Paylocity Review: Features, Pricing, and Alternatives

Although employees always look forward to payday, most small business owners do not. Running payroll can be time consuming and prone to error, taking focus away from your primary business responsibilities.

Using a payroll service can make your life a lot easier. Good payroll software can automatically calculate withholdings, account for tips and other wage adjustments, and handle tax compliance.

Paylocity is a provider of cloud-based payroll and human resource (HR) software. Find out what features are included with Paylocity software, pricing, pros and cons, and best alternatives for running payroll.

What Is Paylocity?

Paylocity provides cloud-based payroll services and HR software for small businesses in a range of industries. In addition to Web Pay, which is their main payroll product, Paylocity also offers tax filing services, benefits administration, time and labor tracking, and talent management.

Once you become a Paylocity customer, you can start processing payroll quickly with onboarding templates for each employee. Once the employer has put in essential information, each employee will receive access to Paylocity’s self-service portal. There, your team members can sign up for direct deposit, provide and edit withholding information, or access other personal and company information.

You’ll have the ability to verify each payroll before it is run to ensure accuracy. Even better, you can run reports to see how your company’s personnel patterns and staffing expenses change over time. Paylocity is a registered reporting agent with the IRS in every state, so they’re also qualified to help you file payroll taxes and other employer taxes.

You can use Paylocity from a computer or from a mobile phone, using their iPhone or Android app.

Green checkmarkPros
  • Time-saving payroll features
  • Connect payroll to other business functions
  • Integrates with other software
Red X markCons
  • Pricing isn’t transparent
  • Customer service


Photo credit: iTunes

Paylocity Features

Paylocity offers payroll and HR software for small business owners. Here are the details on Paylocity, starting with their primary Web Pay payroll product.

Payroll (Web Pay)

  • New-hire templates to simplify onboarding for employees and independent contractors.
  • Automatic payroll adjustments for promotions, bonuses, and raises.
  • Preview, correct, and verify payroll prior to each payday.
  • Workers compensation administration.
  • Built-in expense management program, which automatically syncs employee reimbursements with payroll.
  • Run accruals, general ledgers, and other complex financial reports from the payroll dashboard.
  • Employee self-service portal for direct deposit, pay stub access, and company information.

Tax Filing

  • Paylocity is a certified IRS Reporting Agent and will e-file on your behalf:
    • Federal Unemployment Taxes (IRS Form 940)
    • Employer’s Quarterly Federal Tax Return (IRS Form 941)
    • State unemployment tax and withholding tax forms
  • W-2 preparation and filing with the Social Security Administration (SSA).
  • 1099 form reporting to the IRS.
  • Provide 1095-C and file 1094-C (required for employers with over 50 employees who offer health insurance under the Affordable Care Act).
  • Payroll reconciliation to make sure that your payroll matches what’s reported to the IRS and SSA.
  • 100% guarantee for any IRS penalties charged as a result of a Paylocity error.
  • View your history of tax deposits and periodic payments.

Benefits Administration

  • Let employees self-select from a customized menu of health, dental, and vision options, including:
    • Health savings accounts (HSAs)
    • Flexible spending accounts (FSAs)
    • Health reimbursement accounts
    • Premium only plans
  • Offer COBRA health coverage to employees who are laid off or terminated.
  • Offer commuter benefits to employees.
  • Provide employees with pre-loaded benefit cards.

Time and Labor Management (Web Time)

  • Let employees clock in and out from their computer or mobile device.
  • Set geographical restrictions (called geofencing) on where employees can clock in and out.
  • Request and approve time-off requests from anywhere.
  • Run reports, such as a monthly summary of time worked or time-off reports.
  • Track and assign points for absenteeism or tardiness.
  • Automatically sync time tracking with payroll.

Talent Management

  • Recruiting and applicant tracking.
  • Note meeting agendas and employee tasks, projects, and accomplishments.
  • Track performance on an ongoing basis and more formally at scheduled times.
  • Custom performance review forms, which allow for 1:1 and 360 feedback.
  • Measure employee feedback with surveys.
  • Ensure pay raises and bonuses are in line with organizational budget.


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Paylocity Pricing

Paylocity doesn’t publish prices on their website, but multiple other websites indicate that their payroll product costs $2 to $4 per employee or contractor per month. They’re also likely to charge a base monthly fee like other payroll providers.

Web Pay is Paylocity’s primary product. Customer reviews indicate that there is an additional fee for tax-filing services, benefits administration, time and labor management, and talent management.

To get specific pricing for Paylocity, you must request a demo from their sales department.

Paylocity Payroll: Pros and Cons

Now that you know all the features that Paylocity has to offer and how much it could cost you, you’ll need to decide whether it’s the right choice for your small business. Ultimately, small business owners who want to speed up and automate their payroll will find a lot to like with Paylocity. If you’re simultaneously looking for software to fill other HR needs, then Paylocity might fit the bill there too. However, Paylocity falls short when it comes to pricing transparency and customer service.

Here’s a closer look at the pros and cons  of Paylocity:

Paylocity Pros

Time-saving payroll features

Paylocity’s core payroll features are designed to save time for busy small business owners. Many things that you might manually be doing now will become automated when you start using Paylocity.

