Written by Business Expert Wale Ameen
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Paychex vs. QuickBooks Payroll
Paychex and QuickBooks payroll are two of the most popular payroll solutions on the market. These HR and payroll solutions help businesses, both small and large alike, to manage their income and expenses as well as keep track of the financial state of their businesses.
This review of QuickBooks Payroll vs Paychex takes into consideration the features of each software, more than 200 users’ reviews across four top rated review sites, and my personal assessment of each solution.
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Finding the Best Payroll System for Small Businesses
|QuickBooks Online||Brief Overview|
Don’t have time to read this whole review? Skip ahead to:
- How Payroll Systems Help Business Owners
- QuickBooks Payroll Review [Features, Pricing, Pros/Cons]
- Paychex Review [Features, Pricing, Pros/Cons]
- Paychex vs QuickBooks Payroll – Which Payroll System is Right for You?
- The Final Verdict
How Payroll Systems Help Business Owners
What is a payroll system?
Payroll systems basically help a business manage the entire process of employee payment and filing of employment taxes. These systems help you keep track of important work indices such as employee work hours, wage calculation, calculation and filing of withholding taxes as well as other deductions, printing out of checks.
One of the major headaches a business owner has to constantly deal with is that of the payment of salaries and the filing of appropriate tax returns for workers in the business. This whole task, if not handled smartly and automated with solutions such as payroll systems, might turn out to be a herculean task month in and month out. The recurrent nature of the process can also take its toll on such individuals and lead, at the end of the day, to a loss of revenue.
Another danger this can bring is putting you on the wrong side of the law with agencies such as the Internal Revenue Service. It is a popularly said that ignorance is no excuse before the law and
Payroll systems take the heavy job of reconciliation and payment off your shoulders, thereby giving you more time to concentrate on what really matters – sales. If you have been handling this part of your business, chances are that you are already overwhelmed and do not have as much time as you should to focus on the more important matters.
As a business owner, it’s important that you focus your resources and time on tasks that can make your business more successful. Any tedious task that can be outsourced so that your efforts can be maximized is key to future growth.
Tasks a payroll system will help you with
Payroll obligations are not nearly as simple as they used to be. It’s not as easy as just calculating an employee’s hours, knowing their wage, and handing them a paycheck. Today, there are many more aspects that go into payroll that employers find themselves having to be well-versed in. Some of the many factors that have to be managed under the payroll task umbrella include deposits, attendance, PTO, quarterly/annual tax, retirement funds, workers’ compensation… The list goes on and on. Unfortunately, honest mistakes that are made in your payroll/tax filings can be extremely costly and detrimental to the success of your business.
The best payroll systems offer a solution for business owners. They handle, among other things, payment calculation and payout, statutory deductions such as EPF (Employee Provident Fund), TDS (Tax Deduction at Source), and ESI (Employee State Insurance), and reporting.
With this, the company is able to process the payroll faster and more efficiently, while employers can redirect their attention to more important tasks. Modern payroll systems are much more versatile than when these services were first introduced. Many other back-end tasks can be streamlined and delegated through your payroll software, such as tax documentation and filings. Not only can the software on the market today save you time, but it can also prevent you from making costly errors when it comes to tax filings. As the IRS ramps up their auditing efforts, one thing is for certain; when you’re running your business – you want to make sure all your finances are in proper order so you can avoid getting penalized and fined.
Two of the most popular payroll systems on the market today are QuickBooks and Paychex. In this review, I have outlined all aspects of each of these two systems, looking at their features, pros and cons, cost, and what business owners like you say about them.
QuickBooks Payroll Review
What is QuickBooks Online?
QuickBooks Payroll or QuickBooks Online is a comprehensive cloud-based accounting software that provides businesses with great employee management tools to manage their accounting, income, expenses, and payroll needs.
QuickBooks Online is one of the most popular accounting software platforms available today. Just like its name, Quickbooks helps you get your accounting and payroll tasks done quickly and seamlessly.
QuickBooks offers accounting-related services for business owners of different sizes and across a wide array of industries to optimize the efficiency of their financial transactions and bookkeeping.
The company, initially founded as ‘Intuit’ in 1983 by Tom Proulx and Scot Cook in California has come full circle, as it services more than 5 million businesses globally. It was rebranded to QuickBooks in 1992 and continues to be a global leader in payroll management.
