Comparing Payroll Providers: Find the Best Fit for Your Small Business


Sifting through the countless payroll providers that could potentially be a good fit for your business can be pretty stressful. You might end up overpaying for payroll services when you go with a popular choice, particularly if you don't need all of the bells and whistles that come along with their service. So how do you begin your search? Simply look for a payroll provider that has the solutions to fit your small businesses needs and avoid the providers that don't. Let's see what you should consider when choosing a payroll provider.

Keep in Mind Your Budget

The most significant component in your payroll cost will be how often you run your payroll. Most payroll companies either charge you per payroll (e.g. $45 flat fee each time you run payroll) or charge a monthly subscription cost (e.g. $45 per month for unlimited payrolls, no matter how many payrolls you run). If you pay your employees weekly, a per-payroll plan adds up very quickly. We took the liberty of creating a payroll comparison chart with some of the more popular payroll providers with a breakdown of costs and fees.

One survey showed that 36% of small business owners spent between $101 and $500 per month on payroll, and 32% said they spent over $500 per month on payroll. This generally happens when you have to pay fees for account setup, quarterly and end-of-year tax filing and the number of employees you have, along with other costs that come up. It's beneficial to consider add-ons you might need such as insurance coverage or timekeeping. You'll also want to be sure to ask your provider for a comprehensible breakdown of costs. 


Be Aware of Tax Calculations and Filing

Are you going to do payroll tax calculating and filing tasks yourself? The two most outsourced finance and accounting functions are tax services and payroll services. For many business owners, it's a huge weight off of their shoulders to outsource tax filing. They are able to enjoy the time savings along with vital protection from IRS fines and all-too-common payroll mistakes. Full Service Payroll providers will file your federal, state and local taxes and typically handle W-2s, W-3s, 1099s, 1096s and more. When choosing a payroll provider, you will want to watch out for end-of-year and quarterly filing fees that can be hidden by providers. Fortunately, at TransNational Payments, we don't charge a fee for end-of-year filing. Even better, the New Year is the best time to avoid the hassle of inputting tax information, since taxes start over on January 1.

Think About Your Type of Employees

An important thing to keep in mind is that some payroll providers have a certain number of employees they'll support such as having a 100 employee limit to enterprise-only payroll companies. You'll also want to note what kind of employee's you will have on your payroll. Are you going to have part-time employees, full-time employees, contractors or vendors to pay and 1099s and 1096s? Will you have unique or one-off scenarios, such as wage garnishments or child support payments? These are all things to consider and make a note to ask the payroll representative when you're doing your research.

No matter what, your payroll solution should be user-friendly and practical in terms of the time it takes to input employee hours, wages and other necessary tax information. If they offer a free trial or a demo, make sure you take advantage so you know it's a good fit for your business.

Consider Your Must-Have Payroll Features

The most fundamental payroll services make it easy for small business owners to complete three essential tasks:

1. Run payroll

2. File and deposit payroll taxes

3. Transfer payroll and tax data to an accounting tool

A step above basic payroll, Full Service Payroll typically includes features like free direct deposit and self-serve employee portals, in addition to automated tax filing services.

It's becoming more popular to see payroll companies offer add-on and features to help users reduce on data entry and wage calculations while also getting more out of their payroll service. These are a few examples of common payroll add-ons:

  • Time Keeping and Attendance
  • Human Resources Features
  • Workers Compensation Insurance
  • Multi-State Payroll Services
  • Integrated Accounting Features

There's no doubt that you want a solution as flexible as your business needs, but your primary issue is to get the features you are certain you will be using over the next 12 months. A trustworthy payroll provider won't trap you in a lengthy service contract, preventing you from being able to spruce up or pare down functionality as your business changes.


The search for a payroll provider that fits can be stressful, but you're not alone. We've created a free guide to help small business owners figure out the best solution: Do I Need Payroll Services for My Small Business? 

On average, in-house payroll processing tasks take up 235 more hours than if you were to outsource these same duties, making it important to find the right fit for your small business, leaving you with time and money to do what you do best, run your business.