This article is part of a larger series on Payroll Services.
The best free payroll software for small business owners can calculate pay for hourly and salary workers, handle tax calculations and deductions, and print checks and pay stubs. Some of the systems even file taxes and offer direct deposits. We reviewed six free payroll services in this guide and narrowed them down to our top three recommendations.
- TimeTrex: Best overall free payroll software for small businesses and those looking for payroll with time tracking and scheduling solutions
- Payroll4Free.com: Best for companies with 25 or fewer employees that want the option of add-on payroll tax filings
- HR.my: Best for startups needing a free multilingual platform with basic HR and payroll tools
If you need a small business program for payroll with more functionality but aren’t ready to spend money, consider using affordable payroll software that comes with a free trial so you can make sure it’s worth it, risk-free.
- Gusto: 30-day free trial + solid payroll with multiple direct deposit and payment options
- Paychex: Three-month free trial + dedicated payroll support
- OnPay: 30-day free trial + affordably priced full-service payroll
Top Free Payroll Software Compared
When to Consider Paid Payroll Software
Unlike free payroll software, paid options come with a wider range of solutions and services to further streamline and automate processes. These features include automatic payroll tax table updates, compliance support, and access to benefits plans you can offer employees.
Many paid payroll software also remit and file federal, state, and local taxes for you, while others provide HR consultancy services if you need assistance in managing employee issues.
If you’re looking for an easy-to-use and reasonably priced paid payroll platform that automatically updates payroll tax rates and files taxes (most free payroll software don’t), consider Gusto. It’s an all-in-one payroll and HR solution for small businesses that helps save you time and money by calculating, filing, and paying your payroll taxes automatically. It’s free for up to 30 days.
TimeTrex: Best Overall Free Payroll Software for Small Business
TimeTrex is our top-recommended free payroll software for a small business because it does more than Payroll4Free and HR.my. Aside from pay processing, it has time tracking, scheduling, paid time off (PTO) monitoring, and HR management solutions that you can access at no cost. You even get an online time clock that lets your employees clock in/out through web browsers.
Scoring an overall rating of 4.28 out of 5, TimeTrex earned perfect marks in nearly all our criteria. It would have gotten a higher score if not for its limited employee payment options (only offers direct deposits and checks) and very basic payroll tax services. While it calculates federal, state, and local taxes, in addition to generating tax forms (like W-2s and 1099s), TimeTrex doesn’t remit and file taxes for you.
However, users still appreciate its user-friendly platform that makes pay processing easy. If you need tax filing services, you may want to consider Payroll4Free.com, but it isn’t free—you have to pay $25 per month.
Feature-rich free tier
Even at its free level, TimeTrex grants you access to several integrated solutions designed to help you manage your workforce. You get online tools to create schedules, capture clock-ins/outs, track attendance, monitor PTO, pay employees, conduct performance reviews, and record staff information in a centralized database. This is more than what Payroll4Free.com offers (doesn’t have free HR tools) and what HR.my provides as part of its forever-free solution (doesn’t have performance reviews).
Online time tracking
TimeTrex has robust time tracking capabilities—making it one of our leading time and attendance software for a small business to use. Its web browser-based time clock allows you to turn computers into employee time tracking devices. However, geofencing capabilities, facial recognition time clocks, and mobile time tracking apps aren’t included in its free Community Edition. If you require geolocation and face verification tools to prevent buddy punching, we recommend HR.my as it offers those functionalities for free.
Efficient pay processing
With TimeTrex’s efficient pay processing tools, you don’t have to worry about doing payroll yourself. Its features cover all day-to-day payroll basics, like automatic tax calculations and custom deductions, such as garnishments, PTO accruals, and benefits. It also offers electronic pay stubs, free direct deposit for small business, and paychecks that you can print in several formats. However, TimeTrex doesn’t handle payroll tax payments and filings for you. If you don’t want do-it-yourself (DIY) taxes and are willing to pay extra, then consider Payroll4Free, as it offers automated tax filing services for $25 monthly.
