Online payroll software includes many services. These are some of the most valuable features and tools these programs offer.
Payroll processing
The full-service payroll system calculates worker wages based on entered wage rates and hours worked. It deducts employee benefit contributions and payroll taxes. Some software offers automatic payment options for salaried employees, so you only need to approve payroll each pay period. Depending on your payroll service, it may allow unlimited payroll operations and one or more payroll plans.
payroll tax
One of the great things about using an online payroll service is that it handles your business’s payroll tax responsibilities. Based on each paycheck, the software can withhold the required employee taxes. The payroll company then completes and files quarterly payroll tax reports and makes payments to the appropriate local, state and federal agencies.
At the end of the year, the software generates W-2 and 1099 tax forms for your employees. Many payroll companies offer error-free guarantees. If the company makes a mistake on your taxes, your payroll provider will correct the oversight and pay any penalties or interest incurred.
New employee report
When you hire a new employee, you must report this information to the state. Online payroll services can fill out these forms for your small business and send them to the appropriate state agency. The information on the form includes the employee’s name, address and Social Security number, and the employer’s name, address and federal employer identification number.
Employee payment methods
Payroll companies offer a variety of ways to pay employees. The most common methods are direct deposit and paper check. With direct deposit, employees provide their bank account information, and the payroll software automatically deposits their paycheck into their account on payday.
Another option is a paper check. You can print the checks yourself, or some payroll providers offer a check stuffing service, which means they print the check, put it in an envelope, and deliver it to your office.
Payroll cards are another option for direct deposit. Employees do not need a bank account. Instead, they have prepaid debit cards to which salary funds are deposited. Additionally, a handful of payroll services offer on-demand payroll. In these cases, workers can demand payment before the scheduled pay period.
Not all payroll cards will benefit your employees; some charge hefty fees. Before providing payroll cards to your employees, understand the pros and cons of payroll cards.
Employee and Contractor Types
Payroll software supports hourly and salaried employees, vendor payments, and 1099 contractors, including consultants and freelancers. The system allows you to select individual pay rates (even during the same shift), calculate tip points, allocate bonuses and reimburse expenses.
Payroll report
Online payroll software can provide a variety of reporting tools that allow businesses to gain insights into their company and employees. The types of payroll reports provided by some services include payroll registers, contribution reports, and payroll tax reports. Advanced data visualization capabilities can reduce labor costs and baseline pay rates.
No matter the size of your business or payroll process, you should perform payroll reporting on a regular basis. Browse our guide to find out what to include in your salary report.
Third party integration
Many online payroll software platforms integrate with programs that businesses already use. These include accounting software, time and attendance systems, and human resources tools. These integrations allow programs to connect seamlessly. Data is automatically shared and transferred between them, saving you time entering the same information in multiple places.
Employee self-service
The best online payroll services provide each employee with a login to access the software. An employee portal allows them to view pay stubs, access year-end tax forms and check leave balances. Depending on your payroll plan, employees may be able to enroll in a benefits plan and request shift coverage from co-workers.
PTO management
Many payroll services include the management of paid leave for employees. This could mean simply tracking PTO accruals or allowing employees to request time off and have it approved or denied by a manager. Like other features, these updates can be automatically synced to your payroll software.
HR features and tools
Some payroll companies include HR services within their platform. Customizable offer letters and onboarding tools such as e-signatures are popular features. Programs may also offer employee handbook wizards, document templates, and an HR resource library.
customer service
Online payroll companies usually offer support during weekday business hours, but a few offer 24-hour service or emergency weekend hours. Some will assign a dedicated support specialist, eliminating the need to go through a call center.
While email, phone calls, and live chat are the most common methods, some providers offer customer service via text messages or Slack. Additionally, most online payroll services have extensive resources on their websites, such as how-to guides, FAQs, and videos.
mobile access
Some payroll services offer mobile access to their software. Options may include mobile-friendly sites that open on smartphone browsers or dedicated iOS and Android apps. These apps allow employees to view digital pay stubs and annual tax forms. Others serve as time tracking tools with scheduling or PTO management capabilities.
Benefits management
Many payroll companies allow businesses to manage employee benefits through their payroll software. Benefits administration services may include health and dental insurance, retirement plans, pre-tax savings accounts and workers’ compensation. Additionally, some payroll providers can integrate with your current broker.
