Intuit Online Payroll

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The Quick Take

Breaking news (June 2, 2009): Intuit has announced its intention acquire rival PayCycle for $170M.  The acquisition is expected to close in the third quarter of 2009, so if you are a customer of either service, it's unlikely anything should change significantly for you between now and then.  Sometime after that, customers of both PayCycle and Intuit Online Payroll can expect to see changes in product and pricing. BizSnap will continue to monitor the situation and keep our readers posted.

Intuit Online Payroll is a relatively new entrant into the online payroll services space, debuting its first version available to non-QuickBooks customers in late 2007 (Intuit had previously offered online payroll as an add-on to QuickBooks Online users). The product stands out with an easy to use interface and a rich help system typical of Intuit products. The biggest knock against Intuit Online Payroll is that it only supports e-filing of state taxes in California, compared to SurePayroll’s national footprint, and PayCycle’s coverage of 40 states plus the District of Columbia. However, if your company and employees happen to be based in California, Intuit Online Payroll arguably is your best choice.

Key Features

• Lowest cost option among major online payroll services.
• Excellent user interface—best in class for ease of use.
• Extensive online help system.
• Run payroll the same day you set it up.
• Easily export payroll data to QuickBooks, Intuit’s popular accounting software package.

Intuit Online Payroll – Payroll Packages

Details

Intuit Payroll claims 1 million customers, but it’s important to note that most of those are not Online Payroll customers (but rather users of its other payroll software offerings). Given that the service was only released in late 2007, the number of Intuit Online Payroll customers is likely on the low side compared with longer-time players PayCycle and SurePayroll, but that doesn’t mean that Intuit has not put forward a very high quality product. On the contrary, Intuit has surpassed its competitors in certain respects, notably ease of use and online help/documentation.

As a relatively new service looking to grab market share, Intuit Online Payroll is far and away the low cost option among the major providers. At just $29.95/month for an unlimited number of employees, the product is priced significantly below competing services, which, at $1.50–4.00 per employee on top of a $25–45 monthly fee, would run a 20-person company $55–125/month. The disparity is even greater for larger companies, though of course for the many businesses of five or fewer employees, the difference is slight. Keep in mind that after it has gained a foothold in the market, Intuit may raise prices to be more in line with the competition. Switching payroll providers is a pain, and thus you are not likely to go to another provider in the future if Intuit raises its price to market rate. So keep the price consideration in perspective. The flip side is that, unlike its competitors who only provide payroll services, Intuit offers a broad range of software and services to businesses, so perhaps Intuit will always keep its Online Payroll business as a low-priced “loss leader” in order to cross-sell its other products. (Note: SurePayroll does offer a few other services such as 401(k), Compliance, and Health Insurance, but its name makes clear its focus is on payroll.)

Intuit is known for producing products that are easy to use, and its online payroll service is no exception. Intuit Online Payroll offers an excellent user interface that will not only make setup easy, but also allow you to run payroll smoothly each period. The payroll setup uses an “interview” format to get the required information from you, and you can always clearly see where you are in the process and how much further you have to go to complete setup (if you’ve ever used Turbo Tax to prepare your taxes, you know the drill). When you have questions, the system will suggest answers both from its online help documentation as well as its online knowledge base. On a more superficial note, Intuit Online Payroll, as the newest kid on the block, definitely has the most up-to-date look and feel; the other services have a dated feel and are not as pretty as Intuit’s product.

Intuit Online Payroll only supports electronic filing of state taxes for California. If your company is based anywhere else in the United States, the service can help you prepare and print out the forms, but then you will need to mail in the forms yourself (along with a check for taxes due if applicable).

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