This article is part of a larger series on Payroll Services.
Aside from being affordably priced, the best payroll software for small business users calculates employee wages and deductions accurately and pays and files payroll taxes automatically. Most offer unlimited pay runs, paid time off (PTO) tracking, two-day direct deposits, employee self-service portals, and access to employee benefits.
To find the ideal payroll systems for small businesses, we evaluated more than a dozen solutions and narrowed the list down to our top nine recommendations:
- Gusto: Best overall small business payroll software and for those needing solid HR support
- QuickBooks Payroll: Best for QuickBooks accounting users and fast direct deposits
- Rippling: Best all-in-one human resources (HR), payroll, and information technology (IT) solution
- Square Payroll: Best for small restaurants, retail shops, and Square POS users
- OnPay: Best for delegating payroll duties and those with niche payroll needs
- Paychex Flex: Best for startups and small companies that need a dedicated payroll specialist
- ADP Run: Best for rapidly scaling small businesses
- Homebase Payroll: Best for businesses with hourly workers
- Patriot Payroll: Best for mom-and-pops looking for a low-cost do-it-yourself (DIY) payroll service
Best Payroll Software for Small Businesses Compared
All the providers in this guide offer full-service payroll, tax filing services, year-end reporting, and direct deposit payments, and employee self-service portals. They also provide time tracking tools (except for OnPay), as well as new hire onboarding solutions (except for Patriot Payroll). Here are some of the key features, including the providers’ basic pricing information.
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Gusto: Best Overall Payroll Software for Small Business Users
Gusto ranks high among its competitors as its payroll and HR features enable small businesses to operate with the amenities that some larger companies offer. It supports multiple pay schedules and can pay employees via the Gusto Wallet app, direct deposits, and checks you print yourself. Job postings, applicant tracking, and offer letter templates are also available to help streamline hiring processes. Gusto even notifies each new hire so that they can complete the required paperwork. This is unlike QuickBooks Payroll, Patriot Payroll, and Square Payroll, which have basic HR tools.
Scoring 4.83 out of 5 in our evaluation, Gusto earned perfect marks in pricing, reporting, user popularity, and in our expert assessment. However, the limited coverage of its health insurance (available only in 37 states) and having to subscribe to one of its higher tiers to access HR tools, such as time tracking and online PTO requests, prevented Gusto from getting a higher score. However, many users still find it a valuable payroll partner given its intuitive interface and efficient tools.
QuickBooks Payroll: Best for QuickBooks Users and for Fast Direct Deposits
- Automated local tax filings and time tracking available only in higher tiers
- Limited health benefits coverage (unavailable in HI, VT, and DC)
- Basic HR features
- Doesn’t have mobile apps for employee self-service (offers a workforce portal you can access online)
QuickBooks Payroll is the best option for most QuickBooks accounting users. It integrates seamlessly—you access it within the same system with the click of a button—and all information flows throughout both systems (you don’t have to enter twice). Payroll runs are made easy with automatic pay calculation and tax payment/filing features. Unlike most of the other providers in this guide, its standard direct deposit timeline is a next-day option but can also handle same-day direct deposits if you get one of its higher tiers.
In our evaluation, the platform earned a 4.61 out of 5, with high ratings of 4 and up in nearly all criteria. It scored the lowest in popularity because of the limited number of user reviews (fewer than 500) on third-party review sites like G2 and Capterra. However, many users still appreciate its ease of use and solid payroll tools, especially its seamless integration with QuickBooks accounting.
QuickBooks Payroll Overview
Rippling: Best All-in-one HR, Payroll & IT Solution
- Pricing isn’t all transparent
- You have to purchase its workforce management platform before you can buy its other modules
- HR help desk option with phone and email support costs extra
- Can get pricey as you add more features
- Occasional software glitches
What makes Rippling a good payroll option for businesses is its modular solutions that allow you to choose the HR and payroll tools you need. It even has an expense management module, as well as an IT solution for monitoring business software access and company computer devices. While its workforce management platform is a must-purchase, the cost of adding full-service payroll is still reasonable. However, it isn’t as cost-effective as most of the payroll software for small business users in this guide, such as Square Payroll and Patriot Payroll.
Rippling earned a 4.54 out of 5 rating in our evaluation. Its feature-rich platform, including its PEO and EOR services, are just some of the factors that contributed to Rippling’s high scores. It lost several points because it doesn’t have a pay-on-demand option, its pricing isn’t fully transparent, and you have to purchase its HR help desk add-on to get phone and email support from HR experts. However, users still appreciate its intuitive platform, efficient HR tools, and solid payroll analytics.
