Best Payroll & HR Software Solutions for Small Business

Managing payroll and human resources can be daunting for small business owners, especially when trying to balance efficiency and compliance with limited resources. 

The right payroll and HR software for small businesses can enhance these processes, allowing you to focus more on growing your business and less on administrative tasks. In this post, we’ll explore seven top payroll and HR software solutions out there, tailored for small businesses.

Do SMEs Need Software for Payroll & HR Operations?

There is no doubt that large enterprises need HR and Payroll software to administer processes efficiently.

However, HR & payroll software solutions are equally important for small businesses to grow and succeed. It will ensure that they have a lower rate of errors and discrepancies, especially when it comes to payroll.  Small and medium-sized businesses (SMEs), which are the fastest-growing businesses, must put in more effort daily to solidify their presence in the market.

In addition, if the businesses are busy with internal HR or payroll difficulties; then they will likely squander time. But with HR and payroll software, they can make their processes smoother and more streamlined. The solutions will also improve their efficiency and productivity.

Features to Look Out for Before Purchasing Payroll and HR Software for Small Businesses

✔️Budget

You should select payroll and HR software that fits within your budget. This factor is crucial for small businesses. The best way to go about it is to find a solution that offers essential features without being too expensive. 

You should look for solutions that have clear pricing models on their website or when contacted. Subscription-based plans are good options here. But you should be careful of any additional costs for extra features or users or upgraded versions. 

✔️Payroll Management

An important aspect of a payroll and HR management sofution is how well it administers the payroll process. Proper payroll management ensures you are calculating the salaries, wages, and relevant elements like leaves and absences correctly. This is vital for avoiding conflicts with employees or confusions over recording and disbursiing payment. 

Effective payroll management keeps you in the “good books” of the employees, thus your software should be able to maintain payroll properly. 

✔️User-Friendly Features

The user interface (UI) and user experience (UX) of the HR solution must be user-friendly to all employees, regardless of their technical expertise. Intuitive design, clear instructions, and access to helpful resources will assist the users in easily learning the software and enhancing overall productivity.

✔️Customizable Reporting Capabilities

Customizable reporting capabilities allow businesses to generate reports that meet their specific needs. Whether tracking employee attendance, payroll expenses, or training & development data, the ability to create detailed, custom reports helps in making informed decisions and improving operations.

✔️Scalable Functions

Scalability is a must for growing SMEs. The chosen software for your business should be able to handle the rising numbers of employees and more advanced, complex HR processes as the business grows and expands. 

Scalable functions ensure that the software remains useful and efficient as the company grows, avoiding the need for frequent upgrades or replacements.

✔️Real-Time Customer Support

If your customers can access real-time customer support, it can significantly boost the smooth operation of payroll and HR processes. Instant assistance with technical or usability issues or answers to urgent queries ensures minimal downtime and helps create long-term customer relationships. 

You should look for software providers that offer multiple support channels, including phone, chat, and email.

✔️Self-Service Portal

A self-service portal empowers employees to manage their own HR-related tasks, such as updating personal information, accessing pay stubs, and requesting time off. This feature reduces the administrative burden on HR staff and increases employee satisfaction by providing greater access and transparency.

Top 7 Payroll and HR Software for Small Businesses

Below we present seven payroll and HR software solutions that have the features to enhance your business. These are the top solutions that are currently available in the market. Let’s see!

1️⃣ Rippling

Rippling is a popular payroll management software that also offers various HR tools and elements to handle your business’s payroll and salaries effectively. It covers teams from two to more than 2,000 employees. 

Its aspects or features include:

• an applicant tracking system (ATS), 
• full payroll and benefits management, 
• time and attendance tracking, 
• learning management and 
• professional employer organization (PEO) services.

When it comes to usability, Rippling has both good and not-so-good sides. Its user-friendly design makes it easy to navigate compared to legacy platforms. But too many features can make it feel a bit challenging to work with and learn. 

On the other hand, Rippling is licensed and compliant with global data protection and compliance regulations that helps ensure proper payroll management. It has set up licensed subsidiaries to manage specialized services in the businesses of insurance, PEO, and payments.

Starting Price: $8 per month per user

2️⃣ Lattice

Lattice targets to bring together the tools, workflows, and data that will help small businesses develop engaged and high-performing employees. The solution combines aspects like the following into one platform:

• performance management, 
• goal-setting, 
• employee engagement, 
• compensation management, 
• career development, 
• and people analytics 

This solution helps HR and Operations teams to garner insights that drive impactful business outcomes. It is flexible software, too, enabling you to manage various aspects of employee development and engagement, including pulse surveys, OKRs, 360-degree feedback, 1-on-1s, weekly updates, and growth paths.  

Ranked on the Inc. 500 Fastest-Growing Private Companies list two years in a row and certified as a Great Place to Work by 99% of its employees, Lattice serves sound 4,000 customers worldwide.

Starting Price: $4 per month per user

3️⃣ Paycor 

The SME HR software solution Paycor is designed to offer core HR functions and an integrated benefits platform that directly interfaces with insurance carriers. Its customizable time management platform ensures comprehensive operation and efficiency, especially for payroll management and tracking. 

Paycor Analytics offers enterprise-level insights tailored for small and medium-sized businesses, empowering them with the data they need to make informed decisions about leaves, salaries, and other benefits. 

A big highlight of Paycor is that it ensures that users don’t need to switch platforms, log into multiple systems, re-enter information, or manage numerous spreadsheets for employee and payroll data

Over 29,000 small and medium-sized businesses rely on Paycor to solve their HR challenges on a daily basis. 

