Wave Payroll is an easy-to-use platform that works in tandem with Wave’s free accounting, invoicing and receipt capture software — giving small-business owners a complete solution for managing their finances.
Although you have to pay to use it, Wave Payroll works in tandem with all of Wave’s free products, providing you with a one-stop shop for managing all of your business’s finances. Here’s what you need to know to determine if Wave Payroll might be a good fit for your business.
Wave Payroll: How it works
Wave Payroll is a cloud-based payroll service, meaning your information is stored on Wave’s servers and transferred to your platform via the cloud. When you sign up for Wave Payroll you’ll be able to log into your account via the Wave website on any internet-enabled device. If you’re logging in for the first time, here are the steps you need to take to set up your account and start processing payroll.
When you sign into your Wave Payroll account for the first time, you’ll be prompted to provide a variety of necessary information to begin processing payroll. You’ll be asked for your employer identification number (EIN), your state identifier (EIN but at the state level), business details (address, entity type, description of products/services), the information of your company signatory, tax information and employee information, including bank account info for direct deposits.
If you are migrating over from another payroll platform, Wave also recommends having your payroll history on hand to ensure the accuracy of your tax reporting moving forward.
Once you enter in all the necessary information, you will be directed to your payroll dashboard. This is your home base for reviewing, editing and approving payroll runs. There’s one important thing you need to do here before you can start processing payroll: Set up your payroll schedule. Wave Payroll allows for payroll to be run on weekly, bi-weekly, bi-monthly (twice a month) and monthly.
Note that you must log in to your dashboard and approve each payroll run three days prior to the intended payday in order for payroll to be processed on time. Make sure to set your payroll schedule so that the timeframe for approving a payroll comes after the pay period is done. That way, you can approve the payroll run with all employee hours, bonuses and deductions accurately accounted for.
Wave Payroll will send you email reminders to help you remember to run payroll before your deadline. When you’re ready to run payroll, click “Review” on your dashboard.
You’ll be guided to a screen where you can see a list of all your employees, what they’re owed for the pay period, their tax deductions, bonuses and more. If anything looks off, you can navigate to that employee’s profile and make adjustments in the “Benefits and Deductions” tab.
If all looks good, select the “Approve” button to run payroll. If you realize you made a mistake after clicking “Approve,” simply click “Delete” to remove the payroll from pre-approval. Once your payroll is approved, you can view it under the “Approved Payrolls” tab in your dashboard. From here you can also view and download individual employee pay stubs. Approved payrolls will be processed in accordance with your payroll schedule.
Wave Payroll offers two payment delivery options: Direct deposit or self-printing checks. Wave offers check printing services through Check Print. You can opt to print checks for certain employees when you run payroll. Note that you must purchase your own printer-friendly checks, also known as “laser” or “sheet-fed” checks.
For paying contractors, Wave Payroll has a slightly different system. You first must enter them into the payroll system under “Vendors” in the “Purchases” tab of your dashboard. Be sure to mark them as a “1099-MISC contractor.” This will allow Wave to generate the 1099-MISC form at the end of the year.
When paying a contractor, select “Create a Bill” under the “Purchases” tab. Bills can be created with a flat rate or a per hour rate. When the bill is complete, you can add it to your next payroll run by selecting the option to “Pay contractor.” If you’re not paying the contractor via direct deposit, you will need to cut them a check when you run payroll.
Paying contractors through Wave Payroll costs $4 per contractor paid per month, in addition to your payroll base fee. You will not be charged the $4 fee on months you do not pay contractors.
One other nifty feature is the ability to place certain employees “on hold” from payroll — removing them from future payroll cycles until you decide to put them back on. This can be a time saver for seasonal businesses.
Wave Payroll offers tax administration services for several states in the US. In these states, Wave will pay and file your state and federal taxes when you run payroll. The states that Wave Payroll currently offer tax administration in are Arizona, California, Florida, Georgia, Illinois, Indiana, New York, North Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin. For more information on what tax services they can provide in those states, visit the Wave Help Center.
Once you set up your Wave Payroll account, you can invite employees to the platform. Once they create their own account, they can log on to view payroll-related data, including salary, vacation time left, downloadable pay stubs and tax forms — including year-end tax forms. They can also view the status of a payroll transfer, and see how soon the funds from their paycheck will be available to them.
Integrations and add-ons
Wave Payroll works in tandem with Wave’s other free services, all of which are accessible from your Wave account. Let’s take a look at the other services available to you:
Wave provides accounting software with unlimited bank and credit card connections, income and expense tracking — and the ability to provide your accountant or bookkeeper access to your platform. If you choose to house your business’s books on Wave’s accounting software, you’ll be able to use some additional features, including:
Automatically generated accounting reports, like profit and loss statements, sales tax reports, cash flow reports and balance sheets
Integrations with PayPal, Shoeboxed and Etsy.
Plus, payroll journal entries are automatically added every time you run payroll.
Wave’s invoicing software allows you to create custom invoices to match your business’s branding, set up recurring invoices and automated credit card payments for repeat customers and automatically record all invoice transactions in Wave’s accounting software. Invoices can also be sent from Wave’s mobile invoicing app.
Speaking of apps, another one Wave offers is a receipt scanning app that syncs automatically with your other software for easier expense tracking. The receipt scanner app can also work offline.
Wave will process digital payments on your behalf with Wave Payments. This service allows you to accept all major credit cards and ACH transfers, with funds arriving in your business bank account within two days of purchase. Wave Payments subscribers can attach “Pay Now” buttons to invoices to initiate digital payments, and all transactions are automatically recorded in your Wave accounting software. Processing fees are 2.9% + $0.30 per credit card transaction and 1% on ACH transfers.
The final add-on service covered in this guide isn’t free. Wave+ gives you direct virtual access to a professional Wave bookkeeper or accounting coach. Bookkeepers will take care of a variety of monthly financial tasks, including categorizing transactions, reconciling accounts and preparing income statements and balance sheets. Wave accounting coaches give you two hours of live accounting coaching plus 30 days of email access for follow up questions. The cost of the accounting coach is a one-time fee of $249, whereas the bookkeeper costs $149 each month.
Wave Payroll pricing
Wave Payroll has fairly straightforward pricing. For the states that receive tax administration with their payroll, Wave charges a $35 monthly base fee plus $6 per employee or contractor you run payroll for. For states where Wave does not offer tax administration, the Wave Payroll fees are $20 per month for the service, plus $6 per employee or contractor.
Wave Payroll pros
Wave Payroll’s price is cheap, and you get a lot of additional features to use with it. Although the payroll software isn’t the most in-depth option available, the fact that you also get free accounting and invoicing makes it much more appealing.
It doesn’t have to be a bad thing that Wave Payroll isn’t as comprehensive as some other available software options. That makes it easier to use, which is nice for time-strapped small-business owners. The interface is clean, the steps to take to run payroll are obvious and if you ever get bogged down, there is a Help Center on the website with lots of resources.
Wave Payroll cons
Wave is adding tax service states at a steady pace, but if you live outside ofArizona, California, Florida, Georgia, Illinois, Indiana, New York, North Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin, Wave Payroll won’t handle your payroll taxes. That can add a significant amount of work every time you run payroll, which you may not find worth the $15 price cut Wave provides for not delivering this service.
Wave doesn’t offer check signing and stuffing services, which is something a lot of other payroll service providers do. They also don’t offer paycards — another common option with other providers. Unless you want to be responsible for printing your own checks (and some business owners don’t), your employees need to take direct deposit.
Wave Payroll user reviews
Here’s how users rank Wave on some major review websites:
TrustRadius: 9.9 stars out of 10
Trustpilot: 4 stars out of 5
Capterra: 4.5 stars out of 5
Better Business Bureau: A+.
Pretty high marks all across the board. In reviews, users rave about the intuitiveness of the platform, the access to additional features like invoicing and accounting — and how cheap it is. Drawbacks users point out include the inflexibility of the platform (can’t create presets or custom templates) and bugs and glitches with its mobile apps.
Wave Payroll alternatives
Here are a few additional options to consider when shopping for a payroll service provider:
If you’re looking for more than just payroll, consider Gusto. It’s an all-in-one payroll/HR/benefits system that integrates with a broad range of additional accounting and time tracking software. You can try a free demo of Gusto for one month, and afterwards it’s a flat rate of $39, plus $6 per employee per month. Gusto also has a new option for contractor-only employers, who simply pay the $6/employee rate and no base price.
If you already use Square POS for your brick-and-mortar business, Square Payroll is a natural fit. It’s a fast and easy solution that integrates with a full suite of HR services and benefits providers, allowing it to be as thorough as you need it to be. It also edges Wave on price just a bit — $29 per month plus $5 per employee.
A version of this article was first published on Fundera, a subsidiary of allstocksnews.com