Human Resources

Payroll can be confusing for everyone, but especially for small business owners that are new to it. It’s important that you understand these terms and acronyms to be confident that you’re processing payroll for your employees accurately. Understanding these terms can help make the payroll process far less stressful and can also help you avoid making potentially costly mistakes. Here are the top 25 payroll terms we think you should know before running payroll: 1. Accrue This means to build up or accumulate over time. In payroll processing, accruals can happen a few different ways. Payroll accruals are funds owed to workers for hours they previously worked but haven’t yet been compensated for. Accruals also often happen as part of an employee benefits package. Many employers offer paid vacation, sick, and personal time, which is often earned on an accrual basis. This means that a certain amount of time off is earned per pay period. 2. ACH (Automatic Clearing House) ACH is an acronym for automated clearing house. An ACH is a computer-based electronic network for processing transactions. These transfers often include payroll direct deposits. 3. Compensation Compensation is a broad term that refers to all benefits that a company provides to their employee. Some common types of compensation can include: Regular salary or hourly wages Bonuses Transportation Benefits Stock Options Tip Income 4. Deductions Deductions are funds taken from an employee's paycheck. They are voluntary amounts that the employee elects to have taken from their pay (health insurance premiums, retirement plan contributions, etc.). These items can be considered pre-tax or post-tax, depending on the nature of the deduction. 5. Disposable Income Disposable income refers to the leftover wages after all taxes and deductions have been taken from an employee's paycheck. This amount is then used to determine the level of pay subject to garnishment or child support withholding. 6. EFTPS (Electronic Federal Tax Payment System) EFTPS stands for the Electronic Federal Tax Payment System, which is a free system offered by the U.S. Department of Treasury to pay your federal taxes. 7. Employee Employee sounds straightforward, but we do need to clarify. Employees are workers that are formally hired to fulfill a specific position within a company. They should not be confused with independent contractors, which we will cover below. Employers pay a reasonable wage and may offer benefits, especially if employees work at least 40 hours weekly; you must also pay and withhold taxes on employee earnings. In exchange, these employees must abide by company rules such as when and how to work. 8. Employer Identification Number (EIN) The EIN is a unique nine-digit number assigned to all employers that submit an IRS EIN application; it helps identify businesses as they file taxes, apply for business loans, and open business bank accounts. In summary, it’s like a Social Security number for businesses and is required for any business processing payroll. 9. Exempt Employees Exempt is a classification that employers typically assign to employees who are paid on a salary basis versus hourly (although in some circumstances, hourly workers can be exempt). Exempt employees are paid overtime for any excess hours they work over 40 in a week. 10. Fair Labor Standards Act (FLSA) You’ll hear this thrown around quite a bit and also referred to as FLSA. This is the federal act that consists of numerous laws meant to assure that employees are treated well and paid fairly. The federal minimum wage and overtime rules fall under this act as do recordkeeping rules and child labor laws. 11. Federal Insurance Contribution Act (FICA) Taxes FICA taxes are Social Security and Medicare taxes that the federal government charges on each employee’s earnings. Employers must reduce employee paychecks by 7.65% (6.2% for Social Security + 1.45% for Medicare), and pay the money to the IRS; they also have to pay that same amount from their business funds. Additionally, they must withhold an additional 0.9% for Medicare on any employee earnings that exceed $200,000 in the year ($250,000 for couples married and filing jointly). For Social Security, the maximum amount that can be taxed is $160,200 per year. 12. Fringe Benefits Fringe benefits are additions to compensation that can be offered to employees. Some employers choose to offer these benefits universally to all employees, while others award them to high-level employees as an additional incentive. Some fringe benefits are taxable, and others aren’t. Fringe benefits include: Subsidized health insurance plans Gym memberships Tuition assistance programs Commuting benefits 13. Federal Unemployment Tax Act (FUTA) The Federal Unemployment Tax Act (FUTA) tax is a payroll tax that employers are required to pay to the federal government to help fund unemployment benefits. The tax is 6% of the first $7,000 that an employee earns; however, most businesses do not pay the full 6%. Businesses are able to qualify for a 5.4% FUTA credit reduction after paying their state unemployment taxes, bringing the FUTA tax rate down to 0.6%. 14. Garnishment Garnishments are court orders directing employers to withhold a certain amount from an employee’s paycheck to pay an outstanding debt. Employers are responsible for withholding and sending the money as directed on the garnishment notice; in addition, the notice will sometimes have an ending date that business owners can reference before stopping the collection process. It’s imperative to act quickly after receiving a notice because employers can be held liable. 15. Gross Pay Gross pay is the amount of an employee’s paycheck before payroll deductions are withheld. For hourly employees, this is their hourly rate multiplied by the number of hours they’re being paid for the period—plus any overtime, bonuses, and additional pay. For salaried employees, gross pay is usually the same each pay day; it’s their annual salary divided by the number of pay periods in the year. 16. Independent Contractor Independent contractors are workers who are hired to perform a specific job or project. They’re not employees, so they aren’t protected by federal labor laws or the federal government’s minimum wage requirement. In turn, employers don’t pay payroll taxes on their earnings; instead, they complete a 1099-NEC form for all contractors they paid over $600. It’s important not to confuse contractors and employees. Unlike employees, employers aren’t allowed to dictate how or when contractors complete their work. 17. Minimum Wage Minimum wage is the lowest hourly pay rate you’re legally allowed to pay an employee. Per the Department of Labor (DOL), the federal minimum wage rate is currently $7.25 an hour, but state rates vary. There are exceptions, such as for minors and interns. Tipped employees are another group you’ll find the law makes exceptions for. Federal tipped minimum wage is $2.13 an hour, but employers must ensure that employee tips make up for the differential. 