Top Payroll Processing Services in 2022: Guide for SMBs

When you’re a small business owner, everything is your job — HR, finance, accounting, sales, even payroll. The National Small Business Owners survey showed that 24% of small business owners spend at least two hours a week dealing with federal income tax payments, which doesn’t even include sending out checks to employees. This is time that could be better spent growing the business and creating value for your customers. 

Many small business owners are now choosing to outsource their payroll system. This practice not only saves time that can be put toward the core aspects of your business but also reduces errors that result in costly fines or employee turnover. In this guide, we’ll compare five of the leading payroll processing services and how they could streamline your small business.

Payroll Processing Services for Small Businesses

Few things can be as costly to a small business as payroll errors. The IRS estimates that 33% of business owners make mistakes with payroll and tax withholding which add up to billions of dollars in penalties. Even something as simple as being late sending out W2s will cost you $50 for each employee. Also, more than half of Americans live paycheck to paycheck, so it’s no surprise that just as many say they’ll start looking for a new job after two payroll errors. 

Hiring an expert team to take care of your small business payroll processing services ensures that you’re in compliance with the law and your employees stay happy. The only problem is, how do you choose the right one?

Top 5 Small Business Payroll Processing Services

There are dozens of payroll processing services designed available to small businesses, but their features, prices, and level of customer service vary significantly. These are some of the most popular processing services and what they’re known for.

Quickbooks Payroll

Best for businesses already using Quickbooks

Thanks to their accounting software suite, Quickbooks is already well-known to small business owners. If you already use them for accounting, integrating the payroll system with it is a cinch. Their basic plan is a great option for sole proprietors or businesses with only a few employees as it doesn’t come with anything unnecessary.

However, it’s also one of the more expensive payroll processors, with a slightly higher upfront fee of $45. Fortunately, you can try it for free for 30 days; if you are already using Quickbooks you’ll be hooked by its seamless integration. Additionally, should a payroll error be made while using the software, Quickbooks will cover up to $25,000 in penalties, but only if you purchased their Elite plan. 

Paychex

Best for larger businesses

For those needing a complete payroll setup that includes time tracking, benefits, and HR, Paychex can’t be beaten. With Paychex, you can take an entire payroll team and downsize to just one or two employees. Setup isn’t the easiest, but once everything is dialed in, it’s one of the most efficient systems on the market. Your payroll administrator also gets access to the mobile app that allows them to manage payroll from anywhere. 

Paychex effortlessly syncs with some of the most popular business software systems like Quickbooks and Salesforce too, so there’s no need to spend hours on data migration during setup. Paychex has some of the best customer support in the industry, and if you purchase one of their upgraded systems, you’ll have your own dedicated payroll specialist. 

ADP

Best for companies needing extensive software integration

Along with Paychex, ADP is one of the most popular payroll processing services out there. Where the software really shines is with its integration options, providing seamless data migration between hundreds of programs. It also comes with Apple and Android mobile apps for payroll that allow administrators to make changes on the go and for employees to receive vital payroll information whenever they need it.

ADP doesn’t come cheap though, with a basic suite that costs around 50% more than its competitors. The setup process isn’t very intuitive either, making this a better option for businesses retaining at least one dedicated payroll employee.

On Pay

Best for companies without a payroll specialist

If you’re looking for easy payroll software, OnPay is one of your best options. You don’t need to be an HR manager or a payroll specialist to understand its easy-to-use interface, and setup takes almost no time at all. Employee onboarding is mostly self-directed, so there’s no need to put on your HR hat or hire a dedicated employee for this role. It’s also one of the cheapest payroll processing options for small businesses.

Its biggest downside is that it doesn’t integrate as well with other business software. It works with fewer programs but integrates with most of the big names and is a good option for smaller businesses that don’t have a complicated setup. Additionally, OnPay doesn’t allow for automatic payroll rollouts; it needs to be manually approved each pay period.

Square

Best for companies needing a bare-bones system

Square has taken the payment processing world by storm with its easy-to-use point-of-sale system dominating the market over the past few years. That simplicity is a major feature of the company’s payroll processing system, with transparent pricing and an intuitive setup that doesn’t require a dedicated payroll specialist. It’s also one of the least expensive payroll processing services.

The only downside to the system is that it’s so well-integrated with Square’s subsidiaries. For instance, if you’re a retail business using Square’s point-of-sale systems, you can easily generate reports tracking tips and commissions, but without it, customized reports are more time-consuming to create. Though it’s still a solid choice for businesses that only need the basics.

Get Payroll Support from LendThrive

Many small business owners use LendThrive’s short-term financing options to provide quick, transparent, and predictable funding. Payroll support is just one way in which small business owners can access the working capital to push their business forward – without dealing with traditional loan applications. 

LendThrive offers fixed-rate loans of up to $150,000 with flexible repayment options to help you support payroll and innovate. Contact us today or apply for a loan directly, and we can approve you in as little as 24 hours.