ADP Employment Tax through ADP SmartCompliance--an honest review
December 05, 2025

ADP Employment Tax through ADP SmartCompliance--an honest review

Tracy Rogers, MBA | TrustRadius Reviewer
Score 6 out of 10
Vetted Review
Verified User

Modules Used

  • Employment Tax

Overall Satisfaction with ADP SmartCompliance

We use ADP SmartCompliance as part of their Employment Tax service, which is limited to paying payroll tax and filing tax returns on our behalf. This includes year-end W-2s and 1099-Rs.

Pros

  • The vast majority of returns are filed on time and are accurate.
  • The vast majority of payments are made on time and are accurate.
  • Our one-stop account representative is highly responsive.
  • The tax locator tool is extremely helpful for determining local tax liabilities in particular from work and resident addresses.
  • There are a number of reports offered that help with reconciliation.
  • W-2c Manager makes W-2c processing a breeze.
  • Automatic posting of W-2s and W-2c's (and 1099-Rs) online in iPay portal for easy employee access is a nice feature.

Cons

  • Amended returns can be extremely difficult to find and work with, especially Q4 because everything, including W-2c's, are lumped together in one PDF with all other jurisdictions.
  • We have a lot of unusual tax situations. Employment Tax has limited capability to adjust to some of these needs, which has resulted in a few significant penalties.
  • Employment Tax does not readily allow any adjustments. For the most part, which is sent to them is exactly what is processed, even if some adjustments are needed in between from time to time. In other words, we have lack of control in what is processed and paid.
  • Invoicing system regularly requires overpayment of taxes in certain situations, which many times means waiting for the jurisdiction to refund and ties up cash. Such required overpayments are many times non-negotiable.
  • Employment Tax system is inflexible (more so than their full-service, I'm told) and forcing the system to not charge for taxes we are not liable can take a long time. The worst example is that we are not responsible for Massachusetts' EMAC, but the system automatically assumed we were liable, paid it and charged us for two years before a workaround could be found. Tweaking programming on the back end in their system to account for things like this is never an option.
  • Not all returns are available in ADP SmartCompliance but must be requested separately and sent by our rep.
  • The entire ADP system is slow enough that responding to jurisdiction notices in time to avoid penalties can be problematic.
  • From time to time, returns are inaccurate and/or not filed at all. Rarely payments are skipped but it has happened. ADP usually takes care of late penalties if they are small and 100% their fault but larger penalties can be difficult to negotiate.
  • A .txt file extra character sent to ADP SmartCompliance can result in only partial data being sent to a jurisdiction but we receive confirmation that the entire file was sent.
  • Employment Tax will not file mandatory FLI reporting when SUI reporting is not required, so we have to do that ourselves.
  • Details behind service invoice line items are not always transparent.
  • No real change in workload or time saved from when we paid and filed ourselves because we choose to validate returns amounts to ensure accuracy. If anything, we overall spend more time with tax than we did before when doing this work manually.
  • Compliance risk is a wash compared to when we were filing ourselves.
  • There is less up-front rush such as quarter-end to get returns out but workload is spread out over time as we validate after the fact without the same time pressure.
  • Loss of control of what gets sent out in the returns has caused significant stress.
  • The assurance that the vast majority of returns and payments are correct and on time is a wonderful benefit.
  • Employee satisfaction has increased by having a large provider house W-2s online for ease in individual tax return preparation.
We transitioned to Oracle Fusion Cloud, which does not allow for manual tax processing but requires a third-party like ADP to process payroll tax, at the same time we started with ADP Employment Tax. We used PeopleSoft before that which allowed us to do all our own tax filings by producing the required reports and e-files.
Such integration with some partner is required due to limitations in Oracle Fusion Cloud.
Periodic emailed updates on pending or upcoming changes has been helpful to validate information from other sources, and sometimes alert us before we get word from others like Oracle or PayOrg. We have found ADP-provided webinars on specific issues helpful, and the tools ADP provides online are varied and helpful as well.
We only use Employment Tax, so this is largely not applicable to us. But within the realm of payroll tax, navigating the website is mostly intuitive and easy to navigate.
We reviewed MasterTax and Ceridian before selecting ADP's Employment Tax four years ago. ADP SmartCompliance was selected because it was thought that this solution would save us time and resources. We have since revisited MasterTax and have looked at Asure as well. These companies offer more control and require more manual intervention before returns are filed and payments made as a tradeoff.

Do you think ADP SmartCompliance delivers good value for the price?

Not sure

Are you happy with ADP SmartCompliance's feature set?

Yes

Did ADP SmartCompliance live up to sales and marketing promises?

No

Did implementation of ADP SmartCompliance go as expected?

Yes

Would you buy ADP SmartCompliance again?

No

If a business is typical and falls "inside the box" of most companies with few if any unique tax situations, or if your company is willing to trust ADP's calculations and processes with little oversight on smaller details such as line-item scrutiny and regular validation, ADP's Employment Tax might be a good solution. If a company is like ours, with a lot of unique situations or requiring system exceptions or more control over data before returns are filed, another solution might be better.

ADP SmartCompliance Feature Ratings

Type of tax ()
Not Rated
Tax Reporting & Compliance
7.3
3rd-Party Software Integrations
8
Compliance Administration Management
9
Complex Tax Scenario Management
5

Using ADP SmartCompliance

4 - Payroll Tax.
5 - I support and train my team with ADP SmartCompliance and work with our ADP rep. We have several in-house developers to help when issues arise with getting the right data in the file to send to ADP (this is not their only responsibility).
  • Making payments to tax jurisdictions.
  • Filing employment tax returns.
  • Our current HCM product, Oracle Fusion Cloud HCM, does not allow us to file or pay on our own.
  • Tax Locator tool makes it easy to find any tax liability based on home and work locations, particularly when it comes to local taxes.
  • W-2c Manager surprised us with the ease of use and speed up production of W-2c's.
  • Tax reports are quite helpful in reconciliation.
  • Produce multiple W-2s for single employee in the same FEIN has been great.
  • Provides support for 943 and 945.
Although the vast majority of returns are correct and filed on-time, the fact that we feel we must validate the numbers in the payments and returns regularly, especially at quarter- and year-end, doesn't seem like a good value for the money. More importantly, the lack of control we have with information that goes to the jurisdiction has required significant manual work, and ADP SmartCompliance does not support a few tax jurisdictions and types at all. For now, we are not prepared to pursue investigating other providers due to other time-intensive implementations and issues at hand.

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