Who is QuickBooks Ideal For?
The primary audience that QuickBooks aims to service are small to medium sized companies with up to 50 employees. It supports up to 25 users.
Features of QuickBooks
- Auto Payroll
- Inventory management included with QuickBooks Online Plus and Advanced
- Tax penalty protection
- Financial Statements
- Custom Reporting
- Budgeting / Forecasting
- Data Import and Export Tools
- Audit Trail
- Accounts Receivable
- Invoice Customization
- Mobile app
- Multi country
- Accounts Payable
- Payment Processing
- Real Time Reporting
- Real-time Updates
- Receipt Management
- Receivables Ledger
- Recurring Invoicing
- Recurring Payments
- Recurring/Subscription Billing
How Much Does QuickBooks Cost?
QuickBooks runs four pricing packages: Simple Start, Essentials, Plus, Advanced
Simple Start: Cost $15/month and it comes with the following features:
- Income and expenses transaction import
- Invoice and payments
- Tax deductions
- General reports
- Receipts capture
- Mileage tracking
- Cash flow
- Ability to share/export your books with your financial advisers etc
Essentials: Cost $27.50/month and all the features of the Simple Start plan and the following:
- Supports 3 users
- Bills management
- Advanced report
Plus: $42.50/month and all the features of Essentials plan and the following:
- Supports 5 users
- Project profitability feature which helps you track important details of projects
Advanced: Cost $100/month and all the features of Plus plan and the following:
- More than 5 users
- Business analytics with excel
- Employee expenses
- Batch invoices and expenses
- Customized access
- Exclusive premium apps
- Dedicated account team
- On-demand training
- Workflow automation
- Data restoration
Note: QuickBooks offers 50% off for the first three months on all its packages
In addition, QuickBooks has a plan specially designed for freelancers and independent contractors.
Self Employed : $7.50/month
- Track income and expenses
- Run basic reports
- Capture & organize receipts
- Track miles
- Estimate quarterly taxes
QuickBooks Payroll Services
Aside from the basic pricing plans, QuickBooks Online offers payroll plans. While signing up, you are required to either add a payroll plan to either of the pricing plans you have selected.
The payroll service offered by QuickBooks Online, however, is an additional subscription that users can activate with their QuickBooks Online plan. So, if you are already using QuickBooks for other purposes in your business – great! All you’ll have to do is activate the payroll subscription within your software in order to get started.
There are three different feature packages offered in their payroll service: QuickBooks Online Payroll Core, Payroll Premium, and Payroll Elite.
All three of the different package options are full-service payroll services that will meet standard payroll and tax needs. However, each plan has its own unique features that will appeal to different business owners depending on your individual needs. All of the packages that they offer have a few common features, and the next plan simply adds on features to the previous one.
Here is a quick reference chart for what the 3 options have in common.
QuickBooks Payroll Packages
QuickBooks Payroll Core
The most basic payroll package is known as QuickBooks Payroll Core. Core is the payroll standard for QuickBooks payroll services. If you choose to use Core, you can expect to receive the standard payroll features from QuickBooks Online which are full-service payroll, health benefits for your team, 401k plans, auto payroll, expert product support, and next-day direct deposit. There are no additional features offered with the Core package. Since it is the most basic package, this option is also the least expensive.
Cost of QuickBooks Payroll Core [Basic]
The cost is $22.50/month + $5/employee per month.
The next option in the line up is the Payroll Premium. In addition to all of the core features, simple start services offer a few extra perks to business owners that take their payroll a little more in depth.
When using Payroll Premium, business owners can enjoy benefits like sorted workers’ compensation administration, access to HR support center, expert review, and tracking time on the go.
Cost of QuickBooks Payroll Premium
The cost of adding these extra features jumps up to $37.50/month plus $8/per employee per month.
The most elaborate plan offered by QuickBooks includes the addition of the Payroll Elite plan. On top of all of the features included with the previous plan, QuickBooks Payroll Elite will allow business owners to run more robust reporting, expert setup, track time and projects on the go, access to 24/7 expert product support, tax penalty protection, and personal HR advisor.
Cost of QuickBooks Payroll Elite
This plan costs $62.50/month plus $10/per employee per month.
