6 Best Free Payroll Software 2020

Free payroll software calculates paycheck amounts and helps track employee deductions like workers’ compensation, insurance, and taxes. Some software options offer features like direct deposit but most lack tax filing and state compliance. They’re good starter options if you have a few employees; you can always upgrade to a paid alternative as your business grows.

Over one-third of small businesses calculate payroll taxes incorrectly, costing them time, money, and legal problems. Gusto is an all-in-one payroll and HR solution for small businesses that helps you avoid payroll headaches by calculating, filing, and paying your payroll taxes automatically. And it’s free for up to 30 days.

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6 Truly Free Payroll Software 2020

How We Evaluated Free Payroll Software

When you search for “free” payroll software, you’ll often find payroll software that has a free trial, not software that’s free to use forever. We consider that a marketing ploy. Instead, we evaluated software options you can use for free over a longer time period (at least six months) or software that is free forever—even if it partially requires you to learn how to do payroll yourself.

The criteria we used to evaluate the best free payroll software include:

• Price: Free forever, for a limited number of employees, or a longer time frame; we excluded those that offer less than a six-month free trial.
• Ease of use: Easy for a non-accountant to input earnings and deductions. Some are a bit more complex as they require you to input tax rates yourself.
• Security: Payroll software that secures your confidential banking and employee data.
• Legal and tax compliance: Federal and state tax calculations; Pay rules for unique state laws regarding overtime and sick leave can be added (like double time vs time and a half).
• Payment methods: Cash, payroll checks, direct deposit, or bank card options.
• Software integration and reports: Import time data or export to a CSV file; provide detail and summary payroll and tax reports. (A few integrate with accounting tools.)
• Customer support: Resources to get support via email, phone, online chat, or through self-help user guides, blogs, or community forums.

Based on the criteria above and the fact that it’s free forever for fewer than 25 employees, we recommend Payroll4Free.com as the best overall free payroll software for small business. While it won’t give you everything paid payroll services offer, it does provide the best overall experience to small businesses that need totally free payroll software. Be sure to assess the services you need (taxes filing, paycheck calculations, form preparation, etc.) before choosing a payroll solution for your business.

Payroll4Free.com: Best Overall Free Payroll Software

We recommend Payroll4Free.com to businesses on a budget because it gives full payroll software functionality for free. It’s available in all 50 states and you have the ability to pay employees with direct deposit or paper checks. Payroll4Free.com will also calculate all of your tax liabilities and give you pre-populated forms to submit to the government, including W2s and 1099s.

Payroll4Free Features

What Payroll4Free.com Is Missing

Payroll4Free.com doesn’t file your taxes or provide year-end W2s and 1099s for free, but neither do any of the other free payroll software options. Also, the interface isn’t as visually appealing or user-friendly as some paid software; some tasks that can be completed with one click in paid software may take four to five steps in Payroll4Free.com.

Payroll4Free.com User Reviews

Small business Payroll4Free.com users like the cost (free) and customer service, although one user commented that free users aren’t necessarily the priority when paid users also need support. Others don’t like the complex setup process.

HR.my: Best Free Payroll Software for HR Worldwide

HR.my is a full human resource management system (HRMS) that’s free and includes payroll processing for clients across the globe. It’s the best free payroll software for businesses with international staff and has no limits on how many employees you can have. It also includes many important HR features that you may want as your business grows, including document workflow, timekeeping, and leave management.

HR.my Features

What HR.my Is Missing

HR.my is highly configurable, but being based in Malaysia, it lacks the built-in US labor law compliance of Payroll4Free.com. It also doesn’t provide access to employee benefits and other features that low-cost software like Gusto offers. With HR.my, like most free payroll software, you have to manage and pay employee taxes, garnishments, and benefits yourself. And, with HR.my, if you have a question, your only support option is the online blog.

To address its limitations, HR.my has a pretty ambitious to-do list in regards to the feature its developers want to add. There are plans to enhance reporting so users can see more detail, including department, job title, and employee vs contractor. In addition, developers plan to add more payroll customization options and viewing options.

HR.my User Reviews

Other than testimonials from overseas users of HR.my, who love having a free payroll option, we didn’t find many US user reviews. One review site gave it 4 out of 5 stars. We don’t yet have a review of HR.my on our payroll reviews page.

TimeTrex: Best Free Payroll Software for Hourly Workers

We recommend TimeTrex as the best free payroll software for businesses that schedule and track time for hourly workers, because it integrates timekeeping into its payroll software. TimeTrex offers an open-source community edition of its Workforce Management software that includes scheduling, attendance tracking, payroll, and HR management. It works through a web browser and is supported by a network of volunteers worldwide.

TimeTrex Features

What TimeTrex Is Missing

Unlike Payroll4Free.com, TimeTrex doesn’t automate tax filings and payments to your 401(k), benefits providers, or other third parties. The software is also not guaranteed to be compliant with labor laws such as what to include on a pay stub and sick leave requirements that vary by state. And like HR.my, free support is only available online.

TimeTrex User Reviews

The paid versions of TimeTrex have nice reviews in the 4 to 5 out of 5-star range. However, the community edition isn’t rated as highly, and there are few reviews overall. Many reviews indicate the software does a great job of helping users keep track of the tasks on which they spend their work time, and there were conflicting views on the learning curve. Some people consider it to be pretty steep because the time classification options are so robust, while a few others think it’s either easy to learn or simply worth some extra effort.

eSmart Paycheck: Best Free Payroll for Calculating Salaried Payroll Amounts

If all you need is a way to calculate a one-off check, that service is completely free. You simply input data like the tax year, state, earnings, and deductions, and a pay stub is provided. It doesn’t save paycheck amounts, so it’d be easiest for employers who are only paying a few salaried workers. eSmart Paycheck used to have a free forever plan, however, its free plan now lasts for only three months.

eSmart Features

What eSmart Paycheck Is Missing

eSmart doesn’t allow you to fully process paychecks for free, unless you opt for the three-month trial. And even if you upgrade to a paid package after your three-month trial, the software doesn’t provide direct deposit.

eSmart Paycheck User Reviews

We don’t yet have any eSmart Paycheck user reviews on our reviews page. We were also unable to find any detailed ones on other third-party sites.