Third-party software integrations
TimeTrex seamlessly integrates with other programs for payroll like QuickBooks, ADP, Paychex, Ceridian, and Sage. Note that HR.my doesn’t have this functionality, while Payroll4Free.com has limited options and connects with other software through payroll data exports and time data imports.
Aside from standard payroll, HR, and employee reports, TimeTrex has built-in templates that you can customize.
Payroll4Free: Best for Companies With 25 or Fewer Employees Wanting an Add-on Payroll Tax Filing Option
Payroll4Free is one of the best online payroll services that you can use for free—provided you have 25 or fewer employees. It calculates payroll and taxes, tracks PTO accruals, prints paychecks, and provides free direct deposits if you use your own bank. The software can also handle year-end tax reports (W-2s and 1099s), providing you with pre-formatted forms to send to the government. If you want Payroll4Free.com to file your tax forms, you can pay $25 per month for that function (the other two free providers on our list do not offer this option). If you need time tracking and attendance tools included in a free payroll solution, consider either HR.my or TimeTrex.
In our evaluation, Payroll4Free earned a score of 3.6 out of 5. It would have ranked higher if it didn’t have a 25-employee limit (TimeTrex and HR.my can handle unlimited employees) and if it offered direct deposits and tax filings for free. Plus, its average user rating on third-party review sites (like G2 and Capterra) is below 4 as of this writing. Some users even said that its platform is unintuitive, often taking extra steps to complete what a paid program can do in a single click. They also don’t appreciate the ads that appear while using the tool.
Efficient pay processing
In addition to paying employees and calculating taxes (federal, state, and local) for free, it allows you to set up any deduction, contribution, and earning. Payroll4Free.com will automatically compute it—provided you have specified how these items should be calculated. Note that it doesn’t have the integrated time tracking tools that both TimeTrex and HR.my provide for free. You have to manually import time data into its system before you can run payroll.
Check printing setup assistance
If you prefer to pay employees via checks, Payroll4Free.com can help set up its software to add any data you want to appear on the check. You won’t get the said free service with both HR.my and TimeTrex.
Access to payroll and tax experts
Aside from unlimited customer support, Payroll4Free.com has a team of experienced payroll and tax specialists that you can contact if you have queries or need payroll advice. However, it doesn’t have the community forum that TimeTrex and HR.my offer, which allows you to get input from other business owners and HR professionals.
You get custom and detailed reports, enabling you to stay up-to-date with payroll information, tax details, PTO accruals, and employee deductions. It has several reporting options, but the choices aren’t as robust as HR.my and TimeTrex—simply because these two providers’ free packages include other HR solutions, so you may run non-payroll reports.
HR.my: Best for Startups Needing Multilingual Software With Basic HR & Payroll Tools
HR.my is a free multilingual HR software that is crowdfunded. The company works with those interested in translating the software into additional languages. As of this writing, it has 66 language options—more than the free solutions we reviewed, including most paid payroll software. It has basic payroll and HR features (such as employee information management, time tracking, and expense claims) that you can use for free.
Overall, it earned 3.45 out of 5 in our evaluation, with perfect marks in pricing and popularity. What pulled its score down is the lack of custom reporting and payroll tax filing services. It also doesn’t offer phone support or have a support team. If you need help with a feature, you can visit its community forum and access its online user guide, which is more of an FAQ page but with limited information.
If you’re always on the go, HR.my has a cloud-based system that you can access 24/7 and from any device (such as Windows and Mac computers, Android tablets, and the iPad). No software installation is needed—unlike TimeTrex’s free Community Edition, which you need to download.
Of the three free payroll software that we reviewed, only HR.my has a platform that’s multilingual. While its default language is English, you can change it directly from the system and choose from 66 options, which include Chinese, Korean, French, Spanish, Japanese, and Vietnamese.