Pros and Cons of QuickBooks
Simple to use
Easy to maintain live data across different systems/locations
Has advanced reporting features
Great for bookkeeping
Supports integration with more than 650 other business apps and softwares
|Limited users for each of its plans
Some features are reported to be a bit clunky and some features stop working without warning
QuickBooks eCommerce plugin, Commerce has been noted not to be fully functional
Users complain that attempt to migrate from QuickBooks Desktop to its cloud platform is not as easy as it might be thought
Users have complained that getting through to customer support can be challenging
In addition, the online platform has been reported not to have as much efficiency as the desktop platform.
Is QuickBooks Online Easy to Use?
So here’s my personal assessment of QuickBooks Online. Overall, it is easy to set up and use HR software which is probably why more than 5 million businesses have pitched their tent with it. It is also an intuitive and easy to navigate solution with an inviting user interface. I took a dive and walked through its account setup process.
Overall, I’d score the QuickBooks setup process and general UI a 7/10. The UI is beautiful but can still be improved upon. Some of its features are hidden and some users have complained about this being difficult to find. However, the ‘Talk to Sales’ via chat or phone button on the site can help in finding your way around.
How Do Business Owners Rate QuickBooks Payroll?
There is probably a reason so many business owners use QuickBooks. The QuickBooks Payroll or QuickBooks Online as it is referred to in some cases has more than 2000 reviews on G2, more than 5000 reviews on GetApp, and more than 5000 on softwareadvice.com. This in itself is a pointer to its wide acceptability and use across the world.
On GetApp, the software has an overall rating of 4.3/5 with 85% of this being positive. On software advice, it also has a 4.31 overall rating.
However, there are certainly pros and cons to using QuickBooks as a payroll service provider. This is evident in the list of its pros and cons listed above. While analyzing the reviews submitted by users across various sites, one thing that stands out in their various reviews is the usability of their software.
Many users of Quickbooks software reported that their dashboard was highly intuitive, easy to navigate, and efficient. Another perk you’ll enjoy with QuickBooks is the easy integration of the payroll software with QuickBooks software accounts. If you’re already using QuickBooks in another aspect of your business, the payroll software automatically integrates and deposits information into the correct places in your Quickbooks account. This makes accessibility of essential information a breeze.
I interviewed Mr. Brad Heath, a business owner of over 20 years who runs Double D Trailers and has been using QuickBooks for more than 12 years, and here’s what he had to say.
“I’ve been using QuickBooks online for probably the last 12 years and it really works well, at least for our business. We are a horse trailer manufacturer, and the tools that we use would be, of course, creating invoices. You just click new and invoice. You can select the customer and then just put in your product codes, whatever that is.
From the banking side, I really like that it just pulls in the transactions automatically from our bank and will show a small notification over on the checking account side.”
He went further, saying, “You can accept credit cards. We don’t do that just because of the cost and the dollar amount of the tickets that we are selling. You know, they’re 50 grand. So credit cards really aren’t applicable for that, but it’s very easy to change if you want to.
There’s a lot that you can do on the marketing side, just through QuickBooks. It gives you, nice breakdown overview for cash flow, your expenses. You can run all sorts of reports, quarterly, daily, whatever report that you want.”
See the full review below:
For every gain, it’s almost impossible not to have a pain point. This comes to the fore with QuickBooks. The most common complaint among users of the software was its customer service. As QuickBooks has rapidly evolved into a large company, it appears their customer service support has taken a hit for it and is inadequate to meet the queries of their teeming customers.
For this reason, if you are looking for a software that will provide hand-in-hand support or training, Quickbooks may not be the best solution for you. Many reviewers stated that it was difficult to even get in touch with someone from their support team.
It should also be noted that if you are a Mac user, QuickBooks Payroll will not be compatible for you on the desktop version. Mac users have to use the online version only.
What is Paychex?
Previously known as PayMaster, Paychex has been around for quite some time now. The company was founded in 1971 by B. Thomas Golisano. The company later went public with an Initial Public Offering (IPO) in 1983.
The company raised about $8 million in the IPO. Since then, business has continued to skyrocket for Paychex. Over the years, their business has developed and grown, but their core mission has remained the same. The primary goal of Paychex has been to provide accurate and affordable payroll services to business owners.
