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How Much Is Paychex Payroll Service vs. ADP Payroll Service?


Payroll services are a great choice for nearly any company. Smaller businesses often lack the resources to staff a dedicated payroll specialist who understands the complexities of the compliance issues that surround payroll. But even larger companies may prefer to outsource this time-laden task, particularly when they have employees in multiple states. In this article, we compare two of the industry's largest payroll service providers, Paychex and ADP. When comparing costs, you must consider which features and services are included and which items carry an extra charge to get a true idea of which option is the right one for your organization.

What Features Does Paychex Offer?

Paychex offers everything from simple payroll management to full professional employer organization (PEO) services. If you choose, PEOs manage every aspect of your "human" capital. Basic features include running payroll and managing benefits packages, but can also include pretty much anything a traditional HR department would handle. PEOs write job descriptions, oversee the recruitment process, create onboarding materials for new employees, handle annual reviews, develop performance improvement plans, and even handle terminations, assuming you choose this level of PEO service.

Employee benefit options include the standard medical, vision, and dental insurance, but also retirement and 401(k) plans. Paychex also processes payroll taxes and handles its customers' unemployment and workers' compensation insurance, ensuring you always remain compliant with both state and federal regulations.

Paychex uses a cloud-based software solution that you, and your employees, can access from any connected device. Change employee information, view pay stubs, review PTO and other leave balances, and more, all in real time, using a smartphone, tablet, or desktop. Their service also includes analytics so you can easily project staffing needs based on historical data.

Every Paychex customer gets a dedicated support person, available via phone, live chat, or email. And, their site includes a well-stocked virtual library of tutorials, videos, FAQs, and articles designed to answer your and your employees' HR-related questions. You can also download the mobile app so you and your employees can always access your information.

What Services Does ADP Offer?

ADP may be the most well-known name in payroll. The company offers its services across industries, in every state, and for any size organization. One of the biggest advantages to signing on with ADP is that breadth of experience and knowledge.

The most basic service you can choose from ADP is payroll processing. In addition, they distribute paychecks, file payroll taxes, and prepare end-of-year W-2s for companies that choose that level of service. They also offer time tracking, including PTO accrual, and benefits management.

If you choose ADP's PEO solution to handle all of your human resources needs, you also get workers' compensation and unemployment insurance. And, the company handles all tasks related to employee management, including recruitment, performance management, annual or biannual reviews, employee surveys, and return-to-work programs for workers hurt on the job.

Benefits package options through ADP include medical, dental, and vision, but also 401(k) plans, flexible spending accounts, and life and disability insurance. Employees can access their information online, making changes as needed. You and your employees can also review pay stubs and time off accruals. And, the mobile app lets you and your team access this information any time, any place.

ADP offers a variety of support options, including phone, live chat, and email. There is also an online library with a variety of resources, including an FAQ, videos, articles, and regular blog postings.

If you choose to sign with ADP, you must sign a two-year (minimum) contract.

How Much Do Paychex and ADP Cost?

Costs for both ADP and Paychex vary widely, depending on the level of services you choose, how many employees you have, and many more factors. Another issue is that both companies frequently feature discounts and promotional offerings. The following cost examples are estimates based on a biweekly payroll for 10 employees. You pay their fee each time you pay your employees.

ADP costs include:
  • ADP biweekly payroll services cost around $100 - $150 on average for 10 employees
  • Yearly W-2 and 1099 services costs around $80 - $120 per year for 10 employees
  • There is a set-up fee of around $25 - $50. 
Paychex costs include:
  • Paychex biweekly payroll services cost around $120 - $150 on average for 10 employees
  • Yearly W-2 and 1099 services cost around $125 - $150 per year for 10 employees
  • Direct deposit processing costs around $15 - $20 per pay period
  • There is no set-up fee
While both companies handle interstate processing with no difficulty, ADP has an edge as far as reporting. It's also better-suited to larger companies. However, their two-year contract requirement takes ADP out of the running for many smaller companies.

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