many leading payroll software solutions that you can choose from. Study the features and compare payroll software pricing plans so that you can narrow your choices to those that match not only your operational needs but also your budget. Go for those with free trials and demos so you can test their features first-hand. If you’d like to, you can try out the top HR software with a built-in payroll component. Simply sign up for Gusto free trial here.

By Louie Andre

B2B & SaaS market analyst and senior writer for FinancesOnline. He is most interested in project management solutions, believing all businesses are a work in progress. No stranger to small business hiccups and drama, having been involved in a few internet startups. Prior to his for-profit ventures, he has had managed corporate communications for a Kansas City-based Children International unit.

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