ADP vs Paychex – Payroll Processing Providers Compared

We are in the process of moving from Paychex to ADP Workforce. The history of ADP and Paychex is interesting. As I understand it Paychex was formed to fill a market gap that ADP was not serving or was under-serving - employers with less than 10 employees.

Since then, Paychex and ADP have expanded into each others' markets in terms of employer size, so officially Paychex also serves large employers and ADP also serves small employers.

We have about 45 employees, and working with Paychex it was evident to me that their 'sweet spot' was companies with less than 10 employees. Certain aspects of our 401k, for example, were too complicated for Paychex systems and had to be handled manually, outside of their technology solutions (creating duplication between the online version which was 'wrong and should be ignored' and the manual version, which we had to request and had often at least a one week turnaround to obtain). Our 401k is not complicated at all for our size so this was telling to me.

In addition, Paychex technology is from my experience well behind ADPs. Even Paychex employees would openly discuss this with me (in the last few years they have been pouring money into R&D on the technology front but they have a lot of catching up to do). According to some Paychex employees I spoke to, historically Paychex was anti-technology and it seems it was not until they were way behind that they realized technology was crucial and started to focus on it. For me, the reliability, flexibility and speed of the technology is absolutely critical so this was a major motivator for us to move.

Another comment I would make is that both ADP and Paychex try to up-sell you on their committed HR person/dedicated rep solutions. We had this with Paychex and I have found that the value of it really depends on which reps you are assigned. Some of them are awesome and others are mediocre. If you get someone mediocre, you may as well just have the basic solution and be calling into the general customer service center - you will probably get the same person answering the phone. At Paychex (I can't speak for ADP because we did not sign up for this option) the awesome reps are often promoted so you can be left with the mediocre ones. There was fairly high turnover with the reps on the payroll side, although we had an awesome 401k rep who was with us the whole time (she was burdened by mediocre technology but delivered us awesome customer service).

In coming to the decision to move to ADP, I've talked to a lot of customers of both ADP and Paychex, and also 3rd party vendors who work with both companies. My overall view is: don't expect perfection from either. Both will make mistakes. The differentiating points I have heard over and over again are, as mentioned above, 1) ADP is ahead on technology, and 2) if you are a larger employer, ADP may be better able to handle your complexities.

What you didn't indicate in your initial question was your location, how many sites you have, predominant Exempt vs Non-Exempt, specialized reporting needs, if any...

Look, I was Division CFO for Adecco N.A., managing a 500,000 W2 population on our own internal platforms some years ago... Yet, I experienced one of each over the years as Adecco acquired companies - ADP (SMb and Large), Ceridian, Paychex, Probusiness, even Intuit Payroll...

Amazingly none of the respondents seem to mention all the integration issues and opportunities with payroll -- Employee Self-service linked to you carriers and their benefit sites -- Employees are much happier when their payroll deductions, and life event management are completely integrated with their benefits -- not sure who can do that in the pack being offered, but my Wells Insurance Broker, working with ADP has provided one seamless interface for employees to manage their life events (time off requests, W4 changes, married, births, address moves, etc.) with their selections of 401(k), health insurances, FSA, Commute Reimbursements, etc.

My recommendation: Set up 1 day pitches from ADP, Paychex, or others and ask them about their service level commitments... (SLA) They are all as good as the service team assigned, your focus on assuring they attend to your needs; company size does have an impact, but I have been a 20 person company and received great service from ADP, so bite the bullet and meet them...

ADP is excellent when you have more than 500 EEs. If you have less, you will get better service from Paychex. It only matters when things aren't seamless, which happens occasionally no matter who you with or how large you are. With ADP, big accounts get personal service and the small accounts get webinars and hot lines.

We recently moved to Paychex and it has been painful. We have about 60 employees but have had several situations where they were unable to accurate calculate, pay, or report information. The time savings that were anticipated from the switch just haven't materialized. The success of the rep model is completely dependent upon your rep. Feel free to contact me privately if you want the details.

Over the years I have used many different payroll providers. ADP is the only one that has been both accurate and easy to use. ADP has the ability to create your own standard & ad hoc reports, with minimal training.

Currently I work for a multi state employer with over 1200 employees. About 18 months ago we switched from ADP to UltiPro when we decided to implement an HRIS system. I was disappointed from the start. UltiPro does not seem to have the whole payroll tax filing under control. Nothing balances, and they cannot answer your questions. We keep getting large tax adjustments, with no answers!

Paychex works fine for smaller organizations (under 100 employees) providing you do a proper setup. I did not feel that all of their consultants had a full understanding of the payroll process.

Ceridian was a disaster both time I used them.

