Payroll Service Payroll Trends

Payroll Professionals Turn to Social Media to Evaluate Service Providers

  • A prime outlet for airing complaints in general, social media is becoming a forum for calling out the shortcomings of payroll service providers.
  • It appears no particular service provider is immune to the brickbats.
  • Payroll pros help each other to navigate selecting service providers.

As challenges for payroll pile up due to major, complex legislative changes, payroll service provider solutions are struggling to keep up and deliver at crucial times, according to user reports on social media.

For all that third-party providers do to ensure their clients’ payroll processes are efficient, accurate and timely, there remains concern. 

The complaints appear to span across the entire third-party payroll provider industry of, from the very reputable and well-known to the mid-size and specialty service providers. 

These issues appear to range from system instability and processing delays that impact payroll delivery, to not being able to create usable reports for the employer from the data. There are instances of confusion due to updating procedures, year-end anomalies, and serious customer service problems, all aired out on Facebook, Twitter, Reddit and other platforms. 

Users of services that were pressed minced no words. One said: “Another 65-minute wait for a representative … I finally got a person and they couldn’t figure out the issue … Two hours wasted — payroll processing was delayed.”

Another complained about lack of sufficient support for a specific reporting issue. “When we try to fix or add something, something else ‘breaks.’ I’ve been with this company for a year now and we are on our third rep!” 

A separate service provider received similar bad comments: “Reporting is terrible and if you need something specific you pay a lot for it.”

The issues keep going: 

At year-end, employees using an earned wage access provider at one major retailer were told the option “is not available to associates from Dec 19 to Dec 31.” What a great time to not have access to the highly-touted benefit. 

On being able to generate reports, several echoed this complaint, “They ignored my report request. I had to get other departmental directors involved. We had to pay extra for these reports.”

“Unfortunately, their answer as usual was ‘system limitations’ … no follow-up, no research, no accountability,” cried another.

Many professionals discussed their own work-arounds due to system limitations.

“I keep a separate excel spreadsheet just to make sure it’s right because even though you can see what will be accrued, it may or may not be in the EE’s (employee’s) total,” said one who posted. “Their customer service is horrible”

“Every single time they have an upgrade over the weekend, Monday’s are shot.”

Payroll pros rely on peer evaluation in selecting a provider

Often when these situations are identified as someone asks about a particular service provider, there are a few in the same thread who endorse, and others who pan.

While one says “We are using products from both systems and it’s been great!” Another says “Not user friendly at all. I would never recommend it to any of my payroll friends.”

On another thread about garnishment processing, a similar refrain has one poster saying, “We used them in the past and won’t do it again,” while another says, “The service benefits outweigh the few problems that we know of.”

And there can be more to the concerns than simply what the service provider has offered and can or cannot deliver effectively. Often large service provider systems are set up at the client by approved consultants or teams that specialize in such implementations. And implementations can go badly. For example, “My implementation specialist wasn’t very good. They really made a mess …”

Some are resigned to having to deal with shortfalls in service and delivery.

One in payroll said “I want to switch … but I am just scared it’ll be the same thing elsewhere.” Then another seems to back that issue up, “I wish we hadn’t switched right now. We are at the third check into our new provider and I am so very sad.”

Others pull back completely.

“This is why I appreciate a full in-house payroll. Everything is under my control.”   PYD

Payroll Trends

Payroll 2021: Out and In

The forces of change continue to dominate payroll, and 2021 will see even more changes for employers in how they handle worker pay.’s exclusive “out and in” for 2021 gives practitioners a glimpse at what is going away as the new year starts, and what will come into play as 2021 progresses.

However, many key payroll-related numbers for 2021 will remain the same as 2020 (although there always is the possibility that legislative changes could impact these as well in 2021). The elective tax-free deferral limit for 401(k)-type programs ($19,500), for example, remains the same as in 2020, as is the over-50 additional catch-up amount ($6,000). 

Other figures that remain the same are: flat tax rate on supplemental wage payments (22%; 37% once $1 million in supplemental wage payments is reached); the general tax rates for individuals remain the same in 2021 as 2020 (10%, 12%, 22%, 24%, 32%, 35%, 37%); the Social Security payroll tax rate stays at 6.2% up to the new wage base (see below); Medicare/Hospital Insurance tax rates remain the same as well at 1.45% for most and 2.35% for individuals with incomes generally higher than $200,000, once that amount has been reached for the year.

But, beyond that, here are the major things in payroll that are going “out” and coming “in” in 2021!

Working at Home Office/Home work blend
New Form W-4New Form 941X
State/Local Withholding Based on Company Sites Where Employees Worked State/Local Withholding Taxes Based on Where Employee Works Remotely
COVID-Related Employment Tax Credits Under March 2020 CARES ActClaiming Past Credits
Social Security Tax Deferrals Under CARES Act and President’s OrderAdditional Social Security Tax Payments
COVID-Related Mandated Paid Time Off Under March 2020 FFCRA LawGenerally Mandated Paid Time Off
Paycheck Protection Program Under March 2020 CARES ActPaycheck Protection Program Audits
Suspended Withholding on Student LoansNew Student Loan Withholding Orders
COVID-Related Emergency Unemployment Higher Unemployment Tax Contributions
Social Security Wage Base = $137,700 Social Security Wage Base = $142,800
Standard Business Mileage Rate = 57.5 cents-per-mile Standard Business Mileage Rate = 56 cents-per-mile
Employees Accessing Pay on PaydayEarned Wage Access/On-Demand Pay
Manual ReconciliationsAutomated Reconciliations

Total Defined Contribution Tax-Free Limit = $57,000

Total Defined Contribution Tax-Free Limit = $58,000

Form 1099-MISCForm 1099-NEC

Where to go from here

As in 2020, the payroll professionals who kept a good deal of the economy going despite illnesses, lockdowns, and social and political upheaval can expect more of the same for much of 2021. 

Although most see a light at the end of the tunnel for 2021, those in payroll will need to stay focused on their commitment to process accurate and timely pay under continued trying circumstances, just like the general public is being urged to stick with personal protection protocols until the infection curve declines.