Best Payroll Software for Small Companies
We’ve carefully demoed and tested hundreds of payroll services to arrive at this selection of the best payroll software for small businesses. Each review includes pricing info, screenshots, pros & cons, integrations, and more.
As a small business owner, having a system that helps you manage and administrate your employee’s payroll is a necessity. It saves you time you would otherwise spend on manually processing your payroll –time you simply cannot afford to spare.
Payroll services also save you fines you could incur as a result of incorrect payroll fillings. According to an Internal Revenue Service (IRS) report, 40% of small to medium-sized businesses in the United States pay payroll penalties each year. This can be avoided with payroll software. Not just any payroll system, but one suited to the delicate needs of a small business. That is why, in this article, we set out to review some of the best payroll providers on the market for small businesses.
Best Small Company Payroll Software
We’ve come to this list of the best SMB payroll software companies by evaluating literally dozens of them. We’ve been writing about payroll for years, building a lot of familiarity with these tools. Many of them we’ve followed from their earliest days, getting updates and re-doing demos as they evolve.
Of course, we also complement this research by talking to our community of HR experts. For this buyer guide, we focused on small business owners. Knowing which payroll tools are making their lives easier was crucial. Once we had a shortlist, we cherry-picked the best of the best based on various considerations, chief among which are: automation capabilities, compliance features, and price.
- Payroll Automation: One of the primary considerations for any small business looking for payroll software is reliably automating tasks. We prioritized the tools with the most advanced features here, which translates to saving more hours each payroll cycle.
- Compliance: Then there’s the question of peace of mind. You want to know that the system helps you remain compliant and avoid fines. The companies we chose all do an excellent job when it comes to helping small business owners adhere to all regulations regarding payroll.
- Pricing: Lastly, we know that price is a significant consideration for most small businesses. We picked tools that would adapt to all kinds of budgets and situations. This ranges from tools that are good for solopreneurs paying contractors to premium plans designed for larger headcounts but that still won’t break the bank.
To learn more about our process for evaluating software companies, read this blog on how we select the best HR tech.
Gusto
Gusto is a top-notch payroll solution for startups and small businesses because of its full-service payroll and unparalleled customer service. We think you will agree that Gusto has one of the best UI in this space.
PROS
- Gusto supports payroll for both US W2 workers and either domestic or international contractor workers.
- The software enables online signatures and automated tax filing.
- Flexible payroll options cater to different schedules with unlimited pay runs.
- Automatic deductions streamline benefits administration.
- Phone, email, and customer service support available.
- Licensed benefits advisors assist all plan users.
- Transparent pricing with no long-term contracts or setup fees.
- The dashboard feature keeps tabs on compliance tasks
- The hiring and onboarding sequence is nicely streamlined between HR and the new hire
- Post-offer, pre-start tasks are made easy with integrations like CorpNet (state tax set up) Checkr (background checks)
- Easy payroll for U.S.-based W-2 folks, domestic, and international contractors
- Person-to-person phone support, email, and other customer service resources
- The business model is responsive to customer needs
CONS
- No payroll support for international employees.
- No accounting tool for tracking earnings and spending.
- Their simple plan lacks time tracking and online signature features, requiring integrations with other software.
- Basic analytics dashboard.
- Features like federal & state compliance alerts and broker/health insurance integration are priced separately.
- There is no free trial of Gusto
- Gusto can support payments for international contractors, but not employees
- No native accounting feature to keep earning and spending under the same roof
- Analytics dashboard is simplistic
Gusto is an excellent choice for startups and SMBs seeking a reliable payroll solution.
Let’s begin with its full-service payroll capabilities. Gusto supports payroll for U.S.-based W-2 employees and domestic and international contractors. This flexibility makes it a versatile solution for businesses with diverse staffing needs.
Our editors (and accountants) also love that Gusto provides e-signature collecting and automated tax filing because of its ease of use and usefulness in simplifying essential administrative tasks.
Flexibility is another strength of Gusto. The software offers an automatic deductions feature, varied payroll schedules, and unlimited pay runs so businesses can ensure employees receive their salaries and benefits promptly.
Transparency is a key aspect of Gusto's pricing. The payroll software does not require long-term contracts or setup fees, allowing SMBs to manage their payroll efficiently without any unexpected costs.
But you may notice we didn’t mention payroll for global employees earlier. It’s because it isn’t available in Gusto’s current offerings.
