Payroll is one of the most time-consuming and expensive aspects of running a business. Fortunately, plenty of payroll providers can take the task off your plate, some of them for as little as $19 a month. If you’re in the market for a solid payroll solution, Business.org reviews the year’s best payroll software for small businesses.
The Best Payroll Software for Small Businesses 2021
Instead of charging per month, Wagepoint now charges by how many employees you pay and how frequently you pay them. Apart from that, none of our providers have changed their plans or pricing recently, and we’re happy to stand by our top 10 picks.
Two of our favorite providers—ADP and Paychex Flex—have added online pricing to their cheapest payroll plans. You still have to contact each company to get a quote on their pricier plans, but the new transparency is a plus for customers.
2021's Best Payroll Software for Small Businesses
- : Best overall
- : Best for payroll & HR
- : Best reporting
- : Simplest setup
- : Best customer service
- : Best for contract work
- : Most affordable accounting software integration
- : Most affordable self-service
- : Most user-friendly
- : Best interface
Best payroll software for small businesses 2021
Starting base price
Fee per employee per month
Automatic tax filing
|RUN Powered by ADP|
|Wave Payroll||$20.00/mo.||$6.00/payee||No†||30 days||View Plans|
|Wagepoint||Varies by employee number and payroll frequency||Varies by employee number and payroll frequency|
Free until first payroll run
Data effective 1/12/21. At publishing time, pricing and features are current but are subject to change. Offers may not be available in all areas.
*Automatic tax filing starting at $29.99 per mo. plus $4.00 per payee
†Automatic tax filing available in 14 states starting at $35.00 per mo. plus $6.00 per payee
‡Automatic tax filing starting at $30 per mo. plus $5 per payee
Best overall: Gusto
The heartily named Gusto is a beautifully designed, full-service payroll service with plenty of features and a healthy reputation. And to sweeten the deal, Gusto recently added a new plan that starts at $19 a month plus $6 per employee that still packs in a slew of features—and for $20 less than Gusto's previous starting price.
Every Gusto payroll plan, including the new Basic plan, includes these impressive services:
- Local, state, and federal payroll tax filing
- Automatic state new-hire form filing
- PTO (paid time off) tracking
- Workers compensation administration
- Paystub and W-2 access for employees
- Wage garnishment deductions plus child support payment distribution in every state but South Carolina
Pay particular attention to Gusto’s automatic tax filing, wage garnishment, and workers compensation features: most online payroll providers charge extra for these.
Unfortunately, Gusto's new Basic plan cuts out a few key perks that are included in its three other plans:
- Accounting software integration
- Two-day direct deposit
- Time-tracking integration
- Automatic payroll runs
With Basic, you're stuck with four-day direct deposit, and while Gusto still files your taxes for you, you have to manually hit a button to do so—no autopilot option included. In contrast, the three pricier plans include more HR features, such as time-off approval. They also come with two-day direct deposit, easy software integration, and additional employee support.
Our research on Gusto turned up mostly glowing reviews from customers and rating groups. Customers tend to love Gusto’s design, functionality, and features: on the consumer review site Trustpilot, Gusto has a 3.7 out of 5 from 1.1K reviews.1 In the last few months, though, Gusto's customer service has taken a few hits; users called out slow response times and payroll errors. And unlike some payroll software providers, Gusto doesn’t provide 24/7 customer support. You can reach a representative only on weekdays between 6 a.m. and 5 p.m. Pacific standard time.
Basic for payroll + HR: RUN Powered by ADP
ADP is the biggest name in the world of PEOs, or professional employer organizations, which are companies that help other businesses tackle personnel issues through totally outsourced HR. But if your business isn't big enough to warrant a PEO, RUN Powered by ADP distills ADP’s decades of HR expertise into an easy software service, complete with payroll.
All four RUN plans take care of full-service payroll basics like direct deposit, automatic payroll tax filing, and W-2 submissions. Even the cheapest plan, Core Payroll, includes HR perks like employee onboarding, health care compliance forms, and a regular HR checkup.
