This article is part of a larger series on Payroll Services.
ExcelPayroll is a free payroll solution designed to help small businesses and nonprofits (especially those with 10 or fewer employees) accurately pay their workers. It utilizes Microsoft Excel to perform payroll processes such as calculating amounts for tax withholdings, deductions, and payments.
What We Recommend ExcelPayroll For
Using ExcelPayroll, you can calculate payroll for small businesses and small nonprofits. Once payroll is calculated, you can print checks, share data with accounting software, and create simple reports. Because the data produced is Excel-based, it’s shareable with popular accounting solutions.
In short, ExcelPayroll is best for:
- Nonprofits, small companies, and educators looking for free payroll processing software: This software is free to use and includes the essential tools to run basic payroll. It’s not intended for large organizations, and we don’t recommend it for companies with more than 10 employees.
- Microbusinesses using Excel for payroll calculations: Because ExcelPayroll is based on the Microsoft Excel program, the transition would be easy if you’re familiar with the software. The tools are just more structured and have a higher level of automation than you would get using manual spreadsheets.
When ExcelPayroll Would Not Be a Good Fit
- Companies with more than 10 employees: Businesses with more than just a handful of employees would benefit from a more complete solution with HR tools, benefits, and payment options. Check out our best payroll software guide for more options.
- Growing companies that are in an active hiring phase: This software does not include hiring support such as recruiting, applicant tracking, onboarding, training, and HR document management. For more suitable options, check out our top HR information system (HRIS) software picks.
- Businesses paying executive-level salaries: ExcelPayroll doesn’t support paying a single employee more than $458,300 in a year. If anyone on your payroll earns more than that amount, you’ll need a different service. Read our guide on the best payroll services for a list of other services you should consider.
- Restaurants paying tipped employees: ExcelPayroll doesn’t support paying an hourly rate less than $7.50, so restaurants with tipped workers won’t find this useful. The federal tipped minimum wage is much less, $2.13 an hour. Check out our restaurant payroll software guide if you need other options.
If you need help deciding which payroll solution is best, check out our guide on how to choose the right payroll provider.
Since our last update:
We added more information about its plan and system limitations, including the add-on fees for its state tax table update service.
ExcelPayroll is free to download and use. Its features include payroll and tax calculations, printable tax forms, PTO accruals management, and a time card tool for tracking job costs and employee work hours. It also allows you to manually update tax tables, although you can opt to purchase its tax update service. ExcelPayroll’s pricing for state tax table updates is $50 per state, except for Alabama and New York, which cost $100.
Given that ExcelPayroll designed its pay processing solution for small business and nonprofit use, it placed several plan requirements and system limitations. If you don’t meet these requirements or exceed the limits, then you can’t use its free payroll solution.
- Number of employees (for payroll): Up to 50 active employees
- Number of employees in timecard: Up to 57 active employees
- Minimum hourly pay rate: $7.50 per employee
- Maximum hourly pay rate: $4,807 per employee
- Maximum annual salary: $458,300 per employee
- Number of payroll transactions: 3,640 in a year
For nonprofit organizations, ExcelPayroll can adjust some of its limitations if you need to run more than 3,640 payroll in a year or have more than 57 active employees for its timecard solution. Contact the provider to discuss your requirements.
Since our last update:
We go into more detail on ExcelPayroll’s pay processing, check printing, timecard, and employee profile solutions.
ExcelPayroll is a simple payment processing tool. It helps small organizations calculate payroll for a small group of employees. It is free, making it a good option for those trying to avoid buying expensive software or committing to a monthly agreement. While it does not process direct payments, it saves organizations money by providing simple check printing for free. Let’s look at some of its essential features.
The primary role of this software is to assist with payment processing. It can process payroll for hourly and salaried employees and can handle multiple pay periods—from weekly and biweekly to semimonthly and monthly. It also manages common deductions for taxes, 401(k)s, health savings accounts (HSAs), garnishments, Social Security, and Medicare.
While it typically processes payroll on a per-employee basis, it lets you pay employees in a batch. You can even redo previous payroll―up to five years―and start pay runs in advance―up to two years from the current year―for recordkeeping purposes only.
Basic employee payroll profiles
Adding new employees into ExcelPayroll is fairly straightforward. You input the employee’s complete name, contact information, Social Security number, pay rate, basic tax data, and deduction details. Its system can support up to 1,000 employee profiles, but it can only process payroll for 50 active employees.
ExcelPayroll doesn’t offer employee payments via direct deposits and pay cards. It lets you print paychecks via accounting software. You can even design and create your own check layout.