Paychex, like QuickBooks, is a popular provider of human resources management solutions for payroll, benefits, human resources, insurance services, and employee benefits.
Paychex Flex is the company’s all in one HR, Human Capital Management (HCM), and PEO software which helps companies manage workforce payroll, benefits.
Like QuickBooks, Paychex also focuses on smaller to medium sized businesses. Their average client has 14 employees, and according to the company, they currently provide services to more than 730,000 clients.
Who is Paychex Flex Ideal For?
Paychex Flex is more ideal for medium to large businesses. Unlike its contemporary QuickBooks that targets small businesses of 1 to 10 and above, Paychex Flex may not be too ideal for small businesses just starting out with a minimal number of staff. Medium range companies that will find Paychex ideal are those with a staff member strength of 50 to 1000 and above. As such, I do not recommend it to sole proprietors and freelancers.
Features of Paychex Flex
- Background Screening
- Benefits Dashboard & Management
- Calendar Management
- Candidate Profiles & Tracking
- Compensation Management
- Compliance Management & Tracking
- Direct Deposit
- Email Templates
- Employee Onboarding & Database
- FMLA Administration
- HR Management
- Interview Scheduling
- Job Posting/ Interview Scheduling
- Learning & Development
- Leave Tracking
- Mobile Access
- Online Time Clock
- Overtime Calculation
- Payroll Management, Outsourcing, & Reporting
- Performance Management
- Real Time Reporting
- Reporting & Statistics & Analytics
- Tax Compliance
- Time Tracking
How Much Does Paychex Flex Cost?
My impression of the solution was great and impressive until I decided to look up its pricing plan. Paychex does not publicly provide its pricing plans except for its basic plan, and even then you need to reach out to get the detailed pricing plan. It is kind of disappointing to see that the platform does not operate an open system in this regard.
To get this, I was required to submit a form to get a quote.
While this probably means it runs an a la carte pricing model, which is largely determined by what the needs of the business owner are, to a large extent, this is off-putting for a notable company like Paychex.
Paychex Pricing Plans
- Flex Essentials: $39/month +$5 per employee
- Flex Select: Custom pricing
- Flex Pro: Custom
- Flex Enterprise: Custom pricing
As you can see, save for its Essentials plan, all other plans come with custom pricing, and this essentially means you need to get in touch to get a quote.
Pros and Cons of Paychex Flex
|Easy to use|
Intuitive user interface
Supports integrations to
Free mobile app
Offers compliance officers monitoring US laws
No contracts, cancel anytime
|Pricing plans are not publicly available
Customers complain of an unresponsive customer support
Is Paychex Flex Easy to Use?
For one, Paychex is a generally great solution, as it compares nicely with other top payroll solutions like QuickBooks. However, from my assessment, two strong points that knocks some good points off for the software are its publicly unavailable pricing and reviews from customers. A good way to judge a product is by what those who have used it are saying about it and sadly, for Paychex, the customer reviews are, to an extent, negative.
How Do Business Owners Rate Paychex Flex?
Reviews of Paychex are hugely unbalanced. On the one hand, there are a few users who attest to its ease of use and being a generally great human resource management solution. On the other hand, there is a seemingly large number of dissatisfied users who have had to even move on to using other solutions.
My review of users’ reviews on Trustpilot, G2, Consumeraffiars, and GetApp shows a mixed range of reviews. On Trustpilot, it has an overwhelmingly negative rating of 94%, while its ratings on other platforms are a mix of both positive and negative.
Paychex Payroll Services
Similarly to QuickBooks, there are 3 different payroll packages offered from Paychex for business owners to choose from depending on their wants and needs. The 3 plans offered are known as Paychex Flex Essentials, Paychex Flex Select, and Paychex Flex Pro. The Essentials is their most basic package, with Select being the intermediate plan, and Pro being the most feature-rich plan choice. However, unlike Quickbooks, Paychex doesn’t start with a standard feature set and build upon it with the next package option. While the packages do have some similarities, they each have their own unique offerings in terms of features and benefits. Let’s break down each one.
