To guide your search, we’ve compiled a list of currently trending free payroll software solutions. If none of these solutions meet your needs, explore our Payroll Software Guide to browse other products that might be a better fit.

What is the best free payroll software?

Payroll4Free.com: Best for Windows users

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Payroll4Free.com is a downloadable software that allows you to pay up to 25 employees for free. This comes with a catch, however: You must be able to download the Windows app in order to use it. Despite the name, there is no cloud or web-based option, and if you are a Mac user then you must be running Windows on your Mac in order to use Payroll4Free.com.

The upside is that Payroll4Free.com comes with one of the most well-rounded feature sets of any free payroll software for small businesses. Functionality includes tax support, free direct deposit, employee self-service portal, and time tracking. 

If you already own a PC (or a Mac that runs Windows) and you need free payroll software, Payroll4Free.com should be one of your top choices.

Payroll4Free.com pros and cons

TimeTrex: Best for integrated time tracking

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Unlike Payroll4Free.com, TimeTrex does not cap the number of employees that you can pay for free. Not only that, TimeTrex’s “community edition” is completely free in perpetuity. However, TimeTrex makes it tough to find the free forever version of the software, instead pushing website visitors to sign up for a free trial of the paid version of the software.

The community edition is available in both a cloud-hosted, web-based portal and a downloadable version (you should be aware that the downloadable version requires PHP, a web server, and a database of your own in order to get it up and running). Both can be found on this page on the TimeTrex website.

As the name suggests, TimeTrex also includes a native time-tracking app in addition to payroll, a helpful integration that makes it even easier to run payroll. Other features include scheduling, HR management, and more tools in addition to payroll. TimeTrex also offers the option to integrate with other (paid) software like ADP and Quickbooks, should you decide to switch to them for some reason.

TimeTrex pros and cons

HR.my: Best for non-US businesses

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Similar to TimeTrex, HR.my offers free payroll functionality without any headcount limitations. HR.my is a crowd-founded and ad-supported software that includes payroll as part of its diverse feature set. The ads can get annoying sometimes, but the tradeoff is worth the inconvenience for many users looking for a free payroll solution.

One of the app’s big distinguishing factors is the fact that it supports 67 different languages, which is great for international companies with employees in multiple countries. While the idea of free multilingual HR software sounds great (and it is), potential users should know that HR.my isn’t based in the US, so it isn’t inherently compliant with US labor laws. This can make calculating taxes and other required deductions more tedious, which is why we recommend the software for non-US businesses.

HR.my features include payslip generation, salary record keeping, time tracking and attendance, expense claim management, and too many others to list here. But even with all its features, this free software still can’t compete with full-fledged HRIS systems and other paid HR software stacks, so adjust your expectations accordingly.

HR.my pros and cons

ExcelPayroll: Best for Office 365 users

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With ExcelPayroll, you can do payroll for up to 50 active employees each month; nonprofits can request an exemption for more. While ExcelPayroll is a free downloadable add-on for Excel, it does require that you have an active license for Office 365, so it’s not technically 100% free.

This is why we recommend ExcelPayroll for business owners who are already paying for Office 365, so you don’t have the added expense of the license. If you’re already using an Excel spreadsheet to do payroll, then ExcelPayroll will automate the calculations and make everything a little bit easier for you. But if you’re not used to doing payroll in a spreadsheet, or don’t already have an Office 365 license, then one of the other free options on this list may make a bigger impact on your business operations.

Given that it is an add-on for Excel spreadsheets, ExcelPayroll is pretty stripped back in terms of functionality. Its features are focused narrowly on preparing payroll, so you won’t find a lot of extra bells and whistles. Features of note include vacation time accrual, workers’ compensation reports, wage garnishments, and other deductions.

ExcelPayroll pros and cons

eSmartPayroll: Best for free payroll tax calculations

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eSmartPayroll supports an unlimited number of employees, but only the web-based payroll calculator is free. For this reason, eSmartPayroll is a good choice for employers who are confident doing payroll manually but want an automatic calculator to check their math. 

Paid features offered by eSmartPayroll include printing paychecks and pay stubs, adjustable pay cycles, and a federal withholding calculator. If you want these features and more, then you can sign up for a 3-month free trial. After that, annual subscriptions start at $75 per year.

eSmartPayroll pros and cons

How can I do payroll myself for free?

Many small business owners have good reasons to keep doing payroll for free. First of all (and perhaps most compelling), they may not have the budget for paid software. If they are used to doing payroll manually, learning a new software program may not seem worth the hassle. Extensive feature sets on paid software can also be overwhelming, especially if the business is paying on a couple of contractors.

When it comes to doing payroll for free, your two main options are manual calculations and free payroll software. However, some solutions — namely, ExcelPayroll — straddle the line between these, offering a blend of manual and automatic payroll calculations. Manually calculating payroll is very time-consuming and prone to error, so most people find it helpful to have some kind of software support whether free or paid.

Generally speaking, free payroll software has more limitations and fewer features than the paid versions. There’s often a cap on the number of employees and the functionality of the tool is restricted. Most free payroll solutions are also either online-only or desktop-only (not both) and often lack integrations with other software as well. In other words, if you don’t have the money to invest in paid software, you will probably end up spending more time running payroll manually, even with the help of free payroll software.

How to choose free payroll software

Forever-free payroll software options like the ones in this guide may meet your business’s short-term needs. However, the limitations that come with free tools often outweigh the cost savings, and businesses tend to outgrow them quickly.

Fortunately, there are also plenty of low-cost payroll software platforms that provide robust functionality without breaking the bank. Head over to our Payroll Software Guide to discover affordable, highly-rated solutions for small businesses.

The post Best Free Payroll Software appeared first on TechnologyAdvice.

Whether you’re looking to switch from one of these vendors to the other or you’ve narrowed down your shortlist to Gusto and ADP Workforce Now, compare them in terms of pricing and features to determine which one might better fit your company’s needs. If neither option seems like the right fit, use our HR Software Guide or Payroll Software Guide to explore other solutions.

Gusto vs. ADP: Which is better?

Gusto: Better for small companies focused on optimizing payroll

Gusto started out as a payroll software-as-a-service (SaaS) company, and it’s clear that payroll is its specialty. However, the software has since expanded to perform a range of capabilities.

Its intuitive user interface, market-leading support, and affordable price point make it a popular HR software solution for many SMBs. Specifically, companies with limited HR staff or those with complex payroll requirements are ideal Gusto customers.

Also read: Top Gusto Competitors & Alternatives

ADP: Better for midsize companies focusing on growth and retention

ADP is one of the world’s largest providers of payroll and HR software. It offers a stripped-down solution — ADP Run — for businesses with fewer than 50 employees. ADP’s Workforce Now platform, on the other hand, is built with small businesses in mind and includes HR, payroll, benefits, time, and talent management tools as well as analytics. ADP’s Workforce Now solution is, therefore, more on par for comparison with Gusto.

Also read: Top ADP Competitors & Alternatives

Gusto vs. ADP: A detailed comparison

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Pricing

Gusto and ADP package their features differently, which can make it difficult to understand which vendor provides more value for the money, especially since ADP does not show prices on its website.

While Gusto’s pricing is more transparent and scales with businesses as they grow, ADP customers must switch products entirely based on headcount. For instance, once a company has 50 or more employees, they must upgrade from ADP Run to ADP Workforce Now. Businesses focusing on functionality rather than headcount in selecting a solution may, therefore, find Gusto’s flexibility more appealing than ADP’s more rigid packages.

Gusto

Gusto’s pricing structure starts with a low base price and scales up depending on the number of users. It’s worth pointing out, however, that Gusto has a five-employee minimum. This means that even if a company has only three or four employees, they will be paying the same rate as if they had five.

Gusto offers three tiers of pricing for most businesses. The features each package includes are broken down in the table below:

Gusto also offers a contractor-only plan for businesses that outsource all of their staffing needs to freelancers and other contract workers. This plan includes unlimited contractor payments in all 50 states, plus the option to pay an additional fee for international contractor payments if needed. It also includes some necessary compliance features, like 1099-NEC forms and new-hire reporting for required states.

The contractor-only plan is more affordable than the other plans, with a base cost of $35 USD plus $6 per contractor. However, the plan does not include any features for managing full-time employees, so companies that employ both full-time staff and contractors will need to use one of the three main Gusto plans.

Additionally, Gusto offers a range of services that companies can add to supplement the core features. These include:

• International contractor payments
• State tax registration
• Bring-your-own-broker
• Workers’ compensation
• Health savings accounts (HSAs) and flexible spending accounts (FSAs)
• Life and disability insurance
• 401(k) retirement savings
• 529 college savings
• Commuter benefits
• Research and development (R&D) tax credit services
• Priority support
• Federal and state compliance alerts
• Direct access to certified HR experts
• HR Resource Center

Some add-ons, like workers’ compensation and commuter benefits, are available with all plans, but many are only available for the mid-range Plus tier. For example, customers who opt for the Simple tier don’t have the option to use their own health insurance broker, but Plus subscribers can pay an extra fee for this flexibility. Premium customers have this option included in their plan.

As a company’s list of needs grows, they may consider upgrading to the Premium tier rather than paying for each add-on individually.

ADP

ADP Workforce Now does not post pricing but displays the features that come with each tier. ADP offers more add-on options that are available for any tier, making certain features more accessible to ADP customers than to Gusto customers that have to upgrade to unlock access.

For example, ADP customers can add performance management and recruiting regardless of which plan they select. Gusto customers, on the other hand, have to upgrade to a new plan entirely to get some or all performance management and recruiting functionality.

ADP Workforce Now offers three price tiers to cover varying business needs. The features of each are broken down in the table below:

The Essentials package works for businesses that only need core HR and payroll capabilities, whereas the Enhanced package adds benefits administration features. The Premium package combines the features of Essentials and Enhanced and adds time tracking for comprehensive workforce management.

ADP Workforce Now provides greater savings over Gusto in terms of benefits administration because it takes a bring-your-own-broker approach. Integrating your own benefits providers with ADP doesn’t cost extra, while Gusto charges a fee to do so. Moreover, ADP is built to accommodate international employees and contractors from the get-go, as they’re included in ADP’s payroll software, while international payroll is an add-on for Gusto.

Tools for talent acquisition, performance management, compensation management, learning management, and other modules are available as add-ons to existing plans. For growing businesses, this means extra flexibility to add functionality as needed without needing to upgrade to a new tier entirely.

ADP Workforce Now add-ons available with any package include:

• Recruiting
• Performance management
• Compensation management
• Advisory services and support
• Reporting and analytics
• Learning management

Which to choose for pricing?

It’s a tie. Here’s why: Comparing Gusto and ADP in terms of what’s offered in each package, Gusto progressively adds features to core HR functions like payroll and benefits administration from one plan to the next. ADP, in contrast, offers a set of payroll and benefits administration features across all plans, but these are more basic and one-size-fits-all.

