What payroll tool is best for managing both hourly and salaried employees?

There isn't a single "best" payroll tool for everyone, as the ideal choice depends on your specific business size, budget, complexity of needs, and desired features. However, several excellent payroll providers are well-equipped to handle both hourly and salaried employees seamlessly.

To manage both types effectively, you'll want a tool that offers:

1. **Robust Time Tracking Integration:** Essential for hourly employees to accurately record hours, breaks, and overtime.

2. **Flexible Pay Schedules:** Ability to pay hourly and salaried employees on different schedules if needed (e.g., weekly for hourly, bi-weekly for salaried).

3. **Overtime Calculation:** Automatic calculation of federal and state overtime rules.

4. **PTO/Leave Management:** Tracking vacation, sick leave, and other paid time off for both types of employees.

5. **Benefits Administration:** Handling deductions for health insurance, 401(k)s, FSAs, etc., which often differ between hourly and salaried roles.

6. **Tax Filing & Compliance:** Automatic calculation, filing, and remittance of federal, state, and local payroll taxes.

7. **Reporting:** Comprehensive reports on payroll costs, tax liabilities, employee earnings, etc.

8. **Integration:** Seamless connection with your accounting software (e.g., QuickBooks, Xero) and potentially HRIS.

Here are some of the top payroll tools that excel in managing both hourly and salaried employees:

### Top Recommendations:

1. **Gusto:**

* **Pros:** Extremely user-friendly interface, excellent for small to medium-sized businesses (SMBs). Offers integrated time tracking, robust benefits administration, HR features, and automatic tax filing. Handles both hourly and salaried employees with ease, including PTO tracking and multiple pay rates.

* **Cons:** Can get a bit pricier as you add more advanced HR features.

* **Best For:** SMBs looking for an all-in-one, intuitive platform with strong HR and benefits integration.

2. **OnPay:**

* **Pros:** Highly rated for customer service and ease of use. Offers comprehensive features including unlimited pay runs, all tax filings, PTO tracking, and robust benefits integration. It's very flexible for different pay types and schedules.

* **Cons:** Time tracking is integrated but might not be as feature-rich as dedicated time tracking solutions.

* **Best For:** SMBs prioritizing excellent customer support and a comprehensive, easy-to-use system at a competitive price.

3. **QuickBooks Payroll:**

* **Pros:** If you already use QuickBooks for accounting, this is a natural fit. It offers seamless integration, automatic tax filing, and various tiers that include time tracking and HR support. Handles both hourly and salaried employees well within the familiar QuickBooks ecosystem.

* **Cons:** Can be more expensive than some competitors, and the interface might feel less modern than Gusto for some.

* **Best For:** Businesses already deeply integrated into the QuickBooks accounting ecosystem.

4. **ADP Workforce Now / RUN Powered by ADP:**

* **Pros:** ADP is a giant in the payroll industry, offering highly robust and scalable solutions. RUN is for smaller businesses, while Workforce Now is for mid-sized to larger companies. They offer comprehensive time tracking, HR, benefits, and compliance features. Excellent for complex needs, multi-state payroll, and businesses planning to scale.

* **Cons:** Can be more expensive, and the setup process can be more involved. The interface might feel less intuitive than newer platforms for some users.

* **Best For:** Growing businesses, mid-sized to large companies, or those with complex payroll and HR needs.

5. **Paychex Flex:**

* **Pros:** Similar to ADP, Paychex offers a wide range of services from basic payroll to comprehensive HR solutions. They have strong time tracking options, benefits administration, and dedicated support. Good for businesses of all sizes, with scalable plans.

* **Cons:** Pricing can be less transparent, and some users report a steeper learning curve.

* **Best For:** Businesses looking for a full-service provider with dedicated support and a wide array of HR and compliance features.

6. **Rippling:**

* **Pros:** Rippling is an HRIS (Human Resources Information System) first, with payroll as a core integrated feature. It's excellent for managing the entire employee lifecycle, from onboarding to offboarding, including payroll, benefits, time tracking, and IT management. Highly automated and scalable.

* **Cons:** Can be more expensive than pure payroll solutions, especially for very small businesses, as you're paying for a full HR platform.

* **Best For:** Fast-growing companies that need a unified platform for HR, IT, and payroll, and want to automate as much as possible.

### How to Choose:

1. **Assess Your Needs:**

* How many employees do you have (hourly vs. salaried)?

* Do you need integrated time tracking, or do you use a separate system?

* What are your benefits administration requirements?

* Do you need HR features (onboarding, performance management, etc.)?

* What's your budget?

* How important is ease of use vs. advanced features?

* What accounting software do you use?

2. **Get Demos:** Most providers offer free demos. Take advantage of these to see the software in action and ask specific questions about how they handle your unique scenarios (e.g., specific overtime rules, PTO accruals, bonus payments).

3. **Read Reviews:** Check out reviews on sites like Capterra, G2, and Software Advice to get insights from other users.

By considering these factors and exploring the recommended options, you'll be able to find the best payroll tool to efficiently manage both your hourly and salaried employees.