Another feature Gusto lacks is built-in accounting, meaning you must use third-party integrations for complete financial management.
While the Simple plan is cost-friendly, it lacks essential features like native time tracking and e-sign. To access these features, thus, you, again, will have to integrate third-party tools with Gusto — more money spent.
Lastly, compliance alerts and broker integration are terrific features, but the platform requires you to either opt for its Premium plan or pay extra to use them.
- Simple Plan: $40/month base fee plus $6/month per person.
- Plus Plan (Limited Time Sale): $60/month base fee plus $9/month per person.
- Premium Plan: Contact sales for customized plan options.
- Contractor Only Plan: $6/month per person (suitable for businesses without W-2 employees).
Best For
Gusto offers a budget-friendly basic plan, making it accessible for startups with limited budgets. For SMBs with smaller HR departments and greater financial capacity, the Premium plan is highly recommended, providing additional features and benefits.
I use Gusto approximately every day. Some key workflows are onboarding users (employees) and storing important demographic information and compensation information, paying users (we used to pay employees on the platform, now it's just contractors), and staying in payroll compliance - Gusto gives you a to-do section that shows you all of the things you need to do to stay in compliance.
It's very intuitive, the UX/UI and design features are really amazing. It's also very well liked by our employees because of its ease of use. It's built to keep small companies in compliance -- Gusto really takes it a step further than most other Payroll platforms and gives you a bunch of compliance features and help. Gusto also has "next-day pay" features on some of the more premium tiers of membership; this is a really solid SLA and turnaround for payroll platforms, as this process (sending money to folks) isn't the easiest thing to do at scale.
We onboarded onto Gusto when the company first started back in 2016/2017. We didn't have a way to pay people, and Gusto offered an intuitive, small-business solution to pay employees, help us stay in compliance, and do all the heavy lifting for us in the Payroll and HR world. We've used Gusto for approximately 6 years and we still use it today to pay contractors, which is another benefit it provides.
Gusto is built for small companies so if your company grows quickly, it could easily outpace the features that Gusto provides. It doesn't integrate well/if at all with other softwares it doesn't already have a partnership with. It also has pretty limited reporting capabilities; the reports you can pull are nice, but there are limited types that you can choose from and building reports doesn't include all fields you might need.
It’s more intuitive, but not as scalable for large companies. I'd prefer the more intuitive tools to start with, and then once I wrap my head around how payroll works then I think switching to a larger, more scalable tool helps with understanding the big picture.
If you have a small finance/payroll/HR team, and want a tool to do a lot of the work for you, get Gusto. If you're a large team with a large company, I wouldn't recommend it.
For the most part, it's really improved its contractor payment system and also its compliance features. It still needs to work on allowing for more integrations with third-party tools.
Small organizations (1-100)
Midsize to large companies (100 - 1000+)
Patriot
Patriot is the most affordable full-service payroll for small businesses
PROS
CONS
Of all the full-service payroll software on this list, Patriot is the most affordable. It offers basic payroll and tax management with an intuitive interface that is easy to navigate.
It is designed with the small business owner in mind, providing free payroll setup and expert support from US-based professionals to make the experience a lot easier.
Patriot’s basic payroll service goes for $10 per month plus $4 per employee. Their full-service payroll is tagged at $30 per month plus $4 per employee.
Best For
Small businesses with very basic payroll needs.
PayChex
There are flexible options and add-ons designed with small businesses in mind.
PROS
CONS
Paychex Flex offers HR functionality, retirement packages, online payroll services, and benefits for businesses ranging from solopreneurs to SMBs. It is user-friendly and has numerous plans that cater to the needs of any company size.
Unlike Gusto, which provides health insurance in just 39 states, Paychex Flex covers all 50 states in the US.
Paychex Flex offers a variety of plans depending on your specific needs. There are three curated packages readily available on their website - Paychex Flex Essentials, Paychex Flex Select, and Paychex Flex Pro.
Their Essentials plan is available for a $39 monthly base rate plus $5 per employee per month. Select and Pro are custom plans and you would need to call to get a quote.
Best For
Small companies with basic payroll needs and solopreneurs that want HR software with payroll features.
I use Paychex weekly. Primarily I input my employees' time, submit payroll and check taxes. About once per quarter I review all of the reports they provide on my company's history. Previously I used their third party retirement provider when I had an employee paying into retirement. When the employee found permanent employment elsewhere, I canceled the retirement service.
