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As a small business owner, you’ve probably had some hands in your business accounting, which means you’ve more than likely heard of QuickBooks. One of the most well-known accounting software on the market, QuickBooks services business owners in many different ways. In addition to their robust accounting solutions, QuickBooks also offers payroll services. Paying your employees is one of the most important parts of HR for your small business, so why not get it done through one of the most established business service providers?
After all, payroll software will help you pay your employees quickly and easily—saving you time—and hopefully money, in the long run. But is QuickBooks Online Payroll the right software for your business? Let us help you decide. This QuickBooks Payroll review will break down the features, pricing, advantages, and disadvantages of using this payroll service. We’ll also discuss top alternatives to QuickBooks Payroll, so you can make an informed decision about what’s best for your needs.
QuickBooks Payroll is a payroll software that allows you to calculate payroll, pay your employees, and prepare and file your business taxes. QuickBooks Payroll, as you might expect, can work directly with a QuickBooks subscription—and QuickBooks offers bundled plans for these two services together. You can, however, also purchase QuickBooks Payroll separately and use it without using the QuickBooks Online accounting software.
QuickBooks Payroll has two plan options, a Self Service Payroll and a Full Service Payroll. The main difference between the two plans is how much of your payroll and tax responsibilities you’re going to handle yourself. Both plans, however, give you online access to your payroll software, as well as on-the-go with their mobile app, enabling you to optimize your payroll processes regardless of location.
If you use QuickBooks Payroll, your specific features will ultimately depend on which of the two plans you choose. However, on the whole, QuickBooks Payroll will give you the ability to set up and run your payroll. You will be able to pay both your employees and contractors using direct deposit (or by paper check). QuickBooks Payroll also has 24-hour direct deposit, so you can submit payroll right up until 5 p.m. the day before payday. You’ll be able to review and run your payroll online or through the QuickBooks mobile app.
As part of this process, QuickBooks Payroll will automatically calculate your employee paychecks, as well as payroll taxes. You will receive automatic tax updates based on the latest federal and state tax rates, as well as access to all your necessary tax forms, filled in correctly, and ready to go. Additionally, you can set up your employee information online and you have the ability to run payroll an unlimited number of times as part of your plan. You can choose your payroll schedule and can change it depending on the individual employee. With your payroll subscription, your employees also receive free access to QuickBooks Workforce, which allows them to view their current or prior pay stubs.
As we previously mentioned, the main difference between the two QuickBooks Payroll plans are how much of your payroll processes you want to do yourself. To explain, with the Self Service Payroll Plan, you file your own payroll taxes, W-2s, and have to set up the system yourself. If you choose the Full Service Plan, on the other hand, QuickBooks takes care of these tasks for you. The Full Service Plan includes the filing of payroll taxes, the filing and sending of W-2s, assisted payroll support, as well as a no-tax penalty guarantee. With this guarantee, QuickBooks will resolve any tax filing errors and pay any penalty fees. The Full-Service Plan also includes same day direct deposit and U.S.-based payroll support. If you’re switching providers to QuickBooks Payroll Full-Service, QuickBooks will transfer your payroll data for you.
QuickBooks Payroll also gives you the option to integrate directly with their time management tool, called TSheets, for an additional cost ($5 per user plus $20 base fee). TSheets gives you the ability to track employee time online, create and manage schedules, generate labor reports, and automate overtime rates in payroll. Instead of needing to manually enter or transfer timesheet information, TSheets makes it an automatic and simple process.
This chart compares the two different QuickBooks Payroll plans.
Photo credit: QuickBooks
Furthermore, if you choose to use QuickBooks Payroll as part of a QuickBooks Online subscription, you receive all the capabilities of this subscription (notably third-party integration offerings), in addition to your payroll services. If you use both QuickBooks Payroll and QuickBooks Online accounting software, you’ll be able to sync your data between the two platforms. It’s important to note, then, that QuickBooks Payroll does not offer third-party integrations outside the QuickBooks suite. This means if you use another accounting software, therefore, you would have to manually input or move your data between platforms.
