S corp payroll: Paychex or Zen Payroll?

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markfaix
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S corp payroll: Paychex or Zen Payroll?

Post by markfaix » Fri Jan 09, 2015 12:09 pm

I am the sole owner and employee of an S corp. For the past year, I have used Paychex for semiannual payroll to pay myself a reasonable salary.

Short version of my question:
The past year of payroll with Paychex has been a significant headache. I have spent hours on the phone each quarter, getting them to correct repeated billing, payroll processing, and accounting errors. I *think* the bugs are worked out, although it was difficult to get things corrected each time.

Would you stay now that the problems are apparently worked out, or would you try a new startup payroll provider like Zen Payroll?

Detailed version:
My 1st year with Paychex has been a huge headache. I have had to call repeatedly to remove multiple small charges for services that I did not use. After the 5th call, the incorrect billing stopped. Then they botched my Dec payroll because their definition of gross salary was bizarrely different from my CPA's definition, resulting in $1000 excess taxes withheld. Initially they refused to correct their mistake, but eventually they did. Also, they screwed up my W-2 because they incorrectly handled health insurance and HSA contributions despite my specific directions in multiple emails and phone calls. Again, after repeated phone calls and emails, they fixed it.

My payroll situation is not likely to change in future years. Now that there is a precedent in their system about me, inertia says that it's probably OK to stay with them. But the errors and spotty customer service (eventually corrected each time by a wonderful manager) leave a bad taste in my mouth.

I tried Zen Payroll, which has a much more efficient and visually appealing website compared to Paychex. The customer service has been excellent. Although I have not yet done a payroll with them, they have demonstrated clear understanding of how to handle S corp shareholder payroll (which is different from a regular employee's payroll in important ways). They have even offered to let me call in my payroll numbers once/year instead of using their software because their software is a little better suited to regular hourly employees than the S corp owner.

Zen Payroll is $200/yr cheaper after tax. They are a startup, which is good because they're hungrier but also bad because there's a chance they might go out of business.

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Would you stay with Paychex out of inertia despite past error, or leave to Zen Payroll?

niceguy7376
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Re: S corp payroll: Paychex or Zen Payroll?

Post by niceguy7376 » Fri Jan 09, 2015 1:34 pm

If you are a BofA customer, check their services (if you work in one state only).

There is a sister company of Paychex (actually Paychex bought them last year) called SurePayroll. Everything is online and comparably lower fees than Paychex. We used Paychex like 8 years ago and been on SurePayroll (for company with employees across multiple states) for 6 years and very satisfied. You can get a quote online at their site.

If you are a one man shop and do one state, how much does your CPA charge to do the payroll as well? That might be a lot cheaper.

delconte
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Re: S corp payroll: Paychex or Zen Payroll?

Post by delconte » Fri Jan 09, 2015 1:35 pm

We made the switch from Paychex to ZenPayroll for an S-Corp and have been very happy with ZenPayroll.
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Gropes & Ray
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Gropes & Ray » Fri Jan 09, 2015 2:45 pm

Paychex runs an awful 401k for my wife's company. It has completely tainted my view of them.

Polaris
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Polaris » Fri Jan 09, 2015 4:28 pm

I am also the sole owner and employee of an S corp using Paychex since they acquired Interpay about a decade ago. I did have some minor growing pains when I set up my payroll back in the day, but they seem very minor compared to what your experience sounds like. It does seem like Paychex may have assigned you a lackluster Payroll Specialist though. While I don't have to contact my Paychex Payroll Specialist very often (sometimes once per year to call in EOY fringe benefits), I have found that each of the three people that I have dealt with over the years have been very competent.

One thing that I've disliked about Paychex is that their prices had nearly doubled since they took over from Interpay and I noted this on every one of those silly survey cards that they've mailed me over the years. Lo and behold, one day my latest Payroll Specialist gave me a call out of the blue to tell me they received my survey and she wanted to let me know about something called "Officer Only Payroll", which ended up giving me all of the same services (tax filing, tax pay, direct deposit, etc.) for HALF the cost. I've been very pleased with the change.

As for their 401k offerings, a Paychex retirement rep made a pest out of himself for a while trying to get me to sign up. I've been very pleased with my SEP IRA at Vanguard for many years now, so he eventually got the hint after I told him "No!" every time he contacted me. :D

Allan
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Allan » Fri Jan 09, 2015 5:28 pm

I use Intuit's payroll service (used to be called Paycycle). Love it.

Allan

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markfaix
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Re: S corp payroll: Paychex or Zen Payroll?

Post by markfaix » Fri Jan 09, 2015 5:56 pm

Thanks for the responses so far.

@delconte - When you use Zen payroll for your salary, do you pay yourself a similar $ amount and similar deductions each month? What have you found better about Zen than Paychex? The way my CPA likes it, I take most of my salary at year end for salary and fringe benefits, and one smaller salary in Q1 for 401K deferral only. The Zen payroll system seemed to work better for paying myself the same amount with same deductions each pay period, but they seemed willing to work w/me.

@Polaris – if you don't mind me asking, how much does Paychex charge you for officer payroll? I pay $615/yr for up to 4 payrolls, all fed/state taxes e-paid and all forms e-filed, year end W2.

@Allan - Does Intuit's payroll service allow you to specify exact amounts for the payroll, or do they calculate each paycheck based on # dependents, monthly deductions for benefits, etc.? I would love the ability to say, my salary is this, my federal/state tax withholding is this, health ins is this, etc. But most programs make you enter stuff monthly, and that just makes my life more complicated.

@niceguy - My CPA would charge similar amount as Paychex, and I have to mail forms and make tax payments myself.

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gasdoc
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Re: S corp payroll: Paychex or Zen Payroll?

Post by gasdoc » Fri Jan 09, 2015 6:18 pm

I have been paying about $1,500 total per year for my CPA to do both payroll and taxes for my one person SCorp. I don't really have anything to compare this too, though, since I haven't tried either of the OP's companies.

Allan
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Allan » Fri Jan 09, 2015 6:37 pm

markfaix wrote:
@Allan - Does Intuit's payroll service allow you to specify exact amounts for the payroll, or do they calculate each paycheck based on # dependents, monthly deductions for benefits, etc.? I would love the ability to say, my salary is this, my federal/state tax withholding is this, health ins is this, etc. But most programs make you enter stuff monthly, and that just makes my life more complicated.
They do allow you to modify tax withholdings, I do this often for myself, I actually have more withheld to account for S Corp flow thru income. So the answer is, yes, you can edit these items.

Allan

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Re: S corp payroll: Paychex or Zen Payroll?

Post by Allan » Fri Jan 09, 2015 6:39 pm

bkinder wrote:I have been paying about $1,500 total per year for my CPA to do both payroll and taxes for my one person SCorp. I don't really have anything to compare this too, though, since I haven't tried either of the OP's companies.
My long time CPA charged about the same. I now use payroll service (Intuit) and cost is about $300/year. They file all gov't forms (941, 940, state tax, etc). And of course they do direct deposit and calculate withholdings, tax deposits, etc.

Allan

Polaris
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Polaris » Fri Jan 09, 2015 7:47 pm

markfaix wrote:@Polaris – if you don't mind me asking, how much does Paychex charge you for officer payroll? I pay $615/yr for up to 4 payrolls, all fed/state taxes e-paid and all forms e-filed, year end W2.
My last non-quarterly monthly payroll was $54.15 for the following items:

Payroll Processing
Taxpay Service
Direct Deposit
Readychex
Check Signing
Check Insertion
Postage And Handling

Quarterly/year end payroll months were $60.65 apparently due to additional filings, but I don't have the 2014 EOY invoice yet and it is higher due to W2 generation.

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Hayden
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Hayden » Sat Jan 10, 2015 9:25 am

I've been using Paychex for over a decade. I've had lots of problems over the years. One reason is that their payroll specialists turn over rapidly. Some are quite good, some are quite bad. I spend considerable amounts of time correcting their errors.

For 2015, I have been planning to switch to Intuit. Since at this point I know how to calculate everything, I think I will be better off doing it myself, rather than going through Paychex' specialists. I haven't heard of Zen Payroll.

S Corp owners do have different treatment than employees. Anyone have any issues with Intuit on the S Corp owner issues?

Allan
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Allan » Sat Jan 10, 2015 1:11 pm

Hayden wrote:I've been using Paychex for over a decade. I've had lots of problems over the years. One reason is that their payroll specialists turn over rapidly. Some are quite good, some are quite bad. I spend considerable amounts of time correcting their errors.

For 2015, I have been planning to switch to Intuit. Since at this point I know how to calculate everything, I think I will be better off doing it myself, rather than going through Paychex' specialists. I haven't heard of Zen Payroll.

S Corp owners do have different treatment than employees. Anyone have any issues with Intuit on the S Corp owner issues?
No issues here, I've used Intuit for 3-4 years. Not sure what you mean "I know how to calculate everything", isn't that the point of these payroll services? They do all calculations for all taxes, withhold from employees and employers, make tax deposits, and send returns to governments. At least that is what they do for me. I am S Corp with 6 employees.

Allan

Topic Author
markfaix
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Re: S corp payroll: Paychex or Zen Payroll?

Post by markfaix » Sat Jan 10, 2015 1:35 pm

Allan wrote:
Hayden wrote:I've been using Paychex for over a decade. I've had lots of problems over the years. One reason is that their payroll specialists turn over rapidly. Some are quite good, some are quite bad. I spend considerable amounts of time correcting their errors.

For 2015, I have been planning to switch to Intuit. Since at this point I know how to calculate everything, I think I will be better off doing it myself, rather than going through Paychex' specialists. I haven't heard of Zen Payroll.

S Corp owners do have different treatment than employees. Anyone have any issues with Intuit on the S Corp owner issues?
No issues here, I've used Intuit for 3-4 years. Not sure what you mean "I know how to calculate everything", isn't that the point of these payroll services? They do all calculations for all taxes, withhold from employees and employers, make tax deposits, and send returns to governments. At least that is what they do for me. I am S Corp with 6 employees.

Allan

Allan,

Do you think Intuit Online Payroll will easily handle my single owner/employee S corp payroll situation? I do only two payrolls/yr:

1st payroll in Jan
* 401k deferral $5,000
* No net salary
* Withholding for FICA/FUTA/SUTA. No federal/state taxes withheld otherwise

2nd and final payroll in Dec
* Salary ~$50,000, depending on what CPA tells me is reasonable salary
* Salary deductions for 2% shareholder health ins, HSA, and auto for the entire year
* Fixed dollar amounts for fed and state tax withholdings -- I want specific dollar amounts withheld, not withholding based on # W4 personal allowances

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Hayden
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Hayden » Sat Jan 10, 2015 1:52 pm

Allan wrote:
Hayden wrote:I've been using Paychex for over a decade. I've had lots of problems over the years. One reason is that their payroll specialists turn over rapidly. Some are quite good, some are quite bad. I spend considerable amounts of time correcting their errors.

For 2015, I have been planning to switch to Intuit. Since at this point I know how to calculate everything, I think I will be better off doing it myself, rather than going through Paychex' specialists. I haven't heard of Zen Payroll.

S Corp owners do have different treatment than employees. Anyone have any issues with Intuit on the S Corp owner issues?
Not sure what you mean "I know how to calculate everything", isn't that the point of these payroll services? They do all calculations for all taxes, withhold from employees and employers, make tax deposits, and send returns to governments. At least that is what they do for me. I am S Corp with 6 employees.

Allan
You would not believe how often Paychex mis-calculates things. As one example I've had trouble with, the owner DOES need to pay medicare tax on personal use of company car. Their system did not calculate this correctly in our case, and so i needed to have them re-calculate it. I've had up to 40 employees at one time, with lots of payroll stuff going on. Each pay period, i review their payroll run, notify them of the errors, and then they re-run the payroll to make it correct. In my experience, you really cannot assume that they will do it correctly. You need to carefully review the reports.

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gasdoc
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Re: S corp payroll: Paychex or Zen Payroll?

Post by gasdoc » Sun Jan 11, 2015 11:23 am

Polaris wrote:
markfaix wrote:@Polaris – if you don't mind me asking, how much does Paychex charge you for officer payroll? I pay $615/yr for up to 4 payrolls, all fed/state taxes e-paid and all forms e-filed, year end W2.
My last non-quarterly monthly payroll was $54.15 for the following items:

Payroll Processing
Taxpay Service
Direct Deposit
Readychex
Check Signing
Check Insertion
Postage And Handling

Quarterly/year end payroll months were $60.65 apparently due to additional filings, but I don't have the 2014 EOY invoice yet and it is higher due to W2 generation.
It seems like the list above is actually very small- pay taxes and pay salary. I do it myself for my one person S-CORP. My CPA gives me a salary and tax payment schedule once per year, and on the same day each month, I pay myself a salary check and have the appropriate taxes withdrawn from my business account. I go online at EFTPS to have taxes withdrawn electronically, and I go online on my business account web site to have my salary transferred electronically to my personal account. It takes about 5 minutes, once per month. My CPA tells me it is not really an additional cost for him to do his part becuase it does not take a significant amount of additional time to send the once-per-year schedule. I have been doing it this way for the past 10 years or so. If I had additional employees, besides myself, I probably would do things more formally, using a 3rd party payroll company.

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Hayden
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Re: S corp payroll: Paychex or Zen Payroll?

Post by Hayden » Sun Jan 11, 2015 1:12 pm

bkinder wrote:
Polaris wrote:
markfaix wrote:@Polaris – if you don't mind me asking, how much does Paychex charge you for officer payroll? I pay $615/yr for up to 4 payrolls, all fed/state taxes e-paid and all forms e-filed, year end W2.
My last non-quarterly monthly payroll was $54.15 for the following items:

Payroll Processing
Taxpay Service
Direct Deposit
Readychex
Check Signing
Check Insertion
Postage And Handling

Quarterly/year end payroll months were $60.65 apparently due to additional filings, but I don't have the 2014 EOY invoice yet and it is higher due to W2 generation.
It seems like the list above is actually very small- pay taxes and pay salary. I do it myself for my one person S-CORP. My CPA gives me a salary and tax payment schedule once per year, and on the same day each month, I pay myself a salary check and have the appropriate taxes withdrawn from my business account. I go online at EFTPS to have taxes withdrawn electronically, and I go online on my business account web site to have my salary transferred electronically to my personal account. It takes about 5 minutes, once per month. My CPA tells me it is not really an additional cost for him to do his part becuase it does not take a significant amount of additional time to send the once-per-year schedule. I have been doing it this way for the past 10 years or so. If I had additional employees, besides myself, I probably would do things more formally, using a 3rd party payroll company.
bkinder, who prepares the 941, 940, W2, and W3? Do you do that, or do you pay your accountant to do that? Right now, i am paying Paychex to do it (i haven't yet received the end of year invoice, to see what they charge for this).

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gasdoc
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Re: S corp payroll: Paychex or Zen Payroll?

Post by gasdoc » Sun Jan 11, 2015 6:29 pm

All of the actual tax forms are filled out by my CPA, and sent to me for signature, with a self-adddressed, stamped envelope for me to mail.

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Re: S corp payroll: Paychex or Zen Payroll?

Post by knswamy » Wed Feb 11, 2015 8:24 am

bkinder wrote: It seems like the list above is actually very small- pay taxes and pay salary. I do it myself for my one person S-CORP. My CPA gives me a salary and tax payment schedule once per year, and on the same day each month, I pay myself a salary check and have the appropriate taxes withdrawn from my business account. I go online at EFTPS to have taxes withdrawn electronically, and I go online on my business account web site to have my salary transferred electronically to my personal account. It takes about 5 minutes, once per month. My CPA tells me it is not really an additional cost for him to do his part becuase it does not take a significant amount of additional time to send the once-per-year schedule. I have been doing it this way for the past 10 years or so. If I had additional employees, besides myself, I probably would do things more formally, using a 3rd party payroll company.
bkinder, I was thinking of doing this too for my wife's company. As an engineer, it seems bizarre to be paying as much as she is to do what should be fairly straightforward calcs and to do a few online bill payments. Do you have an Excel spreadsheet setup to do these calcs? Has it been validated by your CPA? Would you mind sharing with me (with personal info removed)?

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gasdoc
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Re: S corp payroll: Paychex or Zen Payroll?

Post by gasdoc » Wed Feb 11, 2015 10:06 am

knswamy wrote:bkinder, I was thinking of doing this too for my wife's company. As an engineer, it seems bizarre to be paying as much as she is to do what should be fairly straightforward calcs and to do a few online bill payments. Do you have an Excel spreadsheet setup to do these calcs? Has it been validated by your CPA? Would you mind sharing with me (with personal info removed)?
I don't really do any calculations. Once per year, my CPA gives me a year's worth of schedule of what to pay and when, and I do it electronically. Quarterly, he sends me a few forms to "sign, date and mail." It takes me about 10-15 minutes per month. Actually, it is hard to tell how much my CPA charges for this service, and how much of the total bill is for "general time" on my account. Each quarter, when he sends the forms for me to sign, date and mail, there is an invoice for $150. Then, there is a charge for the annual forms, which I can't recall what the price is off hand. Did I answer the question? I really don't know if I am overpaying or getting a good deal. I just know that one advantage to using my CPA is that when the IRS a couple of times tried to assess a penalty for some late payment, the CPA wrote a letter taking the blame, and the penalty was dropped. He does a better job communicating with the IRS than I ever could, and this way I don't have multiple parties each blaming each other.

knswamy
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Re: S corp payroll: Paychex or Zen Payroll?

Post by knswamy » Wed Feb 11, 2015 5:48 pm

bkinder, I need your CPA! :happy I'm hoping to interview some new accountants after tax season, and this might have to be one of the questions. Thanks!!

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gasdoc
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Re: S corp payroll: Paychex or Zen Payroll?

Post by gasdoc » Wed Feb 11, 2015 6:23 pm

knswamy wrote:bkinder, I need your CPA! :happy I'm hoping to interview some new accountants after tax season, and this might have to be one of the questions. Thanks!!
My pleasure. I kind of stopped looking when my accountant told me his price would be about the same if I hired a payroll company. I guess between the two of us, we do what the company would do, but for less money.

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