There are two primary distinctions to highlight in terms of pricing between Gusto and ADP Workforce Now. The first is benefits administration: Gusto includes basic benefits administration in every plan, whereas ADP only starts to offer benefits administration in its second tier.

The other difference is their ratio of included versus add-on features, particularly for talent management. Gusto offers basic recruiting tools in its Plus and Premium plans, while ADP offers recruiting as an add-on to any plan. ADP’s recruiting is arguably a better investment for teams that need substantial recruiting support. Pairing ADP’s robust recruiting with its native onboarding features included in each plan makes ADP tough to beat. Gusto’s onboarding features progress from tier to tier, but even at the highest tier, they don’t compare to ADP.

Moreover, Gusto adds employee development features to its top two tiers —employee engagement and performance management— to address staff retention, whereas ADP makes them available to all users as add-ons.

With this information in mind, ADP Workforce Now benefits midsize companies that have benefits packages and have outgrown basic HR tools. Though ADP Workforce Now provides more value by including more core HR features across its plans, its package tiers are rigid and don’t provide as much depth, granularity, and flexibility in payroll and benefits administration like Gusto does. In other words, these features don’t vary significantly from one ADP plan to the next.

Smaller companies may, therefore, prefer Gusto’s flexibility in adding extra functionality to core HR functions as needed. But, they’re forced to commit to a more expensive Gusto plan for access to ancillary HR features like employee engagement and performance management.

Benefits administration

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Gusto and ADP Workforce Now both help companies stay compliant with federal regulations. They also both allow bring-your-own-broker. However, from there, the two take vastly different approaches to benefits administration.

Bring-your-own-broker is the rule rather than the exception for ADP Workforce Now customers, as the platform is set up to integrate with major insurance carriers. Gusto accommodates both third-party broker plans as well as working with Gusto’s own licensed brokers. In fact, doing the latter saves the company money, so Gusto incentivizes working with its own brokers and advisors.

Gusto

Gusto’s benefits administration features are included with every plan. This is beneficial for businesses that need help with benefits as well as payroll, which are two essential HR capabilities. However, companies that have an existing payroll solution may be paying for additional Gusto payroll capabilities they don’t need.

Benefits selection

Gusto’s licensed advisors assist companies with putting together a competitive benefits package. Not only does this save time, but using these brokers saves money since bring-your-own-broker incurs an additional fee and isn’t available with Gusto’s lowest pricing tier.

For example, upgrading to one of the two higher price tiers (Plus and Premium) unlocks access to more of Gusto’s benefits, which include:

• Workers’ compensation
• HSAs and FSAs
• Commuter benefits

Gusto also offers a variety of no-cost (included), low-cost, and premium financial and health benefit options. While these á la carte benefits allow customers to customize their benefits packages, the costs may add up quickly.

Compliance

Gusto helps companies remain compliant and file the right paperwork with the right government agencies. It offers assistance with:

• Affordable Care Act (ACA)
• Health Insurance Portability and Accountability Act (HIPAA)
• Employee Retirement Income Security Act (ERISA)

Moreover, Gusto has automated compliance alerts for state and federal regulations but only in its top two plans.

EDI

One drawback to consider is that Gusto’s benefits administration features don’t support electronic data interchange. EDI connection provides a secure, convenient way to automatically communicate changes to carriers, such as an employer’s changes to the benefits package or an employee’s changes to their selection.

Not having EDI means HR teams will likely need to spend extra time and energy contacting carriers and making benefits changes manually during open enrollment.

ADP

Benefits administration is included in ADP Workforce Now’s top two plans. So, a company that selects ADP’s cheapest package must have a stand-alone benefits administration software solution that will integrate with ADP’s platform. However, as a company grows, it’ll eventually need to upgrade to one of the higher packages anyway.

Otherwise, a company currently without benefits administration will need to choose the Enhanced or Premium plan to start with. This latter option is ultimately better, considering most businesses anticipate growth in terms of headcount that will drive down the cost later on.

Plus, benefits administration in ADP Workforce Now integrates with payroll, HR, and accounting and finance software as well as with most enterprise resource planning (ERP) systems.

This kind of cross-module data integration within one platform enables a company to better plan for and gain better analytical insight on benefits in terms of which ones to offer, how to administer them, and how to streamline communication between employees, the company, and providers.

Plus, HR and finance teams don’t have to manually enter benefit plan information and keep it up to date across multiple systems. This helps reduce the risk of data entry error or duplication and saves time.

ADP Workforce Now packages its features in such a way that makes it hard for companies to even consider the Essential plan because it does not include benefits administration, a key feature of any HR software solution.

Companies choosing ADP Workforce Now are better off starting with the Enhanced or Premium plan, unless they are wedded to a particular benefits administration software vendor and plan to remain small and nimble in a niche market.

Standout features of benefits administration in ADP Workforce Now are its user-friendliness, access, and analytics. ADP Workforce Now features an AI-powered tool called Nayya that helps employees choose benefits that make the most sense for their needs.

The platform also has advanced analytical capabilities to help HR keep track of benefits enrollment and overall cost. Finally, benefits administration is more accessible with ADP Workforce Now through its mobile app, while Gusto does not provide access through an app.

Benefits selection

ADP takes a self-service approach in putting together a customized benefits package. Alternatively, companies can bring their existing benefits to ADP Workforce Now, as it integrates with more than 700 insurance carriers, including major ones like Aetna and Cigna. This makes ADP Workforce Now’s benefits administration great for companies that need minimal assistance in creating a benefits package or migrating an existing one.

This is a major difference from Gusto, which provides more hands-on assistance. ADP Workforce Now offers a limited range of its own licensed specialists to assist companies with selecting the following benefits for an additional fee:

• Group health insurance
• Retirement planning
• Workers’ compensation

ADP Workforce Now is great for companies with established benefits packages they can bring with them to integrate into the platform.

Compliance

Benefits administration through ADP Workforce Now is automatically compliant with ACA, COBRA, and other regulations. It features dashboards to track and measure hours worked and benefits eligibility. This is useful for companies that exempt part-time employees from benefits eligibility.

In addition, when an employee leaves the company, the benefits administration software triggers automated COBRA notifications to ensure the employee gets the option of continued insurance coverage.

State and federal compliance reporting are included in all ADP Workforce Now plans, while they’re only accessible in Gusto’s top two tiers.

EDI

Employee data and benefits information automatically and securely syncs between ADP Workforce Now and benefits providers through EDI. This saves time and reduces the chance of errors. Gusto does not have EDI-enabled benefits administration software.

Which to choose for benefits administration?

It’s a tie. Here’s why: ADP and Gusto target two different customer bases in terms of benefits administration.

ADP caters to more mature, midsize companies that have already established their benefits plans. By comparison, Gusto is oriented towards smaller businesses whose benefits plans are still in flux or perhaps not even set up yet at all.

So in terms of benefits administration, the right vendor depends on whether the company has a benefits package it’s happy with (go with ADP) or is just starting to put one together (go with Gusto).

Payroll

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Gusto and ADP Workforce Now have similar offerings in their respective payroll modules, such as international payroll, mobile accessibility, and the choice of built-in or customizable payroll reports. However, Gusto and ADP Workforce Now differ in their automations and in the breadth of features.

Gusto

Gusto offers full-service payroll in different scopes depending on the plan. The Simple tier includes single-state payroll, while Plus offers multi-state payroll. Companies with distributed, remote work models that opt for Gusto will likely need to start out with the Plus plan. Gusto also offers international payroll in more than 80 countries, which is a bonus for companies that employ staff around the globe. Like ADP, international payroll is available as an add-on.

Gusto has broad payroll functionality and a variety of automated features to save HR teams valuable time. Smaller companies or those with complex payroll requirements are particularly likely to find more success with Gusto than ADP Workforce Now.

Gusto provides more detailed information about all of the payroll features included in its plans. For example, Gusto distinguishes between single-state and multi-state payroll and stipulates unlimited payroll runs each month. The granularity of features it outlines means it accommodates a range of different types of use cases and payroll schedules.

Automated payroll

Gusto’s winning feature is its AutoPilot, which allows HR to set up payroll to run automatically.

It performs payroll and year-end tax filings through the system, including preparation, filing, and remittance. Additionally, users can send and electronically sign I-9s and W-4s as well as provide their direct deposit information. With advanced product options, administrators can restrict access to sensitive information.

Gusto Wallet app

Gusto’s Wallet is a free app included in Gusto plans. It helps employees set and track their budgets and other financial goals. From the app, employees can easily access pay stubs and monitor how they spend each paycheck.

Employees can also use the Gusto Wallet app to decide which accounts their paychecks go into without asking HR to set it up for them. The Gusto Wallet app enables employee self-service and financial wellness. ADP Workforce Now lacks the financial wellness tools that Gusto offers.

Read also: Why You Should Add Employee Financial Wellness to Your Company’s Benefits

ADP

ADP is one of the world’s largest providers of payroll and HR software. The ADP Workforce Now platform includes core payroll features in all of its plans. Beyond that, users can opt for additional ADP products—some free of charge—to administer international payroll and a variety of ways to pay employees.

Automation

ADP Workforce Now also boasts automation, though it’s different from Gusto’s automation. ADP automatically reports new hires to state agencies for tax purposes to remain compliant. ADP Workforce Now includes compliance support for every state as well as for other countries in all of its plans. With Gusto, this kind of support is only available in its top two packages as an add-on to the Plus package and as an included feature in the Premium plan.

It also reconciles multiple rates of pay for reporting and accounting purposes. This automatic reconciliation is helpful for companies with employees in different countries and of different types, for example, contractors versus full-time employees.

However, ADP Workforce does not offer an automated payroll feature comparable to Gusto’s Auto Pilot.

Global payroll

ADP Workforce Now supports compliant payroll in more than 140 countries with its Celergo and GlobalView products that are available as add-ons to any plan, which is a plus for companies with employees and contractors located outside of the U.S.

Flexible payroll methods

ADP Workforce Now enables employers to pay their employees via multiple payroll methods. Even the basic plan allows direct deposit into as many as four accounts, and its partner apps enable payment via carrier mail or prepaid Visa debit card.

Employees also have access to on-demand pay via the Wisely by ADP and ZayZoon Wages On-Demand apps that integrate with ADP Workforce Now. Wisely services can be added to Workforce Now plans for free, but certain terms and conditions may incur fees for both employers and employees.

Employers can offer ZayZoon service as a benefit employees can elect and pay for at their discretion. A variety of payment methods with this solution means employers have flexibility in how they pay their employees.

Which to choose for payroll?

Gusto. Here’s why: Gusto enables unlimited, automated payroll and offers detailed features that serve a variety of customer payroll needs. It also integrates with other popular payroll software, such as Xero or QuickBooks, making Gusto a flexible, plug-and-play payroll software that can incorporate into any existing tech stack.

