The Best Payroll Software for Small Businesses 2020

Need to pay employees? Payroll software can automate the most time-consuming aspects of payroll while costing substantially less than a full-time bookkeeper.
Best overall
Gusto
Gusto
  • Icon Pros  Dark
    Automatic tax filing with every plan
  • Icon Pros  Dark
    Unlimited payroll runs in all 50 states
Best HR add-ons
ADP
RUN Powered by ADP
  • Icon Pros  Dark
    All-in-one payroll and HR software
  • Icon Pros  Dark
    Unlimited payroll runs
Best reporting
Paychex
Paychex
  • Icon Pros  Dark
    Over 160 payroll and HR reports
  • Icon Pros  Dark
    Comprehensive HR services
Simplest setup
OnPay
OnPay
  • Icon Pros  Dark
    Free professional setup
  • Icon Pros  Dark
    Free multi-state payroll
Best customer service
SurePayroll
SurePayroll
  • Icon Pros  Dark
    Extended customer service hours
  • Icon Pros  Dark
    Affordable starting price

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.

2020's Best Payroll Software for Small Businesses

Best payroll software for small businesses

Provider
Starting base price
Fee per employee per month
Automatic tax filing
Free trial
Learn more
Gusto

$19.00/mo.

$6.00/payee

Yes

1 mo.

RUN Powered by ADP

$59.00/mo.

$4.00/payee

Yes

3 mos.

Paychex

$59.00/mo.

$6.00/payee

Yes

3 mos.

OnPay

$36.00/mo.

$4.00/payee

Yes

1 mo.

SurePayroll

$19.99/mo.

$4.00/payee

No*

1 mo.

Square Payroll

$29.00/mo.

$5.00/payee

Yes

Unclear

Wave Payroll$20.00/mo.$6.00/payeeNo†30 days
Patriot Software

$10.00/mo.

$4.00/payee

No‡

30 days

Wagepoint

$20.00/mo.

$2.00/payee

Yes

Free until first payroll run

QuickBooks Payroll

$45.00/mo.

$4.00/payee

Yes

30 days

Data effective 10/13/20. At publishing time, pricing and features are current but are subject to change. Offers may not be available in all areas.
*Automatic tax filing 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

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. 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 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.

Pin
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.

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 4.1 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.

Strengths
Pro Bullet Automatic local, state, and federal payroll tax filing
Pro Bullet Unlimited payroll runs in every state
Pro Bullet Generally positive online ratings
Weaknesses
Con Bullet No accounting software integration with Basic plan
Con Bullet Limited PTO features with the two cheapest plans
Con Bullet Support limited to daytime hours on weekdays

Basic for payroll + HR: RUN Powered by ADP

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.

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

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.

Strengths
Pro Bullet Solid employer-facing app
Pro Bullet In-depth reporting
Pro Bullet Comprehensive HR add-ons
Weaknesses
Con Bullet No online pricing apart from Go plan
Con Bullet No mobile app with cheapest plan
Tired of payroll? Gusto handles payroll taxes and more

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
Simplest setup
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)
Strengths
Pro Bullet Free professional account setup
Pro Bullet Easy PTO tracking
Pro Bullet Low base cost
Weaknesses
Con Bullet No mobile app
Con Bullet 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.

Strengths
Pro Bullet Tax accuracy guarantees
Pro Bullet Affordable monthly starting prices
Pro Bullet Customer service available 6 days a week
Weaknesses
Con Bullet 4-day payroll processing with self-service plan
Con Bullet Extra costs for accounting software integration

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 for contract work: Square Payroll

Square
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 accounting software integration: Wave Payroll

Wave

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 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

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.

Best interface: QuickBooks Payroll

Quickbooks
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.

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.

 

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
State
Median yearly wage
Median monthly rent for 1 BR apartment
Hours of work to afford apartment

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
State
Median yearly wage
Median monthly rent for 1 BR apartment
Hours of work to afford apartment

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.

Kylie McQuarrie
Written by
Kylie McQuarrie
Kylie spent two of the last four years writing for and with small-business owners—from dentists in Australia to plumbers in the Midwest. She spent the other two writing in depth about internet and security. She’s passionate about reading, hiking, and dedicating every spare second to writing for fun (at lunch, between meetings, on the train, before breakfast . . . ). Her content helps small-business owners tackle the logistics of running a business so they can focus more on their passions too.
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