Tracking employee tax records, controlling direct deposits, complying with regulations for internal recordkeeping – it’s enough to make your head spin. For big companies, the solution is not that simple either: hire business analysts, install an expensive on-premise payroll system, and cross your fingers that employees will get paid. Thankfully, there are now online payroll systems that cut through the mire – and they’re much cheaper and much easier to use.

“The advantage for using online payroll is that it saves on the maintenance as there is an assurance that the technology is compliant with federal and local regulations,” says George Ozenne, a technology and outsourcing consultant with Mercer. “They also tend to be quicker to deploy in an organisation, especially if it needs a new system because the existing one is outdated. In other cases, you might have a company that is spinning off a division or has a division in a foreign country.”

CERIDIAN

Ceridian has the best global presence, providing service in just about every major country in Europe, Asia-Pacific, and the Americas. Tools go beyond simple transactions, venturing into areas such as local customs and cultural norms related to payroll. Is it acceptable to send employees in Switzerland a direct deposit stub? Will local managers balk at the idea of distributing cheques (still preferred in some US firms)?

Ceridian provides guidelines for those issues through a slick online interface. The service also provides multi-country support in the same product, so if you have a global HQ and worldwide branch offices, this is your best option. Reports can even be scaled by country or continent so you can compare the payroll for Brazil with an office in the US.

“Ceridian has been around for a long time,” says Jason Nott, an HR and payroll technology analyst for Deloitte. “What isn’t easy is understanding localised HR work. In France the HR system has to track labour or training credits per employee; in Quebec the system has to handle taxation treatments for employer benefits that are different from Alberta. Ceridian’s speciality is payroll, but for HR it is not a mature product.”

ADP

ADP is the 900lb gorilla of the online payroll market, providing a well-rounded suite of products for payroll management, electronic payments, and HR services that let your accounting department breathe easier when it comes to handling even complex taxation and employee benefit issues. For example, the software suite provides “pre-employment” options that help track candidates.”ADP was owned by a bank providing a service to customers for payroll and was eventually sold off,” says Nott. “ADP has been in the HR space longer than Ceridian, and although it would fall at the lower end of the spectrum compared to Oracle or Lawson, and is traditionally viewed as an online payroll provider, some use it for talent management and HR. It has made up a lot of ground in that respect.”

Nott says for companies with 3,000 employees or less, ADP is a good choice. For larger firms, there may be cost issues to integrate ADP into existing Enterprise Resource Planning (ERP) systems.

WORKDAY

Started by Aneel Bhusri, former CEO and chief strategist at PeopleSoft, Workday has the look and feel of a more expensive ERP product from a larger company. You can set up reports to view gross-to-net payroll models or see actual pay for employees minus benefits, and export the data as a Excel doc or PDF file for easy distribution.

“Workday is winning some key accounts,” says Nott. “They offer a lower cost model but some of the same functionality of a tier one product, and you do not have to host it locally. They are gaining traction. You would not know from a demo that this is that different from Oracle or SAP; they are quite competitive; and you do not need to hire a team of business and technical analysts.”

PAYMENT EVOLUTION

Currently available only in Canada, Payment Evolution is free to use for small companies to manage payroll and direct deposits. As a company grows, users can tap into a wealth of services – choosing whether to send an electronic pay stub, how records are maintained and for how long, and options for managing timesheets. The services costs $18 (€14) per month for a firm with more than six employees, but there are no added fees for transactions per employee or per management task.

“Payment Evolution’s strategy is going after the bottom part of the market, which is the holy grail,” says Nott. “They have an extremely low-cost model, marketing it to accounting firms who used to provide payroll. On top of that, they built a service that had financial planning tools embedded in the employee tax contributions. They also provide for employers looking at different ways of paying employees, such as a debit card, to lower the overall costs.”

PROPAYROLL

ProPayroll is a US-based system that touts the idea of “paperless payroll” where all payroll management, electronic pay stubs, and direct deposits are handled online. The service has the most clean-cut interface and like many online systems, ProPayroll offers HR support so any accounting department can request help on complex matters, such as a severance payout of deposits for foreign branches.

“Online payroll has taken out the calling and distraction of running payroll,” says Meredith Murdock Cheshire, president of US clinic Mulberry Medicine. “My payroll processing time has been cut down by more than half. If an employee wants to change their tax status or health insurance benefits hit, I can do it all online without having to call or email the company.”