Managing payroll can be an extremely tedious and complex process, especially for small businesses and startups.Most business owners would likely agree that a free, automated payroll solution that simplifies payroll processing would be hugely beneficial.
Well, Payroll by Wave offers exactly that - a free, cloud-based payroll management system designed specifically for small businesses.
With features like easy employee profile creation, time tracking, payroll tax calculations, direct deposit, and more, Payroll by Wave can handle your entire payroll process for $0 per month.
In this in-depth review, we'll take a closer look at Payroll by Wave's features, capabilities, setup process, available support, and pricing structure. We'll also compare it to leading competitors like Gusto, Justworks, and Square Payroll to help you determine if Payroll by Wave is the right free payroll software for your small business.
Introduction to Payroll by Wave
Payroll by Wave is a free online payroll processing solution designed for very small businesses and startups. As part of the Wave suite of financial software, Payroll by Wave aims to provide an easy-to-use payroll system for companies looking to manage payroll in-house and control costs.
Overview of Payroll by Wave
Payroll by Wave offers completely free payroll processing for up to 10 employees. The setup process is straightforward and the system is integrated with Wave's accounting software.
Key features include:
- $0 paycheck processing fees
- Direct deposit
- Tax calculations and filings
- Integration with Wave Accounting
- Simple setup
Target Customers
Payroll by Wave is best suited for:
- Very small businesses and startups
- Companies with hourly and salaried employees
- Businesses located in the US or Canada
It meets the needs of small teams looking for an affordable payroll solution to run in-house. The system works for simple payroll needs but may lack some advanced capabilities.
Key Benefits and Drawbacks
Main Pros
- Completely free for up to 10 employees
- Easy to set up and use
- Integrates with Wave Accounting
- Handles tax calculations and payments
Potential Cons
- Lacks some advanced payroll features
- Support options could be better
- Only available in US and Canada
So while the price and simplicity stand out as advantages, Payroll by Wave does involve some tradeoffs in terms of capabilities and support. The free tier should meet the needs of many very small businesses and early stage startups focused on managing essential payroll affordably.
Payroll Features in Depth
Explore key modules and functionality for running payroll with Payroll by Wave.
Employee Profiles
The employee profiles module allows businesses to store important details about each employee in one centralized location. This includes information such as:
- Contact details (name, address, phone, email)
- Tax details (tax file number, tax treaty status)
- Bank account details for pay
- Pay rates and schedules
- Deductions for taxes, insurance, 401K, etc.
Keeping this data updated ensures payroll is calculated accurately every pay period. Users can also enable employee self-service to allow staff to update their own details through an online portal.
Additional features include:
- Customizable pay rates based on salary, hourly wage, overtime calculations, and more
- Automated deduction splitting across multiple GL accounts
- PTO accrual and balance tracking
- Defining different payroll schedules for hourly and salaried staff
Maintaining correct employee profiles eliminates manual data entry and reduces risk of errors when processing payroll.
Time Tracking
The time tracking module connects to time clocks, schedules, and timesheets to collect hours worked and feed data directly into payroll. Key features include:
- Approving timesheets and flagging exceptions
- Tracking overtime hours and rates of pay
- Managing schedules, shifts, breaks, and more
- Data integration with time clock systems
- Accruals for sick time, vacation time, paid time off
Capturing accurate working hours ensures employees are paid precisely for time worked. Automated time data collection reduces manual calculations and provides transparency into true labor costs.
Payroll Processing
Running payroll with Wave involves a simple step-by-step process:
- Import approved hours from time tracking module
- Review payroll preview summary and confirm accuracy
- Submit finalized payroll data and pay employees
- Pay tax authorities and generate compliance reports
Additional capabilities include:
- Customizing pay periods and pay days
- Supporting multiple pay types like bonuses and reimbursements
- Voluntary deductions for insurance, 401K contributions, etc.
- Automated garnishments based on court orders
Streamlined payroll processing reduces administrative workload. Users gain flexibility to pay employees using direct deposit or printed checks based on preferences. Compliance features also minimize legal risks related to payroll taxes.
Getting Set Up with Payroll by Wave
Registration and Configuration
To get started with Payroll by Wave, first create an account on their website. The registration process is straightforward - simply enter your email address and create a password.
Once registered, you can connect your business bank accounts to sync transaction data. This allows Payroll by Wave to seamlessly handle payments to employees and tax agencies on your behalf.
Next, add your company details like legal name, address, tax IDs and more. Payroll by Wave needs this info to properly handle payroll taxes and payments.
You'll then want to add employee details one by one. For each employee, enter their personal info, wage rate, benefits, deductions, and other payroll details.
Finally, establish a payroll schedule that matches your payment cadence, such as weekly or biweekly. This sets up automatic payroll runs based on the schedule you configure.
Ongoing Maintenance
As your business grows, you'll need to add new hires to Payroll by Wave by entering their details much like your initial employees. It's easy to onboard new staff one by one.
Additionally, update employee records whenever there are changes to wage rates, benefits eligibility, deductions, or other details that impact net pay. Keeping this info up to date prevents payroll errors.
It's also important to notify Payroll by Wave anytime an employee leaves your company. Simply mark them as inactive so they won't show up on future payroll runs.
By closely managing employee data over time, you enable accurate payroll processing with Payroll by Wave.
Available Support Resources
If any questions come up as you use Payroll by Wave, there are a few support channels to tap into:
- 1-on-1 Phone and Email Help: Get assistance from a knowledgeable support rep to troubleshoot issues
- Knowledge Base: Search for answers to common questions in Payroll by Wave's help documentation
- Community Forum: Post questions and get input from other Payroll by Wave users facing similar challenges
Between their thorough help documentation and responsive customer support team, Payroll by Wave offers reliable resources to resolve almost any question that comes up.
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Pricing Details
Monthly Base Fee
Payroll by Wave offers a free tier for up to 5 employees. Beyond that, they charge $6 per month per employee up to 10 employees, and $4 per month per employee beyond 10 employees. This base monthly fee covers access to their payroll software and processing of payroll for the specified number of employees.
For example, a business with 8 employees would pay $48 per month ($6 x 8 employees) for Payroll by Wave. This predictable per employee pricing model allows businesses to easily budget for payroll processing fees.
Per Payroll Processing
In addition to the monthly base fee, Payroll by Wave charges small transaction fees each time payroll is run:
- $0.50 per bank transfer
- $0.25 per printed check
- 2.5% foreign exchange fee for employees paid in foreign currency
Other additional fees to be aware of:
- $4 per 1099 tax form filed at year-end
- $10 to void and reissue a lost paycheck
So while the monthly fees are very affordable, businesses should factor in potential per payroll run costs depending on payment methods and tax forms required.
Add-on Services
Payroll by Wave offers a few HR-related add-on services for additional fees:
- Applicant tracking system: $5 per user per month for features like customizable job applications, candidate scoring, interview scheduling, and offer letters
- Employee onboarding: $6 per new hire for digital paperwork and onboarding task management
- PTO policies: $2 per active employee per month for features like absence request workflows, PTO accrual tracking, carryover capping, and time-off calendars
These optional services allow businesses to manage the hiring and HR components tied to payroll seamlessly within Payroll by Wave for marginal extra fees.
Alternatives to Evaluate
Wave Payroll provides a free, easy-to-use payroll solution for small businesses. However, it's important to evaluate alternatives to determine the best fit for your needs. Here's a brief comparison of some leading competitors.
Gusto
Gusto is a popular payroll and HR provider known for its intuitive interface and robust feature set. However, Gusto pricing starts at $39 per month base fee plus $6 per person per month for payroll. Key differences vs. Wave Payroll:
- More expensive, especially for larger teams
- Additional HR functionality like org charts, employee self-onboarding, etc.
- Managed payroll services and support available for an extra fee
So while Gusto offers more HR capabilities, Wave Payroll provides solid core payroll features entirely for free.
Justworks
Justworks bundles payroll, benefits, compliance, and contractor payments together under one platform. Pricing starts at $49 per month base fee plus $8 per person. Pros vs. Wave Payroll:
- Integrated health insurance and other benefit plans
- Handles 1099 contractor payments
- Robust compliance features
However, if you just need basic DIY payroll, Wave Payroll provides that for free without the extra costs.
Square Payroll
Square Payroll seamlessly integrates with Square's merchant services and POS solutions. It offers simple payroll capabilities starting at $29 per month plus $5 per person. Differences vs. Wave Payroll include:
- Only syncs with Square merchant accounts
- Less advanced features and customization options
- Additional fees for tax filings and W-2s
So Square Payroll offers a basic ACH payroll solution conveniently bundled for Square merchants. But Wave Payroll provides more stand-alone capabilities for free.
Conclusion and Next Steps
Final Thoughts
Payroll by Wave provides a free, easy-to-use payroll solution for small businesses. Based on the details reviewed, it makes the most sense for:
- Businesses with 1-10 employees looking to manage payroll in-house and save on fees
- Companies that want simple payroll tax calculations and filings included
- Those seeking an intuitive interface without advanced HR features
The lack of some functionality like time tracking may be a drawback for larger or more complex needs. But for most basic, small business payroll, Payroll by Wave delivers solid value.
Signing Up
Getting started with Payroll by Wave takes just a few minutes:
- Go to Payroll by Wave and click "Start Free Trial"
- Enter basic business information to create your account
- Add employee details and payroll information
- Process your first payroll run
You can try it risk-free and cancel anytime.
Comparison Tool
Before deciding, use Payroll by Wave's comparison tool to analyze how their free plan stacks up against competitors. This can help confirm if it best fits your small business payroll requirements.