Paychex is cost effective for my business. Customer service is always timely and helpful. Fees are clearly explained.
My organization is a human resource support company. I hire people to assist with various responsibilities and needed a payroll provider that also handled tax reporting. Paychex is low cost and their customer service has been excellent. I am into my 2nd year using Paychex and so far don't plan to change providers. My clients use other payroll processors and other than a few differences in fees, I can't say one is better than the other. Paychex also asks for feedback regularly and I noticed they often implement that feedback, which is comforting.
I dislike that if I don't process payroll for a couple of weeks I am charged a minimum fee and if I process payroll late instead of moving the pay date back a day or so they charge a rush fee.
Several other providers have complicated customer service processes and it takes a while to get someone to assist. Paycheck replies quickly using their email and phone services.
People should think about how many employees they have. Paychex isn't the best for larger companies. Also, think about what you can afford. Finally, consider user friendliness. I was able to quickly learn this system without guidance from a customer service rep. Although, I think Paychex offers reps to assist and conduct walkthroughs/demos if necessary. Paychex does not have a large training database as some other providers have.
When they request feedback, I often see changes implemented after that.
Small businesses
Larger businesses with tens of thousands of employees
Zenefits
Zenefits is a type of software that can handle payroll for various types of employment: full-time employees, part-time employees, contractors, and freelancers in 49 states. The payroll software is known among SMBs in the US for its wonderful UI and budget-friendly price.
PROS
- Zenefits is one of the top names in HR tech and payroll software for American small businesses.
- Among the easiest payroll tools to figure out.
- Scalable plans with transparent pricing.
- Offers a free trial.
- Doesn’t charge setup fees.
- Mobile-friendly, with good built-in self-service capabilities.
- Simple and effective automated workflows.
- It’s one of the top names in HR tech and payroll software for American small businesses.
- Their platform is one of the best-looking and easiest to figure out among the sector.
- Zenefits can grow with you. Its pricing plans allow you to pay and tweak as you go, add certain modules when you need them, or get rid of them if you don’t.
CONS
- Zenefits is among the easiest payroll tools to figure out.
- Scalable plans with transparent pricing.
- Offers a free trial.
- Doesn’t charge setup fees.
- Mobile-friendly, with good built-in self-service capabilities.
- Simple and effective automated workflows.
- As oriented to small businesses as the tool is, it doesn’t give you the chance to create a custom bundle of the services and/or modules you’d like to have. For instance, Zenefits does not offer a standalone ACA module. Therefore, you will need to purchase an entire HRIS plan if you want to access that offering.
- In addition, Zenefits focuses on small to mid sized companies. If you're an enterprise organization, you may want to consider another option.
- Zenefits is also rather focused on the US market at this point. So, if your team is mostly in another country and you need more of a local know-how, it might not be the best bet for certain modules like payroll and benefits.
Zenefits offer a host of solutions, ranging from onboarding to benefits, payroll, performance, and offboarding, at a transparent and scalable pricing structure. Plus, Zenefits offers a free trial and doesn't charge for the tool's setup, making it more approachable than some other HR tools in the market.
Zenefits offers a gorgeous user interface. The mobile app is also well-designed, with built-in features for self-onboarding, time tracking, org charts, and payroll. Zenefits’ payroll is also pretty cool. It lets businesses pay full-time workers, independent contractors, and freelancers in a single platform.
The automated workflow is a nice touch that sets Zenefits apart from several HR solutions. It’s simple to set up but can lend HR leaders a good hand in automating workflows for key employee events like career advancements, birthdays, and job anniversaries.
However, there are a few things you should watch out for before purchasing Zenefits. First, the payroll feature isn’t included in any of Zenefits' plans but offered as an add-on. In other words, you need to pay extra to use the payroll tool. Second, Zenefits' customer service is noted to be slow in responses. Since there isn’t any support via phone or a dedicated person, it can be difficult to get help promptly. Lastly, Zenefits is tailored to the US-based SMBs, so the software won’t be that helpful if your hires are in other countries.
Quora, Universal Group, Reddit, Asana
- Zenefits has three plans, and its monthly pricing starts at $8 per employee.
- The software also offers some add-ons with prices starting at $5 per employee per month.
- Zenefits doesn’t charge setup fees.
Best For
Zenefits is a good deal for startups and small businesses that require HR services, employee management functions, and payroll for their hires in the U.S.