ADP Workforce Now provides many of the standard features that Gusto does but does not offer much more, rendering it a more rigid, one-size-fits-all solution that won’t work for every company.

Also read: How to Avoid These 3 Costly Payroll Mistakes

Time and attendance tracking

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Time tracking tools are rolled into Gusto’s payroll module in the Plus and Premium plans, but its most basic plan allows for integration with a company’s time tracking tool of choice. ADP Workforce Now houses time tracking tools in its Workforce Management module which is only available in its Premium plan. Time tracking features are, thus, accessible to more of Gusto’s customers.

Gusto

Payroll integration

Gusto’s native time tracking tool integrates with payroll but not with other areas of HR, which makes it tricky to align employee time-off benefits with the amount of time they request and receive. This may require managers and employees to cross-check between the time tracking and benefits modules when managing time off.

HR teams can customize paid time off (PTO) policies and select paid holidays through the time tracking tool. These policies then sync with payroll.

Time-off management and calendar sync

Employees manage time-off requests directly in Gusto’s time tracking tool. Approved time off syncs with payroll and Gusto’s built-in calendar. Alternatively, users can integrate Gusto with a third-party calendar such as Google, Outlook, or iCal, while ADP users only have the option of syncing with Outlook. However, employee scheduling with Gusto requires integration with a third-party app like When I Work or ClockShark.

Reporting

Gusto features time tracking reports to gauge workforce cost based on hours worked but not by labor type, which may be a drawback for companies that work with employees as well as contractors.

ADP

Automated scheduling

With ADP’s native time tracking tool, managers can have schedules automatically created and synced with the Microsoft Outlook calendar. Gusto lacks a native scheduling tool but integrates with more calendars than ADP does.

Reporting

Customers get more advanced reporting and analytics for time tracking in ADP Workforce Now. While Gusto’s reporting focuses on workforce cost and PTO use, ADP’s time tracking reports deliver insights on:

• Absences
• Hours worked
• Labor costs
• Overtime
• Industry benchmarks and comparison

ADP’s reporting can even generate predictive insights to help a company better prepare for staffing bottlenecks or surpluses. This is useful for companies operating in seasonal industries.

Time Kiosk tool

ADP Workforce Now offers several ways to manage employees’ time and attendance via computer terminal, mobile device, and even voice and facial recognition in the Time Kiosk tool. Regardless of the way employees clock in and out, ADP automatically tracks and calculates the time worked and transfers that data to the payroll, HR, and benefits administration information systems in the platform.

Compliant time tracking domestically and abroad

The time tracking module helps a company navigate local and country-specific compliance requirements for domestic and international employees and contractors, such as fair scheduling regulations, laws related to work and rest, and union agreements.

Gusto, on the other hand, does help a company stay compliant with time tracking by automatically storing wage records, but its compliance help is not as specific as that of ADP Workforce Now.

Which to choose for time tracking?

ADP Workforce Now. Here’s why: ADP Workforce Now offers automated schedule creation, more nuanced compliance support, and advanced time management and reporting features. Gusto fulfills basic time tracking needs, but ADP Workforce Now is worthwhile for companies that have complex compliance and scheduling needs for a more distributed workforce. 

Recruiting and onboarding

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Gusto and ADP cover all basic recruiting and onboarding functionality, but ADP goes beyond to include more enhanced features in both areas, especially recruitment.

Gusto offers native recruiting and onboarding functionality along with the option to integrate with third-party recruiting software.

ADP partners with ZipRecruiter for recruiting functionality, which is housed within its Talent Management module. Its onboarding tools are rolled into the HR Management module and can perform some advanced functions that Gusto can’t. As a bonus, all onboarding tools are included in every package.

Gusto

Gusto offers a variety of recruiting and onboarding features across all of its plans. More advanced recruiting features are limited to Gusto’s upper tiers, but onboarding capabilities are more widely available across Gusto’s packages. The fact that Gusto has in-house recruiting and onboarding means HR has more comprehensive analytics and insights about how to improve the hiring process.

Recruiting

Companies can use Gusto’s built-in recruiting tools to create job listings and track candidates, but it doesn’t syndicate job posts, so recruiters are responsible for sharing the post link manually. Gusto users can follow and guide candidates through the hiring funnel in Gusto’s own applicant tracking system.

Alternatively, customers can integrate with a third-party ATS. This approach comes with its own set of technical challenges and budgetary considerations, but it may be more effective for ambitious hiring goals. It’s also worth noting that job posting and applicant tracking capabilities are available only in Gusto’s Plus or Premium plans.

When assessing candidates, hiring teams can collaborate by sharing feedback on candidate scorecards. For candidates that advance to the offer phase, Gusto provides customizable offer letter templates to extend an offer as soon as possible.

Onboarding

Hiring teams can transition candidates who have accepted offers into Gusto’s built-in, self-onboarding process to ensure the new hire experience is as smooth as possible.

Gusto’s base plan features a starter onboarding checklist that includes suggestions of typical stages in the onboarding process, but starting with the Gusto Plus package, HR professionals can add steps that are tailored to their company’s particular needs. For example, tasks on the onboarding checklist may include attending orientation training or signing a W-4 form.

Gusto facilitates organized document management for all recruiting and onboarding documents. Its built-in e-signature capability expedites the onboarding process. Once all necessary documents are signed and submitted, they’re securely stored in the platform.

ADP

Companies have the option of adding recruitment functionality to its suite of talent management tools. Recruiting in ADP Workforce Now works via ZipRecruiter and integrates with ADP’s own onboarding tool.

Recruiting

Recruiters and hiring managers using ADP Workforce Now can take advantage of the ZipRecruiter integration to:

• Create branded career sites
• Post syndicated jobs ads to 25,000+ job boards and to social media networks
• Identify the most qualified candidates

When posting a job to a social media network, users get a pre-populated template to save time and facilitate wider job vacancy sharing to their professional contacts. ZipRecruiter automatically identifies the best candidates and invites them to apply to a company’s job posting.

ADP users can keep in touch with candidates through text messages or video. The system also facilitates interview scheduling for candidates that advance to the interview stage.

ADP has an advantage over Gusto in its recruiting-specific reporting. It tracks key metrics like cost to hire and time to hire to enable recruiting teams to get better over time.

Onboarding

Candidates that receive and accept an offer letter are routed to ADP Workforce Now’s own onboarding tool, which is available in all ADP Workforce Now packages. Via Adobe Sign integration, ADP Workforce Now enables new employees to sign necessary documents from within the platform. ADP’s onboarding is also self-service and mobile-enabled, so new hires can view and take care of onboarding tasks from anywhere.

Onboarding in ADP is set up to trigger a survey for new hires to complete after 90 days on the job in order to gauge their experience with the company so far. This information connects with ADP’s Voice of the Employee sentiment analysis and engagement tool.

Which to choose for recruiting and onboarding?

ADP Workforce Now. Here’s why: ADP leverages its partnership with ZipRecruiter to perform more functions than Gusto can, including syndicated job posting and social recruiting. This gives ADP customers greater reach and visibility in their recruiting efforts.

ADP also boasts a set of advanced onboarding capabilities any ADP customer can access regardless of the plan they pick. ADP’s onboarding supports companies that want to focus on employee experience early on in an employee’s tenure.

In short, ADP Workforce Now supports businesses prioritizing hiring and retention. It offers better functionality and greater accessibility when it comes to recruiting and onboarding.

Gusto works well for companies with lower hiring volumes. It fulfills basic recruiting and onboarding needs for companies filling non-specialized, easier-to-fill roles.

Gusto vs. ADP: Ready to choose?

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Gusto and ADP Workforce Now are two of the most popular HR software solutions on the market. They both offer a range of functionalities at a more competitive cost than larger platforms like SAP SuccessFactors and UKG. Each vendor offers unique advantages for different types of buyers, but the right choice will support your company’s HR goals now and in the future.

Gusto is a better choice for small businesses that have relatively basic needs beyond payroll but want the flexibility to add on incrementally to areas like benefits administration, recruiting, and onboarding.

ADP Workforce Now is more suitable for midsize businesses poised for growth and retention. It includes a larger breadth of core HR features available across the board but without much depth or flexibility for some areas like payroll and benefits administration. It shines in recruiting, onboarding, and employee engagement, all of which are available to customers in any plan.

If neither software meets your company’s unique needs, explore other solutions on the market through our Payroll Software Guide or HR Software Guide​​.

The post Gusto vs ADP appeared first on TechnologyAdvice.

How to do international payroll

When it comes to international payroll processing, there are seven key steps that will help you get started:

1. Categorize your overseas employees
2. Establish a local entity so you can do business in the country
3. Research international labor and tax laws
4. Configure your payroll process
5. Determine employee benefits packages
6. Select payment method(s)
7. Run payroll and maintain accurate records

1. Categorize your overseas employees

When it comes to payroll for overseas employees, there are four main categories of workers that you need to consider: temporary foreign workers, US employees working overseas, native international employees, and international independent contractors.

Each category of workers has different requirements when it comes to paying them and complying with local tax laws. For instance, if you only have a single US-based employee working overseas for a short amount of time, then you might be able to leave them on your US payroll and proceed as usual. If you hire international contractors, then it will be the worker’s responsibility to withhold taxes and ensure global payroll compliance.

Finally, if you hire either temporary foreign workers or native international employees, then it will be your responsibility to withhold the correct taxes, Social Security contributions, and other payroll expenses.

2. Establish a local entity so you can do business in the country

If you hire either temporary foreign workers or native international employees, then you will need to establish a local entity so that your company can do business in the employees’ country of residence. This involves registering and applying for a tax ID number, then withholding all necessary taxes and expenses to ensure global payroll compliance.

If this option doesn’t appeal to you, some countries offer alternative options. For instance, in the UK and Thailand, you can get a foreign employer exemption, which allows a company to hire and pay local workers without having to make local withholdings or contributions. Another more widely available option is partnering with an in-country affiliate, a.k.a. an Employer of Record partner, which will handle all personnel functions on your company’s behalf.

3. Research international labor and tax laws

If you decide to set up your tax ID and directly pay employees yourself, then you will need to educate yourself on all relevant laws and exemptions to make sure that you don’t run into legal trouble and incur penalties down the line. At a minimum, most countries have an income tax and also require employees to contribute to Social Security and pension funds. However, there may be other requirements that you need to meet as well.

In these situations, hiring a local expert who understands the laws and speaks the language may be helpful, especially if you don’t currently have someone on staff who meets those qualifications. This is one reason why many companies hiring international employees do opt to use an Employer of Record instead of handling payroll all on their own. However, even if you do partner with a local Employer of Record, it’s still a good idea to familiarize yourself with local employment laws so that everything remains above board.

