ADP Payroll is a cloud-based payroll system that allows you the flexibility to manage payroll, HR, hiring, and benefits. They offer two plans for small businesses: ADP Run, a four-tiered plan designed for up to 49 employees, and ADP Workforce Now for 50–1,000 employees. Pricing varies by plan, but ADP offers new customers two free months of services.
As a small business owner, doing payroll can be an overwhelming task—there are hours to calculate, taxes to withhold, and rules and regulations to comply with. Plus, if you mess anything up, you could be hit with a hefty fine.
For these reasons, it makes a lot of sense to find a good small business payroll service provider to help you manage your payroll. Payroll software is capable of automating a lot of the tasks required for payroll, including calculating payments, withholding taxes, and depositing wages into your employees’ bank accounts.
If you’re in the market for payroll software, you’ve most likely encountered Automatic Data Processing—better known as ADP. ADP is one of the oldest and best-known names in payroll. It originally started as a manual payroll processing business in 1949. Today over 600,000 businesses in the United States rely on ADP’s payroll software to pay their workers.
So why is ADP such a popular option? And it is a sufficient solution for your business? Well, let’s find out.
ADP Payroll is cloud-hosted, meaning it can be accessed through the web and does not require the installation or maintenance of any software. Once you sign up for ADP Payroll and select your plan (more on this later), you will be able to login to your account from the ADP website.
The first time you log into your account, you will be directed to the Company Setup Wizard. Here, you will provide some basic business information, arrange your payroll calendar, enter tax, earnings, benefits, deductions, and workers’ compensation information, and link your business bank account to the software.
Next, you will enter employee and contractor information. Each employee profile entered into the system must include the employee’s legal name, date of hire, social security number, birthday, gender, and contact information. You will then enter their pay rate (hourly or salary) and earning and deduction types and amounts. If the employee opts for direct deposit, you must also collect their bank name, account type (savings or checking), and account and routing number. Finally, for tax purposes, you must input the employee’s withholding status (collected from their W-2), allowances, and exemptions.
Once all this information is entered, you are ready to begin processing payroll. When the next pay period comes, log into your account dashboard and select the “Run Payroll” option. From here you can view employee time cards and make any manual adjustments. Each employee’s pay should calculate automatically based on the information provided in their profile. The software also calculates deductions for things like tax, health benefits, and retirement contributions. If everything looks good, select “Approve” to run payroll.
ADP Payroll offers three payment delivery options. Employees can opt for direct deposit to receive their funds at the end of each pay period. If employees opt to be paid via paper check, ADP will print and mail the checks to your office so they can be distributed on payday. Employees can also choose to have their funds loaded onto a prepaid Visa debit card.
Everything we’ve just explained to you about how ADP Payroll works comes fairly standard with most payroll software. What separates ADP from other payroll services is the range of additional features you get to assist you with processing payroll, staying compliant, and managing your books. Let’s take a look at some of those features.
Along with calculating the proper withholdings, ADP Payroll will automatically fill out and file the proper forms and make the required payments to local, state and federal agencies. ADP will also handle any questions from taxing agencies regarding your organization’s payroll taxes. At the end of the year, ADP will provide your employees with their W-2 and 1099 forms.
Whenever you create a new employee profile, ADP will fill out and file all the necessary new hire paperwork and submit it to the appropriate state and federal agencies.
ADP Payroll boasts robust reporting functionality. From the dashboard, you can generate reports on payroll summaries, earnings records, timecard comparisons, retirement contributions, and more. These reports can also be filtered by date range or employee and exported to Excel for further customization.
The more advanced plans have compliance features, including enrollment in ADP’s Labor Law Poster Compliance Update Service and wage garnishment assistance. ADP can also manage your state’s unemployment insurance, including auditing your rates to ensure you are getting the best possible deal.
ADP is really a professional employer organization (PEO), meaning it offers a lot more than just payroll services. If you do decide to use ADP for payroll, depending on the plan you select, you will also unlock some of those other features.
Something all payroll users get is access to human resources tools, including a library of key government forms and information, guidance on how to improve your HR practices, help in selecting workers compensation insurance and creating a retirement plan, and information to help you stay on top of changes in the Affordable Care Act.
