Payroll Software

Payroll software is an option for small business owners who feel confident they can handle the employee payroll. This option is typically cheaper as the price for the software is a one-time expense as opposed to a monthly fee for payroll services. While this option offers savings, it is not without some risk. Should any calculation result in an error, the small business owner is liable for the damages and restitution.

Some common features found in payroll software include automatically calculating federal, state and other taxes and supporting a number of payroll forms and direct deposit.

Checks

The crux of payroll software is checks; printing and processing checks and pay stubs. There is something to be said for printing one's own employee checks; it's a clear sign of small business success. Payroll software allows small business owners to print on laser and inkjet printers. Most payroll software programs allow direct deposit, as well. Many banks give discounts to customers who use direct deposit, which will make employees happy to have direct deposit as an option.

Taxes

Most payroll software programs automatically deduct federal, state, and local taxes, social security, Medicare and FUTA (Federal Unemployment Tax). This is highly beneficial for small business owners who may only need payroll help when determining how to withhold taxes and how much to withhold. Some software programs offer customizable tax deductions for even greater control over payroll.

Reports

Most payroll software supports reporting and categorizing features, which allow small business owners to keep tabs on where the money is going and to whom. This is beneficial when planning business budgets or determining the feasibility of hiring more employees. Also, many payroll software programs can import information into Quicken or other accounting programs, which will integrate the amount of money output for wages seamlessly into the accounting program already in use. Monitoring the output of one's small business is crucial to its success, and payroll software supports that ability.

The main benefit of payroll software is the cost. A one-time fee, payroll software is cheaper than payroll services and can be just right for businesses that have a small number of employees. And, the cost varies depending on the type of software and amount of integrated features. Large amounts could be spent on intricate software or small businesses could really save a bundle on inexpensive software. And older versions of payroll software are just as good as current versions. The only concern with older payroll software is the changes made to tax laws may not be included. Some software programs receive updates that account for these changes, but careful research will resolve any questions.