QuickBooks
Easily integrates with other Quickbooks products and has the fastest direct deposit.
PROS
CONS
Most small businesses use Intuit Quickbooks accounting software for their lightweight bookkeeping. It is effective, simple, and affordable. The same is true for their online payroll software. Quickbooks payroll processes employee pay stubs and automatically files taxes in a simple, intuitive interface.
Quickbooks online stands out as having the fastest direct deposit amongst its competitors, processing same-day and next-day payments.
Quickbooks pricing is as follows:
- Core Plan: $22 per month plus $4 per employee
- Premium Plan: $37.50 per month plus $8 per employee
- Elite Plan: $62.50 per month plus $10 per employee
Best For
Small businesses that are already using Quickbooks accounting.
We use Quickbooks for all of our invoicing needs, as well as for AR reporting when needed. We can also keep track of all of our contacts in the vendor section which makes it an easy place to go if we need information.
- User-friendliness is the main pro we find when using Quickbooks.
- It’s been very easy to train my HR employees how to send and receive invoices.
- It’s linked to our bank.
- It gives the option for people to pay via ACH when sending out invoices (easy for them to pay with a touch of a button).
When my organization was looking for options to help quickly get out invoices to our clients they thought Quickbooks would be the perfect solution. We have now successfully been using Quickbooks for 10 years for our invoicing needs as well as AR reporting which helps our HR team run smoothly.
- Sometimes it runs slow if more than one user are in the software at a time.
- Connectivity issues will happen at times which could make it frustrating to use when you are in a hurry.
- You have to add in other apps to be able to use all the functionality of Quickbooks and pay further pricing.
The only other software we have tried in the past was NetSuite, and we ultimately decided to go with Quickbooks due to its pricing and ease of use. NetSuite did have more functionality but overall we liked the way Quickbooks worked with our company’s needs.
They should figure out what they specifically want to use the tool for, and make sure they do their research and pick the correct type of Quickbooks so they can easily work through what they need to get done.
The website itself has changed over the years but in a good way! We feel it is super easy to navigate and works for our business needs.
Really any corporate type of business that needs to send invoices out to customers, our organization does staffing and recruiting and we rely on Quickbooks to be able to send out invoices to clients.
Maybe manufacturing companies or just very small, less than 10 person companies might not benefit from QuickBooks online.
Remote
This service makes it easy for businesses to hire and pay employees remotely across the globe.
PROS
CONS
As the name suggests, Remote helps employers and business owners hire and manage their workforce across the globe. The software combines benefits, tax, HR, and compliance services to give you a well-rounded solution to onboard employees from any part of the world without getting into trouble with local labor laws in respective countries.
Remote functions as an employer of records (EOR) with local entities in over 50 countries and counting. They plan to set up in 130 more countries this year.
Remote offers three pricing packages:
- Contractor Management: Free
- Employer of Record: Starts at $299
- Global Payroll: Call to get a quote
Best For
An excellent choice for remote-first companies wanting to run payroll internationally.
I use remote.com to hire contractors in multiple countries for our company. Once we find a candidate we want to hire, we send an offer letter and start the onboarding process in remote.com. Employees create their invoices at the end of the month and we complete payment through remote.com immediately.
- Ease of use - ability to learn how to use the system in a day
- You are able to contract from over 100 countries in remote.com
- Reporting is clear and easy to understand
As a small organization we were looking to hire many contractors in various countries. Remote.com is extremely easy to use and makes hiring internationally simple. I have been using Remote.com since March 2023.
- Customer service was not helpful and very rude. I had to get a manager involved.
- The system is not very robust. It really is just a payment and time tracking services system, any organization would need an employee performance management system.
- The integrations are underdeveloped and could be improved.
This is the first contractor tool that I have used, and I am very impressed. Remote.com does everything we need so I do not see us needing to switch to a different product.
I think people should assess what countries they need to hire contractors in, and make sure that remote.com is able to hire in those countries. Furthermore the cost of remote.com is pretty reasonable for the price that it costs.
I have not really seen a difference since I have been using it since March 2023. I will say that the reporting is great and I am always happy to improve my process while using it.
Companies with multiple contract workers
Companies with the majority of their hires in the United States.
Square
Seamlessly integrates with Square POS and other Square labor management tools.
PROS
CONS
Square is known for its retail payment-processing tools such as Square reader and Square POS. In 2015, they introduced Square payroll to cater to the payroll needs of SMBs.