Paycheck Manager: Free Tax-compliant Paycheck Calculator for One-off Paychecks

Paycheck Manager, like eSmart Paycheck, provides its paycheck calculation service for free, making it fine for one-off paycheck processing. It’s easy to use and allows you to calculate paychecks on the fly. This is great if you don’t run payroll often or your business only needs to pay one or two people seasonally. You might also choose to use it if your state law requires you to immediately process a paycheck for employees who are terminated.

Paycheck Manager Features

What Paycheck Manager Is Missing

Paycheck Manager is missing the same things that eSmart Paycheck lacks—if you use the free calculator vs signing up for a paid plan, your data isn’t saved. Plus, even if you upgrade to the Basic package, you have to file your own taxes and local tax tables aren’t included.

Paycheck Manager User Reviews

Other than our own Paycheck Manager reviews, we found few user reviews for the platform online. Therefore, we recommend trying the free three-month trial version of the payroll service to see how you like it before committing to an agreement, or use the online payroll calculator free.

ExcelPayroll.org: Best Free Payroll for Businesses Using Excel

ExcelPayroll.org is free payroll processing software that uses an Excel worksheet to manage your payroll. If you’re already pretty savvy with Excel features, this software saves you from having to create your own payroll software. Once you enter your employees, earnings, and deductions, you can run your calculations. This process is easier than manually keying in paycheck data on a calculator each pay period, but not as easy as using free or paid software that assists you with the setup.

ExcelPayroll.org Features

What ExcelPayroll.org Is Missing

ExcelPayroll.org isn’t a great option if you’re not familiar with spreadsheets, as it relies on accurate data entry and an understanding of how Excel works. It’s also not the best choice if you have 50 or more employees because there aren’t any ACA compliance options (although you may be able to program them into the system). Furthermore, its website is not secured (HTTPS), so you’re taking a chance downloading the software.

ExcelPayroll.org User Reviews

ExcelPayroll.org users like the platform because it is free, and because it automates payroll calculations . However, there are many who find the download process frustrating or who try to open the wrong (password protected) files when accessing the software.

Best Alternatives to Free Payroll Software

Free versions of payroll software can help with simple payroll but free payroll software doesn’t always have all the features you want—especially as your company grows. If you need other payroll functions such as direct deposits, time card integration, and automatic tax filing, it’s worth investing in a paid platform that can handle those tasks.

Gusto Payroll

Gusto is payroll processing software that helps small businesses streamline their payroll, track worked hours, manage employee benefits, and automatically calculate and file payroll taxes. Gusto also offers employee self-onboarding and payments via direct deposit and generates year-end W-2s and 1099s. Plus, it’s super-intuitive for you and your employees to use.

Gusto Payroll Pricing Table

Gusto also offers a Concierge package with dedicated HR support, including unlimited access to certified HR professionals ($149 per month plus $12 per employee, per month). That’s a great alternative to hiring a full HR person at $50,000 per year or more.

What Gusto Payroll Is Missing

Gusto’s Core package is one of the most affordable payroll solutions available ($39 per month plus $6 per employee, per month). However, some of the platform’s best features, including employee self-onboarding, PTO management, org chart, and an employee directory, are only available through the Complete package ($39 per month plus $12 per employee, per month).

Square Payroll

Square, the company that has revolutionized payment processing for small merchants, also offers the ability to track employee hours and pay them with direct deposit. So if you already use Square for your POS, then adding payroll makes sense. In addition, Square manages all state and federal taxes and new hire reporting—including year-end W2s and state tax forms—whereas Intuit and most free payroll software require you to prepare tax forms on your own.

Square Payroll Pricing

What Square Payroll Is Missing

At $29 per month plus $5 per month per employee, Square Payroll is more expensive than QuickBooks payroll. What’s more, it doesn’t provide benefits insurance offerings like Gusto does.

ADP Run Payroll

A leading name in the payroll provider space, ADP offers a variety of payroll and tax services for small businesses, including online payroll processing, healthcare benefits management, and tax compliance—much like Gusto. ADP lets you run payroll online by phone or via a mobile app, calculates and pays payroll taxes automatically, and offers 24/7 access to experienced payroll professionals.

ADP Run Pricing Table

What ADP Payroll Is Missing

One drawback of ADP is that it charges per pay period—unlike Gusto, which charges per month regardless of your pay schedule. Pricing is also confusing and you will have to request a quote directly from ADP. However, once you speak to a representative, you can easily negotiate for competitive pricing and waiver of the setup fee.

Top 9 Free Payroll Software Alternatives

Bottom Line

Free payroll software is a good option for businesses with a handful of employees if management has the time to handle some manual processes. These free tools are also a great way to save money while ensuring your employees are paid on-time. However, consider your tax compliance needs when selecting a system because many free options either don’t offer any tax filing or compliance support or charge a small fee for access.

If you’re ready to venture into a paid payroll service but don’t want to spend much, consider Gusto. It’s an affordable, all-in-one payroll and HR solution for small businesses. Gusto allows you to run payroll in minutes, automatically calculates and files payroll taxes, and lets employees self-onboard; it also manages direct deposits and benefits.

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