Square Payroll: Best for Restaurants, Retail Shops & Square POS Users
Square Payroll is the best choice for restaurants and small retailers that are already using Square’s POS system. The seamless integration between the two Square products makes it easy to import online timecards from Square POS into its payroll tool for pay processing. It also has tip reporting features that allow you to record tip amounts, deduct taxes, and report them on your tax forms. You can run payroll as often as you need to at no extra cost (unlike some plans under big-name providers like ADP and Paychex), file quarterly and annual taxes, and sign up for pay-as-you-go workers’ compensation insurance.
In our evaluation, Square Payroll earned an overall rating of 4.51 out of 5, with high marks in nearly all of our criteria. It took a hit in popularity because it didn’t meet our subcriteria of having more than 1,000 average user reviews on G2 and Capterra. However, many of its reviews are positive, with users raving over its ease of use, affordability, and payroll tools that simplify the way they pay workers.
Square Payroll Overview
OnPay: Best for Delegating Payroll Duties & Niche Payroll Needs
If you have a limited budget, OnPay provides a reasonably priced payroll solution that comes with basic HR tools for managing PTO, employee benefits, and onboarding. While it only has a single plan ($40 plus $6 per employee monthly), it’s one of the lowest-priced full-service payroll packages on our list—excluding Patriot with its DIY option. Plus, it can handle the niche payroll and tax filing needs of businesses like farms and agricultural companies. Its six-level system permissions even provide you with enough flexibility to control who has access to and visibility into payroll and HR.
OnPay received an overall score of 4.44 out of 5 in our evaluation, with ratings of 4 and up in almost all criteria. It didn’t rank higher on our list because it has limited third-party software integrations and user reviews on G2 and Capterra. However, many of the reviews are positive, with users loving its efficient tools as it helps them simplify and automate employee pay processing.
Paychex Flex: Best for Startups & Small Companies Needing Dedicated Payroll Support
- Pricing isn’t all transparent
- Access to learning management and state unemployment insurance (SUI) services are available only in higher tiers
- Time tracking, benefits, recruiting, and document management are paid add-ons
- Year-end tax filings cost extra
Paychex has solutions suited for different business sizes. Its Paychex Solo package includes payroll, startup/incorporation services, and access to retirement plan options, making it a suitable solution for one-person businesses. It also offers Paychex Flex as its main payroll platform, which comes with several tiers flexible enough to cater to companies of different sizes. A dedicated specialist is even on hand to help you with your payroll concerns. Unlike QuickBooks Payroll and Gusto, which have limited health insurance coverage, Paychex Flex lets you offer health insurance in all states in the US.
The platform earned a 4.31 out of 5 in our evaluation, with perfect marks in reporting, user popularity, and our expert review criteria. It lost several points because it doesn’t have transparent pricing for all of its plans and charges extra for some of its services, such as year-end tax filings, benefits administration, and time tracking. However, users still love its easy-to-use software and wide range of HR solutions.
Paychex Flex Overview
ADP Run: Best for Scaling Businesses That Need Flexible Plans
ADP Run is ADP’s payroll system for small businesses with up to 49 employees. Aside from payroll and tax management tools, it offers new hire reporting, background checks, learning management, and job postings (via ZipRecruiter). Its higher tiers even come with extra HR support and handholding that you don’t get with your typical small business payroll software like Square Payroll. ADP also makes it easy to transition from one plan to the next if your company scales and you need additional HR tools.
In our evaluation, ADP Run earned an overall score of 4.06 out of 5. It was rated highly in ease of use, payroll and HR features, reporting, popularity among users, and our expert review criterion. It scored the lowest in pricing because of its setup costs and nontransparent fees—and users even commented that it can be expensive for small businesses. However, many reviewers said they do appreciate its easy-to-use platform, adding that its payroll solution helps automate processes.
ADP Run Overview
Homebase Payroll: Best for Businesses Employing Hourly Workers
Homebase Payroll is an add-on module to Homebase, which has a suite of time tracking, hiring, and scheduling solutions. Similar to Square Payroll, it offers flat pricing for its easy-to-use pay processing solution that includes automated payroll tax payment and filing services. Its payroll platform is designed specifically for hourly teams, given its solid solutions for planning staff schedules and capturing employee attendance at work. It even offers job postings, applicant tracking, PTO management, and new hire onboarding tools.
Homebase Payroll earned an overall score of 4.06 out of 5 in our rubric. Its reasonably priced plan and efficient HR tools contributed to its high scores (4 and up), while the lack of online reviews resulted in it getting a zero rating in our popularity criteria.