Note that its check printing capability isn’t connected to a pay period and payroll date, allowing you to print paychecks at any time. You can input any date as a payroll date on the check and the applicable payroll liabilities will be processed based on the date selected.
While this provides you the flexibility to print checks any time you need, it can be a potential security and control issue. You may want to consider adding extra safeguards to your payroll protocols, such as limiting the users who have system access to prevent payroll fraud. You can also set up direct deposit payments so that you can send the employees’ salaries directly to their payroll bank accounts.
Payroll taxes and forms
Aside from calculating and withholding payroll taxes, ExcelPayroll can generate and print tax forms, such as W-2s, W-3s, 940s, and 941s. However, state tax tables are not automatically updated—you have to change this every year yourself. The good news is, for $50 per state ($100 each for Alabama and New York), it provides an updated tax table at the end of each year that you can add to its payroll system files. If you don’t want to pay extra, you can get the latest tax table data from the IRS website and then manually input it into ExcelPayroll.
ExcelPayroll doesn’t connect to a time clock, nor does it capture employee clock-ins and outs. Time data has to be entered manually into its timecard file. Then, the system will compute the applicable regular and overtime hours to be paid.
You can also use the timecard tool to record and track the actual work hours that employees spend on each job, project, and equipment type. It even lets you input PTO data for pay processing.
If managing and tracking employee attendance is critical to your business, read our best time tracking software guide to find more suitable options.
Note, however, that ExcelPayroll has specific format requirements when inputting time data and hour adjustments. It also follows rounding rules when calculating the total hours worked based on the time entries.
- For hours after 1 a.m. but before 12:59 noon, don’t enter “:” and “AM”
- Example: For 9 a.m., input “900”
- For hours after 1 p.m. but before 12:59 midnight, add a plus sign and don’t enter “:” and “PM”
- Example: For 6:45 p.m., input “645+”
- ExcelPayroll has a 7-minute rule for calculating the total hours worked, rounding it off to the nearest quarter decimals of 0.00, 0.25, 0.50, and 0.75. Here are some examples:
- If the exact time is 5 hours and 8 minutes, it rounds it off to 5.25 hours
- If the exact time is 5 hours and 7 minutes, it rounds it off to 5.00 hours
Since this is a free product, support is limited. On its website, a helpful user guide is available with screenshots and examples. If you have questions or want to submit feedback, you can contact ExcelPayroll via email.
ExcelPayroll Ease of Use
- No software installation required
- Similar to using an Excel spreadsheet
- Calculates deductions and withholding
- Allows you to print paychecks in-house
- Full instructions included
ExcelPayroll can be challenging to use if you’re new to Microsoft Excel and doing payroll. Even if you are adept at handling both, navigating through and using its features can be a bit difficult mainly because it entails a lot of manual entries. This can be a source of potential errors, such as incorrect time and pay data, and might impact payroll security.
It also lacks tax filing services, HR tools like onboarding, and an employee self-service portal, which would have made managing payroll easier for you. Plus, it doesn’t automatically update the tax tables to the current year’s tax rates—you have to do this yourself (either by manually uploading a new tax table or inputting the new tax rates into the system).
Despite these shortcomings, ExcelPayroll is a good solution to use if you have basic pay processing requirements and only have a handful of employees. Since it is Microsoft Excel-based, it integrates with any product Excel is compatible with. It can also be used to share information with popular accounting software such as QuickBooks.
What Users Think About ExcelPayroll
As of this writing, there are no ExcelPayroll reviews available on popular review sites such as G2 and Capterra. However, since this payroll software is free, you can download it and test it for yourself, provided you have Microsoft Excel software installed on your computer.
Top ExcelPayroll Alternatives
Best for: Small businesses looking for full-service payroll
Best for: QuickBooks accounting small business users
Best for: Small companies that need free payroll software
Base monthly fee: $39 to $149
Base monthly fee: $45 to $125
Base monthly fee: $0 (free)
Per employee monthly fee: $6 to $12
Per employee monthly fee from: $4 to $10
Per employee monthly fee: $0
If you’re unsure ExcelPayroll is right for you, see how it compares with other top free payroll systems. You may also be interested in our article on doing payroll in Excel, which includes a free template and video guide.
ExcelPayroll is not designed to support large businesses that require complex HR and payroll tools, such as hiring assistance, direct deposit payments, and performance management. It targets small business owners with experience in Microsoft Excel who need a simple upgrade from a pen-and-paper payroll system. It has all the essential tools for calculating wages, paying employees via check, and generating the required tax forms. Best of all, it is free to use—provided you have 50 or fewer active employees (we recommend it for businesses with no more than 10 employees, however).
Set up your company account and enjoy free payroll processing. Download ExcelPayroll today.