Best Payroll Software for Small Business (2024)
We’ve carefully demoed and tested dozens of payroll services to arrive at this selection of the best payroll software for small businesses. See expert insight, pricing info, pros & cons, integrations, and more below.
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Best Small Company Payroll Software
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.
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
Patriot
Netchex
Paychex
Zenefits
QuickBooks
Remote
Square
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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'm an HR Generalist, so I mainly use Gusto to add new hires, update salaries, and ensure that payroll is correct. I also use Gusto to disperse employee documents for signature/acknowledgment (Employee Handbook) and to store employment documentation (offer paperwork, background checks, etc.). Others on my team use it to run payroll and enroll in state tax registration.
I love their customer service, they always have an answer for you and make my job so much easier. The interface is fantastic, and the design is very appealing, which is a huge factor for someone that uses it quite often. I also really like the admin dashboard, Gusto will list outstanding tasks with their deadlines and will prompt you with helpful information to finish the task.
My company is a portfolio company for High Alpha Innovation. Gusto is the go-to HRIS for all portfolio companies. We have been using it since we started in 2020 and have even used it for one of our own portfolio companies. Gusto is a very easy-to-use tool that has fantastic customer support. When you're working for a start-up, you don't want to spend a long time on payroll and Gusto really helps with that. It's also very easy to set up a new instance of Gusto for a company - it took like two hours and was a painless experience due to Gusto's interface.
Sometimes the outstanding tasks aren't accurate, we recently had tasks pop up for an employee that has been gone for two years. This is very specific, but I wish that you could make some employee documents private to employees, all the documents you upload are automatically public and don't give you an option. I dislike their benefits -- we ran a quote before and it took a few weeks to get back the quote and it was incredibly expensive.
The only similar tool I've used is a PEO called Justworks. I'm not sure if it's a fair comparison, since PEOs pretty much do everything for you. I will say, it was nice that you could set up Gusto in a day and run payroll the next day if needed. For Justworks, you have to wait until the system start date, which can be weeks later.
I think that customer service is a huge buying criteria, especially if you have an inexperienced team. It's invaluable to have experts that you can call or chat with at any time. Cost is definitely a big factor that differs from organization to organization. It's sometimes worth it to pay a little bit more to make your life easier and that's what we've found with Gusto. Lastly, I think that it's important to have an easy-to-use system for both HR and employees. Payroll is VERY important which makes it vital to have a system that is easy to comprehend.
Gusto has become more well-rounded over the years. Last year, they added performance reviews into the mix. It's definitely not perfect and not very customizable, but it's a free add-on, which can be a huge value to organizations that don't have performance management built out.
Small to mid-sized organizations. I think it could work for a small start-up, but would be better for slightly more mature organizations.
Gusto would not be good for a small startup that doesn't have someone with HR experience on its team. Definitely would recommend a PEO over Gusto.
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.
Netchex
We like Netchex as a payroll tool for small businesses in the US because it’s super easy to use. None of your employees will need lengthy training to start using it, and they provide a dedicated customer support representative for their clients.
PROS
- Transforms as you grow: Netchex makes it easy to upgrade to a new plan without losing any data, even as your company expands. Unlike with some other vendors, there is no need to transition to a completely different platform and do a data migration.
- Pre-payroll reports: This feature, one of our favorites, allows for critical error checks before payroll processing.
- Dedicated support team: Provides highly praised customer service, which is entirely US-based. This is an important benefit for small businesses without in-house payroll expertise.
- User-friendly payroll grid: We find that their system makes it very easy to input data, make changes, and fix errors at all points of the payroll cycle.
- Versatile payment options: Offers paper checks, direct deposit, and pay cards, catering to diverse employee preferences.
- Grows with your team: With Netchex, it’s very easy to opt for a new plan and keep all your data in the same place even if you outgrow your current pricing plan. Other vendors require a switch to a new service in that kind of event.
- Dedicated support team: Netchex are note-worthy for their award-winning and often lauded customer service. It’s all US-based and provided in real-time through email, live chat, and phone calls.
- Pre-payroll reports: Allows for critical error checks before submission.
- Flexible payroll grid: Easy to make changes or correct errors on the fly.
- Versatile payment options: Includes paper checks, direct deposit, and pay cards.
CONS
- Their payroll module is a requirement: Users must use the payroll module to access other functionalities, so it wouldn’t work as stand-alone HR software.
- No free trial: Potential users can't test the software without committing to a purchase, which might deter cost-conscious small businesses.
- Requirement of payroll: Users must use the payroll module to access other functionalities, so it wouldn’t work as stand-alone HR software.
- No free trial: Potential users can't test the software without committing to a purchase. The demo with a sales rep is the closest thing.
