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The Top 3 Advantages of Online Payroll


Online payroll is one of the hottest topics in HR and accounting today. Reliable, on-time payroll is the cornerstone of a successful operation, especially when you're running a small business. Your employees and independent contractors rely on being paid timely. But handling your company's payroll administration — from cutting checks to overseeing tax filings — can be a time-consuming process. Accuracy and efficiency are essential. But it's also important to minimize the time you're spending on administrative tasks so you can focus your time on running your business. More firms than ever before are considering the advantages of processing their payroll online. What should you look for in an online payroll system and what are the key benefits to this approach?

Streamlined, Secure Interface

One of the most important aspects of an online payroll solution is a streamlined, secure interface. Processing payroll requires handling sensitive financial data on behalf of your company and employees, including social security numbers and employer identification information. Security is a paramount concern. As a result, today's digital payroll solutions should be both highly secure and easy to use.

Online payroll systems allow you to set up individual profiles for your staff and then store their payroll information. Information should be able to be recalled with a few clicks each time you're ready to process payroll. Whether you're paying salaried employees, hourly workers, or independent contractors, it's possible to manage their payments within a single interface, and even automate steps such as direct deposit. Your HR manager or accountant will be able to login, view, and approve your regular payroll in just a couple of steps, reducing the administrative burdens while ensuring that everyone gets paid on time.

Ease of Managing Taxes

Managing your company's payroll taxes in a timely, accurate fashion is important to help you avoid IRS audits and expensive tax penalties. But in today's constantly changing legal environment, that's no easy task. A Web-based payroll system can help you meet the latest tax requirements. Online payroll software will automatically calculate and withhold the necessary taxes from each employee as well as your employer-level liabilities.

On a quarterly or annual basis, the system helps you pay local, state, and federal taxes and file tax returns timely, streamlining administrative tasks. Online systems also make it easy to create and provide staff-related tax documentation, such as Forms W-2 and 1099, to your team.

Simple Financial Reporting

Businesses rely on regular financial reporting to predict cash flow and make accurate decisions with regard to budget planning. An online payroll system can make it simple to integrate payroll data with other financial reporting information. Most systems automatically import your payroll data to popular financial accounting software packages. It's possible to view your payroll information collectively or for individual employees. Up-to-the minute reports can be easily shared with your accountant, HR leaders, or executive management and accessed anywhere you have an Internet connection. This level of useful, self-service reporting helps make financial planning and management a breeze.


This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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