Best Payroll Services

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State of the Industry

A growing number of businesses are finding value in outsourcing their payroll responsibilities. Today’s payroll services handle several critical, time-consuming, tasks, including payroll processing and the calculating, filing and paying of payroll taxes.

Experts say that outsourcing payroll not only helps prevent errors that can be made when the work is done in-house, but it also frees up employee resources.

A recent report on the payroll industry by IBIS World shows that there are nearly 300,000 payroll and bookkeeping businesses in the United States that employ more than 1 million people. Full-service payroll companies account for 60 percent of the total number of businesses in this industry.

Overall, payroll and bookkeeping businesses generated $74 billion in revenue last year, up 5.4 percent over the past five years. To industry generated 9.1 billion in profit.

“As the number of businesses in the United States has grown each year over the past five years, the industry’s consumer base has grown and corporate profit expansion has given more businesses the resources to afford outsourcing their payroll,” the report’s authors wrote.” Over the five years to 2022, revenue is forecast to continue to increase, though at a slower rate compared with the previous five-year period as employment stabilizes, and companies in the industry are expected to attract customers to new cloud-based products and services.”

The report shows that of the businesses in the U.S. using payroll services, the most prominent are technology-producing companies, healthcare providers and manufacturing institutions. Those three types of companies alone account for more than 40 percent of the total organizations using payroll services.

“Operators in these industries are often highly specialized and prefer to outsource human resources such as payroll and bookkeeping services to focus on their core, profit-generating business functions,” the study’s authors wrote.

Reviews

Looking for a detailed breakdown of the more than 20 services we researched and analyzed? Download our comparison guide that offers details on each service, including its cost, features and customer service options.

Cost

While pricing varies from provider to provider, the cost structure most payroll services use is similar. Most services charge a base fee, plus a per employee charge.