4. Configure your payroll process

If you partner with an Employer of Record, they will handle the international payroll process for you — but if you pay your employees directly, you will need to set that up yourself. Using a global payroll software platform can help to automate the payroll process if you decide to proceed with paying employees directly (but you will still need a taxpayer ID registered in that country in order to pay international employees).

Begin by deciding on a pay period and how often you will pay employees, making sure that you remain compliant with all local laws. If you will be paying employees on an hourly basis, you will also need to track their work hours. Look for time-tracking software that syncs with your international payroll platform or HR enterprise software that includes a time-tracking component.

5. Determine employee benefits packages

In addition to minimum wage and maximum hours worked, many countries have stipulations about what benefits must be provided to employees, such as health insurance. These additional benefits must be included as part of the overall compensation package and may affect taxes and withholdings.

6. Select payment method(s)

Again, an Employer of Record will handle the specifics of paying employees each pay period if you decide to partner with one. Some international payroll providers, such as Papaya Global and Remote, will also handle this aspect for your company as well.

If you decide not to pursue either of these options, you will need to choose a method for paying employees. Sending international ACH payments is another alternative, but the Federal Reserve only allows this to happen for a limited number of companies. Your company can also open a central bank account overseas, fund it each month, and pay employees from it directly.

7. Run payroll and maintain accurate records

Once you have accomplished all of the steps above, you are ready to actually run payroll and pay your employees. Keep in mind that even if you have set everything up correctly, you may still run into challenges with payroll processing. Be sure to keep track of all your documentation in case your company gets audited or an employee disputes their pay.

What are the challenges with paying international employees?

Global payroll processing presents a number of challenges for employers who have hired international employees. The biggest areas of concern are cybersecurity, compliance, payroll schedules, and processing delays and fees.

Cybersecurity

Cybersecurity is already a huge concern for domestic payroll and other finance-related tasks. Paying employees across borders increases cybersecurity vulnerabilities and makes data protection even more important. Depending on where your international employees work, there may also be additional international data protection laws that your company needs to comply with.

Compliance

There are many different laws and regulations that you must follow to do business internationally, including tax rates and deadlines, statutory employee benefits, minimum wages, and maximum weekly working hours. These will be different for each country you do business in, and you need to make sure that you remain compliant in each nation.

Payroll schedules

Different countries follow different payroll schedules and have different requirements regarding the length and frequency of pay periods. You need to monitor the pay periods for each country you employ people in and may need to make payments at different times as a result. Finding a global payroll software can automate reminders for this and take some of the burden off your shoulders.

Processing delays and fees

It can take days or weeks to process an international money transaction due to the fraud prevention processes that banks have in place. You need to account for these delays to ensure that employees are paid on time and that your company remains in compliance. Currency exchange rates plus extra processing fees to move money across borders can really add up over time, further adding to the challenges of international payroll processing.

The right software can help with international payroll processing

If you decide to pay international employees directly, investing in global payroll software can help address these challenges and automate the process. Check out our list of Top Global Payroll Solutions to find a payroll platform that works for your multinational business.

The post How To Pay International Employees appeared first on TechnologyAdvice.

Determining the best payroll software can be challenging considering the vast amount of options on the market. Businesses must balance cost with the payroll features most valuable to them — whether its streamlined processes to increase efficiency, simple user interface (UI), robust reporting tools, or global payroll options. 

Keep your business’s needs in mind while comparing our top payroll software solutions below. If none of these options seem like the right fit, explore other vendors in our Payroll Software Guide.

What is the best payroll software?

Our top five payroll software picks cover a range of features, from add-ons like employee time-tracking modules to accommodations for companies in niche industries.

Gusto: Best payroll software for SMBs

Gusto’s payroll features can help small-to-medium businesses (SMBs) balance efficiency with employee engagement. To accommodate this, Gusto offers three price tiers to choose from: Simple, Plus, and Premium. Gusto’s Simple plan starts at $40 a month plus $6 per employee.

Despite this, Gusto includes payroll features targeted explicitly at optimizing payroll processes for HR teams in each of its price tiers. For example, Gusto provides the following automations to improve payroll efficiency: 

• Federal, state, and local taxing filings
• Garnishment processing
• Automatic payroll runs
• Synced paid time off policies with payroll

Businesses with either one person or small HR departments will find such features particularly useful as they allow such teams to offload repetitive, manual payroll processes in favor of higher-priority matters. 

Likewise, employers concerned with attracting and retaining talent can leverage some of Gusto’s employee-focused payroll features — for example, lifetime access to employee profiles, including paystubs and W-2s. This allows employers to maintain compliance with recordkeeping laws in the event of external payroll audits. Similarly, its self-service capabilities mean employees don’t have to rely on past employers for critical financial information, while employers can focus their efforts on active employees.

Gusto accommodates growing SMBs by providing additional tools outside payroll for onboarding, employee benefits administration, and talent management. As a result, companies that choose Gusto can quickly scale their payroll software to create a consistent experience for their employees across the organization. 

Also read: How to Choose the Right Small Business Payroll Software

Gusto pros and cons

Key features

AutoPilot: With Gusto’s AutoPilot feature, HR teams can automate payroll with minimal manual effort. This set-it-and-forget-it module frees up time for HR teams that are pulled in multiple directions daily. Along with Gusto’s unlimited monthly payroll runs, AutoPilot guarantees employees are paid timely according to default settings without incurring additional fees to run off-cycle payrolls to fix mistakes.

Gusto debit cards: Unlike traditional pay cards, Gusto debit card users can access financial wellness tools, such as personalized budgeting categories and spending insights. In addition, small or medium businesses wishing to increase payroll efficiency and cost savings can utilize Gusto’s debit cards to move toward a 100% direct deposit payroll. Employees also benefit from quick access to their paychecks, sometimes up to two days faster.

Small-to-medium size businesses can benefit from the cost savings of Gusto’s employee debit cards as they transition to 100% electronic payrolls. Source: Gusto

ADP: Best payroll software for flexibility

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ADP started over 70 years ago and primarily focused on payroll business solutions. Despite its breadth of human capital management (HCM) solutions, ADP payroll remains one of the best on the market today. 

Because of its long history, ADP has developed payroll product solutions to meet the demands of various-sized companies, from small local businesses (ADP Run) to multinational corporations (ADP Enterprise HR). With multiple subscription tiers for each ADP product, employers only have to pay for the features they need. For example, small employers requiring only core payroll processing can start with ADP Run’s Essential Plan and increase subscription tiers for more advanced payroll and HR features as they scale.

In addition to payroll tools, ADP also offers managed payroll services or co-employment through a professional employer organization (PEO) relationship. ADP’s flexible options mean businesses don’t have to migrate to another platform as needs change; instead, ADP adapts with the company through add-ons, subscription tiers, and payroll services. 

ADP pros and cons

Key features

International payroll: Like ADP’s domestic software offerings, employers with an international presence have several software options and subscription tiers to choose from. Software packages depend on the organization’s employee count – organizations need employees in at least three countries with 50 employees in one international country to qualify for ADP’s starter global software. However, small organizations can take advantage of ADP’s HR outsourcing solutions, where local specialists assist in payroll processing.

With ADP’s software and services supported in over 140 countries worldwide, companies do not have to worry about switching payroll providers as they scale. Moreover, employees across the organization are guaranteed a consistent experience, reducing the time needed to train teams on varying systems around the globe. 

HRIS features: ADP is not limited to just payroll; it also includes modules for time-tracking, talent management, and benefits administration. Instead of integrating several disparate systems as business needs expand, employers can move up subscription tiers or pay for these add-ons without spending additional time in training and implementation. When small businesses move away from a payroll-focused HR department, ADP’s different HR modules allow employee data to remain centralized even as business priorities expand. 

ADP is not only one of our top payroll software solutions, but one of our top HRIS software solutions as well. Take a look at other vendors on our shortlist: The Best HRIS Systems

Patriot: Most affordable payroll software

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For businesses looking for payroll solutions without all the extra bells and whistles, Patriot payroll is one of the most affordable solutions on the market. Users can choose from two subscription tiers, with its Basic tier starting at $17 per month plus $4 per employee. Therefore, it is a cost-effective solution for startups or small businesses that don’t need advanced payroll functions such as garnishment processing or customizable payroll reports.

However, there is a tradeoff. Although Patriot payroll users save on cost, they lose out on valuable features offered by their competitors like ADP or Gusto, such as tax compliance safeguards, automations to improve efficiency, and the ability to add capabilities when future needs arise. For example, with Patriot’s Basic tier, employers must file and deposit federal, state, and local payroll taxes themselves when this service traditionally comes standard in most other payroll software vendors in their lowest subscription tier. Employers must subscribe to the Full Service payroll package if they want Patriot to file and deposit their taxes.

Yet, for small business owners with few employees to manage, spending a little more time on payroll each cycle might be worth the cost savings. For example, take a small company of 10 employees that only needs payroll and time-tracking features. With Patriot payroll, the business can add native time-tracking features for an additional $6 per month plus $2 per employee. The company’s cost every month would be $83 for Patriot’s Basic payroll subscription with the time-tracking add-on. 

In contrast, that same company would have to pay $150 monthly for Gusto’s Plus subscription tier to take advantage of both their payroll and time-tracking features. A startup can save $804 a year by choosing Patriot, which they could invest back into the money-making areas of their business.

Patriot pros and cons

Key features

Accounting: Patriot users can choose between native accounting solutions or integration with QuickBooks. Thus, small businesses already using QuickBooks as their accounting software can seamlessly sync their payroll data into their General Ledger without data loss. 

Even smaller companies can save money with Patriot’s native accounting software solution for an additional $20 per month. The same small business from the earlier example, for instance, would only be paying an additional $36 per year for payroll, accounting, and time-tracking solutions compared to Gusto’s lowest-priced tier, which does not include native accounting features. 

Employers can choose to integrate their QuickBooks accounting software with their payroll subscription or can take advantage of Patriot’s native accounting options. Source: Patriot

Unlimited payrolls: Small businesses new to payroll processing know accidents happen — payroll is finalized, but someone forgot to turn in their time card, a manager missed a contractor payment, or the payroll department did not account for a shift differential pay rate. Many payroll vendors require employers to pay an additional fee for an off-cycle payroll to correct mistakes. 

Moreover, certain states obligate employers to pay employees their last check immediately upon termination for cause (such as California) or risk incurring penalties. Patriot’s unlimited payrolls allow employers to save instead of spend more money correcting payroll errors while also remaining compliant.

QuickBooks: Best payroll software for on-the-go teams

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Employers utilizing QuickBooks for their accounting needs may already be familiar with its payroll features. Optimized for small businesses with 50–150 employees, QuickBooks Online Payroll software offers a standalone payroll solution with several tiers of subscription-based plans, including options to bundle with their accounting program. 

QuickBooks Payroll is tailored to teams not tied to a desk. For example, its time-tracking solution does not require a physical time-clock system installed at one location. Instead, employees use their phones to clock in and out for the day, which is especially useful in industries like construction, where employees must track their time but do not have a base of operations. 