For example, you can automatically adjust compensation for one or more employees, when it’s time for a raise or a bonus. Approving and reimbursing employee expenses takes just a few clicks. Should you also purchase the time tracking product, you’ll be glad to know that time worked automatically syncs with payroll, so there’s no need to manually input hours. With Paylocity’s webhooks feature, you can even configure the system to send you push notifications for certain types of events, such as a new hire or termination.

The employee self-service portal also cuts down on questions to you or your HR staff. Employees can set up direct deposit on their own, access and print pay stubs, and view company information.

Connect payroll to other business functions

One of the big advantages of Paylocity is that there’s a full suite of HR tools at your disposal, allowing you to connect your hiring, benefits, payroll, and retention all in one package. Oftentimes, small business owners juggle multiple different software products for these related tasks, but Paylocity conveniently brings them together. For instance, if an employee choose benefits that require deductions, these will automatically be reflected in your payroll.

Integrates with other software

If you prefer to use an existing tool for an HR matter, then that’s okay with Paylocity, too. The good news is that Paylocity integrates with several other software tools. For example, Paylocity integrates with time and attendance software, employment verification tools, workers compensation insurers, and more.

Paylocity Cons

Pricing isn’t transparent

The biggest drawback to Paylocity, relative to competitors, is that their pricing isn’t publicly available. Gusto, Intuit, Square, and other top payroll services are fully transparent about pricing. Many even offer a free trial to see if you like their software. Unfortunately, small business owners who want to try Paylocity need to take time out of their already busy day to contact sales and request a demo.

Customer service

User reviews across the web indicate that customer service is one of Paylocity’s biggest shortcomings. Paylocity offers phone support, email support, and a frequently asked questions page to help clients. There are even periodic client trainings to help you get the most out of the product. However, many business owners complain on TrustRadius and other review sites that account managers change often and aren’t able to troubleshoot effectively.

Paylocity Payroll: Best Alternatives

For many small businesses, Paylocity is a great way to make payroll more automated and efficient. But there are a number of other good small business payroll solutions. Here are some alternatives to consider when you’re shopping around.


Like Paylocity, Gusto also offers cloud-based payroll software for small business owners. They are one of the most popular names in payroll. Approximately 1% of all U.S. employers use Gusto, a nice achievement in the saturated payroll space.[1]

Gusto stands out most of all for their transparency, which is an area where Paylocity falls short. You can try a demo of Gusto without providing any credit card or debit card information. A one-month free trial is also available. These are great ways to evaluate if the software is right for you.

Their entry-level plan is $39 per month plus $6 per employee or contractor per month. This includes all payroll functionality. You can run unlimited payrolls in all 50 states, and tax compliance is included. You also get benefits administration, workers compensation administration, and paid time off policies. They even offer a bundle called HR Basics, at no additional cost, that lets you manage vacation time, create employee directories, and onboard new hires. Gusto also has a new option for contractor-only employers, who simply pay the $6/employee rate and no base price.

Get Started With Gusto Payroll

QuickBooks Payroll

Intuit, the makers of QuickBooks accounting software, also offers payroll. Over 1.4 million small businesses trust Intuit for payroll and taxes. Using Intuit payroll is a great idea particularly for small business owners who already use QuickBooks for accounting. Since your financials are already tracked in the software, payroll is a breeze.

Setup is fast with QuickBooks Payroll. You can get started and run your first payroll within one hour. Subsequent payrolls just take five minutes to run on average. You can pay employees sooner with free same-day direct deposit as long as you run the payroll by 7 a.m. Pacific Time. Thanks to the mobile app, you can run payroll on time no matter where you are located.

Pricing starts at $45 per month plus $4 per employee or contractor. They’re currently running a promotion for 70% off the monthly subscription for the first three months. Be cautious if you pay employees in more than one state, as each additional state costs $12 per month.

Buy QuickBooks Payroll for 70% Off

Square Payroll

Square is another payroll software that’s ideal for small businesses. Similar to QuickBooks and Gusto, Square Payroll also offers a range of time-saving payroll features. You can run unlimited payrolls each month, pay employees and contractors, offer benefits, track employee hours, and run payroll from anywhere with a mobile device. Employees can access payroll information themselves with their own online account.

Where Square stands out is in terms of pricing. Prices start at $29 per month plus $5 per employee or contractor per month. This is lower than Gusto and QuickBooks (unless you use the QuickBooks discount). On top of that, Square is one of the few payroll provides to offer contractor-only pricing at $5 per contractor per month. This is an excellent option for businesses that rely heavily on freelancers and consultants.

Sign Up for Square Payroll

Paylocity Review: Full-Featured Payroll and HR Software

For small businesses in need of a payroll solution, Paylocity is a good option. They offer time-saving payroll features, and will take tax filing and compliance off your plate. You also have the option to offer employee benefits, track time worked, and evaluate performance from the same platform. This is definitely an option to consider in your search for a payroll service.

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Priyanka Prakash, JD
Senior Contributing Writer at Fundera

Priyanka Prakash, JD

Priyanka Prakash is a senior contributing writer at Fundera.

Priyanka specializes in small business finance, credit, law, and insurance, helping businesses owners navigate complicated concepts and decisions. Since earning her law degree from the University of Washington, Priyanka has spent half a decade writing on small business financial and legal concerns. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.

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