2020’s Best Payroll Software for Small Businesses


Need to pay employees? Payroll software can automate the most time-consuming aspects of payroll while costing substantially less than a full-time bookkeeper.

Last Updated: 2 months ago
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.
3 months ago
We recently reviewed this page to make sure our top picks hadn't changed their plan and pricing information. Apart from a few companies changing their free-trial offers—for instance, SurePayroll now offers a one-month free trial while Paychex is offering three months—everything has stayed the same.
Less than 6 months
We recently updated this page with our top picks' most recent pricing information. While most companies aren't offering COVID-19 promotions anymore, they're still offering assistance, such as Gusto's one free month for new customers and OnPya's COVID-19 resource library.
Less than 6 months
We checked this page to ensure none of our top picks had recently changed their pricing. None have except for Gusto, which lowered its starting price for the Core plan to $19 a month to help business owners struggling during the COVID-19 crisis.
Less than 6 months
Most payroll software providers have either added a list of COVID-19 resources to their pages or are offering a temporary discount to make payroll payments easier on their customers right now. Most notably, Gusto's starting base price is now $19 for the first six months. Additionally, QuickBooks is offering 70% off for the first three months, Square is waiving subscription fees for current payroll users, and SurePayroll is now offering its first three months completely free. We added that information to our page so you can see what our top providers are doing to help customers like you directly.
Less than 6 months
Most payroll software providers have either added a list of COVID-19 resources to their pages or are offering a temporary discount to make payroll payments easier on their customers right now. We added that information to our page so you can see what our top providers are doing to help customers like you directly. Pricing stayed the same for our top picks (for now), though QuickBooks is offering 70% off for the first three months, Square is waiving subscription fees for current payroll users, and SurePayroll is now offering its first three months completely free.
More than 6 months
We double-checked this page to ensure all our information is up to date. None of our top 10 picks have changed their pricing recently; the only info we changed was customer service ratings.
More than 6 months
This month, we added some new contenders to our top five: SurePayroll and OnPay. We also updated the pricing information for all our brands; the most notable change was Wave Payroll, which upped its cost per employee from $4 to $6.
More than 6 months
Within the last few months, QuickBooks completely revamped its payroll plans. All three plans now include automatic payroll tax filing services. Wave has also expanded its full-service payroll option from 8 states to 14.
More than 6 months
We recently reviewed this article to make sure our ratings still stacked up, and good news—after rechecking plan and pricing information for each of our top picks, we stand by our top five, especially Gusto as our best overall pick.
More than a year
This quarter, we completely updated our top payroll software rankings to bring you a thoroughly new-and-improved list of the year’s best. First, we switched the focus of our page from payroll software and services to payroll software only. Our in-depth reviews of the best payroll services are now on another page entirely. Second, we replaced our service-based reviews with our top-rated payroll software companies. We also took Xero out of our top five because instead of offering its own payroll software, Xero partners with Gusto to provide an all-inclusive payroll and accounting solution. Third, we changed QuickBooks' title from "best full-service payroll" to "most user-friendly.” Gusto’s full-service payroll is our top pick, but we love QuickBooks’ efficient, easy-to-understand interface (not to mention its easy integration with QuickBooks Online).
More than 2 years
Because of how popular Gusto's tailored payroll software and services is with small businesses, we moved them to our number one spot.

If your business recently started hiring employees, you might be facing a creeping worry: Am I doing this right? Sure, you may be tallying up employee hours and cutting checks with the right amounts, but are you certain you’re calculating payroll taxes correctly? Are you in compliance with state and federal employment regulations?

Getting this stuff wrong can be more than a hassle—it can result in penalties or lawsuits. Fortunately, several payroll software providers can help you do the work at a fraction of the traditional bookkeeping cost. Take a look at our top picks for the best small-business payroll software to find one that works for you.

Best payroll software for small businesses
ProviderStarting base priceFee per employee per monthAutomatic tax filingFree trialLearn more
Gusto$39.00/mo.$6.00/payeeYes1 mo.View Plans
RUN Powered by ADP$59.00/mo.$4.00/payeeYes3 mos.View Plans
Wave Payroll$20.00/mo.$6.00/payeeNo*30 daysView Plans
OnPay$36.00/mo.$4.00/payeeYes1 mo.View Plans
SurePayroll$19.99/mo.$4.00/payeeNo1 mo.View Plans
QuickBooks Payroll$45.00/mo.$4.00/payeeYes30 daysView Plans
Paychex Flex$59.00/mo.$4.00/payeeYes3 mos.View Plans
Square Payroll$29.00/mo.$5.00/payeeYesUnclearView Plans
Patriot Software$10.00/mo.$4.00/payeeNo§30 daysView Plans
Wagepoint$20.00/mo.$2.00/payeeYesFree until first payroll runView Plans
Data effective 8/10/20. At publishing time, pricing and features are current but are subject to change. Offers may not be available in all areas.
*Automatic tax filing available in Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin
†Automatic tax filing starting at $29.99 per mo. plus $5 per payee
‡30-day free trial or 50% off first three months
§Automatic tax filing starting at $30 per mo. plus $5 per payee

Best overall: Gusto

Gusto
Best overall
Gusto is a comprehensive, intuitive payroll service with plenty of impressive HR extras.

