Wave Payroll Review: Cost, Features, Alternatives

Matthew Speiser

Matthew is a 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. Matthew's writing has been published in Business Insider, The Fiscal Times, and NJ.com, among others. He has a degree in journalism from the University of Delaware.
Advertiser Disclosure

Canadian tech startup Wave has built a complete system to manage your incoming and outgoing finances—and become a popular tool for small business owners in the process. Since launching in 2010, Wave has helped 4 million customers manage over $200 million in income and expenses via their suite of free tools.

In this review we are going to focus on one of the few Wave tools that isn’t free—Wave Payroll. Although you have to pay to use it, Wave Payroll works in tandem with all of Wave’s free products, providing you with a one-stop shop for managing all of your business’s finances. So let’s evaluate Wave Payroll and see if it is a good fit for your business. We’ll also show you a few alternative payroll options so you can get a feel for what the market has to offer.

Wave Payroll: How It Works

Wave Payroll is a cloud-based payroll service, meaning your information is stored on Wave’s servers and transferred to your platform via the cloud. When you sign up for Wave Payroll you’ll be able to log into your account via the Wave website on any internet-enabled device. If you’re logging in for the first time, here are the steps you need to take to set up your account and start processing payroll.

Setup

When you sign into your Wave Payroll account for the first time, you’ll be prompted to provide a variety of necessary information to begin processing payroll. You’ll be asked for your employer identification number (EIN), your state identifier (EIN but at the state level), business details (address, entity type, description of products/services), the information of your company signatory, tax information, and employee information, including bank account info for direct deposits.

If you are migrating over from another payroll platform, Wave also recommends having your payroll history on hand to ensure the accuracy of your tax reporting moving forward.

wave payroll Source: Wave Payroll

Dashboard

Once you enter in all the necessary information, you will be directed to your payroll dashboard.  This is your home base for reviewing, editing, and approving payroll runs. There’s one important thing you need to do here before you can start processing payroll: Set up your payroll schedule. Wave Payroll allows for payroll to be run on weekly, bi-weekly, bi-monthly (twice a month), and monthly.

Note that you must log in to your dashboard and approve each payroll run three days prior to the intended payday in order for payroll to be processed on time. Make sure to set your payroll schedule so that the timeframe for approving a payroll comes after the pay period is done. That way, you can approve the payroll run with all employee hours, bonuses, and deductions accurately accounted for.

Run Payroll

Wave Payroll will send you email reminders to help you remember to run payroll before your deadline. When you’re ready to run payroll, click “Review” on your dashboard.

You’ll be guided to a screen where you can see a list of all your employees, what they’re owed for the pay period, their tax deductions, bonuses, and more. If anything looks off, you can  navigate to that employee’s profile and make adjustments in the “Benefits and Deductions” tab.

If all looks good, select the “Approve” button to run payroll. If you realize you made a mistake after clicking “Approve,” simply click “Delete” to remove the payroll from pre-approval. Once your payroll is approved, you can view it under the “Approved Payrolls” tab in your dashboard. From here you can also view and download individual employee pay stubs. Approved payrolls will be processed in accordance with your payroll schedule.

Wave Payroll offers two payment delivery options: Direct deposit or self-printing checks. Wave offers check printing services through Check Print. You can opt to print checks for certain employees when you run payroll. Note that you must purchase your own printer-friendly checks, also known as “laser” or “sheet-fed” checks.

For paying contractors, Wave Payroll has a slightly different system. You first must enter them into the payroll system under “Vendors” in the “Purchases” tab of your dashboard. Be sure to mark them as a “1099-MISC contractor.” This will allow Wave to generate the 1099-MISC form at the end of the year.

When paying a contractor, select “Create a Bill” under the “Purchases” tab. Bills can be created with a flat rate or a per hour rate. When the bill is complete, you can add it to your next payroll run by selecting the option to “Pay contractor.” If you’re not paying the contractor via direct deposit, you will need to cut them a check when you run payroll.

Paying contractors through Wave Payroll costs $4 per contractor paid per month, in addition to your payroll base fee. You will not be charged the $4 fee on months you do not pay contractors.

One other nifty feature is the ability to place certain employees “on hold” from payroll—removing them from future payroll cycles until you decide to put them back on. This can be a time saver for seasonal businesses.

Tax Administration

Wave Payroll offers tax administration services for several states in the US. In these states, Wave will pay and file your state and federal taxes when you run payroll. The states that Wave Payroll currently offer tax administration in are California, Florida, Illinois, New York, Texas, and Washington. For more information on what tax services they can provide in those states, visit the Wave Help Center.

Employee Portal

Once you set up your Wave Payroll account, you can invite employees to the platform. Once they create their own account, they can log on to view payroll-related data, including salary, vacation time left, downloadable pay stubs, and tax forms—including year-end tax forms. They can also view the status of a payroll transfer, and see how soon the funds from their paycheck will be available to them.