QuickBooks Payroll’s on-the-go features can also help employers move to an increasingly hybrid working environment. By forgoing traditional time-clock solutions, QuickBooks maintains accurate payroll processes while supporting a dispersed workforce.

QuickBooks pros and cons

Key features

Time-tracking: Starting at QuickBooks Payroll Premium subscription tier, QuickBooks Time Mobile is included at no additional cost. Employees can use their mobile phones to clock in from anywhere – QuickBooks automatically logs their GPS location and keeps track of their hours worked. 

With QuickBooks Elite tier, employers can even set up a geofence that reminds employees to clock in and out whenever they enter or leave a job site, so that time data remains accurate when employers run payroll. 

Mobile application: QuickBooks offers a separate mobile application for employers to review and finalize payroll from anywhere. For smaller businesses without a dedicated HR or payroll department, this means they can get payroll done, even on the road, without significant interruptions to their busy schedules. 

OnPay: Best payroll software for niche industries

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Unlike other payroll platforms, OnPay boasts a one-price-fits-all model. In other words, all businesses pay the same price for the same set of features for $40 per month plus $6 per employee. In the price, employers have access to a full range of payroll management features, including basic human resources such as onboarding, personnel file storage, and PTO management. 

Because of its transparent, one-price model, OnPay is especially beneficial to employers in niche industries. This is because OnPay users do not need to pay extra for some of the HR and compliance benefits that are typically only available in higher-paying subscription tiers with other vendors. 

QuickBooks, for instance, requires subscribing to higher-paying tiers for experts to review their payroll setup or offer tax advice; Patriot, meanwhile, offers no such service. With these features standard on OnPay, employers don’t have to worry about sacrificing cost savings to comply with the tax laws in their industry. 

OnPay pros and cons

Key features

Industry-specific payrolls: OnPay offers industry-specific payroll support for farming and agricultural businesses, bars and restaurants, healthcare organizations, and nonprofits. For example, OnPay automatically excludes federal unemployment, Social Security, and Medicare taxes from their payroll calculations for churches and other religious organizations. Thus, companies can benefit from their industry’s unique tax advantages without resorting to outside vendors for support. 

Report designer: OnPay users can customize their payroll reports using filtering and drag-and-drop capabilities to manipulate data to their liking. This is particularly important to companies who need to access industry-specific data points, such as gross tips for restaurants or bars, without being limited to the pre-built payroll reports of other vendors like Patriot.

How to choose the best payroll software

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With a wide array of options available, the best payroll solution depends on what businesses prioritize most when running payrolls, such as accuracy, efficiency, customization, or flexibility. 

Gusto is best for small-to-medium-sized businesses that need to balance payroll efficiency with a good employee experience. Similarly, ADP provides several payroll plans with add-ons for HR and other solutions for companies requiring the flexibility to add additional functionality as they scale. 

Meanwhile, businesses needing the ability to work from anywhere and improve accuracy in their employees’ time tracking should consider the native time-tracking tools that integrate with payroll in Gusto or QuickBooks. QuickBooks, in particular, includes options like mileage tracking so employers can guarantee their on-the-go employees or contractors are correctly reimbursed for things like gas expenditure or drive time. 

OnPay and Patriot are great for businesses looking for value for their money. For companies with particularly tight budgets, Patriot offers basic payroll functionality with the ability to add features like native accounting and time-tracking at a much lower cost than vendors like Gusto. However, small businesses might find OnPay appealing for its one-price-fits-all model as it includes additional HR features to support industry-specific payroll processes without the need to invest in large-scale HRIS solutions. 

If none of these vendors meet your unique needs, visit our Payroll Software Guide to browse other solutions.

The post Top Payroll Software appeared first on TechnologyAdvice.

There are many ADP alternatives that address all of these drawbacks and more. It’s important to keep your business’s unique needs top of mind to know whether any of these solutions could be a match. However, these are not the only options worth considering; if none of the vendors on this list seem like the right fit, check out our HR Software Guide to browse a complete list of solutions.

Top ADP Alternatives

ADP’s strengths as a payroll software solution are hard to top for midsize businesses. However, businesses that are very small, very large, or in need of a robust suite of comprehensive HR tools might be unsatisfied with what ADP offers. In these instances, an alternative like Paychex, Gusto, Paycor, Workday, TriNets Zenefits, or BambooHR might be worth considering.

Paychex: Best for small businesses

As the name suggests, Paychex specializes in payroll, but it also offers simple HR tools for smaller companies and growing businesses.

Payroll

Paychex’s payroll is specifically designed with small businesses in mind. It offers a 24/7 year-round service platform, so business owners can do payroll when it’s most convenient for them. It also automatically calculates taxes to make deductions simple and ensure your business remains compliant with federal, state, and local laws.

Time and attendance

Paychex also offers a native time-tracking app that fully integrates with the payroll software. This makes it easy to pay employees for the time they have worked and means HR teams don’t have to deal with the hassle and expense of integrating a separate time-tracking software.

Why choose Paychex over ADP?

ADP can be rather overwhelming for very small businesses and often presents a lot of excess features with a price tag to match. Paychex is a great solution for very small businesses looking for payroll and time-tracking support, as well as some basic HR tools.

While it’s not a comprehensive human resources information system (HRIS), it will get the job done for small business owners looking to get started with a highly-rated payroll software.

Workday: Best for large companies

Workday provides enterprise-level software for large companies, including human capital and financial management capabilities.

Financial management

Workday goes beyond payroll to offer enterprise-level financial management tools for large businesses, including always-on auditing and analytics powered by machine learning. For payroll needs specifically, customers can choose between Workday’s optional add-on or a third-party integration.

Human capital management

Workday’s human capital management features include talent management programs, augmented people analytics, compensation and benefits tools, workflow automations, and more. Workday also offers a feature called Peakon Employee Voice, which embeds employee engagement tools and data in the same platform as other HR information to create a more holistic view of the company’s workforce.

Why choose Workday over ADP?

Workday was designed to be an enterprise-level, cloud-based software solution focused on enterprise resource planning (ERP) and human capital management (HCM). This makes it a good choice for large businesses that have maxed out the capabilities of ADP and need a more comprehensive software solution that can match their growth and complexity.

Gusto: Best for scalability

Gusto is another payroll-focused platform that competes directly with ADP, but it also offers a more extensive range of HR tools than Paychex and other entry-level software.

Payroll

Gusto’s basic plans offer a lot of payroll features that are only available on more advanced plans or via an add-on with ADP. These capabilities include wage garnishments, benefits administration, and workers’ compensation. This often makes Gusto a more convenient and cost-effective choice for small businesses.

Hiring and onboarding tools

Besides payroll, Gusto also offers HR tools to help businesses hire and manage employees. With Gusto, HR teams can create job posts and offer letters, put together onboarding checklists, integrate with leading ATS, sign and store documents online, and more.

Why choose Gusto over ADP?

Gusto is a payroll-focused HR tool with a transparent pricing schedule that scales naturally as the business grows and adds more employees. This contrasts with ADP, which forces customers to switch from the ADP Run plan over to Workforce Now once they reach 50 employees. For businesses that have plans to grow their teams quickly, Gusto’s flexibility may be more appealing. 

Gusto also offers more HR features than Paychex and similar platforms, so it’s a good fit for slightly larger businesses that want a tool with more capabilities besides just payroll.

Keep reading: Gusto vs ADP

Paycor: Best for integrated recruiting features

Paycor is a direct competitor with ADP that offers a comprehensive suite of human capital management (HCM) tools in addition to payroll.

Recruiting

Growing businesses need to hire the right staff in order to keep succeeding, which is why Paycor has a whole range of recruiting tools. Paycor’s talent management modules let users set up a candidate dashboard, make custom hiring workflows, hire candidates virtually with remote integrations, create post-interview scorecards to standardize feedback, and more.

Benefits administration

Benefits administration can be tedious, but it’s necessary for maintaining compliance with laws like the Affordable Care Act (ACA) and Consolidated Omnibus Budget Reconciliation Act (COBRA). Paycor makes this effort easier by providing automated workflows to reduce rote tasks, EDI connections to transfer data to major insurance carriers, and process guides to optimize open enrollment periods.

Why choose Paycor over ADP?

Paycor is a more comprehensive HCM platform and thus offers more of a direct comparison with ADP. If ADP almost suits your business’s needs and you’re searching for a comparable alternative, Paycor is a great option. It’s ideal for midsize companies looking for a platform that combines robust payroll software with HR tools.

BambooHR: Best for integrated talent management

BambooHR is a highly rated HR software platform that also offers the option to add payroll functionality for U.S.-based employees only.

Applicant tracking system

BambooHR gets high marks for its applicant tracking system (ATS), which helps users identify promising candidates and fill open spots more quickly. The BambooHR ATS offers centralized candidate data, automatic alerts, in-system messaging, offer letter templates, and a mobile hiring app, so hiring teams can review and respond to candidates instantly.

Performance management

Once employees are hired, HR teams can continue to support their development using the performance management modules from BambooHR. The software supports self and manager assessments, customizable performance evaluations, check-in scheduling, and more.

Why choose BambooHR over ADP?

BambooHR has a great reputation for offering comprehensive yet easy-to-navigate HR tools for midsize companies, so it’s an excellent ADP alternative to explore if that’s what your company is looking for. 

However, it’s worth noting that the BambooHR payroll add-on is available for U.S. employees only, so businesses that are searching for payroll tools for international employees will need to look elsewhere or choose a third-party integration.

TriNet Zenefits: Best for HR administration

​TriNet Zenefits offers an extensive suite of HR tools with the option to include payroll as an add-on.

HR administration

Zenefits provides comprehensive HR tools that cover the entire employee lifecycle for streamlined workforce management. The software also includes business intelligence reports, so decision-makers can delve into the analytics and optimize processes based on that.

People Hub

The People Hub is what Zenefits calls its suite of communication tools, which allow HR to interact with employees directly from the Zenefits interface. The People Hub also makes it easy to send engagement surveys and solicit employee feedback, so HR and business leaders can understand employee sentiment more deeply.

Why choose Zenefits over ADP?

ADP is more of payroll software with some HR tools added, whereas Zenefits is HR software with payroll added. In fact, payroll is optional with Zenefits, whereas it is included in ADP plans by default. If you are looking for more of a full-service HR platform that includes payroll, then Zenefits is a good option to consider.

ADP Limitations

ADP is one of the leading payroll solutions, but it may not work for all needs. 

Its primary focus on payroll features means its HR capabilities often can’t match the sophistication of competitors that are HR-forward. If you are looking for a comprehensive HRIS solution, ADP might not offer the right tools to support your goals. 

ADP also targets the middle of the market, so if you are an enterprise-level company or a small business just starting out, then ADP might offer either too many capabilities or not enough.