18. Net Pay Net pay is the final amount you pay your employees for their work, after all deductions have been made. 19. New Hire Reporting New hire reporting is a process employers undergo to report new hires to their state. Federal law requires that all new hires be reported within 20 days of their hire date, but some states are stricter (Alabama requires seven days). All information is stored in the National Directory of New Hires and helps child support agencies locate parents who owe money. Before you can begin reporting, you must register under your state’s New Hire Reporting Program. 20. Overtime (OT) Pay Overtime pay is the additional hourly money you pay an employee in excess of their regular pay rate, usually for time worked over 40 hours in a seven-day period. Per federal law, these hours are paid at 1.5 times the employee’s regular hourly pay rate. California law, however, requires double-time pay for all hours worked over 12 in a day and for all hours worked over eight on an employee’s seventh consecutive day of work. Need help calculating overtime for your employees? Use our calculator to help: 21. Paid Time Off (PTO) Paid time off is time your employees don’t spend working but still earn a paycheck (at their regular pay rate). It consists of any paid leave, i.e., vacation or sick time and even jury duty and holidays. Federal law doesn’t have strict guidelines or requirements regarding PTO; you choose whether you want to offer paid vacation time or not. State laws, however, differ; for instance, California requires employers to provide at least 24 hours (three days) of paid sick leave each year. 22. Pay Periods A pay period is the time frame of work for which you’re paying an employee. If you pay every other Friday, the pay period could be from the prior two weeks, with the last day being on the Friday that’s also payday. Some employers prefer to push the pay period back a week, meaning the current week is always paid on the next paycheck; this gives them time to process payroll without having to predict work hours. 23. State Unemployment Tax Act (SUTA) taxes The State Unemployment Tax Act (SUTA) tax is a payroll tax that states require employers to pay in order to provide unemployment benefits. Each state sets its own SUTA tax wage base, which is the maximum amount of an employee's income that can be taxed. In addition to the wage base, each state then establishes the rates, which can vary anywhere from 0.5% to 7% depending on the state. Rates are determined based on a few different factors, and often many states give new employers a standard rate. 24. Shift Differential A shift differential is a premium amount that you can pay employees who work outside of normal business hours. For some companies, this is the overnight shift and weekends. The additional pay is usually calculated as a percentage of the employee’s pay rate, like 30% extra, or a flat dollar amount, like an extra $3 per hour. 25. W-2 Form The W-2 Form is a tax document that reports all employee earnings in addition to taxes and deductions withheld. Employers must send this document to all employees by Jan. 31 following the year that’s being reported. A copy should also be sent to the IRS and state tax agency, if applicable. The information provided helps employees complete their tax returns with accurate information. Bottom Line Understanding basic payroll terminology is essential to processing payroll successfully. You don’t have to be an expert to know that both you and your employees pay FICA taxes or that all W-2s should be mailed by Jan. 31. By implementing payroll terms into your vocabulary, you make it easier to digest related laws and concepts.

is an online system designed to automate employee salary and tax deduction calculations. Its features include unlimited pay runs, contractor payments, an employee portal, and free access to expert support and payroll setup. Its basic and full-service payroll options―which cost $17 and $37 per month, respectively, plus $4 per employee―make it ideal for small nonprofits and mom-and-pop businesses looking for an affordable solution. In our evaluation of the best payroll software for small business users, Patriot Payroll earned an overall score of 3.69 out of 5. Patriot Payroll Deciding Factors Are you looking for something different? Read our guide to the best payroll services for small businesses to find a service or software that fits your requirements. Top Patriot Payroll Alternatives Patriot Payroll pricing includes a full-service payroll package and a basic payroll option with DIY tax filings. All plans also come with unlimited payroll runs, paid time off (PTO) accruals, electronic Form W-2s, and free direct deposits. You can even use its basic and full-service options to pay contractors. These features contributed to Patriot Payroll scoring perfect marks for pricing. It also doesn’t charge setup fees, even providing free setup assistance to new clients. Pricing is fully transparent, with payroll plans that don’t cost more than $50 per employee monthly. For its full-service payroll package, you only need to shell out $37 plus $4 per employee, monthly (or $17 plus $4 per employee monthly for its basic option). *Patriot will still charge you its base monthly fees for months you don’t run payroll. Patriot Payroll Add-ons What’s great about Patriot Payroll’s pricing scheme is the flexibility—you can purchase HR and time tracking tools, as well as 1099 filing services in case you only signed up for its basic option. Note, however, that its time tracking and basic HR solutions are add-on modules to Patriot Payroll and can’t be used as standalone systems. If you need accounting tools, Patriot has accounting software that integrates seamlessly with its payroll module. Premium support services are also available if you need assistance handling amended tax returns, payroll tax filing for past or future quarters, and making data corrections or adjustments: 1099 e-filings (for Basic Payroll subscribers only): $20 for up to five 1099 e-filings; an additional $2 per 1099 is required for six to 35 filings (no additional charge for 36 or more) Multistate payroll tax filing: $12 monthly for each additional state Time tracking: $6 plus $2 per employee monthly Basic HR/employee data management tools: $6 plus $2 per employee monthly Accounting solution: $20 monthly for the basic option; $30 monthly for