Need more than the HR basics? ADP’s more expensive plans include employee background checks and ZipRecruiter assistance plus more comprehensive payroll help, like wage garnishments and state unemployment tax deductions.
Unfortunately, apart from the Core plan, ADP doesn’t list its full-service software pricing online—you have to contact the company directly to get a quote.
Best reporting: Paychex
Paychex Flex offers cloud-based payroll and human resources software to small businesses that really need the help but don’t want to deal with full-on HR outsourcing. Each Paychex plan includes new-hire state reporting, automatic payroll tax filing, and even an employee financial wellness program. And while most of the software options we’ve listed include a report or two, Paychex Flex blows everyone else out of the water by offering a whopping 160+ reports with its payroll and HR packages.
If you frequently run payroll on the go, Paychex might be the best small-business payroll software for you. Only a few payroll providers offer employer-facing apps. Of the five or so that do, Paychex’s is easily the best: the Paychex Flex app has 4.8 stars (out of five) on Apple’s App Store and 4.5 on Google Play.2,3 Find more in-depth on our Paychex Flex app review.
Of course, there’s a catch: the full 160+ reports and general ledger service come with only the two priciest plans—and that pricing isn't listed online. If you're fine with fewer reports and less HR help, you can try Paychex Go, which starts at $59 a month plus $4 per payee. Otherwise, we think Paychex will work best for you if cost doesn't matter as much as robust reporting and dedicated experts to help with the mess payroll can leave behind.
With unlimited payroll runs and automatic tax filing, Gusto helps small-business owners worry less about payroll and put more time into growing their business.
- Get automatic payroll tax filing, including end-of-year tax forms
- Manage workers compensation insurance
- Track paid time off, sick leave, and holiday pay
Simplest setup: OnPay
OnPay covers the payroll basics that some major players charge more for, such as garnishing wages, withholding state unemployment insurance, and giving employees multiple payment options (including paper checks). We particularly like that OnPay will tailor its payroll services to specific industries—nonprofits, restaurants, and agricultural businesses, to name a few—at no extra cost.
But the main area where OnPay stands out is its setup. OnPay’s experts will set up your software for you for free, so if you’re looking for custom help at the reasonable starting price of $36, OnPay is a great place to start.
Looking for more reasons to try OnPay? Here are a few more perks of its cloud-based payroll software:
- Multi-state payroll at no extra cost
- Time-tracking and accounting software integration
- Tax filing accuracy guarantee
- Employee onboarding
- Employee self-service portal (available even if employees leave your company—they can still access tax documents and pay stubs for tax purposes)
Best customer service: SurePayroll
With self-service plans starting at $19.99 a month and full-service plans starting at $29.99 a month, SurePayroll is one of the cheapest picks on our list. If you go with self service, SurePayroll includes a tax-calculation guarantee, verifying that they’ve accurately assessed your taxes. If you opt for full service, SurePayroll’s 100% tax-filing guarantee means they’ll deal with the IRS if they make a mistake with your payroll taxes—including paying all associated fines.
Unfortunately, SurePayroll charges extra for services most payroll companies include at no extra cost, including accounting software integration. The integration fee is just an extra $4.99 a month, but it’s an odd thing to charge for.
Still, SurePayroll’s $19.99 full-service plan is basically a steal. And we’re impressed that SurePayroll transformed itself from one of the more expensive payroll providers to one of the most affordable at the end of last year.
Best for contract work: Square Payroll
If you need help paying contractors or freelancers, Square offers a bare-bones plan for only $5 per person per month—no base monthly fee required. The contractors log in to a Square portal, enter their information, and then you can pay them. It’s simple and affordable.
Although you can purchase Square Payroll as a stand-alone service, it’s designed to work in tandem with Square’s point of sale solution. Employees can use Square terminals or the mobile app to clock in and out, and POS data is seamlessly synced with the payroll service.
