5 Best Employee Benefits Administration Software for Small Businesses in 2021

In businesses with fewer than 50 workers, 85% of employees say a benefits package plays a big role in how loyal they are to their employers.1
Best overall option
Zenefits
Zenefits
  • Icon Pros  Dark
    Free Lite HR plan
  • Icon Pros  Dark
    Flexible pricing and potential savings
Best for 50-plus employees
ADP
ADP
  • Icon Pros  Dark
    Full range of benefits and HR tools
  • Icon Pros  Dark
    Supports any number of workers
Best for simplicity
Goco
GoCo
  • Icon Pros  Dark
    Customized pricing starting at $5/person/mo.
  • Icon Pros  Dark
    Easy-to-use platform
Best for retirement plans
Paychex
Paychex
  • Icon Pros  Dark
    Top 401(k) plan administrator in the US
  • Icon Pros  Dark
    Full service benefits implementation
Best for a few employees
Gusto
Gusto
  • Icon Pros  Dark
    Competitive pricing for small businesses
  • Icon Pros  Dark
    One-month free trial

If you are like some small businesses, you may not have a dedicated human resources (HR) department. So putting together employee benefits plans that will attract high-quality employees likely falls on your shoulders. But finding benefits administration software to fit your unique needs can be a challenge. To help save you time, we’ve done the research for you and provided our picks for the best employee benefits administration software.

Benefit administration software is commonly used by HR departments, allowing HR managers to administer employee benefits packages. Organizations can identify the best benefit options that provide the most value to employees and reduce costs overall while using such software.

The best benefits administration software of 2021

Zenefits: The overall winner

Zenefits
Zenefits
  • Starting at $8/employee/mo.
  • Check
    Tailored to small businesses
  • Check
    Simple, intuitive user interface

Zenefits steals the show for its all-encompassing human resource administration package that is highly affordable for smaller businesses.

Specifically, the Essentials plan starts at $8 per month per employee and includes a core HR program, complete with hiring, onboarding, and employee documents. To get compensation and performance management, you’ll want the Growth plan, which costs $14 per month per employee, or try the Zen plan for $21 per month per employee if you’d like built-in well-being assessments.

If you work with a Zenefits broker, benefits administration is included free in the monthly base price for all of the above plans. If you’d rather use your own broker, you can add benefits administration to any plan for $5 per month per employee.

Strengths
Pro Bullet 3 affordable plans
Pro Bullet Flexible add-ons, including benefits admin through your own broker
Pro Bullet Mobile app for iOS and Android
Weaknesses
Con Bullet Extra fees for payroll and HR advisory service
Con Bullet No customer support via phone

ADP: Best for small businesses with 50+ employees

ADP
ADP
  • Custom pricing
  • Check
    Powerful, comprehensive HR suite
  • Check
    Abundant third-party integrations

ADP is a well-established household name in the personnel administration field for good reason.

The immensely powerful software suite handles practically every benefit your organization could offer. All the basics, such as health insurance and 401(k) plans, are covered along with less prominent perks, like pet insurance  and a built-in employee rewards platform.

But benefits are only half the story. ADP Workforce Now is a comprehensive human resource software application designed for midsize businesses. It offers payroll, talent management, time and attendance tracking, and employee benefits management—all in one platform. Small-business owners with existing systems, such as Xero, QuickBooks, and Concur, can integrate with ADP Workforce Now.

Bottom line, combining its elaborate benefits offerings with its HR software solutions makes ADP a force to be reckoned with.

Strengths
Pro Bullet Long-standing name brand appeal
Pro Bullet Comprehensive all-in-one package
Pro Bullet Ideal for any number of employees
Weaknesses
Con Bullet Opaque pricing
Con Bullet Tall learning curve

GoCo: Best for simplicity

Goco
GoCo
  • Starting at $5/employee/mo.
  • Check
    Customizable, à la carte HR tools
  • Check
    Superb customer service

If you need something affordable and easy to grasp, GoCo is your hero. The intuitive platform lets you build your own software package starting at $5 per employee monthly. This means you only choose the tools you need, like payroll and time tracking, making it superbly convenient.

Apart from this customizable appeal, the platform’s employee benefits offering is quite thoughtful. While it doesn’t natively support every possible perk, it does synchronize seamlessly with most third-party insurance plans and health savings accounts. This freedom to pick and choose any perk provider is valuable since many competitors charge extra for it, if they support third-party insurance brokers at all.

We also love GoCo’s keen eye for customer service. Every client regardless of budget is assigned a dedicated account manager, making it easy to get personalized support. Plus, everyone can tap into phone, email, and live chat support—options that many competitors often lack or sell as a premium service.

Strengths
Pro Bullet Simple, easy-to-use platform
Pro Bullet Unrestricted access to third-party insurance plan providers
Pro Bullet Superb customer service
Weaknesses
Con Bullet Few in-house employee benefits included
Con Bullet Limited analytics

Paychex: Best for retirement plans

Paychex
Paychex
  • Custom pricing
  • Check
    Largest 401(k) administrator in the US
  • Check
    Abundant insurance products

Paychex oversees the most 401(k) retirement plans of any provider in the United States, according to industry publication Plansponsor.2 This means the New York-based company has a few tricks up its sleeve to help small-business employers compete with larger players when it comes to attracting talent.

In particular, Paychex offers pooled 401(k) plans. This newer retirement strategy involves many unrelated employers combining assets and letting a trusted administrator (in this case, Paychex) handle the day-to-day oversight. This results in rock-bottom fees and little liability for employers, making 401(k) plans more accessible to traditionally underserved small businesses.