Netchex made it to this list for its customer service, ease of use, and overall software quality. Its offering is specifically tailored for small businesses with 50-500 employees. It’s a flexible, single-source solution that integrates payroll, time and attendance, benefits, and HR information into one seamless platform.
We know that most small businesses are pressed for time, so their payroll tool must be extremely easy to use. We find that using Netchex is a very intuitive experience. One can add employees, set payroll cycles, and fix issues without training. That said, they provide a customer support representative to all their clients who can help with the initial setup or any snags that may arise along the way.
That said, one of Netchex’s main differentiators is their pre-payroll reports, which provide a crucial safeguard by highlighting potential problems before payroll is finalized. For example, the system can flag if a terminated employee is set to receive paychecks or if there are any discrepancies in the amounts that are about to be processed.
Another reason we like this company is that they’re always looking forward. They recently rolled out innovative features like AskHR for immediate answers to employee questions and Netchex AI for sophisticated data analysis.
That said, Netchex does have some things we would improve. For instance, as much as they focus on the SMB segment, businesses with less than 50 employees might not be large enough to reap the full benefits, and it could get expensive. Also, small businesses would appreciate having a free trial to try out the tool before committing; and even dropping their current payroll tool.
Netchex is trusted by over 6,500 organizations, including SMBs like Xpressdocs, BK Corrosion, Regal Hospitality, and The Colony ER Hospital.
Netchex follows a Per Employee Per Month pricing model. Pricing varies according to the size of the company and the specific products used. Detailed pricing information can be obtained from their website or by contacting their sales team.
Best For
Netchex is ideal for small businesses (50-500), especially across the service industry.
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 at least twice per week. As new employees are hired, I input their data into the system. The HR team and bookkeeper review payroll weekly. The benefits manager updates and makes any necessary changes. I oversee the final output.
I like that PayChex is a classic system. It is effective in employee payroll management. This system is also employee friendly.
We purchased PayChex to migrate to an effective payroll process. As the organization grew, the platform we were using was not sustainable with the growth that we planned. PayChex allows the HR team to manage employee information effectively. It also allows employees to retrieve data as needed without waiting. I have used PayChex for 10 years.
PayChex has technical issues often. Customer service is not as responsive as other platforms. The app has to be updated often which is tedious.
Paychex is pretty much the standard for Payroll and HR processing. It does not have the most attractive interface but it does carry most of the features that are offered by its competition.
Do you want a classic platform that is easy to navigate and a standard across industries? Do you want a user-friendly experience (PayChex) or a platform that is a teambuilder (others with more interactive and social features)?
PayChex has been consistent over the years. It is exactly as advertised, a payroll platform.
PayChex is good for companies of all sizes.
PayChex is not a good fit for an organization that needs a comprehensive platform, something that allows for team interaction or goal setting.
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.
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- 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.
I use Zenefits at least once a week to update employee information. I approve vacations and time off for staff. The HR team adds new employees by setting up basic information. I sit with new hires to learn the system. I also manage processing 1099s/W2s with the company.
Zenefits is easy to use. The mobile app is very convenient and popular with employees. The platform is also very affordable.
We purchased Zenefits to handle onboarding for new employees. Zenefits allows you to manage many of the processes required for employees. Zenefits has a mobile app that streamlined access for staff to information like PTO, insurance information, and timekeeping. I have used the service for 3 years.
Zenefits relies on chat assistance and it can be inconvenient to wait for a response. The payroll processing can be a little tricky as you have to recheck data. Email notifications can be improved as they sometimes don't send at the appropriate time.
Zenefits is a great tool and comparable to others like Gusto and BambooHR. I feel that there are more comprehensive programs but the price point is very fair.
Do you want a simple program that handles all major HR, Benefit and Payroll needs? Do you need consistent access to tech support? Do you have a dedicated person to troubleshoot and verify data?
Zenefits has improved their app and their processing time for updates in the system.
Zenefits is best for small/mid sized businesses and independent contractors.
It is not a good fit for large or multinational businesses.
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.
First and foremost, we utilize the invoicing functionality to create and send professional invoices to our clients. This feature allows us to track payments, send reminders, and easily manage our accounts receivable.
In addition, QuickBooks helps us with tax tracking by enabling us to categorize income and expenses appropriately, making tax preparation more efficient. This feature ensures that we have accurate records and can easily generate reports for tax purposes.
Another important aspect of our QuickBooks usage is the mileage and expense tracking. We utilize the built-in tools to record and categorize our business-related mileage and expenses, ensuring that we have a comprehensive record for reimbursement or tax deductions.
The reporting capabilities are vital to our organization as well. We leverage the various reporting options available to gain insights into our financial performance, monitor cash flow, track profitability, and make informed business decisions based on real-time data.