The main thing to consider is the implementation team, it can make or break the success of your payroll.

PayTime in Richmond, VA has great customer service. When you call someone picks up. Any changes to payrolls are made easily without the endless phone tag like with PayChex. I have not used ADP, but I was not pleased with PayChex in any manner.

PayTime has an HR division as well.

We're a small but growing company (80 people) currently with ADP. I can echo many of the comments above these solutions. We had a dedicated rep for a couple years, which was great. Once we lost her, then our service went down considerably. ADP has the scale to handle complex things quite smoothly (payroll taxes around Pittsburgh with all the townships and boroughs are intricate). However, their reporting is limited. The fact that they still deliver paper reports should be telling.

We're about to switch over to a new company in January called Paycor. They're local here in Cincinnati, have been around awhile, are growing and get good press around town. Might be worth considering if you're looking for a new vendor.

We're a small accounting and tax firm and actually leverage ADP's small business platform with our clients - Run. Your needs are more sophisticated but my spouse/partner also does interim controller/CFO work at companies 50 - 100 people and has used both firms. Her opinion is that they both offer fine products and it comes down to which support team you feel more comfortable with .... we have seen good and bad experiences with both companies. To paraphrase our Secretary of State - Ask yourself who is going to answer that call at 3 AM when you need to get a delayed payroll out?? I can't comment on the other vendors referenced but I'd make sure I'd talk to a user that had to resolve a difficult issue with the State or IRS as this is another area where the big guys seem to have good leverage IF you have the right support team assigned to you. Good Luck!

We are small 60 EEs company. We had ADP and every payroll we have to call them up for correction. With ADP, every time when you have correction on your payroll before submit final, you have to wait 30 minutes from ADP to reset. We talked to Paycheck and read their reviews, it came out that Paycheck have so many negative reviews from their former clients. I would find a local smaller company payroll in your state. We are locate in CA and we pick CA Payroll.

I have worked with both of these providers with different companies. I never had a poor experience with Paychex. Customer Service was spot on each time. I have had mixed results with ADP. Most of the time it was frustrating getting people to return calls. We made a switch a few years ago to Cbiz. We have been very happy with their payroll service. The follow through has been great and they have a broad national reach. You may want to consider them also.

Considering looking at AmCheck a national Payroll & HR services firm serving the small and middle markets. We've continue to be a fast growing company and had previously used and left both ADP and Paychex due to very poor service / support for small employers. We've been thrilled with AmCheck - strong product, including web offering & extremely responsive customer service irrespective of how big or small the problem may be.

In my experience the service level in dependent on the service center you are assigned to. Very much a 'luck of the draw' situation.

The reporting issue is very important. Many times a low entry rate is offset by "custom" programming.

Good luck.

I find this topic very interesting, since I've worked for payroll companies for the last 13 years. I've worked for Paychex, Paycom, and have extensive knowledge of ADP. When deciding on a payroll company, it all depends on what your needs are, the size of your company, and the competency of your staff. I would use ADP if I had over 1000 ee's. From 300-999 I'd use Paycom, and under 300 I'd go with a local company. I probably would never use Paychex because they are overpriced and have awful technology, service is pretty good though.

At a previous company using ADP, we were always getting notices of late tax payments with penalties from NY State. Every quarter it was a major hassle and took a lot of time to resolve. ADP was trying to stretch the tax payments too close to the deadline. Current company is less than 20 employees, in multiple states. When I started we were with ADP, manually calling in payroll. I tried to contact them to switch to online reporting, never got a call back. After we dumped ADP to Paychex, for half the cost, I was constantly harassed by ADP sales reps trying to get us back. We had a few small conversion issues. You must know your payroll and tax situation and inform them. Our first CSR was good, then after six months we were assigned a new rep who is not as responsive or as knowledgeable. Multiple requests are sometimes needed, and emailed responses are always with a new email, never as a reply to our email. As a small business I am looking to outsource the liability of all the different state taxes to an expert. With Paychex you get decent reporting (have not tried to create any custom reports), fairly easy online transmission of payroll, reliable service and tax payments without errors. Other than tax calculations however, I don't have a sense of trust in Paychex. They offer lots of webinar's about payroll and HR, but they are really sales pitches for their HR and 401K services.

Moved from ADP - PC Payroll to Paychex One solution 01-2012. Payroll works well, but the Time & Labor system is painful. After 16 months of hand holding our supervisors who had trouble updating schedules and entering missed punches, we are returning to ADP Workforce Now. Paychex implementation team and our current rep are great...if you have time clocks the system though is not intuitive. (130 multi-state employees with about 60 hourly).