Feature-rich free HR solution
HR.my doesn’t only provide free payroll tools—you also get time tracking, PTO management, expense claim management, and self-service solutions for employees. However, it doesn’t have the scheduling and performance review tools that TimeTrex offers for free.
Efficient online time clock
HR.my’s time clock solution offers geolocation tracking, facial verifications of clocking in employees, and mobile time-ins/outs for field staff. However, TimeTrex’s time tracking feature is more robust as it has a facial recognition time clock option—employees only have to stand in front of the device’s camera to clock in/out.
Solid pay processing
HR.my’s payroll tools are designed to simplify and automate employee pay processing. It has automatic pay runs and payslips, and you can remit employee salaries through direct deposits or print paychecks. It doesn’t support, however, payroll tax filings and year-end reporting—you have to fill out W-2 forms yourself.
If you need help selecting from our list of best free payroll services, follow our step-by-step guide on choosing payroll services.
Alternative Free Payroll Tools
The three free payroll services that we recommend provide you with the essential pay processing tools you need. However, if you’re looking for a simple payroll calculator with check printing options, then consider Paycheck Manager. Not only does it compute employee pay, but it calculates taxes and overtime for free. A downside is that it can print only one paycheck at a time, so it’s only good for businesses with fewer than five employees.
For those who are more comfortable using spreadsheets to handle basic payroll, ExcelPayroll.org is a great alternative. With its free Visual Basic for Applications (VBA) payroll program, you don’t need to manually input formulas to calculate pay. It’s already programmed with the essential formulas and payroll tools you need, plus it keeps numbers updated for the current tax year.
We also have Excel templates for payroll that you can download for free. Check out our guide of free payroll templates, including tips on how to use them.
How We Evaluated the Best Free Payroll Software
We started our research with six providers that offer free payroll services rather than merely free trials. Then, we examined the features and ease of use, focusing on paycheck processing and tax preparation. To view our full evaluation criteria, click through the tabs in the box below.
40% of Overall Score
Having free direct deposits to pay employees is preferred, followed by the capability to run payroll on mobile, and calculate and file federal, local, and state taxes. We also considered other tax and payroll functions, such as year-end reporting and multiple employee payment options. TimeTrex earned the highest score here, followed by HR.my, then Payroll4Free.
20% of Overall Score
We specifically chose payroll services with free payroll functions. However, we favored those that cover unlimited employees and offered basic HR functions on a forever-free plan. Of the top three software, the provider that didn’t get a perfect score here is Payroll4Free because its payroll service is free only for 25 or fewer employees.
20% of Overall Score
Free is no good if you have to fight the program. We looked for software with an intuitive interface, checked how easy it was to learn, and compared support options. We also considered whether it integrates with other programs or at least allowed CSV file downloads. TimeTrex received the highest score here since it has a relatively user-friendly interface, integrates with third-party software, and offers live phone support. With HR.my and Payroll4Free, you get limited integration options—plus, their platforms aren’t as user-friendly as TimeTrex.
10% of Overall Score
We gave points based on the reports available and whether you could customize them. While the three software we reviewed offer standard payroll reports, only TimeTrex and Payroll4Free have customized reporting.
10% of Overall Score
We considered online user reviews from third-party sites (like G2 and Capterra) based on a 5-star scale, wherein any option with an average of 4+ stars is ideal. Both TimeTrex and HR.my scored well under popularity, whereas Payroll4Free received an average score of 3.85 out of 5 on online review sites.
Small Business Payroll Frequently Asked Questions (FAQs)
What do I need to run payroll?
Running payroll can be a complicated process, as it requires several documents and tools to ensure that you pay employees accurately and on time. The most common requirements that a small business will need include an employer identification number (EIN) and a bank account with sufficient funds to pay employees (either through direct deposits or check payments).
You also need to understand payroll compliance regulations, such as the required tax payments at all levels (federal, state, and local) and the payroll tax forms you need to submit. In addition, knowing common payroll terminologies (such as garnishments, gross and net pay, fringe benefits, and pay periods) will help you avoid potential pay errors.
