If you’re looking to get a new payroll provider, there are many choices out there. ADP and Paychex are both leaders in this space as they allow you to create automated processes for payroll for your employees while keeping track of other important information. However, they approach the market in different ways. In this article, Forbes Advisor compares ADP vs. Paychex on several different criteria so that you can decide which one is right for your business.
ADP vs. Paychex: At a Glance
ADP and Paychex are both leading payroll providers in the United States. ADP is a global leader in providing human resources (HR) and payment solutions for businesses of all sizes across the globe while Paychex is a leading provider of payroll and HR services for small and medium-sized businesses (SMBs).
While ADP is accessible to businesses of all sizes, its RUN service caters to startups and small businesses with less than 50 employees. According to the official website, ADP is trusted by more than 920,000 clients, which makes it a leading provider of cloud-based human capital management (HCM) solutions that integrate HR, payroll, talent, time, tax and benefits administration.
In the same vein, Paychex also offers enterprise payroll and HR solutions for businesses of all sizes. Its smaller payroll platform, known as Paychex Flex, is intended for small enterprises with fewer than 50 employees.
ADP
Starting price
$65-plus
per month, depending on company size and needs
Benefits administration
Yes
extra cost
Contractor payments
Yes
with W2 employee
$65-plus
per month, depending on company size and needs
Yes
extra cost
Yes
with W2 employee
ADP RUN provides automatic tax filing and reporting and facilitates payroll for U.S.-based employees. It allows you to manage and pay 1099 employees and adds on additional features like benefits admin and comprehensive HR training.
ADP RUN is ideal for companies requiring a customizable payroll service platform and tailored support from a customer support specialist. It’s also a wonderful fit for small businesses that anticipates expansion to more than 50 employees.
- Easy employee payroll
- Automatic tax filing and reports
- Add-ons for marketing and legal assistance
- Customizable plans
- Pricing estimates are hard to get
- Requires at least one W2 employee for contractor payments
- Added cost for benefits administration
- Added cost for tax form filing
Paychex
Starting price
$39
per month, plus $5 per employee
Benefits administration
No
Contractor payments
Yes
$39
per month, plus $5 per employee
No
Yes
Paychex helps you manage HR, payroll, benefits and more from their all-in-one solution. It provides an easy-to-use platform for employees’ self-service.
Paychex Flex makes it possible to pay employees via direct deposit or enables you to generate checks on your own printer and hand them out to workers. Employees can verify their pay stubs and tax forms on their own using the platform’s self-service employee portal. The platform is a great option for small businesses looking for a quick, straightforward payroll solution with lots of standard features.
- Easy employee payroll
- Garnishment payment service included
- Supports integration of other accounting software such as QuickBooks, Sage Intact and Xero
- Customizable plans
- Extra fee for payroll tax filing
- Extra fee for W-2 and 1099 filing
- Additional platform needed for time tracking
How ADP vs. Paychex Stack Up
ADP includes payroll with direct deposit, a self-service employee platform and new hire onboarding along with other useful HR features. However, it’s a bit more expensive than Paychex, which offers similar services. Paychex is regarded as the better choice for SMBs.
Pricing
Paychex Flex
Paychex Flex offers three pricing tiers:
- Essentials: $39 per month plus $5 per employee
- Select: Custom pricing based on company needs
- Pro: Custom pricing based on company needs
ADP RUN
ADP RUN pricing plans include:
- Essential: Pricing starts from $59 per month plus $4 per employee, per month
- Enhanced: This includes basic payroll, plus electronic check signing and unemployment insurance and background checks while pricing requires talking with a sales rep
- Complete: This has all payroll features, plus HR features including employee handbook, document management and training and toolkits while pricing requires talking with a sales rep
- HR Pro: This is payroll and HR admin, plus personalized HR support and training for things like sexual harassment while pricing requires talking with a sales rep
Featured Partners
1
Gusto
Yes
Yes
$49 per month plus $6 per user
2
Rippling
Yes
Yes
$35 per month + $8 per user
3
Justworks
Yes
Yes
$59 per month per employee ($49 per month after 50+ employees)
4
Paychex
Yes
Yes
Custom
Bottom Line
It’s easy to see why ADP and Paychex have been successful for so long. They’re both well-established brands with a huge amount of experience in providing payroll services to a wide range of customers.
ADP is one of the largest payroll service providers in the world and its small business solution RUN is a natural extension of the service it provides to medium and large businesses and Fortune 500 companies. Its service could be right for your business if you want a customizable payroll service platform with one-on-one guidance from a customer service representative. It’s also a good fit for a small business that expects to grow because it’ll be easy to migrate to ADP enterprise platforms if your company grows above 50 employees.
However, if you’re looking for a payroll solution for your SMBs that offers top-notch customer support and plenty of add-on features, look no further than Paychex. For an organization that has been around since 1971 offering payroll services to more than 730,000 businesses across the United States and Northern Europe, Paychex has proven to be a suitable choice for smaller firms in search of an economical payroll solution.
Frequently Asked Questions (FAQs)
What are payroll companies?
Payroll companies are businesses that process payroll for other companies. They help employers pay their employees and make sure taxes are calculated properly while also providing services like tax filing and benefits administration. Learn more about the best payroll services.
When should you outsource payroll?
Processing payroll is time-consuming. Outsourcing payroll will help free up time to focus on your company. If you do not want to outsource payroll, consider using software to process your employees’ payments and taxes.
Is Paychex preferable to ADP?
This depends on the size of your business and the specific requirements involved. Paychex is known to work best for new firms and small enterprises while ADP performs better for bigger corporations.
When is ADP ideal?
ADP can be the ideal option for your business if you run a small firm that is swiftly expanding into a profitable enterprise or already has several employees.
Can ADP be trusted?
ADP (legally Automatic Data Processing, Inc.) is trusted by tens of thousands of companies around the world as the largest payroll service provider in the world. More than 80% of Fortune 500 companies use ADP services and it has been named one of the world’s most admired companies by Fortune magazine for the past 15 years.