Homebase Payroll Overview
Patriot Payroll: Best for Mom-and-Pop Businesses That Want a Low-cost DIY Option
Patriot Payroll offers a flexible option that others in this guide don’t: a choice between full-service payroll and a more affordable DIY version. Both come with unlimited payroll runs, multiple pay rates, automated PTO accrual calculations, and customizable deductions and contributions. You can pay employees through direct deposit or manual checks, and if you choose its full-service plan, Patriot will pay and file all federal, state, and local taxes. It even has add-on solutions for tracking employee attendance and managing employee information.
Scoring 4.06 out of 5 in our evaluation, Patriot Payroll received perfect marks in pricing and popularity among users. It posted the lowest score in HR functionalities because it doesn’t offer new hire onboarding and employee benefits that most of the payroll software in this list provides. However, users still appreciate its reasonably priced plans, helpful support team, and easy-to-use payroll tools.
Patriot Payroll Overview
How We Chose the Top Payroll Software
We checked and compared the best small business payroll software across industries; most of them offer many of the same basic payroll tools with certain nuances in features, such as same-day vs two-day direct deposit or unlimited pay runs vs limited pay runs. Generally, the top payroll software offers direct deposit, tax filing, and year-end tax report preparation. Some even provide benefits and HR support.
Click through the tabs below for a more detailed breakdown of our evaluation criteria:
20% of Overall Score
We checked to see if the provider has transparent pricing, zero setup fees, and multiple plan options with unlimited pay runs. Those priced at $50 or less per employee monthly were also given extra points.
20% of Overall Score
We gave priority to those that offer multiple pay options, two-day direct deposits, tax payments and filings, year-end reporting (W-2s and 1099s), and a penalty-free tax guarantee.
20% of Overall Score
15% of Overall Score
15% of Overall Score
In this criterion, we assess whether the software’s ease of use, pricing, and the width and depth of its payroll and HR tools are ideal for SMBs.
5% of Overall Score
We considered user reviews, including those of our competitors based on a 5-star scale; any option with an average of 4-plus stars is ideal. Also, any software with 1,000-plus reviews on any third-party site is preferred.
5% of Overall Score
Preference was given to software with built-in basic payroll reports and customization options.
Keeping track of payroll trends will help your business adapt to potential changes that may impact business operations. Here are some payroll trends and statistics you need to know this year.
- Payroll runs: The most common pay period in the US is biweekly pay runs, according to the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) study. Nearly half of the survey respondents, which belong to around 131,000 businesses and government agencies, pay their workers every two weeks or biweekly. The second most common pay frequency is weekly, followed by semi-monthly and monthly.
- Payment options: The 2022 “Getting Paid in America” survey conducted by the American Payroll Association shows that 93% of employees are paid through direct deposit. This signifies the continued popularity of digital payments, reducing the risk of payroll fraud.
- Pay rates: Many workers want higher wages from their employers, according to the 2022 “Getting Paid in America” survey. 65% of the survey respondents want competitive wages over better health benefits. Most US employers have also paid higher pay rates in the previous year. The BLS Employment Cost report showed that compensation costs for private workers increased 5.1% for the 12-month period ending in December 2022. In December 2021, the increase was 4.4%.
To know other payroll trends that might affect your business, check out our payroll statistics article.
Frequently Asked Questions (FAQs)
A payroll system can accurately calculate employee wages (such as salaries, overtime, and deductions for required payroll taxes) and pay workers either through direct deposits, pay cards, or paychecks. Many payroll solutions also include tax payment and filing services. Others even provide access to basic HR tools like time and PTO tracking, allowing you to easily capture employee attendance data for pay processing.
The best payroll software for small business users should be reasonably priced and meet your budgetary needs while providing essential solutions you need to compute and process employee payments and payroll taxes.
A payroll software can cost anywhere from $30 to $50 per employee monthly. You should expect to pay more if you want additional functionalities like time tracking, employee benefits, and HR advisory services.
Basic HR tools like employee data management, PTO and time tracking, and new hire onboarding are essential as these help small business payroll software users streamline day-to-day HR tasks. Having access to benefits plans and benefits administration tools are also important. These allow you to manage workers comp, health insurance, and other employee benefits through your payroll software.
Aside from calculating earnings and deductions, online software for payroll for small business users help automate processes given its workflow and compliance tools. This helps you save time and enables you to manage payroll easily while ensuring that you remain compliant with federal regulations and labor laws.
Small businesses need reliable payroll software to save time and money. Most providers calculate wages, offer direct deposit, and pay taxes. However, you should consider your business needs and budget limitations. Small businesses can benefit from features such as automated tax payments, year-end report filing, and unlimited payroll runs.
We found that Gusto offers all the features that most small businesses need at a very competitive price. Users find it very easy to use and navigate, and the software is widely used in different industries. Sign up for a Gusto plan today.