FYI, Gusto recently added a contractor plan with no monthly base fee in a clear bid to compete with Square. We’re excited to see which plan comes out on top in the contractor-verse.
Most affordable accounting software integration: Wave Payroll
Wave is among our top picks for the best accounting software because it offers a fantastic range of free accounting services. While Wave’s payroll software isn’t free, it’s among the cheapest out there while still providing an excellent range of payroll services.
Wave offers two plans: a self-service plan and a full-service plan. But the plan you sign up for doesn’t depend on the features you want—it depends on where you live. In most states, Wave offers only a self-service payroll plan, which costs $20 plus $6 per employee per month.
Most affordable self-service: Patriot Software
With a monthly base price of just $10 plus $4 per employee, Patriot Payroll’s Basic plan for self-service payroll is actually cheaper than Wave’s self-service plan—but since Patriot comes without the perk of free accounting software, we rank Wave higher for its overall affordability. Still, if pricing is your top priority, regardless of your accounting software needs, we can’t recommend Patriot Software highly enough.
On top of its $10 price, Patriot Software offers super affordable add-ons, including HR assistance for $4 per month and time and attendance tracking for $5 per month. If you want the full-service option, the cost bumps up to a $30 base price, which still makes Patriot Payroll one of our cheapest recommendations.
Most user-friendly: Wagepoint
It might seem weird to describe a payroll company’s software as “cute and friendly,” but Wagepoint’s software is just . . . so cute and friendly. Based on the smiley face in its logo and the little cartoons on the payroll dashboard, Wagepoint’s thing is clearly friendliness, ease of use, and simple payroll help.
Wagepoint used to charge just $20 a month plus just $2 per employee, but it recently changed its pricing structure. Now, your cost is based on both the number of employees you’re paying and how often you’re running payroll (weekly, bi-weekly, semi-weekly, or monthly). The new pricing structure is a little confusing, so if you have any questions, don’t hesitate to reach out to Wagepoint.
Best interface: QuickBooks Payroll
QuickBooks, long known for providing high-quality accounting software, offers three full-service payroll plans. The cheapest starts at $45 a month and includes automatic payroll runs, health care options for your employees, and next-day direct deposit. QuickBooks’ best feature is its ease of use—the interface requires next to no learning curve, and the mobile app makes on-the-go payroll easier.
A word to the wise, though: QuickBooks Payroll includes a no-tax-penalty guarantee with only its most expensive plan. Even though QuickBooks pays taxes on your behalf with every plan, the company won’t accept responsibility for any filing errors unless you’re paying a ridiculously high $125 a month. We can’t think of any other payroll software that requires such a high fee for such a reasonable, industry-standard guarantee.
Payroll software FAQ
What is the best payroll software for small businesses?
If you’re comparing pricing to features, Gusto offers the best small-business payroll software. Starting at $19 a month, Gusto calculates and files your payroll taxes, helps with workers comp administration, and lets you build paid time off policies for your employees. Gusto’s online payroll service is popular enough to sync with most accounting software options. It’s versatile, affordable, and super easy to use.
However, the best small-business payroll software for you depends on your business’s needs, including how many people you pay and what benefits you want to add. If you want thorough human resource management, you might want to try a provider like Paychex or ADP. If you’re looking to save money, Patriot Software’s $10 self-service plan might be the best payroll solution for you. Before you commit to a payroll plan, thoroughly assess your own needs and make sure they mesh with your preferred plan.
Is there free payroll software?
Yes, but free payroll options are pretty limited. In our opinion, the best free payroll software is Payroll4Free, which lets you run payroll for up to 25 employees, and there are a handful of other trustworthy choices out there.
In general, we don't recommend free payroll processing systems for employers with more than one or two employees. Paying your employees the right amount—and withholding the right amount in taxes—is a big, complicated deal, and paid software is more secure and effective than free options.
Can you use Excel to run small-business payroll?
Yes. Many small-business owners calculate payroll by hand using spreadsheet software like Excel or Google Sheets.