Gusto’s COVID-19 resources

Gusto’s COVID-19 resource guide includes a helpful breakdown of changes to state small-business taxes and a particularly useful guide to the Paycheck Protection Program.

Gusto review

The heartily named Gusto is a beautifully designed, full-service payroll service with plenty of features and a healthy reputation.

Gusto’s cloud-based payroll plans start at $39 per month plus another $6 per month for each managed employee. Every plan—including Core, the cheapest Gusto plan—includes these impressive services:

  • Automatic local, state, and federal income tax filing
  • Automatic state and federal unemployment insurance tax filing
  • Automatically generated and distributed W-2 and 1099 tax forms
  • Automatic new hire filing with your state government
  • PTO (paid time off) tracking
  • Integration with popular accounting software like Xero, QuickBooks Online, and FreshBooks
  • Automatic workers compensation billing
  • 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.

Heads-up: Gusto's Contractor plan

Do you hire contractors on an individual basis instead of working with a full-time team of employees? Gusto’s new Contractor plan has no monthly base cost; you pay only $6 per month per payee.

If you get all of those features with Gusto’s most basic plan, what do you get with the more expensive ones? Mainly, you get more HR and administration services, not more payroll services. Most importantly, you can approve time-off requests instead of just tracking PTO. And approved PTO is automatically synced to an employee’s pay schedule so you don’t have to make any manual adjustments.

Honestly, it kinda sucks that you don’t get automatic PTO integration with the cheapest plan. But it does explain why Gusto’s next-highest plan, Complete, costs the same monthly base price as Core but double the amount per employee.

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 4.2 out of 5 from 1.1K reviews.1 But unlike some payroll software providers, Gusto doesn’t provide 24/7 customer support. You can only reach a representative on weekdays between 8 a.m. and 5 p.m. Pacific standard time.

Strengths
  • Automatic local, state, and federal payroll tax filing
  • Unlimited payroll runs in every state
  • Impressively positive online ratings
Weaknesses
  • Limited PTO and holiday pay features with the cheapest plan
  • Support limited to daytime hours on weekdays

Basic for payroll + HR: RUN Powered by ADP

RUN Powered by ADP
Best for payroll + HR
If you want payroll and HR help rolled into one, RUN Powered by ADP blends ADP’s HR expertise with easy-to-use full-service payroll software.

ADP’s COVID-19 assistance

ADP’s large database covers COVID-19 legislation and changes to employment taxes. The site also offers a handy COVID-19 preparedness toolkit plus tips to protect your company’s data while employees work from home. We doubt ADP’s pricing has changed during the crisis, but the company is emphasizing its three-month free trial that we heartily recommend new customers take advantage of.

ADP review

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.

ADP's Core Payroll plan

Do you want solid payroll with just a few HR add-ons? ADP’s new Core Payroll plan costs $59 a month with just $4 extra per payee. Like ADP’s other plans, the Core plan includes three months free.

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.

Strengths
  • Unlimited payroll runs
  • Basic HR features in every package
  • No-penalty guarantee
Weaknesses
  • No online pricing apart from Core plan
  • No wage garnishment with cheapest plan

Most affordable: Wave Payroll

Wave Payroll
Most affordable
Wave Payroll offers affordable self-service payroll (or full-service in 14 states) that integrates easily with Wave’s completely free accounting service.

Wave’s COVID-19 resources

Like Gusto, Wave has created a resource page that helps small-business owners understand their economic options for dealing with COVID-19.

Wave Payroll review

Wave is among our top picks for best accounting software and best accounting apps because it offers a fantastic range of accounting services while being absolutely free. 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.

Even with its cheaper self-service plan, Wave’s includes workers compensation coverage options, W-2 and 1099 tax form preparation, and good customer service (though it’s only available online, not over the phone). That’s quite a load of features for just a $20 base fee.

Strengths
  • Low base cost of $20 per month
  • Easy integration with Wave’s free accounting software
  • Employee W-2 and paystub access
Weaknesses
  • Limited automatic tax filing (14 states only)
  • Fewer customization options
Find Your Money—and Keep More of It With plans starting at $15 a month, FreshBooks is well-suited for freelancers, solopreneurs, and small-business owners alike.
  • Track time and expenses
  • Create custom invoices
  • Accept online payments
Get Started

Simplest setup: OnPay

OnPay
Don’t want to set up your new payroll plan on your own? Turn it over to OnPay’s experts; they’ll take care of it at no additional cost.

OnPay’s COVID-19 resources

Of all our top picks, OnPay compiled our favorite (and the most comprehensive) COVID-19 resource guide. Its 32-page downloadable guide includes a slew of information for employers, including advice on sick leave policies and a breakdown of all current CDC guidelines on how to keep your workplace safe.

OnPay has also been quicker than other providers to incorporate COVID-19 small-business assistance directly into its software. Most notably, OnPay lets you track and pay FFCRA (Families First Coronavirus Response Act) leave. It also generates reports that simplify PPP loan applications and loan forgiveness.

