Best Payroll Services for Small Businesses

f you’re a small business owner with employees, it’s vital that you have a reliable payroll service to manage employee compensation, benefits, and tax compliance.

There are a vast number of options available on the market, each with different strengths and weaknesses. It can be difficult to know which one to choose, so we’ve compiled 10 popular payroll services designed with small businesses in mind. In this article, we’ll cover:

• The main factors to consider when choosing a payroll service
• Ten popular payroll service providers and what they have to offer
• Common payroll FAQs

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How to Choose The Right Payroll Service For Your Business

When looking for a payroll provider, you’ll want to vet for:

• Ease of use: Your payroll provider should have an intuitive, easy-to-use payroll process. Some payroll services available are created for accountants, which may be difficult to use for small business owners new to payroll. Your payroll service should use accessible language and have clear instructions on how to use each feature. The tool should also be easy to navigate. The service’s website should be mobile-friendly or have a mobile app so you can run payroll on the go.
• Scalability: If you have long-term hiring and growth goals for your business, the payroll provider you pick needs to be scalable. The service should offer features that permit you to grow your business comfortably and stay compliant at each step of the way. The best payroll services for small business owners allow you to file taxes, send tax forms to employees, and make automated direct deposits. Many of these services also offer tools to manage time off, health care benefits, and retirement plans. Basically, a good payroll provider helps you not only today but also several years down the line.
• Cost: Pay attention to the cost of whichever solution you choose. In most cases, the price of your payroll service will not make or break your business – they typically charge a monthly base fee plus a price per employee. Still, paying attention to any additional fees and comparing payroll tools can save you a lot of cash in the long run. Consider: How much is the service charging you to sign up? How much are you going to pay every month? Are there extra costs every time you add an employee or contractor? What other fees are there? 

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Now, let’s dive into the 10 best payroll services for small businesses.

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Gusto

Gusto is an all-in-one service for payroll, HR, and benefits management. It’s easy to navigate and has all the essentials you need to run your small business. With automatic payroll processing, PTO management, next-day direct deposits, hiring and onboarding tools, health insurance benefits, 401(k) benefits, and more, Gusto is a great choice for a range of businesses.

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Pricing

Gusto’s plans start at $40 per month, plus $6 per month per employee.

Base plan features

• Full-service, single-state payroll with unlimited monthly pay runs for both W-2 and 1099 employees
• Supports multiple pay rates and schedules
• Garnishments
• Employee self-service portal
• Basic hiring and onboarding documents
• Health insurance administration (brokered by Gusto)
• Workers’ compensation, 401(k) plans, commuter benefits, and other employee financial benefits
• Payroll and time-off reports
• Integrations for popular external tools
• Basic support
• Ability to create custom admin permissions 

Pros of Gusto

• User-friendly, intuitive interface
• Robust suite of payroll, benefits, and HR tools
• Extensive list of supported integrations for popular tools, including accounting, time-tracking, and expense management software

Cons of Gusto

• Does not allow you to manage payments for international employees
• No accounting or billing features

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Quickbooks Payroll

Part of the Intuit suite of tools, QuickBooks Payroll was developed for small- to medium-sized businesses with up to 50 employees. It offers automated payroll processing, tax filing, benefits administration, and more. QuickBooks Payroll has three tiers – its base plan, Payroll Core, is good for businesses looking for a basic payroll tool. Its higher-tier plans offer more functionality, making the tool a good fit for businesses planning to scale. Already use QuickBooks’ accounting software? QuickBooks Payroll integrates with it!

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Pricing

Plans start at $45/mo + $5 per employee per month and go up to $125/month + $10 per employee per month. As of February 2023, they offer 50% off for 3 months or a 30-day free trial. After either the 3-month period or the 30-day free trial period, you’ll pay the full rate.