However, we recommend using Excel for payroll only if you have 15 or fewer employees and you’re confident in your document organization skills. While spreadsheets can help you calculate payroll taxes, they can’t guarantee that those calculations are accurate. If you can afford it, we recommend using cheap self-service plans from payroll providers like Wave, SurePayroll, or Patriot Software. All three options give you a solid organizational system, accurate tax calculations, and accounting software integration to make bank reconciliation super easy.
How can payroll software help small businesses?
Full-service and self-service payroll systems can save small businesses time and effort. In general, paying your employees, managing their benefits, and filing payroll taxes correctly and on time is tricky and time-consuming. Payroll-related mistakes and delays are potentially costly for and damaging to your business.
So although you have to pay for payroll software, the return on your investment is, by and large, worth it. By freeing up resources and avoiding legal pitfalls, you can focus your time and energy on growing your business and hiring great employees.
Unless you can afford to pay an in-house bookkeeper, we recommend most small businesses outsource at least some of their payroll tasks. Payroll software providers remove much of the hassle, cost, and risk from managing payroll and free you up to do what you’d rather be doing: growing a successful business.
Looking for great accounting software to complement your payroll solution? Read through our list of the year’s best accounting software for small businesses.
At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.
States with the best (and worst) pay in 2020
If you want to make a good living—and we're pretty sure you do—it isn't just the amount you make that matters. It's also where in the United States you make that money. Sure, California's median salary is higher than Wyoming's, but Californians have to work around 68 hours to afford one month's rent on a one-bedroom apartment. Meanwhile, Wyomingans work 30 hours to afford rent, which means they have 38 more work hours than Californians to spend (or save) on something other than housing.
In the midst of this pandemic, making sure your salary goes as far as possible matters more than ever. Now isn't exactly the greatest time to pull up stakes and move from one of the best states to get paid to one of the worst. Curious to know where your state falls in the ranking? Check out our results below.
For this year’s state rankings, we looked at each state’s median hourly wage as recorded by the Bureau of Labor Statistics. We then used info on apartmentlist.com to determine the median cost of a one-bedroom apartment in each state.
After calculating how many hours you’d need to work at the median salary to make the median rent, we ranked the states (plus the District of Columbia) in order of working hours required for rent. Both data points come from May 2019, which makes our data blissfully pre-COVID. We’re interested in seeing how COVID impacts these numbers in next year’s report.
The Aloha State is gorgeous, but island life comes at a steep price: in Hawaii, you have to work over 68 hours to make rent for a one-bedroom apartment. Compare that hourly rate to North Dakota, the best state to get paid, where you can afford a one-bedroom apartment after just 27 hours of work.
Besides pinpointing the best and worst states, we found a few other interesting facts:
- A whopping 6 of the top 10 worst states to get paid in are on the East Coast. (Yikes.)
- In contrast, with the exception of Kentucky, all of the 10 best states to get paid are in the West or Midwest.
- Just two Southern states made the bottom 10: Florida and Virginia. If you want to live in the South, you'll get much more bang for your buck in Kentucky.
- California is the second-worst state in which to get paid, but Oregon and Washington both escaped our bottom 10. If you want to live in a coastal state, we recommend the good old PNW.
- People in the 10 best states have to dedicate less than one week's full-time salary to paying rent. In contrast, people in the 10 most expensive states dedicate closer to a week and a half of full-time salary to rent a one-bedroom apartment.
Top 10 states with the best pay
Median yearly wage
Median monthly rent for 1 BR apartment
Hours of work to afford apartment
Bottom 10 states with the worst pay
Median yearly wage
Median monthly rent for 1 BR apartment
Hours of work to afford apartment
Salaries aren't everything
It's great to bring home a nice check at the end of the day, but especially these days, it's even better to have as much leftover cash as possible after paying rent. Before setting your sights on the highest-paying job in your field, take a look at where you're living: a lower salary in the right state might prove more valuable overall.