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If you’re searching for a payroll software provider for your small business, you’ve probably heard of ADP payroll — according to the company, it pays about 40 million (one out of six) U.S. workers.
But ADP is not just one of the biggest payroll software companies — it’s one of the most robust. It offers payroll plans targeted at small businesses (one to 49 employees) and what it labels as midsized and enterprise companies (50 to 1,000-plus employees). It also offers add-ons if you’re looking for human resources help.
Where ADP differs from many payroll services is that it can also handle more complex needs, including retirement plans, insurance, compliance checks, wage garnishment, background checks and employee onboarding. ADP can be a good choice if your business is growing and you want a payroll company that can grow with you.
What is ADP payroll and why is it so popular?
Forty percent of small business owners said bookkeeping and taxes are the worst part of owning a business, according to a 2015 SCORE survey. A lot of entrepreneurs don’t want to handle payroll personally.
So what is ADP? ADP payroll services automate many of the tedious and time-consuming payroll tasks, including sending W-2 and 1099 forms.
The company’s cloud-based software can calculate payroll and payroll taxes, then pay your employees. This could save your business time and money and prevent you from having to keep up with the latest tax rules and regulations. That’s especially important, since making a payroll mistake can be costly, in terms of IRS fines and employee mistrust.
If you’re looking for a payroll software that can handle growing pains — recruiting, time tracking and more — ADP could be right for you. And if you’re data-driven, you can run reports such as payroll summaries and timecard comparisons.
Advantages of ADP payroll
- Cloud coverage: You can manage your payroll and HR needs by logging on to ADP’s website or using its app. Employees can also use the app to manage and view their information.
- Scalable: ADP offers four plans for businesses with fewer than 50 employees, and its offerings get more complex as your business grows. For example, once you hit 50 employees, the mark at which Affordable Care Act provisions kick in, it can provide ACA guidance.
- HR expansion: Do you need help setting up a retirement plan for your employees? Or maybe assistance with employee onboarding? ADP offers expansive HR services, as well as HR outsourcing or professional employer organization (PEO) services.
Disadvantages of ADP payroll
- Charge per payroll: Some payroll processing companies, like Gusto or QuickBooks, charge per month. ADP, however, charges you each time payroll is processed — this means the more often you pay your employees, the more you’ll pay ADP. The company does not provide pricing on its website unless you ask for a quote, so it’s best to contact ADP and research your options before making a decision.
- Bells and whistles: If you only need basic payroll services and you don’t expect your company to grow, it makes sense to also look at other options.
- Complaints: The Better Business Bureau has closed more than 260 complaints against ADP in the past three years. These ADP reviews range from claims that the company is understaffed to issues with tax withholdings.
Notable features of ADP payroll services
It’s important to note that not all features are available with each plan, so you’ll have to check with ADP on the best plan for you:
- Simple forms: Businesses with one to 49 employees can get started in four steps.
- Payroll taxes: ADP automatically handles appropriate forms for local, state and federal taxes, and responds to taxing agencies if there are any questions about deposits or returns.
- Accounting software integration: ADP works with most major accounting solutions, including QuickBooks, Wave and Xero.
- Retirement plans: It offers 401(k) and SIMPLE IRA plans.
- 24/7 customer service
- Compliance updates: You can get alerts about law changes that may affect your company, as well as access to a health care reform page that reports health care law changes.
Comparing ADP payroll services with other companies
Gusto vs. ADP payroll
- Gusto is more transparent about pricing. It provides specific costs, while you need to get a quote from ADP.
- Gusto charges per month, while ADP charges per payroll period. So there is no extra charge if you pay your employees more than once a month.
- Gusto can be good for small businesses, but ADP is more equipped to handle larger businesses, in addition to smaller ones.
- Gusto doesn’t offer customer service on weekends, while ADP is available 24/7.
Paychex vs. ADP payroll
- You’ll receive $1,000 worth of marketing services to help promote your business on sites such as Google, Facebook and Yelp.
- Paychex will put your pay on a pay card even on its lowest plan. With ADP, you need to have at least its Enhanced plan to do this.
- You can’t link your payroll data to accounting software (like QuickBooks and Sage Intacct), unless you pay for one of the higher plans.
- ADP offers robust reporting starting with its lowest plan, while analytics and reporting isn’t offered in Paychex’s two lowest plans.
QuickBooks Payroll vs. ADP payroll
- QuickBooks Payroll can be set up in about an hour.
- It is transparent online with its pricing. As we’ve mentioned, you need to get a quote from ADP to learn its pricing.
- You need to pay the full-service payroll price to have payroll taxes done for you. ADP does this on all four of its plans for small businesses.
- Customer support is not available 24/7.
If you want to take some of the hassle of payroll off your hands and are interested in some help with HR duties, too, ADP payroll could be worth a look.
How can I contact ADP payroll?
If you'd like to reach ADP customer service, call 1-844-227-5237. Administrators in charge of ADP payroll services for their company should press "2" when prompted. Other employees should press "1".
How much does ADP cost per employee?
In order to get an exact quote, you'll need to contact ADP directly. Prices will vary by company depending on a number of factors including the size of your business, what services you'd like to use, etc. Payroll prices are also typically broken down by a base monthly cost plus an additional cost per employee. Typical pricing is anywhere from $25 - $100 base cost plus $2 - $5 per employee.
Can I do payroll myself?
Payroll services can be complex and grow in complexity as the number of employees grows. The answer to this question will depend on how much time you want to dedicate to solely operating payroll versus spending time on other aspects of the business.