Choosing the Right Alternative to ADP

If your business has outgrown ADP or found that it no longer meets your HR needs, there are many alternatives to consider. Small businesses may find success with Paychex, whereas large companies should look to Workday for more advanced functionalities.  TriNet Zenefits is a good option for businesses with broad HR administration needs.

Gusto is a strong contender for businesses needing a scalable HR platform that can grow alongside their teams. Similarly, businesses that are looking to expand quickly may benefit from Paycor’s integrated recruiting features, and BambooHR might work for businesses that need to juggle internal and external talent management.

Still not sure what ADP competitor is right for your company? Explore our HR Software Guide to learn more about your options.

Currently Trending HR Software

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Payroll is arguably one of the most important functions of human resources. Employee livelihoods depend on it, and failing to pay employees properly and in a timely manner hurts the company’s reputation, damages employee trust, and can lead to litigation and fines.

Bare Bones HR: What Every Startup Needs

Who Is Responsible for Payroll?

Payroll processes don’t look the same across all companies. How payroll functions in any given organization depends on its size, location, and the composition of its workforce. For instance, companies with mostly freelance and contract workers will have different payroll processes and needs than an organization with mostly full-time, in-house employees.

A company may opt to do payroll in one of two ways:

• In-house staff
• Payroll as a service

Payroll and in-house staff

A company may opt to assign payroll to in-house staff, more specifically to accounting or HR. Each approach comes with its own benefits and drawbacks. 

Payroll as a function of accounting

Payroll understandably falls under the purview of accounting at some companies, since payroll pertains to the amount of money that a company pays to its employees. 

Accounting approaches payroll from a purely numbers perspective in balancing accounts receivable with accounts payable. It keeps detailed records of payments to employees and addresses any discrepancies or errors when accounting for money going out to employees.

Companies with a mostly contingent workforce — meaning contractors or freelancers — are likely to designate payroll as an accounting task, since the company does not have to account for tax, insurance, or other benefits-related deductions.

Pros

• Accuracy
• Cost control and close supervision

Cons

• Potential for non-compliance with local, state, or federal tax and labor laws

Payroll as a function of HR

HR is responsible for payroll at some companies. Once an individual is vetted and hired, HR takes care of collecting necessary payroll documentation as part of the onboarding process. 

HR approaches payroll from a policy point of view. When an employee gets a raise or needs an extended unpaid leave, HR professionals are familiar with the external laws and internal corporate policies that regulate how and when an employee gets paid.

Organizations consisting mostly of full-time and part-time employees—who earn benefits and pay taxes on their wages—usually assign HR the responsibility of payroll. Also, companies with hourly workers should house payroll within HR, as hourly employees’ pay hinges on time tracking and scheduling, both of which fall under HR’s purview.

Pros

• Compliance with local, state, and federal tax and labor laws
• Pay that aligns with established internal policies

Cons

• Less emphasis on accuracy
• Room for error when payroll is just one of HR’s many functions

Considerations for in-house payroll

When keeping payroll in-house, consider cost and data access.

Cost of payroll software

Regardless of which department ultimately handles payroll, administering payroll in-house is the most expensive option. A company not only needs to pay its employees but also inevitably invest in software to help manage payroll processes. 

Due to their size and complexity, many medium and large businesses utilize an HRIS system that includes automated payroll tools. The good news is these software systems remedy the drawbacks related to accuracy and compliance.

BambooHR, GoCo, PeopleGuru, Namely, and Rippling are just a few examples of HRIS platforms that include payroll. 

Standalone payroll software tools are an alternative for companies that start out with accounting software but need to integrate it with payroll software. Tools specializing in payroll include but are not limited to:

• ADP
• Gusto
• Paychex
• Paycor
• TriNet Zenefits

Common data source through software

Payroll connects to accounting and HR, albeit in different ways. Regardless, the two departments will need to communicate with each other to ensure accuracy and efficiency. 

This means both departments need to be privy to the same data surrounding who is getting paid how much and when. Rippling, for example, unifies employee data across HR, accounting, and other departments that need access.

Pros of in-house payroll

• Enhanced security and accuracy from software
• More direct control
• Efficiency between departments

Cons of in-house payroll

• Cost
• Software selection and implementation

Payroll services

Enterprise businesses are likely to have in-house staff that take care of payroll, but small businesses often lack the resources to dedicate full-time staff to the function of payroll. 

Small businesses therefore often turn to standalone tools like the ones mentioned above or to payroll services offered by a third party. 

However, large organizations operating in multiple locations and with different currencies may also opt for payroll services for complicated payroll needs.

Pros of payroll services:

• Potential cost-effectiveness
• Compliance
• Expertise
• Convenience

Cons of payroll services:

• Potential incompatibility with time tracking and scheduling software
• Potentially necessary manual entry of employee hours worked
• Security concerns about sensitive employee data, such as social security numbers and banking info
• Less direct control

Multiple Paths to the Same Destination: Payroll Accuracy

Accuracy is key with regards to payroll because employees’ livelihoods and a company’s reputation depend on it. Accounting and HR both have integral roles to play in ensuring payroll accuracy, even if they approach payroll differently. 

Companies may choose to outsource the payroll function entirely. Otherwise, using payroll software — especially a solution embedded in a broader HRIS — is a must for in-house payroll administration to ensure accuracy and compliance.

Read next: Best HR Software for Small Businesses

Top Human Resources Software Recommendations

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Employers have several options for paying employees: cash, checks, direct deposit, and payroll cards. It can be difficult to choose which to use since each payment method comes with its own benefits and drawbacks.

Direct Deposit

Direct deposit is the most common wage payment method in the U.S., especially for salaried employees. In fact, more than 93% of employees earn their pay this way, according to the Getting Paid in America survey. Because direct deposit is so popular, most payroll platforms include direct deposit features.

How does direct deposit work?

With this payment method, a direct deposit provider automatically transfers money from your business bank account to each employee’s bank account at the end of each pay period. You might be able to set up direct deposit through your bank, but most payroll software providers support direct deposit as well.

Pros of paying employees via direct deposit

Perhaps the biggest benefit of direct deposit is the convenience it offers both you and your employees. Everything is handled electronically, so there’s no paper to worry about. HR and accounting staff can spend their time doing more important things than running payroll manually, and employees get access to their money quickly and easily.

Direct deposit also offers a lot of flexibility while maintaining compliance with important payroll laws. For example, ADP’s Workforce Now allows you to have up to four direct deposit accounts and makes it easy to pay your workers — whether they are exempt, nonexempt, or international employees — via direct deposit. All transactions are recorded automatically, and any discrepancies can be addressed quickly and efficiently.

Cons of paying employees via direct deposit

On the downside, direct deposit won’t work for employees who don’t have bank accounts. You will need to provide another payment option for these employees, so it’s important to be prepared with at least one alternative method as a backup.

Cost is another factor to consider. There are per-transaction fees to use direct deposit as well as initial setup costs, depending on the provider. And if you need to speed up a transaction, you might have to pay a higher fee. In some cases, a payroll services provider might cover the fees, though there may be other expenses to consider with these providers.

Also read:  How to Choose the Right Small Business Payroll Software

Cash

Cash payroll is less common today than it was in the past, and it is often associated with paying workers without a paper trail. However, it is legal to pay workers a salary in cash if you follow the proper employment laws.

How does cash payroll work?

Though cash is perhaps the most straightforward option since it doesn’t require any waiting period or bank involvement, it takes the most manual effort of all the payment methods. Some accounting platforms and other resources offer free calculators that can simplify the math involved in calculating how much to pay each employee.

Calculate gross pay

The first step is to calculate gross pay, or how much you owe each employee before deductions. This requires an accurate record of each employee’s working time, with careful attention to any hours that may be considered overtime.

There are many other factors that may affect how much you owe one employee versus another, though overtime is the only one mandated by law. Depending on your employment contract, you may also need to account for unpaid time off, holiday pay, hazard pay, salaried versus hourly wages, and different pay rates among other factors.

Other factors to consider may include paid and unpaid time off, holiday pay, hazard pay, salaried versus hourly wages, and any other differences in pay rates from one employee to another.

Calculate net pay

Once the gross pay amount has been calculated for each employee, you must calculate the necessary taxes and other deductions. Tax withholdings include federal income tax, Medicare tax, Social Security tax, and state and local income taxes, if applicable. The exact tax rate depends on each employee’s W-4 filing as well as your business’s location.

Other deductions include insurance premiums, retirement contributions, wage garnishments, and union dues. Some of these deductions must be taken before taxes, but others should be included in the employees’ taxable income.

Any reimbursements owed for work-related expenses are considered nontaxable income and should therefore be added to the post-tax payment amount.

Distribute and document payment

Once you’ve calculated how much to pay each employee and organized the cash amounts, it’s essential to have each employee acknowledge when they’ve received their pay. This may look like a ledger that includes the payment amount, date, pay period, and a spot for each employee’s signature. Documentation like this may be important if an employee ever claims they weren’t paid for their work or disputes the amount.

Pros of paying employees via cash

Many businesses may choose to pay employees in cash because it’s more direct, especially for those that only accept cash payments from customers. Cash-only businesses don’t have to worry about learning new software or working with a bank to cut checks or process direct deposits. Cash payroll also avoids any fees associated with processing payments through a bank.

The straightforward approach to paying employees may be particularly appealing for businesses that are just starting out. Cash is the only payment method that any employee can accept, so you can run payroll without worrying about whether it will work for everyone.

Cons of paying employees via cash

The biggest drawback with paying employees in cash is the risk of miscalculations. Though payroll calculators can help with the math involved, the manual nature of cash payroll means there’s a larger margin of error. If you choose this payment method, you must be very familiar with payroll laws and how they apply to each of your employees. Even small errors with tax calculations or time tracking can have significant financial and legal implications.

Additionally, cash payments can make maintaining accurate records a bigger headache compared to other payroll methods. If you are ever audited, you will need to provide all employee pay records with clearly documented payments toward taxes and other deductions. Depending on your state, you may be required to provide your employees with paystubs, so they can see their net pay, gross pay, and deductions. Check payments, direct deposits, and payroll cards offer a more streamlined way to keep track of these records and produce copies if needed.

Also read: Is Doing Payroll By Hand Cheaper Than Using Software?

Check

Printed checks were the most common payroll method before digital banking gave rise to direct deposit. Although some financial experts disagree about whether paper checks will become totally obsolete in the near future, it’s a reliable payroll method that balances flexibility and efficiency.

How do payroll checks work?

Payroll checks work similarly to cash payments, except each check gets routed through your business bank account. This means checks are generally easier to prepare than cash payments, too. Rather than counting out the exact amount of dollars and cents you owe to each employee, you can write or print checks that they can then cash or deposit.