If you’re new to processing employee payments, you can attend payroll training to familiarize yourself with how to run payroll, including labor laws and state guidelines. You can also hire a payroll accountant to handle your pay runs or invest in a payroll system like TimeTrex, Gusto, and the other providers we mentioned in this guide.
How often should I process payroll?
First, check federal and state laws, as some states may have payday schedules for specific types of employees. Next, take a look at the payroll frequencies that best fit your business and workers—the most common options are biweekly, weekly, semimonthly, and monthly.
It is also important to set up a payroll calendar and identify the different pay periods so you know when to start calculating payroll and when employees should expect to receive their pay. For example, hourly workers paid on a biweekly basis will receive their pay every two weeks, whereas employees on a semimonthly payroll will get their salaries every 15th and end of the month.
What is the difference between paying employees and independent contractors?
Paying independent contractors is simpler compared to paying employees because you’re not required to withhold taxes and pay taxes for contract workers. Given that contractors are not your employees, you also don’t have to include them in your company’s benefits plan (such as retirement and health insurance).
In terms of W-2 vs 1099 reporting, you don’t have to file year-end tax forms for independent contractors—they are responsible for paying and filing their own payroll taxes. However, as an employer, you should prepare 1099-NEC forms for your contractors to show how much each worker earned for the calendar year.
Employee payroll, on the other hand, requires you to deduct income taxes, garnishments, Medicare, Social Security, and benefits premiums (if you offer employee benefits), among others. You also have to remit tax payments and submit quarterly and annual tax forms to government agencies.
What payroll software is best for small businesses?
Getting the cheapest payroll software for small business owners may be one of the criteria that budget-friendly users are looking for, but it’s also important to determine whether it can handle all of your pay processing and basic HR needs.
For small businesses, consider online payroll tools that can calculate overtime, wages, taxes, and deductions (like benefits and insurance premiums). Plus, it should have the capability to generate required reports (such as tax forms) and can help you comply with federal regulations. Providers that can remit payroll taxes and file tax reports for you are preferred, especially if you don’t want to handle tax filings yourself.
For companies that employ hourly staff, look for payroll systems that have time tracking tools to capture employee clock-ins/outs. If it doesn’t have this feature built-in, check if it can connect with a time and attendance solution (like Homebase and Clockify), as this integration allows you to easily import time data into payroll for pay processing. It also removes the need to manually track employee attendance using time sheet templates and then having to input the summarized work hours directly into payroll.
While taking stock of the payroll features you need is essential, it is equally important to consider the size of your company, your budget, and the type of employees you have. Businesses in certain industries may even need specific functionalities, such as tip reporting and commission payments for restaurants and retail shops. Also, choose payroll software that is flexible enough to scale with your business and handle your additional HR needs (like recruiting and performance review tools), especially if you have plans to grow.
How can I do payroll myself for free?
Processing employee payments yourself may save you money since you don’t have to pay a software provider or a payroll accountant to handle it—but we only recommended it to business owners who only have a handful of employees. It’s also important that you’re well-versed in how to run payroll and have no problems managing payroll taxes yourself. This includes remitting tax payments and filing the required tax forms to the applicable government agencies.
While the free payroll software on our list are great options, you can manually calculate payroll with a calculator or use Excel to compute all earnings and deductions. There are also online payroll calculators you can use, but you have to input the salary information one employee at a time in order to get each worker’s net pay. Plus, these online calculators can’t store salary data, which means you have to separately track and save all computations and payments for payroll tax processing.
Businesses that are on a tight budget or have limited payroll needs may find free payroll software as a way to save time and help prevent mistakes that can cost money and even legal problems. The free payroll services on our list offer online tools to make your pay processing tasks easier.
Overall, we found TimeTrex to be the best free payroll software because of its wide range of useful features that include tax calculations, automatic pay runs, and free direct deposits. Its free version provides you with efficient payroll and HR tools, while its paid tiers offer even more HR functions. Sign up for a TimeTrex plan today.