Base Plan Features

• Full-service, single-state payroll with unlimited monthly pay runs for both W-2 and 1099 employees
• Automated payroll for salaried employees
• Next-day direct deposits
• Garnishments and deductions management
• Unlimited e-filing for contractors
• Employee self-service portal
• Health benefits and 401(k) plans
• Payroll reports
• Product support

Pros of Tool

• Payroll taxes are handled automatically
• Offers fast direct deposits
• Includes 401(k) plans and health benefits plans
• Integrates with QuickBooks online

Cons of Tool

• Filing fees for employees in different states are extra at the Core and Premium plan levels
• Time-tracking is not available with the base plan
• Doesn’t integrate with accounting software outside of QuickBooks Online

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Paychex Flex

Paychex Flex offers payroll solutions for businesses of all sizes, with tiered pricing based on business size. Services like benefits administration and time tracking are not included in their payroll plans but are available as separate solutions. Paychex, Inc. also owns SurePayroll, another provider that we’ll cover in this article.

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Pricing

Paychex’s base plan starts at $39/month, with an additional $5 per employee. Pricing for higher-tier plans is customized based on business needs, so you’ll need to get a quote from Paychex.

Base plan features

• Direct deposits and on-site check printing
• Garnishment services
• Payroll tax administration
• W-2s and 1099 forms
• Employee self-service portal
• Access to a library of HR documents
• Compliance services, including new hire reporting, up-to-date labor compliance posters, and workers’ compensation insurance
• Analytics and reporting
• Mobile app
• General ledger report
• Optional services, including pay card issuing, financial wellness programs, tax credit services, and an employee assistance program

Pros of Paychex Flex

• Integrates with popular accounting software like Xero and Quickbooks
• Access to e-learning tools with higher-tier plans

Cons of Paychex Flex

• Need to speak to a sales representative to customize your plan
• Doesn’t include time tracking, although you can integrate with Paychex Flex Time
• Benefits administration is not included

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ADP Run

ADP Run is optimized for businesses with fewer than 50 employees. If your business headcount grows beyond that threshold, it’s easy to migrate to their enterprise platform. One differentiator of ADP Run is that it offers add-ons for marketing services, which can be helpful for business owners looking to get started with digital marketing. It’s not an out-of-the-box solution – you’ll need to speak with a representative to get pricing specific to your business.

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Pricing

ADP does not cover pricing on their website – you’ll need to submit information about your business in order to get a quote.

Base plan features

• Payroll services, including payroll tax filings, with the ability to run payroll online or by phone. Offered across multiple jurisdictions
• W-2s and 1099s, with ability to file W-2s for an additional fee
• Direct deposits
• Employee self-service portal
• New hire onboarding paperwork
• New hire reporting
• Payroll reports
• General ledger exports
• Pre-paid debit card
• Employee discounts on certain products
• Google Ads management and optimization services, powered by Upnetic

Pros of Tool

• Add-ons offered for marketing and legal services, as well as time-tracking
• They handle tax filing and pay any penalties resulting from filing errors

Cons of Tool

• Benefits administration is not included
• Pricing is not available online – you’ll need to get a quote based on the specifics of your business
• You need at least one W-2 employee before you can pay 1099 employees

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Square Payroll

Designed for small business owners, Square Payroll is great for businesses whose headcount fluctuates seasonally – there’s no cost for seasonal inactivity, and Square offers a contractor-only option for businesses without salaried employees.

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Pricing

Square Payroll starts at $35/month with $5 per month per employee.

Base plan features

• Full-service, multi-state payroll with unlimited monthly pay runs for both W-2 and 1099 employees
• Ability to pay by check, direct deposit, or Cash App
• Ability to track and import tips and commissions
• W-2 and 1099-NEC forms
• Employee self-service portal
• Timecards
• Support available
• No fees for seasonal inactivity

Pros of Tool

• You can cancel your subscription at any time, and there are no hidden fees
• Integrates with Square products, as well as other apps like QuickBooks and ZipRecruiter
• Contractor-only option for businesses with no salaried employees
• Relatively affordable

Cons of Tool

• Benefits administration is not included
• Doesn’t offer advanced features that your business will likely need as it scales

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OnPay

For the price-conscious small business that's growing, OnPay could be an attractive choice. The HR and payroll company prides itself on its ease of use, pricing transparency, and customer service. OnPay calculates and withholds taxes, integrates with accounting software, and has an in-app reporting tool that allows you to monitor key payroll-related metrics.

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Pricing

OnPay charges a $40/month base fee plus an additional $6 per month per person.