Handwriting checks takes time, but it can be a good option for a small business with few employees. Printing checks is a faster option, but it requires special equipment and supplies that can get expensive. You can use check stock that is pre-printed with your banking information or you can use blank check stock and a MICR printer that uses magnetic ink.

Some payroll software providers like Quickbooks support paper checks, which means you can get the convenience of automatic payroll calculations while still maintaining control over how you distribute payments to employees. Alternatively, some payroll software integrates with check printing services like Printech.

Pros of paying employees via check

Many businesses that still pay employees via paper checks do so because it’s familiar to them. They have a solution that gets the job done, and moving to a digital payroll method isn’t worth the hassle of learning a new process. As direct deposit becomes more accessible and affordable, however, it may become difficult to justify the extra expense.

Some businesses prefer to pay their employees with paper checks because employees don’t need a bank account to get their money from a check. They can use a check cashing service for a small fee that’s typically less than the cost of opening and maintaining a checking account.

Similarly, payroll checks are a compelling choice for employers that want to maintain a privacy boundary with their employees. Whereas direct deposit requires employees to provide their bank account and routing numbers, paying with paper checks allows employees to remain in control of their personal information.

Cons of paying employees via check

Paper checks are losing popularity among employers because they take more manual effort and time to process than electronic payroll methods. Not only does it take longer to print and distribute checks than it does to process a direct deposit, but check deposits also take longer to clear. This means employees could be waiting several days to get access to their available funds, especially if payday falls on a bank holiday or weekend.

Additionally, it’s possible that employee checks might become lost or get stolen. If this happens, you will have to void the check and issue a new check to the employee. This incurs an additional expense and requires more administrative work to correct payment records.

Also read: 5 Costly Payroll Mistakes Small- and Medium-Sized Businesses Should Avoid

Payroll Cards

Also known as paycards, payroll cards are prepaid cards that are directly managed by your payroll software provider. They offer

How do payroll cards work?

Payroll cards function similarly to debit cards, except instead of a bank, the account is managed by a payroll software provider or a payment processor such as Visa or Mastercard.

The employee can use their paycard to make purchases, pay bills, and withdraw money from an ATM, just like they would use a debit card. Because it’s not a true bank account, though, an employee can access their funds immediately without waiting for the deposit to clear.

Pros of paying employees via payroll cards

Payroll cards are a convenient solution for employees that don’t have a bank account. They offer all of the flexibility and speed of paying employees in cash, but with the convenience and accuracy of digital payroll processing.

What’s more, some payroll card providers like Gusto offer unique tools not found with traditional checking accounts. For example, the Gusto Wallet app includes embedded features for time tracking that make it easy to verify an employee is being paid accurately for the time they worked.

Cons of paying employees via payroll cards

Payroll cards have become more popular in recent years as an alternative to direct deposit, and they’ve become more heavily regulated as a result. This may make payroll cards more difficult to use than they are worth.

Because payroll cards aren’t managed by banks, it may take longer to replace them if they are lost or stolen. Debit cardholders can withdraw cash from their bank accounts at any time by visiting a local branch if their card is stolen, but payroll cardholders may not have any way to access their funds without their physical card in hand.

Additionally, you and your employees might face fees with payroll cards. You might have to pay setup fees and recurring maintenance fees, and your workers might have to pay fees to get their money off the cards.

Understanding Payment Laws

Before choosing a payroll method, you should consult your state laws on the payment type and familiarize yourself with relevant federal laws such as the Fair Labor Standards Act. Many states have paycard laws that dictate how the cards can work, and employers can’t make direct deposit mandatory for their employees in every state. It’s best to take time to review the laws to prevent any mistakes and penalties.

Because payroll software has been developed in compliance with state and federal laws, having a payroll solution in place can give you peace of mind when it comes to paying your employees. Whether you need to track hours worked and holiday pay for an hourly employee, log paid time off and employee benefits for a salaried employee, or pay foreign employees in local currency, there’s a payroll software that can help with it. Check out our Product Selection Tool to speak with an advisor who can help you find the right payroll software for your needs.

Top Payroll Software Recommendations

The post What Are the Best Methods for Paying Employees? appeared first on TechnologyAdvice.

Now though, you have another issue to tackle. There are a lot of factors to pay attention to as the startup begins to grow, but one of the most critical is Human Resource Management. From developing a strategy to attracting and retaining the right talent, to ensuring all HR regulations are adhered to, HR management can become complicated.

Your HR department will determine:

• What pay is fair for new employees
• What communication strategies you can establish to ensure everyone is on the same page
• How to terminate employees who might not be working out

These are all decisions startup entrepreneurs should deal with sooner rather than later. While you may not need to hire a full HR team right away, read on for six things every startup needs to handle HR successfully.

Also read: Knowledge Management for SMB: How to Retain Expertise During Turnover

HR & Payroll Experts

A company in the early stages of development and operation might not need to hire a full-scale HR team. However, the best HR practices for startups require at least someone on the team to be knowledgeable in two primary areas: creating a healthy company culture and HR regulation and policy.

Hiring a part-time HR professional, or even looking at affordable consultants, can help with this. This individual can set the foundation for developing a cohesive culture and good, sound policy. They can also handle payroll, taking a time-consuming task off of your plate and handling all the intricacies that come along with it.

Best Payroll Software for Startups

Payroll software is probably one of the first tools you’ll need to purchase as a startup. Employees don’t tend to stick around long if they’re not getting paid. You’ll want to choose payroll software with strong automation features to limit the amount of time you have to spend on payroll and reduce the chances of errors.

Many software tools either include or integrate with time clocks, allowing the software to pull employees’ hours directly and pay them according to the time they worked. Payroll software can not only save you time, but it can also keep you from making expensive payroll law violations.

Some of the top payroll tools include:

• Gusto
• QuickBooks
• Patriot

Also read: Gusto vs Quickbooks

A Recruitment Strategy

Recruitment can be one of the major HR challenges in startup companies. It’s hard to compete for top talent with established companies because you don’t have the same level of resources. While your salaries may not be as competitive, you can offset that by offering more flexibility and moving forward with candidates faster.

This doesn’t mean you shouldn’t still pay a fair salary; it just means you don’t have to be at the top of the range.

As a startup, it’s probably best to target recent college graduates as they’ll be looking to build experience. You can likely even start them early as paid interns and then bring them on board as full employees when they graduate. This way, you get employees who already know the business and they’ll be able to gain useful experience before graduating.

Also read: How to Hire For the Future of Work

Best Recruiting Software for Startups

Recruiting software streamlines your hiring process by pushing job postings out to top job sites, so you only have to make them once. As a startup, your IT resources are probably limited, so you’ll need to choose cloud-based software.

You’ll also want recruiting software with artificial intelligence and automation features to reduce the amount of time you have to spend poring over resumes. With these tools, the system can parse resumes for you and automatically eliminate unqualified candidates. You also might want to look for tools that offer mobile accessibility, so you can review candidates on the go.

Here are some of the top recruiting platforms:

• Workable
• BambooHR
• Breezy HR

Also read: Best Practices for Writing the Perfect Job Descriptions

An Employee Handbook

This is another policy-driven element startups need to ensure everyone starts on the same page. Creating an employee handbook also causes management to think through questions hires will have about procedures and their place in the company.

Start by answering these questions:

• How much notice do employees need to give before asking for time off?
• How is overtime calculated and allocated?
• Is there a dress code?
• How will the company handle issues of harassment and discrimination?

All of this should be discussed in the employee handbook with the expectation that new hires will read through it and ask any questions they may have. Train managers on the correct answers to these questions.

Track Time and Duties Assigned

Startup entrepreneurs may not have the money to purchase an all-in-one HR management system to track time and compensation. That’s entirely okay in the beginning; there are a lot of free options for having employees track their time and duties completed.

Programs like Trello, Hubstaff, or even Google Sheets can be used to monitor time and tasks, and there are some well-priced employee engagement and performance management software options to help employees stay on track toward goals.

Look for cloud-based applications that allow others to view and edit content as needed. Project management tools are a great way to know if everyone is staying on task and track information to use with performance reviews. Understanding how employees are performing is key to any basic HR management strategy.

Best Time Tracking Software for Startups

Time tracking software is a must for startups that employ contractors to get work done. With these tools, you can ensure you’re only paying for the time the contractor spends actually working. It’s also a good idea to use this software for any employees you’re paying hourly.

With time clock software, employees can track their time online. This time is stored in a database, and the timesheets can then be exported into your payroll system, which is much simpler than making employees physically punch time cards and then trying to organize these come payday.

Startups should consider the following time tracking software:

• Mitrefinch
• Buddy Punch
• When I Work

Create a Strategy for Learning and Development

It may not be the primary priority in the beginning, but learning and development will be critical to any long-term growth and success for a startup. The more training workers receive and the more knowledge they gain, the better they can help the company move forward and promote their own development.

Leaders should work alongside HR professionals to develop a training and development program. This step can look like a monthly workshop where an expert is brought in to train workers on software or processes, purchasing stand-alone or subscription learning management software, or paying for workers to attend training or classes.

Continued education not only benefits the company, but it lets workers know from the beginning that leaders care about their professional development and career goals.

Best Learning Management Systems for Startups

A learning management system (LMS) makes it easier for you to train new employees and ensure they understand your business. You can create custom curricula and quizzes, host video and audio files, and use gamification to keep learners engaged, improving retention.

Even the most qualified candidates will need some training on your processes, and using an LMS ensures all new hires get the same training upfront. An LMS reduces the amount of time you have to spend training your employees hands-on and allows them to learn at their own pace. Some programs even offer a free tier for small teams.

Here are some of the best LMS solutions for startups:

• TalentLMS
• ProProfs
• Bridge

Also read: The Influence and Effectiveness of Gamification in eLearning

Protocol for Performance Reviews

Workers can only improve with feedback. Someone has to tell them what they are doing right and what they may need to work on. It may be hard to believe, but many companies do not engage in regular performance reviews. This impedes progress, so owners should make sure their startup does not follow in the same footsteps.

Get ahead of the game by working with the HR team (or employee) to develop standards for performance reviews. Plan to answer these questions:

• How often should they occur?
• What should managers be on the lookout for?
• Should it be 360, pulse surveys, quarterly reviews, or does another format work for the team?

The goal is to have a starting point for team leaders to begin to assess how their team is performing. Setting relevant benchmarks and goals is another crucial part, and leaders need to make it a priority. Also, it is critical for team leaders and managers to encourage workers to give feedback concerning the company and the performance of leadership.

Read next: TechnologyAdvice Buyer’s Guide to Social Collaboration Software

Best Performance Management Software for Startups

Performance management software allows you to set goals and expectations for your team and make sure they’re on the same page. Provide transparent evaluations and ensure you’re keeping the right employees.

Performance management software also helps you work with employees to map out their career trajectory, so they can see their growth opportunities within your company. As a startup, this will be helpful for you because you can plan how you want your business to grow.