This is off topic, but the accounting nerd in me has to point-out that the SAS-70 regulations have been replaced by SSAE-16 for financial controls, and AT-101 for non-financial controls. If you are international, look to ISAE-3402.

On-topic: I use both ADP and Paycycle (an Intuit service). My day-job uses ADP for a 3,000 employee company and they have all of the bells and whistles. However, the cost is definitely more of a consideration. I volunteer at the church and we use Paycycle for 15 employees. While for me, the cost savings outweighs the loss of functionality, it may depend on how sophisticated a system is needed to compliment your payroll manager. That being said, you can't go wrong with ADP.

What company would you recommend for payroll if you have less than 15 employees?

I have had very good luck recommending Harpers Payroll. They have better trained implementation and service people at a much lower cost than ADP or Paychex.
Much of their business is with cities and towns, which means they are adaptable to any type of rules you may have with overtime, shifts, etc. (I have audited municipalities and their payroll is as complex as it gets)

My experience with a mid size payroll company, First Pay, was that they went out of business and neglected to pay $13000 in taxes they had already taken from me.

We just got of the phone with Paylocity and I have to say, I was extremely disappointed. The sales rep was very pushy and avoided answering questions directly. We would ask her how much does ________ cost and she would start in about their satisfaction rating or cloud technology. It took asking several times to find out simple answers to pricing. Basically they are fee crazy and if you pin them down, they admit each of their "features" has an additional charge.

ADP is horrible so in comparison to one of the worst payroll services, Paylocity is a step up. Paylocity is still far below many of the options out there. We currently use Paychex and they aren't perfect (why we are looking) but they are better than Paylocity both in cost and service.

Have you looked at Ascentis? They compete with the "big box players, but are privately held (vs. focused on never missing a quarterly dividend to investors!) and have about 1,000 customers. Not very well known, but their HR, payroll, benefits, recruiting and time products compare very well, and their dedicated support model (named person to speak with, ALWAYS!) gets raves from some of their customers...

I recently joined a very small (6 - 8 FTE) non-profit in Northern CA, however we do have a sizable "seasonal" workforce in the equation. Our trick is the HRIS piece, since the organization does not have dedicated HR staffing and has been doing payroll the same way for a very long time and we are fairly confident there are compliance issues to resolve.

Can someone please speak to HRIS quality of their chosen payroll providers. We have come complexities, so need a provider who can look at the entire operation and help us move forward in full compliance.

Thanks!

ADP & Paychex are the 2 large payroll processing companies in the US. One thing I've noticed, is that more & more companies are moving to direct deposit, & they have not passed those savings on to their customers. Payroll is becoming more difficult every day, but with technology enhancements, the cost's have come down (or at least they should) If you are still paying the same amount you were 2-3 years ago, it's time for a price check.

Your question is very difficult to answer, as you have seen from the answers you have already received.

There are other alternatives outside of the two you have mentioned as well. Paycom being one.

I have found that from a service standpoint the service depends on the "team" you are assigned to. Some companies us a "tag team" approach to small businesses. Others have true dedicated service personnel. I prefer having a dedicated person I can talk to when there are problems.

You really need to prepare a list of needs and desires. The answers you have received so far will give you a pretty good list of questions to ask.

Then do extensive interviews with at least 3 providers. You need to determine what is important to you in a solution.

One final thought, ADP used to be the gold standard, but I found that they were a little too big and a little too expensive the last time I went through this exercise. Plus they wanted to use the "tag team" approach to service.

We were formerly with ADP and customer service was their weak point. Their systems are not integrated and it took a month when the payroll administrator retired and we tried to add a new contact person. All the customer service reps were telling us to call every department to make this change but none knew who was responsible. Ultimately we had to contact several different departments because they operate independently. We switched to Paychex and their customer service is excellent whether by phone or by email. We are paying a fraction of ADP's cost with more services. Paychex is not perfect, but, much better than ADP. The reports are easily identifiable, easy to print and some are customizable and can be exported to Excel. We have multi state payroll and all taxes are filed without a problem. I like Paychex much better than ADP.

I work for a Michigan based privately owned company called BASIC. We have been in business for over 27 years and service over 10,000 companies nationwide. Here is the big difference (having worked for a larger provider in the past I speak from experience) in payroll we answer over 18,000+ calls each month but our average hold time is 11 seconds to speak to someone, call abandon rate is less than 1% and we have an entire department dedicated to Compliance with attorneys on staff. Our security for FTP data transfer is double that of a banks and we value each and every customer whether you have 1 employee or 5000. If you are considering a switch take a moment to check us out at: www.basiconline.com or you can call me directly at 616.648.4097 and I would be happy to answer any questions you have regarding payroll.