OnPay review

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 they’ll tailor their 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)
Pros
  • Free professional account setup
  • Easy PTO tracking
  • Low base cost
Cons
  • No mobile app
  • One plan only

Best customer service: SurePayroll

SurePayroll
Best customer service
With extended weekday and weekend hours, SurePayroll’s US-based customer service is a must for anyone who wants extra payroll help. And SurePayroll’s starting price of $19.99 a month doesn’t hurt either.

SurePayroll’s COVID-19 resources

SurePayroll has a thorough guide to all COVID-19 legislation and a jumplink to the Paycheck Protection Program application form, which will take applications until August 8.

SurePayroll review

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.

Pros
  • Tax accuracy guarantees
  • Affordable monthly starting prices
  • Customer service available 6 days a week
Cons
  • 4-day payroll processing with self-service plan
  • Extra costs for accounting software integration
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We gave you our top five recommendations above, but the payroll software market is a crowded one. Here are five more small-business payroll solutions worth considering.

Best interface: QuickBooks Payroll

QuickBooks Payroll
Try QuickBooks Payroll if you want powerful, feature-rich, and secure software that easily integrates with your existing QuickBooks Online account.

QuickBooks, long known for providing high-quality accounting software, offers three full-service payroll plans. The cheapest is pretty similar to Gusto; it 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.

Best reporting: Paychex

Paychex
If you want to keep a finger on the pulse of your business's success, Paychex's reporting, HR, and payroll features can help you out.

Paychex’s COVID-19 resources

Paychex has a quick and dirty guide to the Paycheck Protection Program similar to SurePayroll’s (which makes sense; Paychex owns SurePayroll). It also has some small-business FAQ related to COVID-19, but the site is a little harder to navigate than most other companies’ resource guides.

Paychex Flex review

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.

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.

Best for contract work: Square Payroll

Square Payroll
If you want an affordable way to pay contractors, Square Payroll is an excellent bet. Employees can also use Square software to clock in and out, simplifying your payroll processes.

Square’s COVID-19 resources

Square doesn’t have a payroll-specific resource page, but it does have a pretty comprehensive roundup of government resources besides the SBA that can offer immediate small-business support.

Square Payroll review

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 alternative: Patriot Software

Patriot Software
For hyper-affordable self-service payroll, you can’t do better than Patriot Software’s $10-a-month base plan.

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

Wagepoint
Apart from its $20 starting price, Wagepoint’s biggest selling point is its friendly interface and helpful customer service team.

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. Even better, Wagepoint backs that friendliness up with their price: at $20 a month plus just $2 per employee, Wagepoint’s cutesy software is a steal.

Payroll software FAQ

How can payroll software help small businesses?

Once you have employees, you’ll quickly learn how important it is for payroll to be accurate and efficient. Paying your employees, managing benefits, and filing payroll taxes can be difficult and time-consuming. And payroll-related mistakes and delays are potentially costly and damaging to your business.

Both full-service and self-service payroll help ease the burden of having to handle the minutiae of payroll yourself. And although you have to pay for payroll software, the return on your investment is 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.

Is there free payroll software?

Yes, but the options are pretty limited. Our preferred free payroll software provider 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 software 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.

The takeaway

Unless you’re willing—and can afford—to pay an in-house bookkeeper, we recommend most small businesses outsource at least some of their payroll tasks to a third party. Payroll software providers remove much of the hassle, cost, and risk from managing payroll and free you to do what you’re meant to be doing: growing a successful business.

Looking for great accounting software to complement your payroll software? Read through our list of the year’s best accounting software for small businesses.

Disclaimer

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.

Sources

1. Trustpilot, “Gusto.” Accessed August 10, 2020.

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.

US map with average salaries for each state

Methodology

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.

Key Findings

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

Rank-StateAnnual median wage1br Rent# of hours worked at median wage to afford median 1br rent
1-North Dakota$42,510 $571 27.9
2-Wyoming$41,650 $614 30.7
3-Iowa$38,280 $603 32.8
4-South Dakota$34,750 $567 33.9
5-Oklahoma$35,730 $600 34.9
6-Montana$36,420 $618 35.3
7-Nebraska$38,390 $653 35.4
8-Kentucky$35,540 $605 35.4
9-Ohio$38,560 $661 35.7
10-Arkansas$32,940 $574 36.2

Bottom 10 states with the worst pay

Rank-StateAnnual median wage1br Rent# of hours worked at median wage to afford median 1br rent
1-Hawaii$44,400 $1,456 68.2
2-California$44,180 $1,442 67.9
3-New Jersey$45,000 $1,254 57.9
4-New York$46,680 $1,285 57.3
5-Maryland$45,970 $1,263 57.1
6-Florida$35,850 $975 56.6
7-Massachusetts$50,200 $1,313 54.4
8-Virginia$42,220 $1,065 52.5
9-New Hampshire$41,490 $1,036 51.9
10-Delaware$40,900 $1,003 51

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.