Paychex has been providing payroll, human resources, and benefits outsourcing for companies around the country since 1971. The company, based out of Rochester, New York, went public in 1983. Paychex specializes in helping small- to medium-sized businesses handle their payroll needs, and the company also offers a fully integrated 401(k) plan.
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Who it’s best for
Paychex is a great solution for small- to medium-sized businesses that are looking to outsource all of their payroll needs. Businesses can decide whether they want to utilize just some of Paychex’s offerings, or the company’s full suite of integrated services. While Paychex is primarily a payroll company, small businesses can benefit greatly from Paychex’s 401(k) plan because it easily integrates into the same system that the company would use for payroll. As a result, this makes for an easy resource for employees as well.
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- Great fit for small- and medium-sized businesses that need guidance
- Reputable business that’s been around for a while
- Businesses can choose a 401(k) plan that’s specifically tailored to their business
- Outstanding customer service for employer and employees
- Great offerings in terms of website and mobile app technology
- Multiple investment options include pre- and post-tax contributions
- Low costs based on number of employees and pay periods
- Not a dedicated 401(k) company
- Can’t provide extensive expertise with 401(k) plans
- Requires the business owner to choose their 401(k) plan specifically, causing some extra work
Paychex does not offer any investments directly. Instead, Paychex allows companies to customize a retirement plan that would fit their company. This is a nice feature for some businesses, as it allows them to cater to their specific needs, and to the needs of the company’s employees. For businesses that would rather not be bothered with choosing, though, this could provide an extra unwanted step in the process.
One of the biggest benefits of using Paychex is that it makes the setup and administration process very easy. In fact, this is what Paychex prides itself on as a company. Paychex offers a lot of flexibility and choice, as businesses can choose the specific administrator they work with, as well as the trading platform and investment options that would work well for them. This includes fully integrating the 401(k) plan within the same payroll system, and also offering options for both pre- and post-tax 401(k) investments.
Paychex’s fee scheduled is determined by the number of employees a business has and the number of pay periods in a year. While this is great for small businesses, as it limits the total cost outlay of the service, it does also come with a stipulation. Because Paychex is a payroll service first, a business must have payroll services with Paychex in order to take advantage of the 401(k) plan.
Employer and employee customer service
Paychex is known for its outstanding customer service, both for employers and employees. On the employer side, Paychex gives each business they work with a dedicated administrator who works directly with them, answering any questions, and solving any issues in a prompt manner. For employees, Paychex offers a number of resources, both in terms of over the phone customer service and also a plethora of resources available online. That’s another big positive to Paychex: The company has advanced technological offerings with a website and mobile apps where employees can make changes to their 401(k) plan directly.
The biggest downfall with Paychex is that they aren’t a 401(k) provider. Instead, they are a payroll company that offers integration with 401(k) plans. While some businesses might like the freedom that comes with choosing their own plan and investment options, others may want to be more hands-off. Because of this, Paychex doesn’t have a team of investment professionals who can help employees with more intricate questions about their 401(k) funds.
How to get started
Getting started with Paychex is a simple and easy process. You can go on their website or call them at (844) 754-1453 to set up a consultation. If you want, Paychex will also send out a sales representative to your business to go over all the options for payroll and 401(k) plans, and all the other options it offers.