Base plan features

• Full-service, multi-state payroll with unlimited monthly pay runs for both W-2 and 1099 employees
• Ability to pay employees by direct deposit, debit account, or check
• Ability to set multiple pay rates and schedules
• Garnishments
• Unemployment insurance withholding
• Employee self-service portal
• A suite of HR and compliance tools
• PTO management tools
• Org charts
• Health and dental benefits with the option to include life, vision, and disability insurance
• 401(k) plans
• Workers’ comp administration
• Payroll reporting (with ability to export)
• Accounting and time-tracking integrations for popular software
• Mobile-friendly app
• Setup assistance and customer support
• Special payroll services for restaurants, agriculture businesses, nonprofits, and more

Pros of Tool

• One pricing tier for their full suite of tools
• First month and setup (including migration) are free
• Unlimited payroll runs
• OnPay handles payroll tax filing

Cons of Tool

• No free trial available, although the first free month can serve as a trial
• Payroll approval requires some manual input
• No native time-tracking functionality
• Mailing tax forms costs extra
• If you can’t cover the total cost of a pay run, OnPay charges an insufficient funds fee

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Justworks

Justworks is a Professional Employer Organization (PEO), which means that they share certain employment responsibilities with your business – this is known as co-employment. PEOs help you manage the administration side of your business, allowing you to focus on operations and growth. Justworks’ Basic plan offers payroll, benefits, HR tools, and compliance, while their Plus plan includes everything in the Basic plan plus access to health benefits. It’s easy to use, and while it is more expensive than some of the options we’ve listed above, it can pay off if you are more than just a payroll service.

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Pricing

Justworks charges $59 per month per employee for their Basic plan. The price decreases when you hit 50 employees. Their Plus plan, which includes access to medical, dental, and vision, costs $99 per month per employee, with a discounted rate of $89 dollars after your 50th employee.

Base plan features

• Full-service, multi-state payroll with unlimited monthly pay runs for both salaried and hourly employees
• Vendor payments included
• W-2 and 1099 filings
• Unemployment insurance filings
• Employment Practices Liability Insurance coverage
• HR consulting services
• Access to workers’ comp, life & disability insurance, health & wellness perks, and 401(k) benefits
• Virtual employee onboarding
• PTO management
• Commuter benefits
• Company directory, org chart, calendar, and document center
• Integrations with popular accounting software
• Reports
• Harassment prevention training
• Mobile app
• 24/7 customer support and plan setup

Pros of Tool

• Robust software that includes full-service HR
• Easy-to-use interface

Cons of Tool

• Time tracking costs extra ($8 per person per month)
• Expensive if you’re just looking for a payroll service

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SurePayroll 

A subsidiary of Paychex, Inc., SurePayroll is an affordable solution for small businesses looking for payroll services. It’s not as robust as some of the other tools but offers the essentials you need to run payroll for your business.

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Pricing

Like ADP, SurePayroll doesn’t advertise pricing on their website – you’ll have to submit your information to get a quote. Some users report plan costs ranging from $19.99 to $29.99 per month plus $4 per employee per month, which is affordable relative to other options on the market. They have two payroll plans – Full-Service and No Tax Filing.

Base plan features

• Unlimited payroll runs
• Ability to set multiple pay rates
• Ability to pay bonuses
• Payroll deductions
• No-penalty tax filing guarantee
• Flexible payroll options, including next-day payroll, same-day payroll, payroll cancellations, and automated payroll
• Employee paycheck calculations
• Direct deposits and digital pay stubs
• 4-day payroll processing window
• New hire reporting
• Mobile app
• Customer support

Pros of Tool

• No setup fees
• More affordable than other options
• Live customer support

Cons of Tool

• Time tracking and accounting software integrations cost extra
• Multi-state tax filing costs extra
• Doesn’t offer many robust HR features

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Patriot Payroll

Patriot Payroll is the most competitively priced option of all the services we’ve named that advertise pricing. At $17 per month for their base plan (plus $4 per employee or contractor), it’s hard to beat. Their customers are typically businesses with 1 to 500 employees across a variety of industries. Note that it doesn’t offer benefits administration but does offer the ability to set up payroll deductions for 401(k), HSA, and FSA contributions.

