Paychex is one of the top payroll software solutions that helps businesses automate payroll, HR and other human-capital services. In order for you to determine if Paychex is ideal for your business, read this breakdown of the software’s notable features, pros, cons, pricing details and main competitors.
What is Paychex?
Paychex is a cloud-based payroll and HR solution that provides businesses with HR services, tax preparation, benefits administration, time and attendance services. The solution is designed for businesses of different sizes and working conditions.
With Paychex, businesses can offer their employees a variety of payment methods, such as direct deposit, paper checks and payroll cards. The solution also makes it easy for each employee to choose the sequence or frequency in which they want to be paid, as there are options for weekly, biweekly and monthly payments.
Payroll processing is at the core of Paychex’s services. The platform can help businesses handle payment processes by calculating hourly rates, pay rates, commissions and other additions to employees’ base pay. Paychex’s pre-check feature allows employees to review their scheduled payments to reduce payment-related issues (Figure A).
Human resource services
Paychex comes with a range of HR services including hiring, applicant tracking, employee development and records management that can help organizations streamline these tasks. In addition, the platform has a team of dedicated HR experts that offer more advanced HR assistance to organizations that may have complicated HR issues to resolve.
Paychex offers flexible payment options through direct deposit, paper checks and prepaid cards. For businesses that still offer their employers paper check payments, Paychex provides a Readychex service to make this work. There is also an on-demand pay option, also known as earned wage access, that allows employees access to their wages when needed without waiting for the next payroll cycle (Figure B).
Tax management is an especially difficult aspect of payroll that requires expert handling. Paychex offers a system that calculates, files and processes taxes at the federal, state and local levels. With this service, businesses will not need to worry about meeting tax deduction regulations, as the system takes care of that automatically.
Paychex offers business insurance solutions that provide comprehensive coverage for your properties, organizations and employees. Some of the areas covered are cyber liability insurance, employment practices liability insurance, commercial auto insurance and commercial property insurance. Figure C shows an example of an employee benefits dashboard in Paychex.
Pros and cons of Paychex
Analytics and reporting
Paychex helps businesses create personalized analytics and reports. The platform also has editable templates to keep track of and display critical data.
Attendance and time tracking
Paychex offers a way to track employees’ attendance and the time they spend on tasks, which can ultimately improve productivity.
Simplifies the hiring processes
The platform helps businesses screen, collect and centralize candidates’ data from when the candidates submit their resumes for an interview until when the application window is closed.
Supports third-party integrations
Paychex provides a variety of third-party software integrations for easy data sharing. Through its API library, organizations can easily connect with other software for accounting, HR and productivity, reducing the time-consuming process of manual configurations of third-party apps.
Not all enterprise-level software offers a mobile version, though at Paychex’s Flex and Enterprise levels, businesses can use a free mobile app for on-the-go accessibility.
Pricing is not expressly stated
Most Paychex plans are unavailable on its website, which requires contacting the vendor for a quote for each service.
No free trial
Paychex does not offer a free trial, which many businesses like to do before making this type of financial commitment.
How much does Paychex cost?
Paychex’s lowest pricing tier, Flex Essentials, starts at $39 per month plus $5 per employee; however, to determine how much the other pricing tiers would cost your team, you will need to enter your business details to obtain a price quote (Figure D). To start the process of getting a free quote customized to your company’s needs, answer questions about your business.
Top alternatives to Paychex
If Paychex doesn’t seem to have all of the features your company needs or perhaps isn’t in your budget, here are payroll alternatives to consider.
Like Paychex, Gusto is payroll management software that includes payment, hiring, insurance and other business support solutions in one offering. Although Gusto provides similar services as Paychex, the main difference lies in the fact that Gusto offers employees lifetime access to pay stubs while Paychex does not.
SEE: Gusto vs Paychex: Compare top payroll software (TechRepublic)
OnPay offers HR, payroll and employee management in one suite. With its one-month free trial, potential customers can get a feel of the product without making a payment.
Paylocity offers an all-in-one solution for businesses that need to administer payroll, benefits management, HR, time and attendance from one platform. The platform is best suited for small and medium-sized businesses.
QuickBooks Payroll is suitable for much smaller companies or independent contractors who wish to automate their payroll, invoicing, tax filings and bookkeeping but can’t afford to pay for higher packages.
SEE: QuickBooks Payroll review (2023): Pricing, features, pros and cons (TechRepublic)
Is Paychex right for my organization?
If you run a large organization with complex payroll needs, you should consider Paychex because it has numerous customizations. Its features are designed to scale as your business needs grow. In addition, organizations that still run on the paper check means of payment can adopt Paychex because it features a tool that accommodates such traditional means of payment.
If you’re comfortable getting started with a software tool without trying a free version, Paychex lets users dive into the complete package for a fee. On the other hand, if you’re looking for top payroll processing services for small businesses, or a payroll solution that offers a free trial and easy to find pricing details, check out QuickBooks Payroll and OnPay.
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