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How Do I Choose a Payroll Processing Service?


Question: How Do I Choose a Payroll Processing Service?

Once you have decided to outsource your payroll, the next task is choosing an outsourcing company. Here is a brief review of several top payroll companies, including their services and costs.

As you consider each company, read the information on their websites and contact the representatives of the companies. This is always a good way to tell how friendly they will be and how responsive to consumer questions.


How Payroll Processing Companies Charge
Most services charge a basic fee, so that even if you have just one employee you are paying more, because the service has to all the same filings for one employee as it would do for 10. For example, they would still have to file an Employer's Quarterly Federal Tax Form (Form 941), even if you have just one employee. The incremental cost for each additional employee is quite small. With that in mind, here is some information on payroll processing services, with their costs and services.

Option 1: Assisted Payroll Services
Some services do all your paychecks, reporting and deposits for you. For example:

Paychex Paychex charges $55 per pay period, for one check, with filing, direct deposit, and checks cut. You can input information online and they assign a payroll specialist to help you.

ADP ADP's small business service, which includes direct deposit, is $72 per payroll. You can see the full range of services on their website.

Option 2: Self-Service Online
Other services help you do your own paychecks, filings, and deposits. For example:

Intuit Intuit's online payroll serviceallows you to fill out payroll forms online. They offer six months free, then a monthly cost of $9.95. This service works with some Quicken and QuickBooks products but not all (it doesn't work with Mac or Online versions). Intuit also has an Assisted version (starting at $60 a month) and a packaged version with support starting at $15 a month.

Paycycle Paycycle gives you the tools to complete your payroll and do your own filing with their assistance. Payroll Basic offers "30 days FREE + 2 more months at $9.99" (Includes 5 employees and 1 state), then $24.99 per month. Payroll Plus includes 5 employees and 1 state for $42.99 per month.

Choosing a Service
Most any payroll service will do the basic stuff well and they have comparable prices. It is the service that sets companies apart. Look for a company that is willing to fit their service to your needs. Ask how they help with new hire paperwork, multiple states, job costing, and other special features that you need. The company that gives you the best service for a reasonable price is the one you want.

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