Performance management tools also allow you to give bonuses based on performance rather than educated guesses, improving employee motivation.

Top performance management tools include:

• Cornerstone
• Engagedly
• ClearCompany

Do Startups Need HR?

In the hustle and bustle of keeping a startup afloat, owners cannot forget to support their most precious resource: the employees.

Sales cannot happen if customer service is lacking, partnerships are less likely if employees are not ready to facilitate them, and the company will not move forward if workers are not equipped to be innovative and creative.

A company’s forward motion is facilitated by a stellar HR team with an in-depth understanding of sound policy and regulations. HR policy not only helps employees manage their day-to-day administrative needs, but it can also expose them to sensitivity and harassment training and help them understand relevant laws.

Startup leaders cannot leave HR by the wayside as they strategically put the company in a position to grow. HR management gives startup owners the tools to take care of the company’s most vital resources.

Read next: Workplace Trends for Employers to Consider

Chanell Alexander is a writer for TechnologyAdvice. She is a freelance writer and digital marketing strategist. She has over seven years of experience in the nonprofit field, and enjoys blending innovative technology solutions with communications. When she is not writing, Chanell enjoys traveling, contributing to video game blogs, and embracing her inner foodie. See what else Chanell has been up to on her LinkedIn profile and Twitter page.

Top Human Resources Software Recommendations

The post Bare Bones HR: What Every Startup Needs appeared first on TechnologyAdvice.

ALSO READ: ADP vs. Paycom: A Payroll and HCM Software Comparison

TechnologyAdvice can help you dramatically reduce your research time. Use the Product Selection Tool on the Payroll Software page to enter your requirements, and one of our Technology Advisors will set you up with a short list of software recommendations that fulfill your needs.

ADP vs Paychex overview

Both payroll software companies have been around for over 40 years and have a long list of satisfied payroll management customers. They’ve managed to stay at the head of the pack, despite the rise of smaller, local, or online payroll providers in recent years. ADP and Paychex can each adapt to your particular business needs, which makes the choice between them difficult. But their differences, outlined below, will help you differentiate.

ADP

ADP Workforce is a full-service payroll company that provides many different services for small, medium, and large businesses, and many of these services are available a la carte or as integrated suites. If the conventional plans don’t fit your needs, you can choose from partner programs and franchise accounts or private accountant networks. ADP’s multinational presence means that companies located across several countries or US locations can find expert advice navigating international or multi-state payroll taxes and fees.

In addition to payroll services, ADP also offers HR consulting and internal solutions including:

• Insurance
• Human capital management (HCM)
• Employee onboarding
• Insurance & employee benefits administration
• Affordable Care Act (ACA) compliance
• Retirement services (401k, IRAs)
• Employment verification
• Time and attendance tracking
• Employee handbook creation
• Background checks

Paychex

Paychex compares to ADP in size and complexity, but they’ve built their business by focusing on improving online payroll processing and accounting-related HR solutions for small and medium-sized businesses. They also offer enterprise-level software, if that’s what your company needs. Every new account gets an implementation specialist and a dedicated customer service manager from the payroll processing company.

Additional HR features from Paychex include:

• Time and attendance
• Biometric time clock
• Compliance services
• Records administration
• Business insurance
• Worker’s compensation
• Tax forms and services
• Online marketing services
• Employee Benefits
• Retirement plans

Digital payroll solutions in ADP vs. Paychex

Like most modern payroll solutions, ADP offers direct deposit and paper-free payroll updates. ADP also provides a direct-to-debit-card solution called ALINE, where employees can receive their pay automatically on a card similar to a credit card. This program looks great on paper but does have a few issues. Payments to these cards leave no paper trail, and complaints of lost or missed debits can take a long time to resolve. ADP pushes this ALINE program as a good solution for workforces without bank accounts, but these same employees are most likely to live paycheck to paycheck, which means a missed payment can cause severe hardship.

Paychex’s flagship offering is the online payroll service, Paychex Flex. Flex gives you access to your entire payroll system online and includes mobile-ready dashboards and data transfer to outside accounting software, including QuickBooks and Kashoo. Although they provide limited email and live chat support, Paychex responds to immediate and time-sensitive support requests with 24/7 phone support. Paychex Flex Select gives you the ability to work in future payroll periods for upcoming events, which you won’t find in a lot of other software.

Customer service and data access

ADP’s multinational size means that small businesses may get lost in the shuffle. Although the website lists several toll-free numbers and an email service option, requests for customer service often take more than one phone call, and no dedicated customer service is available for small businesses. ADP gives standard payroll reporting options to all accounts, but access to your data is limited. Complex analytics require a request from ADP for a report.

The Paychex Flex Enterprise system includes an employee portal within the software, so employees can check on the status of their payments and view past pay stubs which is especially helpful for remote workers. Some users do complain that the busy interface can be confusing, and Paychex doesn’t let you download and print your own checks on-site. If some employees need paper checks, they’ll print at the nearest Paychex office (there’s at least one in all 50 states) and deliver to employees via mail.

Outsourced payroll and HR services

All that said, small and medium-sized companies that don’t have a dedicated HR professional can use ADP for business process outsourcing. This program gives you access to dedicated HR professionals who will guide you and your employees through the entire lifecycle of human capital management. ADP also partners with professional payroll and HR consultants well-versed in both accounting and human resources needs specific to ADP.

Like a lot of other companies in this category (including ADP), Paychex covers benefits and HR solutions for the full range of needs, from employee recruitment through retirement. They also address government compliance through OSHA, COBRA, workers compensation, and unemployment insurance.

In addition to the basic payroll service, Paychex offers several add-ons. Taxpay handles your payroll tax and sales tax filing. Paychex Time organizes and tracks employee clock-ins via a mobile app, and the Paychex PEO helps improve your benefits administration. Other extras include credit card processing, currency conversion for international receipts, and gift cards.

Making Your Final Decision

Comparing ADP vs. Paychex can be difficult because both of these software companies offer so many different services. As you evaluate the two, use your own business needs as a litmus test. Large companies that need less support and already have a dedicated payroll specialist/HR staff may find that ADP meets their needs. Small businesses looking for a best-of-breed solution with dedicated support might want to consider Paychex for easier payroll processing.

Still having trouble deciding on a payroll solution? Our Payroll Software Product Selection Tool will turn your requirements into a short list of payroll software vendors that are right for your needs.

The post ADP vs Paychex: Payroll Comparison appeared first on TechnologyAdvice.

You might see the price tag on payroll software and panic. The sticker shock makes you think, “I can do payroll manually.” You built a business yourself, so why can’t you run payroll yourself?

That thought is understandable. Small businesses are often strapped for cash. Adding payroll software as another expense can be dismaying. You can do payroll yourself for no extra cost, right?

Sure, you can do your own payroll. Especially if you have few employees and a simple payroll process with minimal deductions and calculations. But, even doing payroll yourself has expenses. In fact, 46% of small businesses spend $101-$500 per month on payroll costs. This doesn’t account for any costly errors you might make either. Running payroll yourself isn’t as free as it seems. And, as you add employees and your payroll becomes more complex, you’ll have additional expenses.

Also Read: The Top Payroll Software For Enterprise And SMB

Believe it or not, doing payroll yourself can be more expensive than using payroll software. Let’s take a look at the things that can increase the costs of doing payroll on your own.

Increased time to run payroll

Running payroll with software can take minutes. Running payroll by hand can take hours.

When you run payroll by hand, you have to do all the calculations yourself. You have to add employee hours, determine straight time pay, calculate overtime pay, consider other compensation, withhold taxes, deduct other benefits contributions, and subtract garnishments.

And, there’s not an easy way to do calculations. You must calculate each employee’s paycheck individually.

Learning how to do payroll by hand can quickly become your biggest payroll time waster. Before you can even begin payroll yourself, you must know about taxes and labor laws. Learning everything you need to know can take a while.

You should know that time is money. You pay your employees for their time after all. Your time has a dollar amount attached to it, too.

While you don’t have the expense of small business payroll software, you still have to account for the time you spend running payroll. When you use multiple hours per week to set up and run payroll, the cost of your time adds up.

Incorrect calculations

Manual payroll has more room for mistakes than any other payroll method. There are more opportunities for human error.

When you are doing payroll by hand, you might forget to calculate some things. You might forget to subtract a deduction or add in some employee hours.

Watch out for incorrect calculations. You could multiply, add, or subtract the wrong numbers. You might type the wrong number into your calculator. Or, you might write down the wrong number.

Incorrect calculations can cause you to pay employees the wrong amount. If this happens, your employees might sue you. You’ll have to pay back wages and legal fees.

You might also incorrectly pay employment taxes. If you don’t pay payroll taxes or pay them incorrectly, you will have to pay penalties. In fact, during the IRS’s 2016 fiscal year, it assessed almost 5.9 million civil penalties for employment taxes, amounting to about $6 million.

There are possible legal fees and criminal penalties, too. Messing up your payroll tax payments can also lead to imprisonment.

Payroll software is programmed to prevent mathematical errors. The software can calculate the gross wages of each employee and subtract all the payroll taxes and other deductions. The program will tell you exactly how much you must pay toward each employment tax. You don’t have to worry about incorrect calculations and financial consequences.

Wrong information

When you manually calculate payroll taxes, you have to constantly research and update your payroll tax rates. You must update federal tax rates, and many employers must update state and local employment tax rates, too.

Out-of-date tax rates can lead to incorrect calculations. Perfect math can’t save you if you start with the wrong numbers.

Payroll software automatically updates with the newest payroll tax rates, which saves you time and potentially money you would spend on errors.

For example, an employee gives you a new Form W-4 to update their withholding allowances for federal income tax withholding. You take the form, but the next time you run payroll, you forget to implement the new withholding allowances. As a result, you withhold the wrong amount of federal income tax from the employee’s wages.

Or, let’s say you promise a raise to an employee. With payroll software, you can go in your account and adjust the employee’s wages for the next payroll. But with manual payroll calculations, you must remember the raise or hope you see where you wrote down the information. If you forget about the raise, you’ll have an upset employee, spend more time on payroll, and might have to pay penalties if you pay taxes incorrectly.

Manual payroll isn’t cheaper

No matter what, payroll is an expense. You have to pay your employees and you have to pay for payroll-related administration.

While manual payroll might be enticing with its initial look of being free, the costs can add up quickly. Especially because you are not a payroll expert. Odds are, you’ll make mistakes and waste time.

Payroll software can reduce the expenses that are associated with running payroll. You can save time and cut out costly errors.

There are plenty of inexpensive payroll tools on the market, so don’t have to go for a pricey enterprise package, especially if you have a small business with a simpler process.

Kaylee Riley is a content writer for Patriot Software Company, the parent company of Patriot Software, LLC and Top Echelon, LLC. Kaylee writes about payroll, accounting, recruiting, and other small business topics.

Top Human Resources Software Recommendations

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