Integrations and Add-Ons

Wave Payroll works in tandem with Wave’s other free services, all of which are accessible from your Wave account. Let’s take a look at the other services available to you:

Accounting

Wave provides accounting software with unlimited bank and credit card connections, income and expense tracking, and the ability to provide your accountant or bookkeeper access to your platform. If you choose to house your business’s books on Wave’s accounting software, you’ll be able to use some additional features, including:

  • Customizable sales taxes
  • Automatically generated accounting reports, like profit and loss statements, sales tax reports, cash flow reports, and balance sheets
  • Integrations with PayPal, Shoeboxed, and Etsy

Plus, payroll journal entries are automatically added every time you run payroll.

Invoices

Wave’s invoicing software allows you to create custom invoices to match your business’s branding, set up recurring invoices and automated credit card payments for repeat customers, and automatically record all invoice transactions in Wave’s accounting software. Invoices can also be sent from Wave’s mobile invoicing app.

Receipts

Speaking of apps, another one Wave offers is a receipt scanning app that syncs automatically with your other software for easier expense tracking. The receipt scanner app can also work offline.

Payments

Wave will process digital payments on your behalf with Wave Payments. This service allows you to accept all major credit cards and ACH transfers, with funds arriving in your business bank account within two days of purchase. Wave Payments subscribers can attach “Pay Now” buttons to invoices to initiate digital payments, and all transactions are automatically recorded in your Wave accounting software. Processing fees are 2.9% + $0.30 per credit card transaction and 1% on ACH transfers.

Wave+

The final add-on service we’ll go over isn’t free. Wave+ gives you direct virtual access to a professional Wave bookkeeper or accounting coach. Bookkeepers will take care of a variety of monthly financial tasks, including categorizing transactions, reconciling accounts, and preparing income statements and balance sheets. Wave accounting coaches give you two hours of live accounting coaching plus 30 days of email access for follow up questions. The cost of the accounting coach is a one-time fee of $249, whereas the bookkeeper costs $149 each month.

wave payroll

Wave Payroll Pricing

Wave Payroll has fairly straightforward pricing. For the six states that receive tax administration with their payroll, Wave charges a $35 monthly base fee plus $4 per employee you run payroll for. For states where Wave does not offer tax administration, the Wave Payroll fees are $20 per month for the service, plus $4 per employee.

Wave Payroll Pros

Given what we’ve gone over, here are what we see as the benefits of Wave Payroll:

Value

Wave Payroll’s price is cheap, and you get a lot of additional features to use with it. That’s what we call value. We admit that the payroll software isn’t the most in-depth we’ve seen, but the fact that you also get free accounting and invoicing makes it much more appealing.

Simplicity

It doesn’t have to be a bad thing that Wave Payroll isn’t as comprehensive as other software we’ve reviewed. That makes it easier to use, which is nice for time-strapped small business owners. The interface is clean, the steps to take to run payroll are obvious, and if you ever get bogged down, there is a Help Center on the website with lots of resources.

Wave Payroll Cons

Here are some drawbacks with Wave Payroll:

Tax Administration

If you live outside of California, Florida, Illinois, New York, Texas, and Washington, Wave Payroll won’t handle your payroll taxes. That can add a significant amount of work every time you run payroll, and we don’t see it being worth the $15 price cut Wave provides for not delivering this service.

Payment Delivery

Wave doesn’t offer check signing and stuffing services, which is something a lot of other payroll service providers do. They also don’t offer paycards—another common option with other providers. Unless you want to be responsible for printing your own checks (and some business owners don’t), your employees need to take direct deposit.

Wave Payroll User Reviews

Here’s how users rank Wave on some major review websites:

Pretty high marks all across the board. In reviews, users rave about the intuitiveness of the platform, the access to additional features like invoicing and accounting, and how cheap it is. Drawbacks users point out include the inflexibility of the platform (can’t create presets or custom templates) and bugs and glitches with its mobile apps.

Wave Payroll Alternatives

Here are a few additional options to consider when shopping for a payroll service provider:

Gusto

If you’re looking for more than just payroll, consider Gusto. It’s an all-in-one payroll/HR/benefits system that integrates with a broad range of additional accounting and time tracking software. You can try a free demo of Gusto for one month, and afterwards it’s a flat rate of $39, plus $6 per employee per month.

Square Payroll

If you already use Square POS for your brick-and-mortar business, Square Payroll is a natural fit. It’s a fast and easy solution that integrates with a full suite of HR services and benefits providers, allowing it to be as thorough as you need it to be. It also edges Wave on price just a bit—$29 per month plus $5 per employee.

Is Wave Payroll Right for Your Business?

We think Wave Payroll is a really nice option for small business owners. It’s simple, cheap, and provides you with some other really helpful tools at no additional cost. As your business expands, you may grow out of Wave, but there is a lot to like for those who are in the early stages of business ownership.

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.

Matthew Speiser

Matthew is a 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. Matthew's writing has been published in Business Insider, The Fiscal Times, and NJ.com, among others. He has a degree in journalism from the University of Delaware.

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