What Is Xact Payroll and How Does It Work?

Payroll can feel like a juggling act for business owners. You’ve got to calculate wages, track hours, handle taxes, and—oh yeah—make sure everyone gets paid on time. It’s a lot, especially when you’re also trying to grow your company or keep customers happy. That’s where tools like Xact Payroll come in. If you’ve heard the name but aren’t sure what it’s all about, you’re not alone. Plenty of employers wonder how Xact Payroll fits into their day-to-day operations and whether it’s worth the hype.

In this blog, we’ll unpack everything you need to know about Xact Payroll. We’ll define what it is, explain how it works step-by-step, and dive into why it matters for businesses big and small. Plus, we’ll highlight the benefits that make Xact Payroll a game-changer for payroll management. Whether you’re a small business owner, an HR manager, or just curious about payroll solutions, stick with us—we’ll make it simple and show you how Xact Payroll can lighten your load.

What Is Xact Payroll?

Xact Payroll is a payroll service designed to streamline how businesses manage employee payments, taxes, and workers’ compensation. It’s a cloud-based solution offered through a partnership between Thomson Reuters and The Hartford, a well-known insurance provider. Unlike traditional payroll systems that might leave you guessing your costs or drowning in paperwork, Xact Payroll ties your payroll directly to your actual employee earnings, making it precise and efficient.

At its core, Xact Payroll combines payroll processing with workers’ compensation insurance in a unique way. Instead of estimating your workers’ comp premiums upfront and settling the difference later, Xact Payroll calculates them based on real-time payroll data. This “pay-as-you-go” approach means you pay exactly what you owe, when you owe it—no big year-end surprises. It’s built for businesses that use Thomson Reuters software, like Accounting CS or Practice CS, but it’s flexible enough to fit various industries, from retail shops to construction firms.

So, what does Xact Payroll do in practice? It handles the usual payroll tasks—paying employees via direct deposit or checks, withholding taxes, and generating payslips. But it also integrates workers’ comp payments into the process. Every time you run payroll, Xact Payroll adjusts your insurance premiums based on actual wages, then deducts them automatically via Electronic Funds Transfer (EFT). The Hartford handles the insurance side, while Thomson Reuters powers the payroll engine. Together, they create a seamless system that saves time and reduces guesswork.

You set up Xact Payroll by linking it to your payroll software, assigning wage types to employees (like regular pay or overtime), and syncing it with The Hartford’s insurance plan. Once it’s rolling, Xact Payroll processes payments, tracks compliance, and keeps your records straight—all from one platform. It’s not just about paying people; it’s about making the whole payroll process smarter and less stressful.

How Does Xact Payroll Work?

Understanding how Xact Payroll works is key to seeing its value. It’s not a one-size-fits-all tool—it’s a tailored system that adapts to your business. Let’s walk through the process step-by-step so you can picture Xact Payroll in action.

Step 1: Setup and Integration

First, you connect Xact Payroll to your existing Thomson Reuters payroll software. If you’re using Accounting CS, for example, you add Xact Payroll as a module. You input your company details—like your Employer Identification Number (EIN)—and employee info, such as names, wages, and job classifications. Then, you link it to The Hartford’s workers’ compensation plan. The Hartford sends a consent file to confirm your insurance setup, which Xact Payroll uses to sync everything up.

You also assign “Xact Payroll types” to each pay item—like regular wages, bonuses, or overtime. These tell the system how to calculate workers’ comp premiums for different kinds of earnings. Setup takes a bit of time upfront, but once it’s done, Xact Payroll runs smoothly in the background.

Step 2: Payroll Processing

When it’s time to run payroll—weekly, biweekly, or monthly—you enter employee hours and wages into your Thomson Reuters software as usual. Xact Payroll kicks in here. It calculates each employee’s net pay by subtracting taxes (like federal, state, and FICA) and any deductions (like health insurance or 401(k) contributions). It then generates payslips and processes payments via direct deposit or printed checks—your choice.

What sets Xact Payroll apart is the workers’ comp piece. As it processes payroll, it tallies actual wages and uses them to compute your exact workers’ compensation premiums. Traditional plans estimate these costs annually, often leading to overpayments or underpayments you fix later. Xact Payroll does it live, every pay period, so your premiums match reality.

Step 3: Workers’ Compensation Payments

After calculating premiums, Xact Payroll deducts them from your bank account via EFT. This happens alongside your payroll run, so you’re not writing separate checks or chasing deadlines. The Hartford gets the payment directly, and Xact Payroll logs it in your records. If an employee’s hours spike (say, from overtime), your premium adjusts automatically—no manual tweaks needed.

Step 4: Reporting and Compliance

Xact Payroll doesn’t stop at payments. It generates reports showing your payroll totals, tax withholdings, and workers’ comp costs. These reports help you file taxes accurately and stay compliant with federal and state rules, like the IRS’s Form 941 or state unemployment taxes. Plus, because it’s tied to actual payroll data, you skip the year-end workers’ comp audit that traditional plans require. Xact Payroll keeps everything current, cutting out that extra step.

Step 5: Ongoing Management

You manage Xact Payroll through your Thomson Reuters dashboard. Need to add a new employee? Update their pay rate? Check a past payroll run? It’s all there. The system also includes a helpdesk from Thomson Reuters and The Hartford, so if you hit a snag—say, a premium calculation looks off—you’ve got support to sort it out fast.

