From Paper to Digital: Modern Payroll Options for Small Business

The basic idea behind payroll isn’t new: Business owners have been paying employees for their labor for eons. Keeping a written record of those payments and even deducting federal or state taxes and other withholdings. however, it is a relatively modern concept.

Traditional paper-based payroll systems can be complex and often require bookkeeping expertise. This is why many owners today are turning to digital payroll options for small business, which offer features like cloud-based software, mobile apps, automation, and other online payroll services. Whether you need to onboard a new employee, file tax forms, get on-the-spot payroll reports, or simply give employees access to their own paystubs, these digital payroll options for small business can be the answer.

Here’s a look at which small business payroll programs are available and how they differ from traditional payroll options for small businesses.

Traditional Paper-Based Payroll Systems

The old ways of running payroll involved an accountant, bookkeeper, or both maintaining paper books. Calculations were done manually, hardcopy forms were submitted, and physical checks were issued with wet signatures.

These payroll professionals were also given complex tasks like tracking deductions, withdrawing and paying taxes, and managing employee benefits (like health insurance, retirement accounts, workers’ compensation) manually. This was a time-consuming and costly process that was prone to errors.

The traditional methods and payroll options for small business also ran the risk of human error leading to compliance issues or tax penalties. There was concern for financial security and difficulty in maintaining efforts, and it was hard to scale this system as the business grew.

The Rise of Cloud-Based Payroll Options for Small Business

Cloud-based payroll software was first launched during the dotcom boom, with the introduction of NetLedger (which later became NetSuite) in 1999. In the 25 years since, remote accounting software has expanded to include integration with other business systems  like HR and accounting  as well as real-time access for business owners and employees alike.

These payroll features are user-friendly and make it easy to allow for employees to provide self-service. Employees can now log in to access their records, submit requests, and print out tax documents anytime, from anywhere. Some platforms offer HR solutions like requesting PTO or tracking time and attendance.

For employers, this new small business payroll software makes it easier to onboard new hires, manage benefits administration, request customer support, and even offers peace of mind that they’re maintaining compliance with the latest tax laws and regulations. Modern payroll options for small businesses can easily scale for growing businesses, too. Whether you’re adding employees or offering new features and perks  like retirement plans or health benefits these payroll service providers have HR tools that are as easy to manage for 100 employees as for 10.

Popular Cloud-Based Payroll Providers

There are many different digital payroll options for small businesses today, depending on the pricing and features you need most.

For example, there are some free payroll companies, but they are limited to a handful of employees; if you need to pay more than 10 people, for example, you may encounter additional fees. Others might offer basic human resources features but lack the full-service payroll options you need for your team.

Here’s a look at some of the leading platforms and what they offer:

• Gusto: For $49 to $180 per month (plus $6+ per employee), Gusto offers complete HR solutions. This includes time tracking and scheduling, PTO management, hiring and onboarding, unlimited payroll runs, wage garnishments, tax calculations, and more, and you can upgrade or downgrade anytime with no contracts.
• ADP Workforce Now: ADP offers an all-in-one solution for HR, payroll, time, invoicing, and talent acquisition. HR insights make it easy to track and analyze the company while proactive error protection makes it easier to avoid payroll tax issues. Pricing varies depending on the features you choose.
• QuickBooks Online Payroll: Starting at $50 per month plus $5 per employee, Intuit Quickbooks Online Payroll offers full-service payroll solutions with a 100% accuracy guarantee on state and federal payroll tax compliance. Next- and same-day direct deposit is available on all three levels, along with health benefits, workers’ compensation, and onboarding support. Your payroll cost depends on whether you want to add time or project tracking or tax payment penalty protection.
• Paychex: Whether you’re self-employed or run a company with 1,000+ employees, Paychex has a customizable payroll option for your small business. Through Paychex, you can offer HR support, run accurate payroll, enhance and manage employee benefits, and even drive team alignment, all in one place. You’ll have to reach out to the Paychex support team to get pricing and build a package, however.
• Rippling: Another 100% guaranteed payroll option for small businesses is Rippling, which offers complete workforce solutions for startups, Mom & Pop businesses, or Fortune 500 companies. Packages are completely customizable with base plans and add-ons so custom quotes are offered.
• OnPay: Payroll, HR, and more are available through OnPay, an integrated small business software solution for a simple $40 per month plus $6 per employee. There are no integration fees, so your cost is the same whether it’s your first payday or your 50th. There’s also an error-free guarantee so you don’t have to worry about unexpected liabilities down the line.
• Bambee: Bambee not only offers a wide range of payroll options to small businesses, but it also gives you a dedicated HR manager included in your monthly fee. Pricing starts at $99 per month plus a one-time setup fee, which includes HR Autopilot and support.