The platform provides basic tools for you to automatically file taxes, manage employee work hours, and run payroll. For small businesses using Square POS, this software integrates seamlessly to provide a labor-sales ecosystem.
Square payroll gives a $35 per month flat rate plus $5 per employee. They also offer a contractors-only plan for $5 per contractor.
Best For
Square is an incredible option for retailers, especially store owners and restaurants. These small businesses will find the combination of Square POS and Square payroll useful in many ways.
OnPay
It is fast, easy to use, and does not require a steep learning curve.
PROS
CONS
Like all of the cloud-based software mentioned in this list, OnPay performs basic payroll, HR, and benefits management functions. It is the fastest among the software mentioned, saving businesses up to 15 hours a month. It is also extremely easy to use with very intuitive functions and it has a responsive chat feature operated by helpful professionals.
OnPay has curated solutions for businesses in several business niches ranging from agriculture to NGOs, franchise to healthcare, and more. It also integrates with Xero accounting software.
OnPay starts at $36 per month plus an additional monthly fee of $4 per employee. Your first month is free.
Best For
OnPay is best for small business owners that have no prior background knowledge on anything payroll.
Payroll Software Benefits and ROI for Small Businesses
For small businesses, time is money. You don’t want to spend time on repetitive tasks that can be easily automated. It is estimated that an hour wasted per employee amounts to $3,750 per year, and that figure can be as high as $11,250! For a small business, this is too high of a cost to bear. It affects your profitability and growth.
On the other end of the spectrum, automated payroll management saves you a lot of time (up to 40 hours a month) and money. Money lost due to human error during payroll preparation proves to be a huge problem. The American Payroll Association estimates that human error can reach 8% while processing payroll manually. To give an example of what this means in hard numbers, an 8% human error rate on a $15,000 payroll equals $1,200 lost in erroneous wage calculation.
With payroll software solutions, you are protected from compliance issues. Small businesses do not have the time nor resources to be at the front of the ever-changing tax policy landscape.
It is especially complicated when you have employees in different states or beyond US borders. Each state and country has differing tax policies (deduction rates, compulsory contributions, etc.). If you default in filing correct tax returns, you will be penalized. In 2019 alone, the IRS levied $13.7 billion in tax penalties relating to payroll. As a small business looking to grow and expand, losing money to tax penalties will grossly affect your bottom line. All these can be avoided with a simple automated payroll solution.
Pricing Models for Small Business Payroll Service
For small businesses, payroll softwares mostly offer two kinds of pricing models:
- Flat rate per month/year
- Base rate plus per employee per month/year
The majority of the payroll software companies mentioned in this article use a base rate model. That is a good choice for small businesses, especially those with few employees. If you are a rapidly-growing business or you already have a sizable number of employees (say > 50) then a flat-rate pricing model might be best.
FAQs
Which payroll company is best for small businesses?
It depends on your business needs and the price you are willing to pay. If you want an affordable, stand-alone full-service payroll, you can go for the more affordable options like Patriot, Quickbooks, and Zenefits. If you want HR solutions too, Gusto, and Paychex Flex, are a good fit.
What is the most used payroll software?
Quickbooks is the most used payroll software due to their accounting suite. Paychex and Gusto are close runner ups.
What is the best international small business payroll service?
Amongst the payroll software providers on our list, Remote offers the best international options.
Final Advice on Buying a Small Business Payroll Solution
For small businesses, the process of choosing a payroll service provider can be cumbersome. The extreme dynamicity of small businesses requires you to choose one that fits your exact needs. We advise you to highlight your needs using these questions:
- How big is my business? Are you a solopreneur, a microbusiness with fewer than 10 employees, or maybe a small enterprise with over 100 staff?
- Who are my employees? Are your employees salaried workers or contractors? If they are salaried, do you pay an hourly wage or monthly salary?
- What is my budget? How much can you spend per employee/per month?
Answering these questions satisfactorily will streamline your payroll options. If, for example, you have employees that get paid per hour, you will likely opt for a payroll software that has time tracking to calculate and sync employee hours with payroll.
In the end, make sure to take your time and ask a lot of questions before you choose the best payroll software for your small company.
Please note that the services mentioned in this article are for small companies in the United States. If you are a global business looking to compensate your remote employees while staying compliant with international labor laws, check out our roundup of the best international payroll companies.
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