Wave Payroll Review: Is It the Right Payroll Software for Your Business?

If you want to switch from a full-service payroll into a self-service option with DIY tax filings, Wave Payroll will allow you to downgrade your plan. Unfortunately, there won’t be any change to your monthly fees. You still have to pay the $35 base fee per month (plus the per-employee costs) even if you opt not to get the provider’s automated tax filing services.

Wave Payroll offers a “Limited Access” option if you need to temporarily pause your plan. It allows you to continue accessing previous payroll journal entries and generating reports without having to run payroll. Also, you’re still covered by its automated tax payments and filings (Wave reports $0 on filings during the “pause payroll” period)—provided your business is located in one of the 14 states it services. You can even input your new hires’ direct deposit information into its system for future payroll runs, plus your employees can still view their previous pay stubs and tax forms. However, you have to pay a minimal amount each month.

• For states covered by Wave Payroll’s tax services: $17 monthly
• For other states: $10 monthly

If you decide to resume pay processing, simply go to Wave Payroll’s billing menu to activate your subscription and immediately start using the software’s payroll tools. Note that Wave Payroll’s pricing will automatically switch from “Limited Access” to either its full-service or self-service option, depending on the plan you selected before pausing payroll.

Aside from manually navigating through Wave Payroll’s billing menu to unpause payroll, its “Run Payroll” page has a “Go to Billing” button to help you easily update your subscription.

Canceling your Wave Payroll plan is very easy—go to the “Payroll” menu, choose “Billing,” and then click “Cancel Payroll Subscription.” Your plan will remain active until the end of the monthly billing cycle.

For businesses located in the 14 states covered by Wave Payroll’s tax filing services: Given the quarterly tax payment and filing deadlines, consider canceling your payroll subscription within the quarter-end months (April, July, October, and January) to enjoy Wave’s tax services. Aside from remitting and submitting taxes due for the quarter you end your subscription in, Wave will refund you taxes that have been withdrawn but will not be paid by the provider.

However, if you need to cancel your payroll plan outside of the quarter-end months, Wave will only pay the tax liabilities due in the month you cancel and refund taxes that have been deducted but not yet remitted. It will be your responsibility to ensure that taxes after the month you cancel are submitted and filed to the applicable agencies.

For businesses located in other states: To generate W-2 and W-3 tax forms, you will need to temporarily reactivate your Wave Payroll account. However, the provider will charge you subscription and per-employee fees for that month.

With Wave Payroll, you can maintain a simple employee database that contains your workers’ basic information, salary and tax details, paid time off (PTO) balances, and benefits deductions.

In addition to changing personal information, you can update their employment status from active to inactive. This is helpful if you have employees that work seasonally—you can exclude them from your pay runs if they’re not working by tagging them inactive and then switching them back to active status as needed.

If resigning employees are nearing their last working day, you can start the offboarding process directly from Wave Payroll’s employee module.

For contractors: While Wave Payroll can help you pay contractors, the process of adding independent contractors into its system is slightly different. Unlike employees, with online profiles created in its Payroll module, contractor profiles are set up in the Purchases module because Wave considers these workers as vendors.

While Wave Payroll has an “Add contractor” option, its system will automatically guide you to its Purchases module to set up vendor profiles for your independent contractors.

Wave Payroll will file state new hire reports for you, provided your business is located in one of the 14 states covered by its tax filing services. The process is also seamless—after adding the new employee’s details into its system, the provider will automatically generate and file the report to the applicable state agency.

You can check new hire report details in Wave Payroll’s employee module.

Wave Payroll doesn’t have time tracking functionalities, so you need to input the hours into its online time sheet manually. It has separate tabs for hourly workers and salaried employees. For your hourly staff, you use it to enter their total hours worked, overtime hours, and PTO information. For salaried employees, you can add in their overtime and PTO details, if any. Overtime pay is also automatically calculated at either time-and-a-half or double time, depending on when employees are eligible for it.

Besides overtime, Wave Payroll’s time sheet lets you record PTO for salaried employees.

Unlike most small business payroll software, which streamline the process of managing PTO applications, Wave Payroll doesn’t have the capability to request and approve leave transactions online. You have to separately track PTO and input the number of approved leave hours into its online time sheets for pay processing.

However, it does have paid sick leave policies for California, Oregon, Massachusetts, and Vermont already loaded into its system to keep you compliant, and you can add other paid state sick leave laws. It also supports paid COVID-19 sick leave and COVID-19 family and medical leave, allowing you to claim tax credits for these transactions. It even helps you calculate the vacation leave accrual credits that employees should earn weekly.

When adding new employees into Wave Payroll, you can specify the vacation accrual rate percentage and whether or not you want it to compute the leave credits.

With Wave Payroll, you can set up multiple pay schedules—from weekly to semimonthly and monthly. It supports paycheck printing and even offers free direct deposits, but the standard timeline is three days (many payroll companies have a two-day processing time). Pay stubs are available online via its employee portal, which is where your staff can view their personal information and access tax forms.

In addition, Wave Payroll has a dashboard where you can see important payroll and tax filing dates, including holidays. It even shows your total payroll costs for the pay period. If you’ve yet to set up your direct deposits, a task reminder will appear on the dashboard that includes a link to the system’s direct deposit setup page.

Wave Payroll’s dashboard serves as your hub for running, reviewing, editing, and approving payroll.

Wave Payroll is committed to providing accurate tax calculation services. Its platform has a robust tax engine that automatically computes federal, state, and local taxes. And, to help ensure that all tax computations are correct, Wave Payroll regularly updates its system with the latest tax tables and regulatory changes.

It even provides automated tax payment and filing services, including year-end reporting, but only 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. However, you need to complete Wave Payroll’s tax payment information requirements before you can enjoy this service.

If your business is located in a state not covered by its tax services, Wave Payroll will calculate the applicable tax deductions from your employees’ pay. It will also generate Form W-2s that you can use to file year-end tax reports.

Wave Payroll’s tax services vary depending on the requirements of each state.

Wave Payroll’s partnership with AP Intego allows you to provide workers’ compensation insurance in all US states. You can sign up directly from Wave Payroll—go to “Payroll,” then “Run Payroll,” and click “Get Insured” to create your profile. From there, an AP Intego representative will call to help you complete your setup.

You can check your pay schedules directly in its system and get email notifications about upcoming pay runs. You can even export payroll dates into a calendar app—simply download your Wave pay schedules as an ICS file and then upload it to calendar programs like the Apple Calendar and Google Calendar. This helps you get extra reminders, plus you can easily see payroll timelines without having to log in to Wave Payroll.

Every time a payroll run is approved, the applicable bookkeeping information is logged in to Wave Accounting. The gross payroll amount is recorded in the expense category of your Account Mapping and included in the Profit and 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 payroll and tax payments are paid out and you replenish your account, these are reflected in the “Wave Payroll Clearing” account. The system categorizes the transactions (i.e., “Payroll Liabilities” or “Transfer to Wave Payroll Clearing”) for easy payroll bookkeeping.

Wave Payroll automatically creates a detailed journal transaction after each pay run.

Wave integrates with Google Sheets, BlueCamroo, and Zapier, which allows it to connect with several business solutions like email marketing, appointment scheduling, customer relationship management (CRM), and payment tools. However, it doesn’t have integrations with HR-related software, such as time-tracking and employee scheduling solutions.