Automation in Payroll: Reducing Human Error and Saving Time

Many of today’s digital payroll options for small businesses utilize automation to make processes simpler, faster, and more accurate than before. Here are some ways this works:

• Taxes, deductions, overtime, and benefits can be automatically calculated.
• It streamlines the process of generating paychecks, including sending direct deposits and uploading payslips.
• The risk of human error in calculations is eliminated.
• Automation reduces the time spent on manual tasks.
• Faster (and more accurate) payments build trust with staff.
• Tax filings, benefits management, and year-end reporting are all made more efficient.

AI and machine learning are quickly becoming the future of payroll, helping identify tax and compliance updates, detect fraud, and even analyze salary benchmarks for recruitment purposes.

Final Thoughts

Transitioning from paper-based payroll processing to more modern digital and cloud-based solutions may feel overwhelming initially but can be one of the more time-efficient and cost-effective choices for your company. Today’s best payroll options for small business can help you run payroll, eliminate human error, send payments, and even manage employee benefits. With accuracy guarantees and digital automation, these services help your company become as error-free as possible, avoiding IRS and state penalties for errors or non-compliance.

If you’re interested in leveling up and moving your business away from paper payroll, take some time to research and implement a cloud-based digital solution. This can help you improve efficiency, accuracy, and compliance to create a more streamlined and secure approach for your whole team.

FAQs on Payroll Options for Small Business

Do I have to pay for a payroll service for my business?

Unless you’re able to run your own payroll for your business, you’ll need to hire someone to manage payroll and cut checks, such as an accountant or bookkeeper. You can also sign up for a digital payroll service that can simplify and condense a lot of these tasks, making the process much faster.

Are there any free payroll services online?

There are some payroll options for small business and platforms that offer free online services, as long as you only have a handful of employees or need limited services. If you have a larger company or want more comprehensive payroll, benefits, or time-tracking services, you’ll likely need to pay a monthly base and/or per-employee fee.

What sort of functionality does cloud-based payroll options offer?

Each payroll platform offers its own features and functions, but these generally include things like payroll and payment processing, benefits management, onboarding, time tracking, and PTO. The more functions you require and the larger your employee pool, the more you can expect to pay.

Can I do my own payroll for free?

You can  run payroll on your own without paying someone else. Just be sure that you are making accurate calculations and keeping clear records, as the penalties can be steep if you or your employees aren’t compliant with state and/or federal guidelines.

Am I required to withhold taxes from my employees when doing payroll?

Except in specific instances, most employers are required to withhold required state and federal taxes from employees’ paychecks, then submit those funds to the appropriate department. Some employees may qualify for exemption but willfully failing to withhold taxes can lead to penalties and fines. Many modern payroll options for small business can help your company do this automatically.

What is one of the  best ccs for small business?

If you’ve spent time building up the best credit for your small business, you may qualify for some of the best rewards credit cards. These credit cards offer signup bonuses, referral bonuses, and cash back, miles, or points rewards on your business spending. You can even use your business credit card to pay for whatever service you choose to provide payroll options for small business.

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