Payroll Solutions for Small Business: How to Choose

They differ in who does the work every pay run and who you call when something breaks.

Payroll software you run yourself

Your own team runs payroll in a platform and owns compliance. It fits a business with someone who has the time and know-how.

Outsourced payroll processing

A payroll team runs every pay run for you, and you approve each run.

Managed payroll with emergency coverage

Managed payroll adds tax registrations and filings, benefits deductions and quarterly and year-end reporting, and the team covers the week your payroll person is out.

Payroll advisory

Payroll advisory fixes the process behind payroll: the controls, workflows and documentation that prevent repeat errors.

Do you have to switch systems?

You should not have to. We work inside the system you already have.

Who answers the phone?

Ask whether a person picks up or a queue does.

How many states do you pay people in?

Before an employee starts working in a new state, check which withholding, unemployment and local payroll registrations apply. Requirements depend on the state and the employee’s work arrangement.

What happens when your payroll person is out?

Ask who runs payroll that week.

Do benefits deductions reconcile to payroll?

401(k) contributions and health premiums must match what payroll deducts.

What does it cost compared with an in-house hire?

Count salary, payroll taxes, insurance, equipment and office space.

These eight fixes come from our payroll system optimization playbook.

1. Standardize change requests. Rate, deduction and status changes use one intake form.
2. Set hard cutoffs. Changes, timesheets and bonuses have a firm deadline.
3. Add a second review. Someone else checks totals, taxes and pay swings.
4. Clean up earnings codes. Consolidate duplicate or unclear codes.
5. Reconcile deductions monthly. They drift with plan and eligibility changes.
6. Audit permissions. Only payroll administrators change settings.
7. Document workflows. Written procedures cut dependence on one person.
8. Run variance reports. Compare each run with past runs to catch errors.

Late or wrong tax filings

Federal, state and local payroll taxes have to be filed on time, every time, or penalties pile up.

A missed out-of-state registration

Before you run payroll in a new state, check which withholding and unemployment accounts apply and register them, or risk penalties and interest. Requirements depend on the state.

Workers classified as 1099 who should be W-2

Misclassification can lead to back-tax penalties. A payroll audit reviews 1099 and W-2 status line by line.

Deductions that drift

Reconcile 401(k) deductions monthly and confirm health insurance premiums are remitted correctly.

The payroll person quits

Payday still has to happen, so line up backup coverage before you need it.

PayAdvisors is a fully managed fractional payroll department: a team of 25+ payroll and HR professionals serving businesses, CPA firms, and HR firms in all 50 states.

We run, fix and support payroll for small and mid-sized businesses.