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How to Choose the Right Payroll Software for Your Business

iconPayroll SaaS icon5 min read
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Finding the right payroll software that suits your business can be a long, arduous process, and it’s important that you don’t rush the decision and choose the wrong service. There are many factors to consider when choosing the right payroll software for your business such as features, ease of use, customer service and much more, which is why we’ve compiled a list of everything you need to know before choosing a payroll provider. 


The main benefit of outsourcing payroll is freeing up time to grow your business. When that growth does happen, you need a payroll service that can scale up to accommodate additional employees and services. Make sure to find a payroll service with a clear pricing structure. This will help avoid any potential surprises as your service increases. 


A typical online payroll service operates in the cloud, so businesses are able to manage and run their payroll from anywhere they have internet access. Good payroll systems can help you carry out your pay run with greater speed, efficiency, and confidence, and they usually include a variety of additional services. Some of these services are:

  • Tax Filing - Your payroll software should automatically withhold your employee taxes, file quarterly tax reports, and pay tax withholdings to the appropriate state and federal agencies. It should also be able to issue employee forms such as the W-2 and 1099 at the end of the year. This will help payroll administrators navigate the complexities of managing deductions and filing taxes.

  • Direct Deposit - Having a direct deposit option is a great tool to have when you want to streamline processes. Paper checks can be a time-consuming task, as administrators would need to physically complete and distribute checks. By removing this task, you will save time, resources, and effort.

  • New Hire Reporting - A quality payroll service should report your new hires to the government on your behalf.

  • Employee Self-Service (ESS) - Your employees should be able to have access to the software whenever they need to view their pay stubs, request time off, and obtain their year-end tax forms.

  • Additional Features - Depending on the size and nature of your business, you should have the option to utilize additional features that work seamlessly with your payroll. The most common of these include Time & Attendance, HR and Benefits Administration, Applicant Tracking, ACA Reporting, Onboarding, and Performance Reviews.

  • Reporting - For a more detailed analysis of your business's payroll, make sure the payroll software you choose has good reporting functions. This should be able to provide wage and labor reports, tax payment reports, and payroll summary reports.


An essential factor you have to take for consideration during payroll conversion is the customer service level that’s provided. You must feel confident in knowing that customer support members are available when you need them and are knowledgeable about the software, as well as payroll and human resources. Consider some payroll providers who assign several dedicated account managers and trainers. 


Even if you have an intelligent, capable person processing your payroll, you have to make sure that the software you choose is easy to use. This is because you cannot ensure that this person will stay with your company forever. Therefore, if you have an easy-to-use software, anyone will be able to learn it quickly and you will not have to undergo arduous training for each person who will take over that role. Typically, payroll providers will offer free demos or 30-day trials, so it is a really good idea to take advantage of those options. By doing this you can see exactly how the software works and if you could be able to use it without extensive training.


The price for payroll software will vary greatly between providers. However, because of the sensitive nature that goes along with processing payroll, you don’t always want to choose the cheapest option right off the bat. Many times large corporate payroll providers can afford to offer their service cheaper than the business right down the road from you. However, the quality of the software is often sub-par, and getting ahold of a human representative can take up half of your workday. Make sure you do thorough research when deciding on a provider, and ask for feedback from other clients who use that same service. If there are case studies available that are in your industry, those can be a great resource to see how that provider will work with your business. Watching a demo of their software as another great way to see if the functionality and usability meet your standards.


If you’re a Michigan-based business, you should find a payroll service that is based in Michigan. Not only does this allow for in-person collaboration, but local providers are more aware of laws that will directly affect your business. Payroll laws are constantly changing, and local providers are the most aware of changes in the areas in which they are based.


It’s always a good idea to look into whether the clients of your potential payroll software company are happy. You can usually find this information by doing a simple google search. Other ways you can do this are by asking for references from the salesperson you’re interacting with or reading some case studies. If someone has referred you to a certain payroll service, then you already have some good insight into how the software has helped their business. No payroll service provider is perfect; some lack quality customer service, others don’t provide adequate training, while others may blast you with emails every day. Keep in mind, however, that payroll software that is perfect for one company may not be perfect for all. Before choosing a provider, make sure that you know what you are getting yourself into and ask for a variety of resources to get different perspectives.

There are many more factors to consider before choosing a payroll service provider, and making the wrong decision could set your company back a way. Make a list of what you’re looking to get out of payroll software and make sure you ask all the questions you have. The more educated you are, the easier it will be for you to make a decision.



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