In a nutshell, Xact Payroll works by syncing payroll and workers’ comp into one real-time process. You input data, it crunches the numbers, pays your team, adjusts your insurance, and keeps you compliant—all without breaking a sweat. It’s like having a payroll assistant who never sleeps.

Importance of Xact Payroll

Why does Xact Payroll matter? Payroll isn’t just about cutting checks—it’s a lifeline for your business and employees. Mess it up, and you’re facing unhappy staff, tax penalties, or cash flow hiccups. Xact Payroll steps in to make it reliable and efficient. Here’s why it’s a big deal.

Accuracy in Payments and Premiums

Xact Payroll eliminates guesswork. Traditional workers’ comp plans rely on estimates, which can leave you overpaying all year or scrambling to cover a shortfall after an audit. Xact Payroll uses real payroll data, so you pay exactly what’s due—no more, no less. This precision keeps your finances on track and your employees paid right.

Legal Compliance

Payroll comes with rules—lots of them. The IRS, state tax agencies, and labor departments all expect accurate withholdings and timely filings. Xact Payroll handles federal taxes, state taxes, and workers’ comp compliance in one go. It reduces the risk of errors that could trigger fines or audits, keeping you in the clear.

Time Savings

Manually juggling payroll and insurance eats up hours. Xact Payroll automates the heavy lifting—calculating taxes, adjusting premiums, and generating reports. Without year-end audits or separate premium payments, you save time you’d otherwise spend on admin tasks. That’s time you can use to grow your business or just take a breather.

Cash Flow Control

Big, lump-sum workers’ comp payments can strain your budget. Xact Payroll spreads those costs across each payroll run, matching them to your actual wages. This pay-as-you-go model smooths out cash flow, so you’re not hit with a massive bill at the wrong moment.

Employee Trust

Employees notice when payroll goes wrong—late checks or wrong amounts breed frustration. Xact Payroll ensures timely, accurate payments, which builds trust. Happy employees stick around, and that stability keeps your business humming.

Scalability

Whether you’ve got five employees or fifty, Xact Payroll scales with you. Add new hires, adjust wages, or shift schedules—it adapts without missing a beat. For growing businesses, this flexibility is gold—it keeps payroll simple no matter how big you get.

Xact Payroll matters because it turns a complex, error-prone process into something reliable and stress-free. It’s not just a tool; it’s a partner in keeping your business steady and compliant.

Benefits of Xact Payroll

Now that we’ve covered why Xact Payroll is important, let’s zoom in on the perks you’ll actually feel. These benefits make it stand out from traditional payroll setups.

Real-Time Cost Accuracy

With Xact Payroll, you pay workers’ comp premiums based on actual wages, not estimates. If an employee works less one month, your premium drops. If they rack up overtime, it adjusts up. This real-time accuracy cuts out overpayments and surprise bills, keeping your budget tight.

No Year-End Audits

Traditional workers’ comp plans often end with an audit to reconcile estimates with reality. It’s time-consuming and can lead to unexpected costs. Xact Payroll skips this entirely—your premiums stay current all year, so you’re done when the year’s done.

Streamlined Cash Flow

Paying premiums alongside payroll spreads out expenses. Xact Payroll deducts them via EFT each pay period, so you’re not shelling out a lump sum upfront or scrambling at year-end. This steady flow helps you plan better and avoid cash crunches.

Simplified Administration

Xact Payroll bundles payroll and workers’ comp into one system. You don’t juggle separate vendors or deadlines—Thomson Reuters and The Hartford handle it together. Fewer moving parts mean less room for mistakes and more time for you.

Enhanced Compliance

Tax laws and insurance rules change fast. Xact Payroll keeps you compliant by automatically calculating withholdings and premiums per current regulations. Its reports also make tax filing a breeze, reducing the odds of penalties.

Employee Satisfaction

Xact Payroll processes payments quickly and accurately, whether it’s direct deposit or checks. Employees get their money on time, every time, which boosts morale and cuts down on payroll-related gripes.

Integration with Existing Tools

If you’re already using Thomson Reuters software, Xact Payroll slots right in. No need to learn a new platform—it works with Accounting CS or Practice CS, syncing data seamlessly. This integration saves setup headaches and keeps your workflow smooth.

Cost Predictability

Big audits or premium adjustments can blindside you with traditional plans. Xact Payroll’s pay-as-you-go model makes costs predictable—you know what’s coming each payroll run. This clarity helps you budget smarter.

Support When You Need It

Xact Payroll comes with a helpdesk from Thomson Reuters and The Hartford. Got a question about a premium? Trouble with a report? You’ve got experts to call, so you’re never stuck figuring it out alone.

Scalability for Growth

As your business expands, Xact Payroll grows with you. Add employees, tweak pay rates, or open new locations—it handles the load without slowing down. This flexibility keeps payroll painless, no matter your size.

These benefits show Xact Payroll isn’t just about meeting payroll needs—it’s about making the whole process better, cheaper, and easier for your business.

Conclusion

Xact Payroll is a smart, all-in-one solution that blends payroll processing with workers’ compensation in a way that saves time, money, and stress. It works by syncing real-time wage data with premium payments, ensuring accuracy and compliance without the usual headaches. From smoother cash flow to happier employees, Xact Payroll delivers benefits that make it a standout choice. If you’re ready to ditch the payroll grind, give Xact Payroll a look—it might just be the fix your business needs.