Like many other payroll software offerings, QuickBooks Payroll Pricing is subscription-based, including a monthly fee plus an additional per employee monthly cost. That being said, the Self Service Payroll Plan costs $35 per month, plus a $4 per employee per month fee. The Full Service Payroll Plan, on the other hand, costs $80 per month, plus the same per employee monthly fee. If you want to add-on TSheets, the time management tool we mentioned earlier, it will cost a base fee of $20, plus $5 per user per month, for 2-99 users. If you have a larger company or are interested in an annual plan, you can contact QuickBooks directly to address your specific needs.
Additionally, if you decide to use QuickBooks Payroll as an add-on to your QuickBooks Online subscription, you can take advantage of the bundle pricing deals that QuickBooks runs. As of April 2019, you can purchase any QuickBooks Online subscription at 50% off for the first three months, plus a free trial for 30 days. With this subscription, you also can get 50% off QuickBooks Payroll—meaning Self Service will cost $18 per month plus the $4 per employee per month fee and Full Service will cost $40 per month plus the $4 per employee per month fee. Furthermore, when you use any of these QuickBooks products, there’s no contract or commitment. You can switch plans or cancel at any time, without being charged a cancellation fee.
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As one of the biggest servicers of business operations software, there are definitely advantages to choosing QuickBooks for your payroll provider. Here are two benefits:
Perhaps the greatest advantage of using QuickBooks Payroll is its relationship to the QuickBooks Online accounting software. If you already use QuickBooks Online, all you have to do to start automating your payroll process is to add either of the QuickBooks Payroll plans to your existing subscription. In doing so, you’ll be able to set up payroll and integrate it directly with all of your data that’s already in QuickBooks Online. With this integration, you and your business team members will be able to much more quickly and easily run payroll, manage taxes, and monitor these tasks with your accounting needs—essentially streamlining your business operations in a major way. In fact, many of the positive QuickBooks Payroll reviews highlight that you can use it with QuickBooks Online to optimize processes having everything in one place. If you don’t currently have QuickBooks Online and want an accounting software as well as payroll services, you have a significant incentive to take advantage of the QuickBooks pricing deals.
QuickBooks is one of the most popular accounting software options out there and has been serving small business owners for decades. It’s a tried-and-true software and this familiarity extends to their payroll offering. QuickBooks Payroll, by all accounts, is relatively straightforward and easy to use. Just like QuickBooks itself, this software is made to be used by anyone, regardless of their knowledge or background. With the direct connection between QuickBooks Payroll and QuickBooks Online, this payroll software is going to be even easier to use if you have any experience with QuickBooks.
Moreover, again, since QuickBooks is such a big player in small business services, the resources available to help you through your process are endless. If you use the Full Service Payroll Plan, you have U.S. based customer support included in your plan. However, even if you use the Self Service Plan, you have access to all of the internet resources on QuickBooks website and otherwise, as well as the many professionals out there who have experience with this suite of software.
Although there certainly are benefits to the using QuickBooks Payroll, there are disadvantages worth considering as well. Here are a few:
Although the QuickBooks Payroll two plan offerings cover your basis for payroll and tax needs, they’re notably lacking in extended functionality—especially if not used as part of a QuickBooks Online subscription. Competitor payroll software, on the other hand, often include capabilities like health benefits administration, PTO tracking, and additional HR functions—making these more robust, all-in-one tools. QuickBooks Payroll only offers two plans, and both are solely focused on payroll and tax processing. If you’re looking to get the most out of payroll software, then, there are definitely more comprehensive options available.
Additionally, if you don’t use QuickBooks Payroll with a QuickBooks Online subscription, you have no third-party integration capabilities, other than products within the QuickBooks Suite, like TSheets. Therefore, if you don’t use QuickBooks for your accounting software, you would have to manually move and monitor data between your accounting and payroll platforms. This then, also limits your HR capabilities, as many other payroll software give you the ability to use HR add-ons or integrate with other software to expand your functionality. Although the QuickBooks Payroll integration with QuickBooks Online is useful if you want to utilize (or already have) that accounting software, it could be problematic—and limiting—if you don’t.
Despite the deals available to you if you purchase QuickBooks Payroll as part of a QuickBooks Online subscription, the general cost of the two QuickBooks Payroll plans isn’t as impressive when compared to other payroll software (and their functionality) on the market. Patriot Payroll, for example, offers a Full Service Payroll plan with essentially the same capabilities as the QuickBooks Payroll Full Service. Their plan, however, is $30 per month, plus $4 per month per employee. Even with the QuickBooks discount price, the QuickBooks Payroll Full Service Plan is still more expensive. For comparison sake, Patriot also offers you add-on capabilities for their HR software and time and attendance tool at very low additional fees.