If you subscribe to a more advanced plan you may also get integration with ZipRecruiter, an employee handbook wizard, onboarding services, and access to an online library of HR forms, best practice guides, and compliance information. You’ll also be allowed to conduct up to five background checks annually, and receive one-on-one assistance from ADP’s HR team.
Another ADP feature that payroll users have access to is ADP’s time and attendance tracker. This tool syncs directly with your payroll system for faster processing. With ADP’s time and attendance tool employees can clock in and out via a mobile application, request PTO, and track overtime. Employers can use the tool to manage PTO, approve timecards, and create schedules.
ADP offers support for both employers and employees on a 24/7 basis via phone and email. There are also support pages on the website that answer a wide range of different questions related to payroll, HR, and other topics.
Finally, all of the aforementioned functionality can also be accessed via the ADP mobile app, including payroll processing, time tracking, and HR tools.
ADP offers two different payroll products for small businesses: One plan for businesses with up to 49 employees, and another for 50 to 1,000 employees.We should also note that ADP offers two additional enterprise solutions, should your business grow even larger: ADP Vantage HCM is designed for businesses with more than 1,000 employees, and ADP Streamline is designed for global businesses. For our purposes, we’ll look at the two most relevant solutions for small businesses:
ADP Run is designed for businesses with up to 49 employees. Within ADP Run there are four plans, each offering a different set of features and capabilities.
Essential Payroll is ADP’s basic payroll solution for small business. This plan comes with ADP’s core payroll processing features, including tax calculations, withholdings, and filings. You’ll also get check delivery, access to reporting features, integration options, new-hire reporting tools, yearly W-2 and 1099 delivery, and account access for your employees to view their paychecks and update tax information.
Other perks include HR guidance, access to important government forms and documentation, and help with workers’ compensation, retirement plans, and healthcare.
The Enhanced Plan boasts all the features of the Essential Plan, plus additional payment delivery options, including the ability to deposit wages onto a prepaid Visa debit card. You’ll also be enrolled in ADP’s Labor Law Poster Compliance Update Service, and receive assistance with state unemployment insurance and wage garnishment.
The next level up is ADP Run Complete, which provides you with all your payroll tools plus additional HR perks. This is where you will get ZipRecruiter integration, assistance with creating an employee handbook, a direct line to ADP HR pros, onboarding help, five annual background checks, and access to various HR trainings, toolkits, and documents.
When you sign up for ADP Run HR Pro, you are getting everything short of a PEO. The HR Pro plans adds on even more HR functions, such as an employee discount program, employee work-life assistance programs, legal services, and access to a designated team of HR business advisors.
ADP Workforce Now is designed for businesses with 50–1,000 employees. This product offers a variety of core features beyond just payroll, as well as additional add-on features. When you sign up you can work with an ADP representative to select the features you need, and remove the features you don’t. Among the core payroll features are online processing, automated tax services, new-hire reporting, employee self-service, payroll reporting tools, wage garnishment assistance, and a mobile app.
Beyond payroll, Workforce Now can provide solutions for HR, time tracking, talent management, and benefits management. Additional add-ons with the Workforce Now plan include PTO management, insurance services, and Microsoft Outlook integration.
Essentially, Workforce Now is a tailor-made solution, allowing you to build a product that makes sense for your business.
ADP does not list prices on their website. Instead, they offer customized pricing based on each individual client’s needs. Factors that impact pricing include the product your business needs (ADP Run vs. ADP Workforce Now), the service plan you select (Essential Plan, Enhanced Plan), the additional features you need, the number of employees you pay, and the frequency with which you run payroll.
With the ADP Run plans, you are charged a base fee and a per-employee fee each time you run payroll. Note that ADP will offer new customers two free months of service.
Given everything we have learned about ADP Payroll, here are what we see as its biggest benefits:
By virtue of being such a large business with lots of different clients, ADP has built up a robust feature set that rivals any other payroll service out there. It’s safe to say that most anything you need to manage payroll, HR, hiring, or benefits, ADP can provide. Furthermore, their customizable pricing allows you to only choose the features you need.