the premium version Premium support services Deposit and file taxes for past or future quarters: $37 for each past or future month Amended tax returns for quarters where Patriot’s full-service payroll was active: $100 per quarter for Q1, Q2, and Q3; $150 per quarter for Q4 Payroll or accounting data corrections or adjustments: Custom-priced, depending on complexity Patriot Payroll’s online tools aim to help SMBs process employee salaries easily and quickly. In addition to having an intuitive interface, its software is mobile-friendly. This allows you to run payroll directly from smartphones and tablets without having to download an app—provided there’s an available internet connection. While this provider offers solid payroll tools, it didn’t get a perfect rating in this criterion. What pulled its scores down are the limited payment options and two-day direct deposits that are only available for qualified companies (those that don’t qualify get four-day direct deposits). Compared to Gusto and Rippling, which both have feature-rich platforms, the HR solutions you get with Patriot Payroll are limited. It lacks HR advisory services, employee benefits plans, and state new hire reporting (it only generates the report). These factors prevented Patriot from getting a high score in this criterion. While it offers time tracking and basic HR tools for managing employee information and documents, these modules cost extra. This is unlike similar payroll systems that provide these functionalities in this starter plan. With Patriot Payroll, you can access a wide selection of reports to check payroll tax computations, direct deposit payment details, employee information, and more. Here are some of its reports: Payroll register Payroll tax deposit report Payroll tax filing report Individual paycheck history Paycheck/deposit payment report PTO balances Assigned deductions report Payroll tax liabilities report W-2 summary report If you purchase Patriot’s HR and time tracking modules, you are granted access to reports showing your employees’ attendance, contact information, birthdates, retirement contributions, service anniversaries, and more. Accounting-related reports will also be made available to you if you get Patriot Accounting. In addition, tax reports like W-2s are easy to generate via its system, allowing you to post the tax forms quickly to your employees’ online portals. Patriot Payroll will also alert you whenever corrections need to be made. This prevents tax filing errors and helps you save time from having to redo incomplete and incorrect forms. The provider didn’t get a perfect rating in this criterion because of its limited third-party integrations and customization options. However, Patriot Payroll is relatively easy to learn and use. Its online help center and FAQs also contain a wide range of how-to articles—some even come with video guides. Intuitive dashboard Mobile responsive platform Free and easy payroll setup Frequently asked questions (FAQs) and how-to guides Expert US-based support with extended weekday hours Setting up its system is a breeze. Apart from an easy-to-follow DIY payroll setup wizard, Patriot’s representatives will walk new users through the setup process for free. Even if you subscribe to Patriot Payroll in the middle of the month or quarter, the provider can still help input your staff’s payroll history for you. If you want to handle payroll setup yourself, Patriot has a setup wizard. The process isn’t difficult, plus you can opt to skip some of the steps and go back as needed. You can check out our guide on setting up and running payroll with Patriot, which includes a video walk-through. Aside from its user-friendly platform, what I also appreciate about Patriot Payroll is its mobile-friendly interface. This enables you to access the software from any tablet and smartphone device—provided an internet connection is available. Its payroll dashboard even contains helpful links for running payroll, adding new employees, creating W-2 forms, and processing contractor payments. If you need support, live expert help is available for all Patriot users at no extra cost. It has a US-based team you can contact via chat, email, and phone, from Mondays to Fridays, from 9 a.m. to 7 p.m. Eastern time. For those who use third-party business software, note that Patriot Payroll has limited integration options. As of this writing, it integrates only with QuickBooks Time (formerly TSheets) and QuickBooks (both online and desktop versions). Patriot Payroll is great for business owners looking for a solid payroll solution with plans and add-on modules that are reasonably priced. For $37 plus $4 per employee monthly, you can run unlimited payroll without having to worry about tax filings and payroll compliance. However, its HR functionalities are basic. You would need to invest in separate systems if you want additional features, such as job postings, applicant tracking, and staff scheduling. Many of the Patriot Payroll reviews online are positive. Users who left feedback on third-party review sites like G2 and Capterra highlighted its affordability, easy setup process, efficient payroll tools, and user-friendly interface as its best features. They also complemented its support team, citing the helpfulness of its customer representatives. On the other hand, some reviewers said that while it has made payroll processing an easier task for them, they wished the provider offered more integration options and a mobile app. A few users also complained about having experienced software glitches from time to time. At the time of publication, Patriot Payroll software reviews earned the following scores on these sites: Capterra: 4.8 out of 5 based on more than 3,100 reviews G2: 4.8 out of 5 based on 450-plus reviews Methodology: How We Evaluated Patriot Payroll For this Patriot payroll review article, we looked at the payroll features that the provider offers and whether it has the essential HR functionalities that SMBs need. We also considered whether it provides access to third-party integrations, employee benefits plans, and HR advisory services. In addition to ease of use and pricing transparency, we checked the feedback that users posted on popular review sites. Click through the tabs below for our full evaluation criteria: Bottom Line Patriot Payroll is an ideal choice for small business owners looking for an inexpensive way to process employee salaries. It has a low-cost DIY option and full-service payroll packages that are reasonably priced. Plus, you get a lot of freebies that include direct deposits, payroll setup, expert support, and an online employee portal. Sign up for Patriot Payroll’s 30-day free trial—no credit card required.

offers human resources (HR) solutions and services for managing international payroll, taxes, benefits, and compliance for all business sizes. Benefits packages tailored to specific countries are also available, plus its employer of record (EoR) services allow Remote to handle your payroll and hiring needs in countries where you don’t have business entities. It also offers low-cost contractor payroll and management tools. In our review of the best international payroll services, Remote earned an overall score of 4.36 out of 5. Remote Deciding Factors Are you looking for something different? If you only want online tools to pay US-based employees, check out our list of the best payroll services. If you need help deciding which payroll software to get, read our guide to finding the right payroll solution. Top Remote Alternatives In our evaluation of Remote’s pricing, the provider earned a nearly perfect score for this criterion given its multiple plans, reasonable fees, and separate payroll option for global contractors. While it doesn’t charge setup or client onboarding fees, its pricing details aren’t all available on its website. This cost Remote a few points in pricing transparency. Remote has an inexpensive Contractor Management solution for onboarding and paying international contractors. It also offers a Global Payroll module (custom-priced) and an EoR option with hiring, payroll, benefits, and compliance functionalities. Those fees range from $599 or $699 per employee monthly, depending on whether you select an annual or monthly plan. For those needing customized solutions, its Remote Enterprise package is a great option as it has all of its HR and payroll features plus custom reports and system integrations, dedicated support, and quarterly consultations with its team of HR, tax, benefits, legal, and immigration experts. *Contractors may be charged 1% to 2% of their payment if they require currency conversions via Remote’s payment partner. **Remote also offers an annual-billed option that costs $599 per employee monthly (paid in a lump sum). **Consists of HR, legal, benefits, tax, and immigration professionals. Remote’s prices are the management fee only and are on top of the total cost of employment for your employee, which includes their wages and any government-required additions like Social Security, as well as the price of benefits packages. Remote offers competitive rates on benefits with no additional administration costs. Companies with global distributed teams will find Remote’s payroll solutions and services helpful and convenient to use. It scored high in this criterion (4.13 out of 5) because of its solid pay processing tools, payroll compliance support, the wide coverage of its payroll services (more than 100 countries), and for having local entities in the countries it services. However, the lack of built-in time tracking tools cost this provider some points. Remote earned a perfect rating for HR functionalities given its online onboarding solutions, localized employee benefits plans, and international HR compliance tools. It handles your essential global HR needs—from managing paid time off (PTO) and local employment taxes to ensuring you stay compliant with the statutory benefits requirements and tax regulations. As an EoR, Remote can help find and hire qualified candidates for you in countries where it has local entities. This is another criterion where Remote received a perfect score in our evaluation. Basic payroll and tax reports are available and you can easily download these into CSV files. Apart from contractor invoices, Remote can generate expense reports for specific workers or all employees. Plus, hiring and onboarding tasks are made easy with its customizable employment contract templates that comply with country labor laws and regulations. Remote’s relatively user-friendly platform, good customer support, and helpful online guides contributed to this provider’s high score in this criterion. It lost points because it doesn’t offer live phone assistance and you have to upgrade to its Enterprise to get dedicated support. User-friendly interface Dedicated onboarding specialist for each new hire Legal compliance tools Fully owned local entities in dozens of countries Access to dedicated support team (for the Remote Enterprise option) 24/5 email support Online guides and how-to articles Customizable and localized contractor contracts Remote takes the stress away from hiring, onboarding, and paying both international employees and contractors. Unlike similar global payroll and EoR service providers that have third-party partners in the countries that it services, Remote fully owns the local legal entities in the countries where it handles employees, so you’re assured of getting solid HR/payroll services and comprehensive IP protection. It assigns each of your new hires a dedicated onboarding specialist who can answer their contract and/or onboarding-related questions. Its interface is also simple to learn and use, with built-in legal compliance tools that include localized contractor contracts that you can easily customize. While it lacks phone support, it offers 24/5 assistance via email and access to a dedicated support team—provided you’re on its Remote Enterprise plan. Its online help center is also full of how-to guides that cover a wide range of topics—from new hire onboarding to payroll and contractor management. Remote even integrates with third-party software, such as Stripe, Greenhouse, BambooHR, and AngelList Talent. With its application programming interface (API) tool, you can integrate its platform with popular HR, benefits, legal, applicant tracking, and payroll systems. In our expert assessment of Remote’s overall pricing, features, and software intuitiveness, this provider only earned a 3.75 out of 5 score. Remote may offer essential tools and services to manage global payments efficiently for both employees and contractors, but its suite of HR solutions doesn’t have the additional tools that similar providers like Rippling offer, which has a feature-rich HR, payroll, expense management, and information technology (IT) platform in addition to EoR and PEO services. Its contractor payroll plan—while reasonably priced at $29 per worker monthly, also isn’t as affordable as some of its competitors. For example, Rippling and Papaya Global’s global contractor plans only cost $20 and $25 per worker monthly, respectively. Many of the Remote company reviews on third-party sites like G2, Capterra, and Trustpilot generally are positive. In our evaluation of Remote’s popularity among users, this provider earned a 2.5 out of 5 rating mainly because its average user reviews didn’t reach 1,000. Users who work in HR or run the company said that it has a straightforward interface with tools that are easy to learn. They also commended its helpful and responsive support team. A few reviewers complained about the lack of chat support, alerts to show onboarding progress, and per-region payment details that are easily accessible on its platform. Employees had more complaints, which included difficulties with onboarding that resulted in working without benefits or having to sign a contract with unanswered questions. A few said their dedicated support person disappeared (possibly on vacation) and no one was able to help them. Most did say that the interface was easy to use, however. Complaints generally stemmed from contract questions or unusual requests. At the time of publication, Remote.com reviews earned the following user ratings: G2: 4.5 out of 5 based on almost 500 reviews Capterra: 4.8 out of 5 based on nearly 40 reviews Trustpilot: 4.5 out of 5 based on about 750 reviews Bottom Line Hiring and paying international employees can be challenging because each country has different labor regulations, statutory benefits, and local tax employment laws. Remote takes away the stress and burden of handling these complex HR, benefits, and payroll processes yourself. As an EoR, it can help you manage the entire employee lifecycle of your global staff while keeping you compliant with local laws and tax rulings in more than 170 countries. Sign up for a Remote plan today.

The best free payroll software for small business owners can calculate pay for hourly and salary workers, handle tax calculations and deductions, and print checks and pay stubs. Some of the systems even file taxes and offer direct deposits. We reviewed six free payroll services in this guide and narrowed them down to our top three recommendations. : Best overall free payroll software for small businesses and those looking for payroll with time tracking and scheduling solutions : Best for companies with 25 or fewer employees that want the option of add-on payroll tax filings : Best for startups needing a free multilingual platform with basic HR and payroll tools If you need a small business program for payroll with more functionality but aren’t ready to spend money, consider using affordable payroll software that comes with a free trial so you can make sure it’s worth it, risk-free. : 30-day free trial + solid payroll with multiple direct deposit and payment options : Three-month free trial + dedicated payroll support : 30-day free trial + affordably priced full-service payroll Top Free Payroll Software Compared Free Payroll Software Quiz TimeTrex: Best Overall Free Payroll Software for Small Business is our top-recommended free payroll software for a small business because it does more than Payroll4Free and HR.my. Aside from pay processing, it has time tracking, scheduling, paid time off (PTO) monitoring, and HR management solutions that you can access at no cost. You even get an online time clock that lets your employees clock in/out through web browsers. Scoring an overall rating of 4.28 out of 5, TimeTrex earned perfect marks in nearly all our criteria. It would have gotten a higher score if not for its limited employee payment options (only offers direct deposits and checks) and very basic payroll tax services. While it calculates federal, state, and local taxes, in addition to generating tax forms (like W-2s and 1099s), TimeTrex doesn’t remit and file taxes for you. However, users still appreciate its user-friendly platform that makes pay processing easy. If you need tax filing services, you may want to consider Payroll4Free.com, but it isn’t free—you have to pay $25 per month. TimeTrex Overview Payroll4Free: Best for Companies With 25 or Fewer Employees Wanting an Add-on Payroll Tax Filing Option is one of the best online payroll services that you can use for free—provided you have 25 or fewer employees. It calculates payroll and taxes, tracks PTO accruals, prints paychecks, and provides free direct deposits if you use your own bank. The software can also handle year-end tax reports (W-2s and 1099s), providing you with pre-formatted forms to send to the government. If you want Payroll4Free.com to file your tax forms, you can pay $25 per month for that function (the other two free providers on our list do not offer this option). In our evaluation, Payroll4Free earned a score of 3.6 out of 5. It would have ranked higher if it didn’t have a 25-employee limit (TimeTrex and HR.my can handle unlimited employees) and if it offered direct deposits and tax filings for free. Plus, its average user rating on third-party review sites (like G2 and Capterra) is below 4 as of this writing. Some users even said that its platform is unintuitive, often taking extra steps to complete what a paid program can do in a single click. They also don’t appreciate the ads that appear while using the tool. Payroll4Free Overview HR.my: Best for Startups Needing Multilingual Software With Basic HR & Payroll Tools is a free multilingual HR software that is crowdfunded. The company works with those interested in translating the software into additional languages. As of this writing, it has 66 language options—more than the free solutions we reviewed, including most paid payroll software. It has basic payroll and HR features (such as employee information management, time tracking, and expense claims) that you can use for free. Overall, it earned 3.45 out of 5 in our evaluation, with perfect marks in pricing and popularity. What pulled its score down is the lack of custom reporting and payroll tax filing services. It also doesn’t offer phone support or have a support team. If you need help with a feature, you can visit its community forum and access its online user guide, which is more of an FAQ page but with limited information. HR.my Overview Alternative Free Payroll Tools The three free payroll services that we recommend provide you with the essential pay processing tools you need. However, if you’re looking for a simple payroll calculator with check printing options, then consider Paycheck Manager. Not only does it compute employee pay, but it calculates taxes and overtime for free. A downside is that it can print only one paycheck at a time, so it’s only good for businesses with fewer than five employees. For those who are more comfortable using spreadsheets to handle basic payroll, ExcelPayroll.org is a great alternative. With its free Visual Basic for Applications (VBA) payroll program, you don’t need to manually input formulas to calculate pay. It’s already programmed with the essential formulas and payroll tools you need, plus it keeps numbers updated for the current tax year. We also have Excel templates for payroll that you can download for free. Check out our guide of free payroll templates, including tips on how to use them. Methodology: How We Evaluated the Best Free Payroll Software We started our research with six providers that offer free payroll services rather than merely free trials. Then, we examined the features and ease of use, focusing on paycheck processing and tax preparation. To view our full evaluation criteria, click through the tabs in the box below. Small Business Payroll Frequently Asked Questions (FAQs) Bottom Line Businesses that are on a tight budget or have limited payroll needs may find free payroll software as a way to save time and help prevent mistakes that can cost money and even legal problems. The free payroll services on our list offer online tools to make your pay processing tasks easier. Overall, we found TimeTrex to be the best free payroll software because of its wide range of useful features that include tax calculations, automatic pay runs, and free direct deposits. Its free version provides you with efficient payroll and HR tools, while its paid tiers offer even more HR functions. Sign up for a TimeTrex plan today.

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A behavioral interview is a conversation between a job candidate and an employer that focuses on past job-specific situations. Asking questions about previous behavior can help illuminate a candidate’s skills and predict how they might perform in your open role. This article provides free sample behavioral interview questions and answers by topic, guiding you on what to look for in an applicant’s answers. To help keep track of your applicants’ responses, download our free behavioral interview template. Teamwork Teamwork questions are asked to gauge how well the applicant works with others and will fit into the existing team and company culture. Depending on the role, the importance of teamwork in a specific job can vary. Poor answers show that the applicant does not try to work with others or resolve conflict diplomatically. Good answers show that the applicant has experience working in a group setting and would work well with your existing team members, as a leader or a collaborator. They also indicate that the candidate can work through conflict constructively and knows when to escalate issues to management or human resources. The very best answers exhibit a candidate’s willingness to work with a multitude of unique personalities, demonstrated success in working with a group, and a keen understanding of their strengths and weaknesses in a group setting. Client & Customer-facing Skills Client or customer-facing skills questions help you understand how the applicant will communicate with individuals who are expecting a service from them. For a salesperson, it would be the company’s client. For an operations staff member, it would be the company’s employees. You are looking for responses that show the applicant is aware of how their work affects others and the company as a whole. Good answers show that an applicant takes pride in their responses and communication, whereas poor answers indicate a disregard for how work is accomplished or how it’s communicated to clients and customers. Poor answers also reveal that an applicant only looks at how they are personally affected by what happens with a customer or client. Adaptability The importance of adaptability questions depends on the variability of your company. If your company is in constant change, the applicant’s ability to adapt to change will be vital to their success. Positive answers show they are able and willing to step up in a variety of different situations. Poor answers show they may be reluctant to learn new skills and techniques or voluntarily help others. However, poor answers may also reflect an inability to establish necessary boundaries with co-workers and seek help if their workload is unsustainable. Time Management Time management questions allow you to learn how an applicant prioritizes their work. You are looking to see if the applicant has a strategy that works for them and if that strategy can be replicated in this new position. You’re not looking to trip up candidates and give them unrealistic scenarios. Instead, look for strategies that show they know how to prioritize. Good answers show that the applicant is strategic about how they spend their time and can avoid distractions. Even better answers will show that they can identify distractions and prioritize tasks due to their understanding of the department or company’s goals. On the other hand, poor answers show that they struggle to meet deadlines and are dependent on their manager to keep them on task. Communication Questions about communication skills are designed to determine how an applicant interacts with others and provides information to them. This includes communication with managers, colleagues, and people the applicant may oversee. Good answers show that an applicant is aware of their communication preferences and how their communication is perceived by others and is willing to adapt if necessary. Poor answers reflect an inability or unwillingness to communicate effectively with others. Motivation & Values Motivation and values questions seek to give interviewers an understanding of what inspires the applicant to be the best version of themselves. This group of questions is especially important for jobs that have a robust career trajectory within the company. Great answers show that the applicant’s motivation and values mirror or complement the company’s mission, vision, and core values. Poor answers show apathy for success and failure questions, which could show a lack of motivation for professional growth. Not every applicant will show strong signs of motivation or growth. Don’t necessarily take this as a bad sign—some people truly love what they do, do it well, and have no desire to move up. Bottom Line Behavioral interviews can be a very important tool in evaluating an applicant’s future success in a job. Being intentional with what questions you ask and knowing what to look for in the applicant’s answers will go a long way toward ensuring positive hiring outcomes. For more help on sample interview questions, please see our guide on the best interview questions for employers.

is a free cloud-based HR management software. It has a multilingual platform and mobile apps (for iOS and Android devices) that provide basic HR functions, such as time and attendance tracking, leave monitoring, pay processing, and expense claim management. While HR.my is not as robust as other HR management software, it is a good choice for budget-conscious startups and small businesses looking for essential employee management and payroll tools. In our review of the best free payroll software, HR.my earned an overall score of 3.45 out of 5. HR.my Deciding Factors Top HR.my Alternatives If you’re looking for payroll software with more functionality but have a limited budget, consider using reasonably priced payroll systems that come with a free trial so you can evaluate whether they have the essential HR tools you need. Here are some of our recommendations. In our evaluation of HR.my’s pricing, this provider earned perfect marks given its free-forever plan that can handle an unlimited number of employees. The provider doesn’t collect software fees from users but relies on crowdfunding to support its operation and continued development. If you’re interested in participating in its crowdfunding campaign, sign up for a sponsorship package ($5 per sponsorship monthly) through the HR.my account dashboard. A paid monthly sponsorship also includes access to additional features: Ad-free employer and employee web accounts Additional 3.5GB of file storage (or 7GB for an annual sponsorship) for employer account per unit of sponsorship Additional HR role (or two HR roles for an annual sponsorship) per unit of sponsorship Early access to newly developed features under HR.my’s “Preview scope” mode HR.my only earned a 3.13 out of 5 rating in this criteria because it doesn’t offer payroll tax filing and payment services. You have to handle these processes yourself. However, HR.my can accommodate multiple payroll periods (such as monthly, bimonthly, weekly, and biweekly) and has a salary adjustment tool to help you record and track changes in your employees’ pay rates. You can even set up an alert for salary reviews to remind you when it’s time to revisit an employee’s compensation package. Recurring allowances and deductions can be added to its system, including other earning types like bonuses, commissions, and one-time allowance payouts. You can also choose to pay employees in cash, via manual checks, and through direct deposits. Other HR.my Features Apart from payroll functionalities, HR.my offers online solutions for managing employee information, expense claims, workflows, and more. Here are some of its features. HR.my took hits in this category because it doesn’t offer customizable reports. And while you can easily download reports (in Excel file formats), you can only upload documents or files of up to 5MB in size into HR.my. Plus, the document storage is capped at 100MB (or 1GB). If you require additional file storage, consider signing up for HR.my’s sponsorship package, which gives you an extra 3.5GB of storage (or 7GB for an annual sponsorship). HR.my only scored 2.5 out of 5 in this criteria because it lacks live phone support and its platform isn’t as intuitive as popular HR payroll software like Gusto or QuickBooks Payroll. It also lacks live phone support, and you can’t integrate HR.my with third-party software like accounting programs. Easy account sign-up process Online user manual with how-to guides for each module In-app user guide and help button Workflows streamline approval processes HR.my support forum to ask questions and interact with the administrator Employee self-service portal Customer support via email and through the company’s Facebook page While this software is less intuitive than others, its sign-up process is very easy to complete. You just need to navigate to the software’s homepage and click on “Sign Up (Free)” in the upper left corner of the screen. After you’ve activated your account, you can immediately access its platform, which has a more modern interface than its earlier dated-looking versions. However, new users unfamiliar with adding HR and pay-related rules (such as leave accruals and earning/deduction types) into a system will find the initial setup process challenging. Unfortunately, HR.my doesn’t provide training support to new users. What it offers are user guides to help you through the setup. While the how-to guides are relatively easy to understand, navigating through its various articles and the system itself can be confusing. In addition, if you didn’t sign up for HR.my’s crowdfunding, be prepared to see in-app ads on the main dashboard asking you to join its campaign. The ads also appear in different modules from time to time. While there aren’t a lot of up-to-date HR.my reviews online, this provider earned a perfect rating in this criterion because it earned an average score of 4 and up on third-party review sites like G2 and Capterra. Those who left positive feedback like that its HR and payroll solutions are free to use. They also appreciate its time tracking tools as it helps them efficiently monitor staff attendance. However, some users complained about the lack of live phone support, while others commented that navigating through its platform can be confusing and difficult for new users. At the time of publication, HR.my reviews earned the following scores on popular reviews sites: G2: 4.2 out of 5 based on 10+ reviews Capterra: 4.9 out of 5 based on more than 5 reviews How We Evaluated HR.my We looked at the provider’s features (both HR and payroll) and payment options. We also considered ease of use, reporting functionalities, and the feedback that actual users posted on popular user review sites. To view our full evaluation criteria, click through the tabs in the box below. Bottom Line HR.my has the essential HR tools you need to handle employee management and payroll processes. It even offers expense claims tracking, document management, and customizable workflows. Your employees will also appreciate its self-service portals and mobile apps, allowing them to easily access payslips, clock in/out for work, and request PTO online. This makes HR.my an excellent option for startups and small businesses that need helpful HR tools at a low price point. Sign up for a free HR.my account today.

Some employee bonuses are easier to calculate than others. Performance-based bonuses depend on factors for which you may need to gather data such as total sales revenue for the month or the number of new clients signed during the year. Meanwhile, to pay nonperformance bonuses, you might need to set an arbitrary amount, like $1,000, or calculate payroll payouts based on individual salaries or work hours. To learn more about how to calculate bonuses for employees, keep reading. When it comes to bonus payouts, you can streamline the process by using a payroll system like . Apart from offering an unlimited number of pay runs, Rippling allows you to run a separate bonus payroll that withholds taxes per IRS guidelines or add it to employees’ regular payroll at no additional cost. Sign up for a free demo today. Calculating Performance-based Bonuses Performance-based bonuses can include individual sales incentives or sales commissions, department-wide incentives, and annual or quarterly performance compensation. They can usually be calculated with simple multiplication or division. Before you begin, you’ll need to determine the percentage you plan to use if basing employee bonuses on factors like sales or salaries. Sales Commission To calculate a bonus for an employee who earns “X” dollars in sales, multiply the sales total by the bonus percentage you established. Department Goals If you want to pay bonuses based on goals reached by a particular department or team, be sure you know how many people are in each. To calculate, divide the total bonus you want to distribute by the number of employees who will be receiving it. Calculating Nonperformance-based Bonuses Nonperformance bonuses are an easy way to make sure all employees share in the incentives, and it simplifies bonus calculations for you. Some common bonuses not based on performance include percent of salary, holiday bonuses, retention or sign-on incentives, and referral bonuses. Percent of Salaries If you want to ensure all of your employees receive a bonus, consider basing it on their annual salary or wages. For instance, you could offer 3%, and everyone would receive a check. To calculate, you will need access to all employee salaries or wage amounts. You may need to use prior-year figures to estimate annual wages for hourly employees (who don’t work consistent hours). In this example, employees who are paid more in regular salary will receive a higher bonus. This could lead to some dismay since the bonus is determined by the type of position each employee holds, but it ensures every staff member receives a payout. This is where payroll software, like , comes in handy, as it can generate a report containing all of your employees' annual salaries. If you download it as a Microsoft Excel file, you can manually add formulas into the work sheet (with the applicable percentage) to compute the bonus amounts. Note, however, that there are also a few payroll systems with advanced reporting tools that can automatically calculate percent-of-salary bonuses. This is helpful, especially if you want to avoid computation errors. Sign-on & Retention Bonuses Both sign-on and retention bonuses are usually paid as flat rates—which means there’s no calculation necessary if it’s all paid out at one time. For example, if your policy states to pay new employees who relocated for the job a $2,500 sign-on bonus, you will distribute that amount. The terms of a bonus agreement or policy might indicate the bonus should be paid in increments, and if that’s the case, you will need to determine how much you should distribute and how often. Retention bonuses are calculated similarly but are usually paid out long after the employee is hired. How to Calculate & Pay Taxes on Bonuses Once you determine the type of bonus you want to pay, you need to decide how you will handle payroll taxes. Bonuses are taxable as supplemental wages, and the IRS gives you a couple of options for taxing the amount. You can opt to pay the employee’s regular tax rate by adding the bonus to their regular paycheck. Or you can pay it in a separate check and withhold 22%. Be sure you understand all the different ways you can do payroll when bonuses are involved. Pay Bonus With Regular Check Without Specifying Amount If you pay a bonus with an employee’s regular paycheck by simply adding it to the gross wages earned without differentiating the amount from regular wages, the bonus tax rate will be the same as regular tax rates (7.65% FICA rates designated by law, and income tax rates determined by the employee’s W-4 form). As the employer, you’ll also have to pay your portion of FICA and unemployment taxes. Pay Bonus With Separate Bonus Check The IRS also gives you the option to pay employee bonuses using a completely separate paycheck. If you decide to use this option, you have two choices on how to tax the bonus. Option 1 for Calculating Taxes on Employee Bonuses The first option is to withhold a flat 22% (no other percentage allowed) for taxes. Some of the best payroll software, like , gives you the option to run off-cycle bonus payments for free and will automatically withhold the 22% to help you maintain compliance. Option 2 for Calculating Taxes on Employee Bonuses The second option is to hypothetically add the bonus amount to the employee’s regular wages for the prior pay period to help you calculate how much in taxes to withhold. Once you add them together, you’ll need to determine the taxes that would’ve been withheld had the bonus actually been paid out. Then, subtract actual taxes paid for the prior period from that amount. The difference is what you should withhold from the bonus check. Gross-up Bonus Checks If you want your employees to receive a specific bonus amount after taxes (the net payment), you can use the tax gross-up method to determine how much of a bonus you need to give. You will have to increase the bonus amount for this to work. Here are the steps you need to follow to gross-up employee bonuses: Sum all tax rates, including federal, state, and local, if applicable. Subtract the total tax rates from 1 (equivalent to 100%): 1 – tax rate = net percent employee will be paid. Divide the net payment by the net percent to get the gross bonus payment. Verify your answer by multiplying the gross payment by the tax rate and then subtracting that number from the gross payment. You should be left with the net bonus payment you were seeking for your employee. Bottom Line Learning how to calculate a bonus is fairly straightforward, as long as you know the approach you’re taking. It can be as simple as deciding on a flat rate to distribute to each employee or as complex as tracking metrics, calculating bonuses due, dividing the bonus among employees in a systematic way, and grossing up to cover taxes. However you choose to structure your bonus plan, can help make it an easy process. The software allows you to run a separate bonus payroll or add it into regular wages in your next payroll cycle. It only takes four to five steps to complete. Sign up for a free demo today.