If you’re not planning to use QuickBooks Payroll with QuickBooks Online, therefore, and are going to pay the full cost for this payroll software, there are certainly more economical options available to you—that will give you more functionality for the price you pay.
As we’ve mentioned, there are numerous payroll software options on the market—and a competitor to QuickBooks Online Payroll might better suit your budget and business needs. Here are a few top alternatives to QuickBooks Payroll:
Gusto is a popular payroll software that offers three different plans: Core, Complete, and Concierge. The pricing for Gusto plans starts at $39 per month plus a $6 per employee per month fee. With the Core plan, you receive full payroll processing, tax filing, employee self-service, health benefits and workers’ comp administration, and PTO tracking. With the upper-level plans, you have access to additional functionality that you don’t see have with QuickBooks Payroll, like employee onboarding, an organizational directory, employee surveys, and extended HR resources. Gusto also offers you the ability to add-on tools for 401K plans and commuter benefits.
With all of the Gusto payroll offerings, you can also integrate with third-party platforms like Clover for point of sale, Xero for accounting, and even QuickBooks Online. Although Gusto’s plans start at a higher price point than QuickBooks Online Payroll, even the most basic plan has increased HR functionality that you don’t get with QuickBooks. Plus, Gusto gives you a greater opportunity to integrate with other tools and third-party platforms, whereas QuickBooks Payroll is heavily reliant on their connection with QuickBooks Online. If you’re looking for a more all-inclusive payroll software option, you might want to explore the Gusto payroll plans.
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Like QuickBooks Payroll, Sage is a payroll software with an inherent accounting integration. Sage Payroll is part of the Sage Business Cloud, which includes Sage’s well-known accounting software. In fact, the payroll plans Sage offers are very similar to QuickBooks, in that they have Essentials, Essentials Plus, and Full Service—each with an increasing level of automation for payroll and tax processing. Unlike QuickBooks, however, Sage has an additional offering, Sage Payroll HCM, which extends their payroll software to include HR capabilities like recruiting, hiring, and onboarding for employees. With all of Sage’s plans, you also have the ability to add time management, ACA compliance, and payment processing tools.
Unfortunately, Sage Payroll operates on a quote-based pricing system, so you have to work with their sales team to get a price based on your individual business—making it difficult to compare the cost with other software on the market. However, if you’re interested in a payroll software with a direct accounting connection, as well as additional HR functionality, Sage is a worthy alternative to QuickBooks Payroll.
Patriot Payroll is known as one of the most affordable and highly-rated payroll software options available for small businesses. Just like QuickBooks Payroll, Patriot two plan offerings: a Basic and a Full Service. These plans are generally comparable to the QuickBooks Payroll plans, with the Full Service plan including tax filing, payroll set up, and customer support. The Patriot Payroll plans, however, have lower costs, with the Basic costing $10 per month and the Full Service costing $30 per month, plus the $4 per employee per month fee for each.
Additionally, Patriot Payroll gives you the ability to integrate with their time and attendance tool, as well as their HR software, for low monthly fees. Patriot Payroll can directly integrate with Patriot Software’s accounting platform, as well as with third-party accounting providers. If therefore, you’re looking for similar functionality to QuickBooks Payroll at a lower cost with more add-on options, Patriot is an alternative to consider.
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Paying your employees correctly and punctually is an essential component of your business operations—and that’s why the right payroll software is so important. At the end of the day, however, the software that’s right for you will depend on your budget and specific business needs. If you already use QuickBooks Online for your small business accounting software, QuickBooks Payroll is without a doubt, a sensible choice. You’ll easily be able to integrate this payroll platform with your accounting software and will quickly be on your way to automating your payroll processing and taxes with a provider you’re already familiar with.
However, if you currently use a different accounting software platform—and have no interest in starting a QuickBooks Online subscription—it might be worth looking into an alternative payroll software for your small business. Since QuickBooks Payroll is greatly dependent on the QuickBooks suite of products, there might be another option that gives you more functionality at a reasonable cost. Therefore, definitely explore the ins and outs of all your payroll software options, especially available free trials, to get a better sense of which will truly meet your business needs.