Another benefit of ADP is that it is built to grow with your business. The ADP Run plans provide increasing levels of service, and when it comes time to graduate to Workforce Now, you can mix and match to create a product that makes sense for you.
There’s a lot to like about ADP, but it’s not perfect. Here is something we think you should note. In addition, we’ll go over customer complaints in the section below.
It’s hard to dispute price when every customer gets a different quote. However, ADP’s structure of charging a fee every time you process payroll limits the amount of payrolls you can process each month. Other payroll providers only charge a monthly fee, allowing you to process as many payrolls as you want for the same price.
ADP has an A+ rating from the Better Business Bureau (BBB) and a 4.5 out of 5-star rating on TrustPilot. In positive reviews, customers say they find the platform easy to use, mobile-friendly, and that payroll is always processed on time and without issue.
Users really appreciate the ease of use and the wide assortment of features and benefits that ADP Payroll can offer.
“It’s awesome software for a startup with less than 20 employees! Once you customize all the settings (adding your team, setting the payroll amount and payment date), everything works smoothly with no involvement from your side!” Dmitry Lepikhov, CEO of Mighty Call who has used ADP Payroll before, told Fundera.
Several ADP Payroll users we spoke with highlighted that it is one of the more expensive options on the market. The owner of Fire and Ice Therapeutic Massage, in Charlotte, NC, Ashley Dwyer, said she’s even considering switching to another service because of the high prices and a few issues they’ve encountered using ADP Payroll in the past.
Another ADP Payroll customer, Todd Hinson, the founder of Tod.d, highlighted that he really likes the new ADP TotalSource service that the company offers. He says it offers him, and other professional employer organizations, services like payroll processing, HR, health benefits and more that large payroll providers historically haven’t offered startups.
“The best part of the service for me is being able to offer my employees really attractive benefits packages, something many startups and small businesses historically struggled with due to the fact that the costs of those programs did not make sense for their small size,” Hinson said.
If ADP Payroll doesn’t sound like the right fit for you and your business, there are other options you can try and see if they might work better.
Gusto Payroll offers three tiers of services with pricing accordingly. If you go with the least expensive option, called Gusto Core, you’ll have to pay a $39 base fee per month in addition to $6 per employee you pay through the app. Gusto also has a new option for contractor-only employers, who simply pay the $6/employee rate and no base price.
For small businesses that don’t employ a ton of people, Gusto Payroll could be a great alternative. It’s not the most sophisticated option out there but it can get the job done. Gusto Core comes with full service payroll, employee self-service features, the ability to create employee profiles, health benefits administration, workers comp administration, PTO tracking, and unlimited customer support by phone, email, and chat.
Gusto Complete and Gusto Concierge are the more expensive options that will get you more features, like administrative permissions, an employee directory, and a dedicated support team. You can try it for free with one-month trial.
Read our full comparison review of Gusto vs. ADP.
Square Payroll offers a suite of payroll and tax administration features for your business. Square Payroll lets you to pay a variety of workers, from contractors to employees, while allowing for benefits distribution, direct deposit, timecard syncing with the Square POS software, and tips distribution. It can be a flexible solution for your business, and customers frequently praise it for being user-friendly.
The pricing for Square Payroll is highly dependent on the type of employee you pay and who your team is made up of. For example, if you only employ contractors, you simply have to pay $5 per contractor per month. For contractors and employees though it will cost you $29 a month, plus $5 per person on the payroll.
There’s no annual contract and Square Payroll will handle filing payroll taxes on behalf of your business.
Our answer is: probably. We say this because ADP is flexible enough to tailor their services to meet any business’s needs. Their ADP Run product is specifically designed for small businesses, and with so many additional features and plans, a business can certainly grow from one to 1,000 employees using ADP from the get-go.
However, if you’re just looking for a quick and easy payroll solution without all the bells and whistles, there are probably cheaper options on the market. If you want to compare ADP to other payroll software service providers, check out our list of the best payroll services for small business owners.
Matthew Speiser is a former staff writer at Fundera.
He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Prior to Fundera, Matthew was an editorial lead at Google and an intern reporter at Business Insider. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world.