One of the most well-known accounting software platforms on the market, QuickBooks, services business owners in many different ways. In addition to their robust accounting solutions, QuickBooks also offers payroll services to help make payroll an easier task for business owners. Paying your employees is one of the most important parts of HR for your small business and QuickBooks might seem like a logical choice for your payroll needs.
The point of using payroll software is that it should 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 Online Payroll is a payroll software that allows you to calculate payroll, pay your employees, and prepare and file your business taxes. Keep in mind that it’s not the same as the QuickBooks Desktop Payroll software. QuickBooks Online 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 the QuickBooks Online accounting software.
QuickBooks Online Payroll has three plan options: Core, Premium, and Elite. The main difference between the three plans is the extent of your features, including how much is offered beyond automatic payroll and how much support is provided directly from QuickBooks. All three plans, however, give you online access to your payroll software, plus a mobile app to allow you to optimize your payroll processes regardless of location.
- Easy-to-use interface
- Payroll tax help
- More expensive compared to other options
- Lack of integrations
If you use QuickBooks Online Payroll, your specific features will ultimately depend on which of the three plans you choose. However, on the whole, any QuickBooks Payroll plan 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, which will be automatically calculated, filed, and paid by QuickBooks. 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. Moreover, QuickBooks Payroll will allow you to manage all of your health and other benefits for your employees within their platform as well.
As we previously mentioned, the main difference between the three QuickBooks Payroll plans is the extent of your features. Although all three plans will offer the capabilities we’ve just described, the two upper-level plans, Premium and Elite, will offer even more beyond the basic features of the Core plan.
With the Premium plan, you’ll have access to:
- Same-day direct deposit
- Customizable user permissions
- An HR support center
- Payroll setup review from a QuickBooks expert
- Premium time tracking with the mobile app (aka mobile access to TSheets, the QuickBooks time tracking app)
The Elite plan, as the highest-level offering, will include the most functionality, as well as the most support from QuickBooks. With this plan, you’ll receive all of the features of the two previous plans as well as:
- Professional payroll setup
- Elite time tracking with geofencing and project planning
- Tax penalty-free guarantee
- U.S.-based payroll support via phone or chat
- Personal HR advisor
Image source: 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, you will 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 Core plan costs $45 per month, plus $4 per employee per month. The Premium plan, on the other hand, costs $75 per month, plus $8 per employee per month. Finally, the Elite plan costs $125 per month plus $10 per employee per month.
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. QuickBooks Online frequently offers promotional pricing, meaning you could get their services for as much as 50% off for the first three months. They also offer free trials. 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.
QuickBooks Payroll Pros
As one of the biggest names in business operations software, there are definitely advantages to choosing QuickBooks Payroll for your business. Here are three benefits:
Integration With QuickBooks
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 team members will be able to run payroll more quickly and easily, 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 how you can use it with QuickBooks Online to optimize your processes. 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.
Another huge pro of QuickBooks Online Payroll is that they help you with your payroll taxes. QuickBooks can calculate your federal and state payroll taxes automatically. Additionally, if you were worried about any mistakes being made on those payroll taxes, there’s QuickBooks’ Tax Penalty Protection, meaning if there’s anything wrong with the filings, QuickBooks will resolve it and pay any of the resulting penalties on your behalf.
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.
And 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 Elite plan, you have U.S.-based customer support included in your plan. However, even if you only use the Core plan, you still have access to all of the internet resources on QuickBooks’ website, as well as the many professionals out there who have experience with this software suite.
QuickBooks Payroll Cons
Although there certainly are benefits to using QuickBooks Payroll, there are disadvantages worth considering as well. Here are a few:
Limited Extended Features and Integration Options
Although QuickBooks has extended their features from earlier versions of the payroll product, they’re nevertheless lacking in some extended functionality—especially if you don’t opt for a top-tier plan or use the software as part of a QuickBooks Online subscription.
Even though QuickBooks Payroll includes features like benefits administration within the Core plan, you have to opt for Premium or Elite to receive additional HR features such as the HR support center or time tracking. Along these lines, QuickBooks Payroll also doesn’t offer some of the recruiting, onboarding, and employee-centric tools that you see within some of the competitor payroll software solutions, like Gusto or Justworks. Therefore, if you’re truly looking for a payroll and HR software in one platform, there are definitely more comprehensive (and cost-effective) options to consider.
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. Therefore, if you don’t use QuickBooks as your accounting software, you would have to manually move and monitor data between your accounting and payroll platforms. This also limits your HR capabilities, as many other payroll software platforms 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 three QuickBooks Payroll plans isn’t as impressive when compared to other payroll software (and their functionality). Patriot Payroll, for example, offers a Full-Service Payroll plan with essentially the same capabilities as the QuickBooks Core plan. Their plan, however, is $30 per month, plus $4 per month per employee. Moreover, for comparison’s sake, Patriot also offers you add-on capabilities for their HR software and time and attendance tools at very low additional fees.
Additionally, if you want to receive the most from QuickBooks Payroll, you’ll have to opt for either the Premium or Elite plan—which will significantly increase your cost. Therefore, whether or not you’re planning to use QuickBooks Payroll with QuickBooks Online, this payroll platform is likely going to be expensive in the long run. This being said, there are certainly more economical options available to you—that will give you more functionality for the price you pay.
Alternatives to QuickBooks Payroll
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 Online Payroll:
Gusto is a popular payroll software that offers three different plans: Core, Complete, and Concierge. Gusto also has a new option for contractor-only employers, who simply pay the $6/employee rate and no base price. The pricing for Gusto plans starts at $39 per month plus $6 per employee per month. With the Core plan, you receive full payroll processing, tax filing, employee self-service, health benefits and insurance administration, and PTO tracking. With the upper-level plans, you have access to additional functionality that you don’t have with QuickBooks Payroll, like employee onboarding, an organizational directory, employee surveys, and extended HR resources. Gusto also offers you the ability to add tools for 401(k) 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.
Patriot Payroll is known as one of the most affordable and highly rated payroll software options available for small businesses. Patriot has two plan offerings: Basic and Full Service. These plans largely differ based on how much of your payroll and tax processes are handled by Patriot—with the Full Service plan including tax filing, payroll set up, and customer support. This being said, compared to QuickBooks, the Patriot Payroll plans have much lower costs, as we briefly mentioned above, 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’s accounting platform, as well as with third-party accounting providers. If you’re looking for similar functionality to QuickBooks Payroll at a lower cost with more add-on options, Patriot is an alternative to consider.
The Bottom Line
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 as your small business accounting software, QuickBooks Online Payroll is 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 provider 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.
Randa Kriss is a senior staff writer at Fundera.
At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions.