Wave Payroll is a highly intuitive payroll add-on to Wave’s free accounting system. Best suited for small businesses with less than 15 employees, it lets you pay employees or contractors, includes workers’ compensation, and has an employee portal. It’s quick to set up and easy to use, but only files taxes for 14 states and has limited reporting and HR features.
What We Recommend Wave Payroll For
I’ve tested, reviewed, and read user feedback on dozens of payroll systems, and I can attest that for small businesses with simple payroll needs, Wave provides a simple solution that’s super easy to use. Payroll can be run in a matter of minutes, and it gives you the information you need for filing taxes—or, if you are in one of the 14 states it services, Wave files them for you. It has an employee portal for seeing pay stubs and tax forms (if applicable). However, it’s not a good choice for managing benefits or incorporating HR.
In short, Wave Payroll is best for:
- Employers who are currently using Wave’s free software: If you already use Wave Accounting or are looking for free accounting software that handles invoices and more, this program natively integrates with the payroll software. New small businesses that haven’t yet purchased accounting or invoicing software and aren’t complex will find this to be a good starter option.
- Stores that hire seasonal staff: It’s easy to change the status of an employee on Wave from active to inactive (and you don’t have pay during months they don’t work), making it a good choice for businesses that hire seasonal employees such as restaurants and retailers at beach towns or ski resorts.
- Small businesses with contractors or less than 15 employees: Currently, Wave Payroll only files taxes in 14 states, and if you’re in one that it doesn’t service, it’s much easier to manage when you don’t have a ton of employees. With contractors, you don’t have to file taxes, so the service is even cheaper.
When Wave Payroll Would Not Be a Good Fit
- Businesses with 50+ employees: Wave does not provide HR features such as hiring, onboarding, or benefits management. As businesses surpass 50, health insurance benefits become essential. If you need any HR services or benefits, check out our top picks for HR payroll software for more suitable options.
- Companies that rely on labor and job costing reports: Wave has a few basic reports, but does not offer data breakdowns for job costing or dividing payroll by departments. This makes it a poor option for companies that heavily rely on this data, like manufacturers.
- Multi-state employers: Wave Payroll’s tax filing service is very limited, and having employees in multiple states makes it more than likely your business won’t be able to be 100% serviced. Although we do recommend the software for very small companies, if your employees are in more than one state, it will become difficult to manually keep track of multiple payroll tax payments and filings. Check our guide to the best payroll services for alternative providers.
Looking for something different? If you are looking for accounting software that includes payroll but Wave isn’t right for you, consider QuickBooks or one of its alternatives.
Wave Payroll Overview
| PROS | CONS |
|---|---|
| Native integration with Wave’s free accounting software | Does not file taxes in 36 states |
| Free direct deposit | No out-of-cycle pay runs |
| Pay by month rather than pay run | Basic HR features only |
| Stays updated on COVID-19 relief programs. | Not for household employees in the US |
Wave Payroll Pricing & Features
Wave’s plans offer the same payroll features, with one important difference. In 14 states, it also automatically transfers tax payments and files the paperwork with your state and the IRS. In the other 36 states, it provides the information, but you need to file yourself.
Wave Payroll Monthly Fees
Tax service: $35 + $6 per active employee and $6 per independent contractor paid
- Applies to Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin
Self-Service: $20 + $6 per active employee and $6 per independent contractor paid
Wave Payroll integrates into its suite of products.
With simple menus and straightforward processes, payroll can be set up and run quickly. Users say it takes a few hours to set up their employees manually, or you can import the data. There’s also an employee portal where they can input some of the information. Once ready, payroll can be reviewed and approved at a glance.
Payroll Processing
The Run Payroll page gives you all the information you need to review, edit, and approve payrolls.
Wave Payroll lets you pay by check or direct deposit. You can only designate one pay run, but it can be as often as weekly. You can pay contractors, and it gets filed in Wave Accounting as a vendor payment. Direct deposit is included but can take up to three days. It does not have integrated clock-in/clock-out, so you need to input the hours manually.
Tracking Vacation, Sick Pay
The time sheet also lets you record PTO for salaried employees.
The time sheets feature does more than track hours. For salaried employees, you’ll use it to add overtime pay or paid vacation or sick leave. Overtime pay is automatically calculated at time-and-a-half. Wave has the paid sick leave policies for California, Oregon, Massachusetts, and Vermont already loaded into the software to keep you compliant, but you can add policies for other states.
Incorporation to Wave Accounting
Wave makes a detailed entry with each payroll.
Once a payroll run is approved, it is logged in your Wave accounting software–which is very efficient since you don’t have to enter it. The gross amount is recorded in your account mapping and included in the Profit & Loss report, as is the amount of taxes you owe as an employer. Wave also creates a holding account, called “Wave Payroll Clearing” to hold payroll and tax payment funds. As these are paid out, they are reflected in the Wave Payroll Clearing account; you’ll recognize the benefit of this if you ever do a payroll audit or need to trace a payroll charge.
Employee Status
The employee status section lets you change details, record vacation, and offboard.
In the left-hand menu, you can click on Payroll>Employee Status to access your employee’s information. In addition to changing personal information or accounts, you can change their status. This lets you record vacation times or sick leave. If you have an employee that works seasonally, you can also record it here (as a long-term vacation).
Tax Service
Wave’s tax filings vary by the requirements of the particular state.
Wave currently processes taxes in 14 states: Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin. It will also file new hire reports for employees in these states. You’ll need to set up your tax payment information.
All payroll accounts get workers’ compensation through AP Intego. Go to Payroll>Run Payroll>Get Insured to create your profile. From there, an AP Intego representative will call to help you complete your setup.
Wave Payroll Ease of Use
- Automatic integration with Wave Accounting
- 24/7 support via chatbot, forum. Live Chat Support (Monday-Friday)
- Intuitive interface
- Some functions take many steps
- Files taxes in 14 states
- Preloaded sick pay policies for some states
Wave’s strongest feature is its ease of use. Because it doesn’t have a lot of extra features, the interface is straightforward, and functions are easy to find. It handles taxes in 14 states and provides information for filing in the other 36. It also has sick pay policies preloaded for several states. In some cases, the software will walk you through a process, and you have a help button, chatbots, and a community forum. In addition, Wave offers general articles on payroll matters from preparation to COVID.
On the flip side, some functions, while simple, take more steps than with other payroll software. The online help center is basic. The articles don’t go into a lot of step-by-step detail, although in some cases, the software should lead you through the process itself. While it says it has live chat support, real-world users said they got chatbots or that reply times were frustratingly long.
Top Wave Payroll Alternatives
Best for: Small businesses wanting easy software plus onboarding and benefits | Best for: Low-cost DIY, affordable full-service payroll | Best for: QuickBooks, fast direct deposit |
Base monthly fee from: $19 | Base monthly fee from: $10 | Base monthly fee from: $45 |
Per-employee monthly fee from: $6 | Per-employee fee from: $4 | Per-employee fee from: $4 |
If you’re not sure Wave Payroll is right for you, see how it compares with our top payroll services. And if you need help deciding which is right for you, visit our guide to choosing the best payroll software.
What Users Think About Wave Payroll
I looked at reviews from real-world users on trusted review sites, giving consideration to those who had used the software for several months and through a tax cycle. Overall, users who had simple needs raved about the intuitive interface and ease of use. The complaints usually came with larger businesses (over 10 employees) or when they wanted more features or details in reports or analysis. Some complained about the slow or nonexistent live customer support.
One complaint that caught my attention was that the DIY payroll service did not give the user all the information they needed for determining taxes. Be sure you understand tax laws in your state and as an employer what you’re responsible to pay.
- G2: 4.2 out of 5 based on 19 reviews.
- Capterra: 4.35 out of 5 based on 48 reviews.
When reading through user reviews, here are some of the trends that I noticed:
Users Like: | Users Don’t Like: |
|---|---|
Simple to use, easy to manage | Reports, analysis not as detailed as users would like |
Works with the free version of Wave Accounting | Customer support mostly chat, forums |
Affordable | DIY taxes |
Bottom Line
Wave Payroll is best for small businesses with fewer than 15 employees and whose payroll needs are very simple. As a Wave add-on, it integrates all the information into your Wave Accounting software, making accounting a breeze. It offers workers’ comp and an employee portal, but otherwise, it lacks benefits. Users love the intuitive interface, which is easy to follow, even if some functions take a few more steps. Sign up for a Wave Payroll demo today.