Paychex Essentials Plan
If you are looking to just test the waters for your small business with Paychex payroll, this Essentials plan might be the one for you. Although it’s their “basic” package, there are a ton of features for users to enjoy. With this plan, users can expect to see:
- Paychex mobile app
- Direct-deposit and on-site check printing
- New-hire reporting
- Payroll tax administration/support
- Self-service options for employees
- HR library and business forms
- Standard analytical reporting
- General ledger reports
- Labor compliance kit
- W-2 and 1099s
- Workers’ compensation insurance
- Garnishment payment services
Paychex Flex Select
Paychex’s next payroll plan is the middle-tiered option known as the Flex Select. The Select plan includes all the features of the Essentials plan and:
- Dedicated payroll specialist
- Online tax filing
- Paper checks, check-signing, or check logo services
- Employee training and development (this is only available in this plan)
- Round the clock support
This plan does not include garnishment payment services. You can also add the optional services of pay card, financial wellness program, and tax credit services with no additional fees required. This plan requires a custom quote from Paychex.
Paychex Flex Pro Plan
Just like the others, this plan’s price is not published. It includes all the features found in Flex Select plan plus:
- Integrations to accounting software’s
- State unemployment insurance services
- Tools for onboarding
- Pre-employment screening
- Employee handbook tool
Paychex vs QuickBooks Payroll – Which Payroll System is Right for You?
How Paychex vs QuickBooks Payroll stake up
Let’s break down the major concerns into categories to determine the winner of this battle of the payroll systems.
Pricing: Winner – QuickBooks
When it comes to the category of pricing, QuickBooks easily wins. The starter package from QuickBooks is way less than the basic package from Paychex. Another easy angle where QuickBooks takes the win is the breakdown of its entire packages. With QuickBooks, you know exactly what you are paying for. This is not so with Paychex, as all other plans, aside from its basic plan, do not come with transparent pricing.
Features Offered: Winner – Paychex
Paychex flex vs QuickBooks both offer the standard payroll processing functionalities, tax reporting, and mobile app access, but Paychex takes the trophy in this category. Not only does their system offer a wider variety of features, but their company also offers more advantages for employees as well. Paychex allows business owners to pay their employees in many different ways, such as direct-deposits, checks, and pay cards for instant payment access. In addition, Paychex provides more employee-targeted features and benefit enrollment options as well as HR focused solutions.
User Reviews: Winner – QuickBooks
QuickBooks easily takes home the trophy in this category. Across the popular review sites I analyzed as well as business owners I interviewed, QuickBooks has a higher percentage of positive reviews. This is unlike Paychex, which has seen some users describe it in some very strong negative terms. Also, QuickBooks has an overall rating of 4.3/5 with 85% of this being positive on GetApp, while Paychex has an overall rating of 4.1 on the same platform.
Ease of Use: Winner – QuickBooks
According to many users and reviews, and based on my personal interaction with both software, QuickBooks wins this category. Users have reported that both are easy to come up to speed with, but QuickBooks has more users loving its user interface and ease of use.
Customer Support: Winner – Paychex
QuickBooks has 24/7 support offered through live chat and limited hours of phone support. Paychex offers 24/7 support. It has been reported from both systems that their phone/chat support can be inconsistent. However, Paychex is unique in that they have a dedicated team of payroll experts available for assistance when you are subscribed to one of their advanced tier packages.
The Final Verdict
Having analyzed Paychex vs QuickBooks Payroll and how they both work, it is clear that both solutions have their strengths and weaknesses. With both of these companies, business owners are able to access cloud-based payroll software to assist them with payroll and payroll related administrative tasks. If you are just a small business owner with a small team looking for a really basic system to run payroll, OR if you are already using QuickBooks for accounting, then QuickBooks may be the best option for you. Get started now with QuickBooks.
However, if you are a medium to large company, looking for a more robust option that offers a greater variety of functionalities and administrative possibilities, I believe that Paychex has the advantage here and take the trophy for the overall winner in this battle. Get a quote from Paychex here.
Which software is best for accounting?
The best overall accounting software for small business owners is QuickBooks.
Can I use QuickBooks for free?
QuickBooks can be accessed for free, but only if you are a student or a teacher.
What is the easiest accounting software to use?
The easiest and most user-friendly bookkeeping software is QuickBooks online.
What’s the difference between Paychex and Paychex Flex?
Paychex Flex is designed to accommodate more employees.