Starting Price: Contact Sales for info. (minimum package begins with less than 50 employees)

4️⃣ BambooHR

BambooHR is an all-in-one solution designed to meet the HR needs of small to mid-sized businesses. It integrates and manages an employee’s lifecycle, from hiring and onboarding to payroll, benefits, and offboarding. The software is user-friendly, equipped with numerous built-in templates, and features well-organized, visually appealing workflows.

As an HR & payroll solution, BambooHR offers numerous features and tools to manage employee data and more. While it may initially seem overwhelming, navigating through its main features becomes straightforward as the system guides you through each step, presenting payroll-related information in an easy-to-understand manner. 

Its Core Features include:

• Employee Data Management
• Benefits Tracking
• Time-Off Management
• Approval Workflows
• Applicant Tracking System
• Onboarding and Offboarding
• Reporting and Analytics
• Employee Wellness

BambooHR stands out for its ease of use despite a good number of features. It makes calculating salaries, taxes, and payments easy for small businesses. It also has 125+ pre-built integrations. 

Starting Price: $108/month for 20 employees plus $5.40 per month per additional employee.

5️⃣ Paychex 

Paychex Flex is a more simplified payroll solution designed for small businesses. In contrast, there is a more complex Paychex platform used by larger enterprises. It provides essential payroll services tailored to the needs of small businesses, ensuring ease of use and efficiency.

Paychex Flex offers simplified payroll processing and tax filing, making it ideal for small businesses that do not require extensive HR tools. 

Your employees can access a self-service portal via the Paychex website or Paychex Flex app, while you or the employers can submit payroll and access reports through the same platforms. 

You can also add features such as time tracking and benefits administration to help meet your specific business needs. Benefits administration is available as an add-on, providing flexibility for businesses to manage employee benefits through the Paychex platform.

While Paychex Flex aligns with competitors in terms of services for small businesses, its pricing structure can be more complex and expensive. 

However, it stands out with its Voice Assist capability, enabling hands-free payroll reviews, approvals, submissions, and updates, enhancing accessibility for users with different needs. 

Additionally, payroll can be submitted over the phone through a payroll specialist, ensuring flexibility and reliability.

Paychex Flex ensures compliance with state and local reporting and tax filing requirements. All plans include new hire reporting and provide labor law posters, either printed or electronic. The platform automatically calculates, pays, and files payroll taxes for each pay period, streamlining tax compliance.

Though not included in basic plans, time tracking can be added with the Paychex Flex Time add-on, allowing employees to log time through the app or a kiosk, even without an internet connection. This helps expedite payroll processes. 

Overall, Paychex Flex offers a straightforward payroll solution for small businesses, balancing ease of use with customizable options to meet various business needs.

Starting Price: $39 per month plus $5 per employee

6️⃣ Gusto

Gusto is an online payroll and HR platform designed to simplify payroll processing and benefits management for startups and small businesses. Gusto handles payroll for both employees and contractors and manages employee benefits such as health insurance, retirement plans, and more. 

The HR software solution offers additional features like automated charitable donations and a digital wallet, giving employees greater control over their finances.

For Gusto, you need to input all relevant company data, including tax information, benefits, bank account details, and any third-party apps you wish to integrate. Gusto then provides a brief questionnaire to let you select the plan that meets your needs. After that, you enter employee information, such as pay rates, direct deposit details, and withholdings. 

Gusto’s uniqueness is its ability to handle payments for a variety of employee types and its tools to support financial wellness. Gusto’s payroll system is versatile enough to support full-time W-2 employees as well as domestic and international contractors, accommodating different pay rates and schedules.

Gusto’s Wallet app is a mobile tool that tracks payment history, hours worked, and more. All Gusto plans include access to this app, which allows employees to:

– View paycheck breakdowns.

– Set up high-yield savings accounts.

– Split paychecks among different accounts to achieve savings goals.

– Set up personalized financial goals.

– Manage time-off requests.

– Clock in and out and view hours worked (available in Premium and Plus plans).

Gusto features:

• Payroll for your company’s needs. 
• Calculation, filing, and paying payroll taxes for employees. It also manages W-4 and W-9 forms and distributes W-2 and 1099 forms for tax returns. 

• a native applicant tracking tool (available in Plus and Premium plans) and integrates with external ATS tools for the Simple plan. 
• a range of benefits, including health, commuter, life insurance, and retirement plans. 
• time tools module which includes time-off management and time tracking. 
• a comprehensive reports library covering various categories such as time tracking, contractors, and payroll. 
• Employee Self-Service 

Starting Price: $40 per month + $6 per person

7️⃣ Paylocity 

Paylocity is a comprehensive platform designed to meet the needs of HR teams, employees, and managers. It’s best for enhancing employee engagement at SMEs, in addition to payroll management. It offers a robust suite of tools that includes:

• Payroll
• Benefits Administration
• Time and Attendance Tracking
• Employee Scheduling
• Automated HR Workflows
• Document Management
• Employee Self-Service Portal
• Talent Acquisition and Management Tools
• Compensation Management
• Employee Engagement Tools
• HR Reporting and Analytics
• HR Compliance

One downside is that Paylocity does not publicly disclose its pricing or clearly outline which features are included in each package, making it necessary to contact the company for detailed information. 

However, you can notice that its pricing is calculated per employee per month and is based on the features you add to its core offering. 

HR and Payroll Software Comparison for Small Businesses

Wrapping up

The right payroll and HR software can significantly ease managing administrative tasks, helping small business owners focus on growth and innovation. By leveraging the features offered by the top solutions we’ve highlighted, you can enhance efficiency, maintain compliance, and foster a better work environment for your team. 

Investing in the right tools today can pave the way for smoother operations and a more successful business tomorrow. So it’s time for you to utilize the best payroll and HR software solutions designed specifically for small businesses and discover which one is the perfect fit for your needs.