Paylocity HR & Payroll: A Complete Guide for Modern Businesses
What is Paylocity?
Paylocity is a cloud-based HR and payroll platform designed for small to mid-sized businesses, though it also scales for larger companies. Founded in 1997 and headquartered in Schaumburg, Illinois, it now serves over 36,000 clients across industries (Paylocity Investor Relations).
The platform combines payroll processing, human resources management, benefits administration, time tracking, talent management, and employee engagement tools in one interface. Its main draw? Reducing admin work while improving compliance and employee experience.
Paylocity’s Star Features
Payroll Processing
Paylocity’s payroll tool automates gross-to-net calculations, tax filings, and direct deposits.
Multi-state payroll support handles complex tax jurisdictions.
Automated compliance keeps pace with state and federal labor law changes.
Employees get self-service access to pay stubs, W-2s, and tax forms via mobile. Stat: The average payroll error rate in the U.S. is 1-8% of total payroll costs (American Payroll Association), so automation can significantly reduce financial leakage.
Human Resources Suite
The HR tools include employee records, performance reviews, onboarding workflows, and compliance tracking.
Customizable onboarding reduces paperwork by letting new hires complete forms online.
Document storage keeps all HR files in one place with e-signature capability.
Compliance alerts notify HR when certifications expire or labor laws change.
Time & Attendance
Paylocity integrates with biometric clocks, web punch, and mobile GPS punch-in.
Overtime rules are configurable by state or company policy.
Managers get real-time labor cost reports to track budget vs. actuals.
Talent Management & Learning
Built-in performance review cycles with goal tracking.
Learning management system (LMS) to host training content.
Internal job boards to promote upward mobility.
Employee Engagement Tools
This is where Paylocity stands out.
Community feed functions like a corporate social network.
Peer-to-peer recognition tools boost morale.
Pulse surveys gather feedback quickly. Data point: Companies with strong employee recognition programs see 31% lower turnover (Gallup Workplace Report).
Benefits of Paylocity
One-stop platform for HR, payroll, and engagement.
Strong mobile app—employees can clock in, view pay, and communicate on the go.
Scalable pricing—good for businesses from 20 employees to 2,000+.
Potential Drawbacks
Learning curve for smaller teams with no dedicated HR staff.
Pricing transparency is limited—you must request a quote.
Integration limits—while it connects to some ERP and ATS tools, it may require API customization for niche systems.
On G2, Paylocity scores 4.4/5 from over 2,000 reviews (G2 Paylocity Reviews), with high marks for payroll accuracy but some complaints about reporting flexibility.
Is Paylocity Right for You?
Paylocity works best for:
Growing businesses need more than just payroll.
Companies with distributed teams that need mobile-friendly HR tools.
Organizations focused on culture and engagement alongside compliance.
Industries that especially benefit include healthcare, manufacturing, retail, and professional services, where complex payroll and compliance are common.
Insights That Matter Most
Paylocity vs ADP If you want employee engagement built into payroll and HR, Paylocity wins. ADP shines in global payroll and deep compliance for highly regulated industries. ADP is heavier and costlier but better for multinational or very large teams.
Paylocity vs Paychex Both offer strong payroll and HR features, but Paychex is often more customizable for unique payroll setups, like union jobs or special shift rules. Paylocity has the edge in employee culture tools.
Paylocity vs Gusto For startups or very small teams, Gusto is cheaper and simpler to set up. But it lacks the scalability and advanced HRIS of Paylocity. Gusto works best for <50 employees, while Paylocity can handle hundreds to thousands.
500+ employees, multi-state or global payroll → ADP
Union-heavy, shift-based, or highly customizable payroll → Paychex
Pricing Overview
Paylocity doesn’t list standard rates, but according to third-party sources like Software Connect, expect $18–$25 per employee per month, plus base fees. Costs vary depending on:
Number of employees
Feature modules selected
Contract length
Our Closing Analysis
Paylocity is more than just a payroll processor—it’s a full-service HR ecosystem designed to reduce admin time, ensure compliance, and keep employees connected. For businesses aiming to scale without ballooning HR costs, it’s a solid investment.
If you only need basic payroll, cheaper tools like Gusto or ADP RUN might fit better. But if your goal is long-term HR efficiency, Paylocity has the depth to grow with you.
