16 Best Accounting Software With Payroll For Small Businesses Reviewed In 2025

Much of this activity can be automated when a computerized timeclock is used. Have new employees fill out payroll-specific information as part of the hiring process, such as the W-4 form and medical insurance forms that may require payroll deductions. Set aside copies of this information in order to include it in the next payroll. An employee has a normal hourly pay rate, if for a particular period of time the employee is on time and a half pay, then for the hours worked during that period, the normal rate is multiplied by one and a half.

Automated timesheets makes processing payroll a breeze

Many organizations also leverage advanced payroll software to automate calculations and streamline compliance reporting, reducing the risk of errors. Some states impose additional income taxes or require specific contributions, such as California’s Disability Insurance (DI) contributions, which in 2023 are 1.1% on wages up to $153,164. Accurate calculation of employee deductions is critical for compliance and employee satisfaction. Payroll professionals must interpret legislative changes, as these can significantly impact deduction calculations. Updates to the Internal Revenue Code (IRC), for instance, can alter tax withholding tables and thresholds, requiring adjustments in payroll systems.

PTO, overtime, and absence management

Kashoo provides a straightforward interface and automated features that simplify financial management for small businesses. ZipBooks simplifies accounting and payroll with its user-friendly interface, extensive capabilities, and efficiency in managing financial operations. Voluntary deductions, such as contributions to retirement accounts and Health Savings Accounts (HSAs), are governed by regulatory guidelines. For example, HSA contributions are capped at $3,850 for individuals and $7,750 for families in 2023. A nongovernment group of seven members assisted by a large research staff which is responsible for the setting of accounting standards, rules, and principles for financial reporting by U.S. entities.

What is a payroll report?

The amount in the Insurance Expense account should report the amount of insurance expense expiring during the period indicated in the heading petty cash of the income statement. For example, if salaried personnel are paid on the 15th and the last day of the month, we would say they are paid semimonthly. (People paid every two weeks – such as every other Thursday – are said to be paid biweekly and will receive 26 paychecks during the year). Liabilities also include amounts received in advance for a future sale or for a future service to be performed.

• Accurate calculation of employee deductions is critical for compliance and employee satisfaction.
• There are four salaried employees in the Selling & Administrative Department with combined salaries of $9,000 per pay period.
• Many businesses also use payroll summary reports to verify payroll accuracy before releasing paychecks.
• This means the company must report on its income statement the hourly wages and other payroll expenses that the company incurred (and the employees earned) through December 31.
• Whether or not employees are paid for overtime depends on each employee’s job responsibilities and rate of pay not the employee’s job title.
• The Federal Unemployment Tax Act (FUTA) requires employers to pay this tax.
• Hence, an independent contractor is not an employee, sole proprietor of the business, or business partner.

Connecteam is a great option because it’s affordable for small businesses and easy Retail Accounting to use. The app totals up everyone’s hours and owed wages, and then you can export it to a payroll processing software for easy and accurate payments. Integrated time-tracking and attendance features accurately record employee work hours, reducing errors common with manual entry.

Finally, I looked for these additional features:

The remittance advices may be sent by email or printed and handed out manually. Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He payroll accounting has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries.