This post originally appeared in Peter's blog, and is reposted with permission from author Peter Keung. 

My 5-employee small business had been using ADP Canada for payroll services for many years. Nearing the end of 2012, I decided that I was ready to find an alternative payroll service provider for a few reasons:

  • Inconsistent service: Most of the time, customer service was good. However, normal modifications to employee deductions or employee information was input incorrectly about a third of the time. Sometimes the error was by a large factor (as in a couple of extra zeros added to taxable benefits) and, after I pointed it out, it was only corrected for 1 payroll run. Other small issues included being disconnected when being transferred over the phone to a different internal department and not being called back (and thus being required to sit in an hour-long hold queue again).
  • Technological inconvenience: To review payroll numbers online, I was forced to use Internet Explorer 6 or 7. Despite repeated requests to have this updated, at the end of 2012 I still had to load a virtual machine or use an old computer that had software updates turned off in order to access the online interface.
  • Nickel and diming with fees: The $26 + tax per-payroll (at 4 employees) fee was relatively reasonable. However, with extra fees for processing and sending year end review forms, T4 forms, schedules of payroll input dates, and so on via courier (without an option to have this sent via regular mail or electronically), the total cost added up to more than $800 every year.

When I indicated to ADP that I wanted to cancel my account, I was put in touch with a retention specialist who assured me that all 3 main complaints could be addressed. However, she followed up to say that neither the Internet Explorer requirement nor the courier requirement could be changed.

The end of a calendar year is a good time to switch payroll service providers since there are no accruals that need to be ported. The employees and deductions simply need to be set up in the new system before the start of the new year.

Alternative payroll service companies in Canada are more numerous than I would have originally guessed. I evaluated a few of them, including PaySavvy, Payment Evolution, and Wave Payroll. Most of them seemed quite adequate, but I ended up switching to Wave Payroll: it differentiated itself based on its intuitive interface, ability to schedule several payroll runs in advance, and strong enthusiasm for customer support.

Wave Payroll is a service by the makers of Wave Accounting, which is a free online accounting system (that I haven’t tried). They also have an invoicing application and a personal finance application (similar to Mint). The Wave company itself is relatively new, having started in 2009, focused on small businesses. Wave Payroll was officially launched in February 2012. Wave has been quite active in the past year: they’ve announced a major round of funding, website changes, the integration of Wave Accounting and Wave Payroll, the expansion of Wave Payroll beyond Canada and into the US, and much more.

Wave Payroll’s pricing starts at $5 per employee per month; it drops if you have 6 or more employees. All other features are included, such as direct deposit, tax remittances, and T4 forms. For my company, this means our yearly payroll fee cost will be less than a third of what it was with ADP.

Your entire Wave Payroll account is managed online. You can set up an account for free, add employees and their taxable benefits and deductions, and preview payroll runs before you have to pay. You can have multiple management logins, and employees can log in to access their deposit slips online. I found that setting everything up was incredibly simple. I’ve used their e-mail support a few times, and they’ve responded within 1 business day in a friendly and efficient manner. They also have phone support, although I’ve only spoken to them to inquire about features before I decided to use Wave.