How Do I Choose the Best Payroll Software?

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  • Written By: Maggie Worth
  • Edited By: Jenn Walker
  • Last Modified Date: 19 November 2018
  • Copyright Protected:
    Conjecture Corporation
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Payroll software is computer software that allows you to process payroll-related functions electronically. This usually includes figuring the amount owed to employees as well as withholding amounts for taxes and insurance. Additional options are available with some packages. When choosing the best payroll software for your business, you will want to consider the specific functions you need, built-in security control options and compatibility with your existing systems. You will also want to think about ease of use and cost.

Functionality of any software is always a prime consideration. If you need a program that simply figures pay and withholding, a basic payroll software package may work fine for you. If, however, you are looking for a more advanced program, you'll want to ask each software company for a list of options and associated fees. Options might include the ability to track and apply vacation, sick or other leave time and the ability to process direct deposits through the system. Other options include year-end financial reporting functions.


When dealing with private employee information such as names, identification numbers and salary rates, you will want to ensure that you choose payroll software that offers a high degree of security. Talk with the software company about built-in safety controls, such as password protection, and find out what options and guarantees are included. If you will be sending any information through a server or over the Internet, find out how this affects the security parameters of the program.

Like most businesses, you will probably have existing computer systems with which your payroll software must interact. This includes your operating system as well as other financial programs. Verify that any new program you select will work with these existing systems, or you may need to plan to purchase different software to replace what you already have.

Ease of use may well be a factor in your decision-making process. Depending on who will be entering data — and there can be several options on that front — you'll want to make sure that the software interface is manageable for all users. If you plan to run reports or to import or export between other programs, you will also want to consider the ease of these functions.

Cost can vary dramatically from one payroll software package to another. Features, platform compatibility and the number of required licenses all contribute to the overall cost. You'll want to make sure you consider both the up-front cost of the software as well as maintenance fees and any additional hardware or software costs involved. Ultimately, the best payroll software is the one that provides your company with the functions you need at a cost that fits in your budget.



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