Paychex extends this small-business leverage further with its full-service, in-house benefits brokers who can gracefully walk you through nearly every insurance product imaginable. We bet you didn’t launch your business to spend all day researching insurance policies, so this is a super convenient perk often absent in small competitors.

Strengths
Pro Bullet Pooled 401(k) retirement plans
Pro Bullet Full-service insurance benefit setup
Pro Bullet Comprehensive human resource (HR) software suite
Weaknesses
Con Bullet Opaque pricing
Con Bullet Jargon-filled educational materials

Gusto: Best for small businesses with a few employees

Gusto
Gusto
  • Starting at $39 + $6/employee/mo.
  • Check
    Full-service payroll and tax filing
  • Check
    Support from HR professionals
Strengths
Pro Bullet Competitive pricing for small businesses of all sizes
Pro Bullet Lifetime employee access to paystubs and W-2s
Pro Bullet Integrations with accounting and time-tracking software
Pro Bullet Mobile app for smartphones and tablets
Weaknesses
Con Bullet No evening or weekend customer support
Con Bullet Health benefits available in only 22 states

Gusto is our top choice for small businesses with a limited workforce. That’s because the all-in-one solution boasts its Concierge service that serves up unlimited access to human resource professionals. This means smaller entities can reduce or eliminate the need to hire in-house HR specialists, saving massive amounts of cash as a result.

Apart from top-notch expert support, Gusto solves more than just benefits administration. Full-service payroll and tax filing, workers compensation, an employee self-service portal, and unlimited support via phone, email, and chat are just a few other perks. Using the online portal, employees can enroll, add dependents, and ask questions about their plans. And with benefits in sync with your payroll, paycheck deductions are automatic.

Small-business owners can choose from three different plans, including the Core plan, which is available for $39 per month plus $6 per employee. Add-ons, such as 401(k) plans, life insurance, and HSA accounts cost extra. One of our favorite Gusto features is its one-month free trial offer: you can fully engage with the platform before making any commitments.

Gusto employee benefits administration software plans

Plan
Monthly base cost
Cost per month per employee
Features
Learn more
Core$39$6● Full-service payroll
● Health benefits and workers comp administration

Complete

$39$12● Full-service payroll
● Health benefits and workers comp administration
● Employee onboarding
● Time-off requests

Concierge

$149$12● Full-service payroll
● Health benefits and workers comp administration
● Employee onboarding
● Time-off requests
● HR resource center
● Dedicated support

Data effective 7/08/2021. At publishing time, pricing and features are current but are subject to change. Offers may not be available in all areas.

Runners-up

Workday HCM

Workday Human Capital Management (HCM) is an HR platform with workforce planning, recruiting, and talent management capabilities. With its employee benefits system, you can create a package for your employees that includes medical insurance, dental insurance, FSAs and HSAs, life insurance, retirement plans, and more. But to get pricing information, you’ll have to contact its sales department and request a quote.

Employee benefits administration FAQs

What are the must-have features for benefits administration software?

Depending on your needs, there are a variety of useful features for benefits administration software. For example, employee self-service portals lets employees easily enroll in a plan, access their benefits, get answers to questions, and update personal information.

With this feature, plan participants can also make changes to their insurance enrollment status when they experience a qualifying life event, such as marriage, the birth of a child, a 26th birthday (the cutoff age for being covered on parents’ insurance plans), or the loss of a loved one. Here are a few other features you may want to consider when choosing a benefits enrollment platform:

  • Time and attendance tracking
  • Performance management tools
  • Compliance management with government regulations
  • Retirement plan access

Why is benefits administration important?

Small-business owners can benefit from using benefits administration software in several ways:

  • Attract and keep high-quality employees with a great benefits package.
  • Increase accuracy of employee data with automated processes.
  • Boost employee satisfaction and productivity levels.
  • Save time and money previously spent on human resource tasks (think of the hours you’ve spent fielding employees’ questions during the insurance enrollment process alone).
Best Benefits Administration Software
Gusto
Best Overall
Namely
Best for 50 or More Employees
BambooHR
Best for Benefit Tracking
ClearCompany
Best for Talent Management
Zenefits
Best for Business with Few Employees

But how important are employee benefits plans to plan participants? Well, in an Aflac report, small-business employees say that a benefits package directly affects their happiness and satisfaction. In the survey of more than 300 employees, 88% say a good benefits package contributes to their overall job satisfaction.3

Not yet sold on the value of a benefits package? Here’s another statistic that packs a bit of a punch. According to the same survey, 48% of small-business employees say they would possibly consider a lower paying job with better benefits.4

The takeaway

Benefits administration software can help you provide a great benefits package for your employees. We think Zenefits is the best choice for most small businesses, but depending on your requirements, you may find that another company will more closely fit your needs.

If you’d like to learn more about the importance of offering benefits, read “Top 5 Reasons to Offer Employee Benefits.”

Related content

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Sources

  1. Aflac, “Aflac Workforces Report.” Accessed July 13, 2021.
  2. Paychex, “Paychex Ranks as Largest Provider of 401(k) Recordkeeping Plans for 10th Consecutive Year.” Accessed July 13, 2021.
Ian Agar
Written by
Ian Agar
Ian covers human resource administration at Business.org. His expertise stems from his four years as a military HR generalist in the U.S. Coast Guard, where he held the title of yeoman and became an Oracle Peoplesoft maestro. Ian also owned an ecommerce small business for over three years and holds a bachelor’s degree in psychology. He was previously a venture capital reporter at PitchBook Data, and his work can be seen on Seeking Alpha, The Motley Fool, and Yahoo! Finance.
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