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Pricing

For their Basic plan, Patriot charges $17 per month plus $4 per employee or contractor. For their Full Service plan, it’s $37 per month plus $4 per employee or contractor. The Full Service Payroll plan includes tax filing and guarantees.

Base plan features

• Payroll with unlimited monthly pay runs for both salaried and hourly employees
• Calculates payroll taxes for multiple locations
• Free 2-day direct deposit for qualifying customers
• Supports multiple pay schedules and up to 5 pay rates
• Customizable hours, payment types (e.g. tips, bonuses, commissions), and deductions
• Supports payment of additional employee allowances
• Access to net-to-gross payroll calculator
• Employee self-service portal
• Ability to pay workers’ comp premium via their integration with Next Insurance
• Access to W-2 forms
• Opt-in for 1099 e-filing
• PTO management
• Ability to assign employees to departments
• Free 401(k) integration through Vestwell
• Integrations with QuickBooks and with Patriot’s own software for accounting and time-tracking
• Customer support
• Mobile-friendly software

Pros of Tool

• Very affordable, especially for the Basic plan
• Easy to set up
• Free setup and customer support
• Optional add-ons for HR software and time-tracking

Cons of Tool

• Multi-state filing costs $12 per month per state
• 1099 e-filing is a paid add-on
• No custom report capability
• No health insurance capability

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Wave Payroll

If you’re looking strictly for a payroll service, Wave Payroll could be right for your business. This user-friendly tool is designed for small businesses and is reasonably priced. However, if you’re looking to use their tax service plan, note that it’s only available in 14 states. Overall, it’s a solid option for small businesses looking for a simple, easy-to-use payroll tool.

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Pricing

Wave Payroll has two payroll plans, one for tax service states and one for self-service states. The tax service states plan has a base fee of $40 per month with an additional $6 per active employee or contractor paid. The self-service states plan has a base fee of $20 per month with an additional $6 per active employee or contractor paid.

Tax services states include Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin, while self-service states encompass the remaining 36 states. On its website, Wave Payroll notes that it will be releasing automated tax filings and payments to more states in the future.

Wave Payroll also offers a free 30-day trial.

Base plan features

• Payroll for employees and contractors
• Payroll expense reports
• Employee self-service portal
• W-2 and 1099 forms
• Time tracking
• Customer support via live chat and email
• Automatic integrations with other Wave offerings

Pros of Tool

• Time tracking is included
• No setup fees
• Free 30-day trial
• Option to hire a Wave Advisor for tax filing assistance
• Easy to use
• Accuracy guarantee

Cons of Tool

• No automated tax filing in 36 states
• Data migration process is manual
• Contractor fees are calculated based on how many contractors you pay in a given month
• Payroll cannot be automated and requires approval
• Wave Payroll doesn’t currently have a mobile app, so you can’t manage payroll on-the-go
• No benefits administration

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Choosing a payroll service provider ultimately depends on what set of tools and services you require, how much you’re willing to spend, and whether it’s set up to grow with your business. The options we’ve outlined above are among the most popular for small businesses and offer a range of features that are designed to simplify payroll, allowing you to focus on running your business.

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FAQs

Q: What type of HR features should a payroll system have?

A: A payroll system with HR features should offer employee information management, time tracking, payroll processing, benefits administration, compliance, reporting functionalities, and integrations with popular external tools.

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Q: Can I set up payroll software myself?

A: Many payroll tools are out-of-the-box, allowing you to set them up on your own. You’ll need to have the necessary information on hand to input into the system. Other tools may require more technical expertise and will offer setup as a feature (either for a fee or as part of your payroll package).

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Q: Can payroll software be used for independent contractors or seasonal employees?

A: Many payroll programs allow you to process payments for seasonal workers, contractors, and other types of non-salaried employees. It’s advisable to consult with a specialist to ensure that you’re handling payroll correctly for these workers, as their classification differs from W-2 employees.

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Q: How secure is payroll software?

A: Payroll software is designed to securely store your data, using encryption methods, data backups, access controls, and compliance with security standards to keep your financial and personal data safe. It’s important to fully research any tool you choose to ensure that it’s secure and reliable.

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Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.