Wave Payroll Review 2023: Pros, Cons & Deciding Factors

With Wave Payroll, your small business can manage payroll, employee deductions and taxes in an easy-to-use, affordable platform. You may set up payroll for both employees and independent contractors while giving them access to a portal with their information and tax forms, such as W-2s and 1099s. Wave Payroll lets businesses manage payroll, employee deductions and taxes all in one platform. Employers can run payroll for employees and contractors, connect their accounts with Wave Accounting and let Wave file their payroll taxes for them in some states. It also provides employees with a portal to access and update their information. Payroll by Wave calculates state and federal payroll taxes you’re required to pay.

If you’re currently using Wave Accounting and are looking for easy integration with payroll, Wave Payroll may be a good fit. However, if you’re in one of the 36 unlucky states that don’t have full-service payroll available through Wave Payroll, you might want to seriously look elsewhere. One of the more convenient features available in Wave Payroll is the ability to create a payroll journal entry that will be automatically posted in Wave Accounting. Employee garnishments are not supported in the application, and it only offers a single payroll report. Imputed income capability is not available in the application either, and currently, Wave Payroll does not offer an app for iOS or Android devices.

The Top 8 Open Source Payroll Software Choices for 2023

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Otherwise, the cost is $20 per month and you’ll have to file taxes yourself. There’s a $6 fee per person on your payroll per month, whether employees or contractors. If you’re in one of the states that doesn’t yet support automatic payroll tax filings and payments (which is most of them), Wave’s price is at the low end of the sites we’ve reviewed. You’ll pay a $20 per month base price, plus $4 per month for each employee or contractor.

Manage your money like a boss

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. Our guide to the best payroll services for small businesses contains our recommended pay processing solutions.

Upon processing your first payroll, you can use Wave Payroll for up to 30 days, commitment-free. At any time, you can activate to start your billing cycle and gain access to items like tax filing and approving payrolls beyond the current month. PCMag.com is a leading authority on technology, delivering lab-based, independent reviews of the latest products and services. Our expert industry analysis and practical solutions help you make better buying decisions and get more from technology.

What are some Wave Payroll alternatives?

It’s particularly ideal if you operate in one of the 14 states it files taxes in automatically and appreciate an easy-to-use interface without a lot of extras or clutter. If your business is in a state where Wave doesn’t offer automatic tax filing or you prefer additional features, such as benefits administration and self-service onboarding, you should look elsewhere. Wave Payroll is best for small businesses with very simple payroll needs.

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. With Wave Payroll, you can pay both contractors and employees. It calculates wages, deductions, and taxes, including Federal Unemployment Tax for you.

Fantastic mobile companion for Wave users

This review features information compiled from multiple relevant sources. The above information about financial reports and ratios for profitable landscaping companies was collected from users, the vendor and reputable third-party organizations. Automated, accurate payroll helps you stay compliant, save time, and be stress-free. Only pay for what you use and simplify annual audits with workers’ comp built for small business owners.

• Both QuickBooks Payroll and Wave Payroll lack compliance management, but Wave Payroll features a detailed employee portal, which QuickBooks Payroll lacks.
• 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.
• Create beautiful invoices, accept online payments, and make accounting easy—all in one place—with Wave’s suite of money tools.
• Pricing for Wave Payroll is a bit different in that you pay either $20 or $35 per month as a base payment, depending on the state in which you’re running payroll.

You also have to submit quarterly or annual filings as well as your year-end W-2s/W-3s and 1099-MISCs to the IRS. You click “Deduct from Pay” to add standard before-tax deductions. Your only options here are health insurance or a 401(k) plan; QuickBooks Payroll offers more. Unlike all other competitors, Wave doesn’t let you enter employer contributions or deduct a percentage of employee pay for a retirement plan. Here, too, you can establish after-tax deductions—union dues, garnishments, and so on.

Your employees can log into Wave securely to access their pay stubs and T4s, and manage their contact and banking information. You’ll have to ask new employees to complete a W-4 form so you can enter its details. Payroll by Wave accomplishes this by providing a link to the official form on the IRS site; the employee has to print and complete it. Rippling and other sites provide more convenient ways to do this, including the ability to sign onboarding documents electronically. Finally, if you use Wave Payroll, you can only access customer service via live chat on weekdays or via email.

It was easy for me to add bank accounts and integrate other key extensions. I prefer this over Xero only because it’s free and easy to use on both mobile and desktop. It’s packed with many things that I still have to explore when I get the chance. I think everyone should give this software a shot before they decide on moving on to a paid platform.