Finally, QuickBooks serves as our central hub for transaction tracking. We record and categorize all our financial transactions, including sales, purchases, and payments, in order to maintain accurate and up-to-date financial records.
- QuickBooks integrates seamlessly with other business tools and software
- It allows us to customize our needs and only pay for what we use
- It integrates with other vendors to help us streamline processes
I have used it for almost 3 years and tried different versions. I chose QuickBooks because it provides a user-friendly interface, comprehensive features, industry recognition, seamless integration capabilities, and scalability options—all of which contribute to efficient financial management and supports the organization's needs.
It is easy to switch between versions as business needs change (add or remove payroll option, etc). One of the primary reasons we selected QuickBooks is its widespread adoption and industry recognition. QuickBooks is widely regarded as a leading accounting software solution, trusted by millions of businesses worldwide. This reputation reassured us of its reliability and stability.
It offers scalable options that can accommodate our organization's growth and evolving needs. As we expand, QuickBooks provides the flexibility to add additional features or upgrade to more advanced versions to support our changing requirements, ensuring long-term viability for our financial management system.
- There are so many versions and it's hard to find directions for the one that we use at that time
- It is nearly impossible to talk to a human being
- During the sales process they will give you as much attention as you need but as soon as you are in, you are pretty much on your own
- Quickbooks offers many different options and they will cater to your business needs (just make sure you do your due diligence at the beginning before they close the deal)
- EVERYONE knows about Quickbooks so it's easy to use and clients have no problem paying you via QB
- However, many other similar tools will offer live support or even a dedicated account manager. Even though it may cost a little more but this might be a dealbreaker to some businesses.
- Know exactly what you need it to do for you and clearly specify it during the sales process. Make sure you do not overpay for something you will not use
- Make sure you stay within budget and pay attention to special pricing as most plans will offer discounted costs but only for the first few months.
- Check that your bank and other third-party vendors will integrate with QB. While a lot of them do, not all.
They evolve all the time by adding new versions to accommodate everyone's needs (last time I checked there were 45).
Small to Medium, independent contractors, startups.
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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.
We use Remote to maintain and track payroll and PTO for our international hires.
- Very organized to track international payroll and PTO.
- User friendly for both hiring manager and employee.
- Great dashboard and easy to navigate.
We made international hires. Remote provided a safe space for us to negotiate, track and provide timely payments to our international employees. Remote provides similar HR/Payroll usage as another in-house system for example like TriNet.
- If you’re unfamiliar with international payroll processing, it can be confusing.
- Invoices need to be attended to so employees do not miss timely payouts.
- Benefits and policies can be different country to country.
Remote is the only platform I have used for international hiring purposes.
- What does the hiring manager and employee need access to regarding payroll, benefits and HR purposes when hiring internationally.
- Confirmation that Remote can support the respective country you are hiring someone
I’ve used Remote for about 6 months now and it’s worked like a charm. They provide a great customer support team that is responsive and knowledgeable about everything related to hiring and payroll policies with respect to regions and countries.
Companies that are looking to expand hiring internationally.
This tool would not be a fit for departments outside of talent acquisition, payroll and/or HR. Remote is primarily used for hiring and tracking invoices of international hires. It would not make sense for someone in sales, marketing or CS to ever use remote.
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.
We use Square for mobile sales. It allows us to avoid a hodgepodge of Venmo and PayPal transactions going through multiple workers. We use it a few times a month when we run large events and sell concessions. It's made the sales transactions much easier for customers. And it's also allowed us better control over our budget.
It's very convenient to use on the go. We don't have to pay a monthly fee - we just pay a percentage of transactions. Customers like having this option instead of using cash.
My organization bought Square for mobile sales transactions. It's a small operation, and we had been operating cash only, but a lot of customers didn't have cash. We tried using other online payment services, but they were going through organization volunteers instead of directly to the organization. This made it difficult to manage the budget and track down payments.
We are a very small non-profit operation so the transaction charges can add up. I don't like that we have to pay more if we have to manually enter a payment card number.
I can only compare this to using Venmo, PayPal, and Zelle and Square is much easier for us to use. Customers don't need to have a pre-existing account - they can just use their credit or debit card. It makes things much easier.
Consider whether this would be easier to use than cash or cash apps. Also consider the transaction fees. They can add up when you are a small business and/or nonprofit.
I think they are always trying to be more user-friendly and accessible. It's nice to have a pricing model where we don't have to pay a monthly or annual fee.
It could be good for a range of organizations from large to small. Mine is very small and the pricing flexibility is good for us and allows us much easier transactions with our customers.
I think most organizations would benefit from Square. Again, I would just caution you to consider the transaction fees and make sure they are within an acceptable range for your organization.
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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