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For small to large enterprises, payroll software streamlines every stage of the payroll process. It assists you in managing employee payments simplifying payroll taxes deduction, keeping proper records, setting up direct deposits, and avoiding fines. When done manually, all of these operations can take a long time, and it’s simple to make a mistake. For concerns including the inability to pay and faulty checks, the IRS levied more than $4.9 billion in fines in 2020.
We looked over ten different payroll software options to help you select the best one for your company. Cost, simplicity of use, essential integrations, convenience, reporting options, and support were all factors considered.
1. Best Small Business Payroll Software 2023
1.1 Gusto – Best Overall Payroll Software
Gusto is comparable to many other payroll software systems in that it allows you to pay your employees via direct deposit or cheques. It also automatically records and submits federal, state, and municipal taxes. Gusto offers a better strategy as you progress through the tiers. Rather than eliminating direct deposit for the cheapest plan, Gusto makes a direct deposit more convenient as your plan becomes more costly. Direct deposit, for example, can take four days to process for the lowest-tier plan, while the next-day direct deposit is available for the higher-tier plans.
Gusto’s Core plan is $39 per month plus $6 per worker every month, making it one of the most cost-effective full-service payroll options. The Complete plan is $39 a month, but it costs $12 per employee and allows you to provide a next-day direct deposit. The Concierge service, which includes specialized assistance and compliance notifications, costs $12 per person and $149 per month.
|Affordably priced but of high quality.||Only Concierge subscribers get dedicated support.|
|Payroll runs indefinitely.|
|Tracking paid time off (PTO) is possible.|
|Basic reports are offered at all levels.|
|Full-service Payroll is provided.|
1.2 Paychex Flex – Best Reporting Software
Paychex Flex has over 160 reports to assist you to gain a comprehensive picture of your turnover, salaries, taxes, and more. Paychex is one of the many top reporting choices since it checks practically all of the boxes when it comes to data and reports in payroll software. It also submits your payroll taxes automatically, guarantees compliance, and integrates with other critical tools you use, such as bookkeeping and benefits apps.
Paychex has a number of positive aspects. It is easy to set up and handle Payroll, automates the filing of local payroll taxes, and provides a variety of upgrade choices that you may require as your company expands. One of the most significant features of a solid online payroll system is integrating it with other applications. Paychex works with Xero accounting software and QuickBooks, time and attendance software, a variety of health insurance, and HR software.
Still, Paychex’s basic reporting justifies the monthly charge on its own, giving it the advantage in this area. Plus, owing to custom fields, you’ll be able to introduce any extra data field you want, which is uncommon for a small company’s online payroll systems. While the Paychex Flex Essentials plan costs $5 per employee and $39 per month, it’s hard to ascertain how much the more extensive Paychex Flex Select and Paychex Flex Pro plans would cost you until you get a bespoke quotation.
|Support is available 24×7||Setup costs and EOY tax documents are not included in the price.|
|Add-on HR services|
|Effective reporting capabilities|
|Easy to navigate|
1.3 QuickBooks Payroll – Best Easy Set-Up
QuickBooks Payroll is easy to set up because everything is computerized. It is a user-friendly tool for any QuickBooks user. Because the training and reference manual are so comprehensive, you’re unlikely to have to contact support seeking assistance. Even if it doesn’t work, a fast web search will lead you to many walkthroughs. The new Payroll Tax Center, additional online support resources, and free Form 1099 generation and delivery have been added to QuickBooks Payroll in recent years. QuickBooks Payroll has a straightforward, user-friendly interface.
Since its UI is so straightforward for anybody acquainted with QuickBooks, it gets our vote for the most effortless setup. Aside from customer support, there are many online tools to help anyone get started with their payroll management. QuickBooks does an excellent job of making payroll setup and management straightforward for everyone, regardless of expertise.
You’ll pay for QuickBooks’ superb capabilities, even if its HR choices are a little limited. The cheapest package is $45 per month + $4 per month for each additional person. The Premium plan would cost $75 per month + $8 per employee every month, including HR help and a payroll configuration review from a professional. QuickBooks’ Elite plan costs $125 per month plus $10 per person per month, and it includes 24/7 assistance and tax penalty protection.
|Direct deposit the next day or the same day.||Keeping track of time feature is not accessible with the lowest-tier subscription.|
|QuickBooks accounting software is seamlessly integrated.||Without QuickBooks Online, there are just a few connections available.|
|With the Elite plan, you get extra tax penalty protection.|
|Simple setup with a user-friendly interface.|
1.4 Workful – Best Customer Support
Workful is a newer online payroll provider that’s already creating a reputation with excellent customer service. The GPS time-clock tracking is simple to set up, and it ensures that employees check-in and leave from the locations you specify. Employees can also submit costs using the app to be paid during the following paycheck cycle.
Workful is among the most user-friendly online payroll programs on the market. The primary menu on the left is simple to use, and the interface is uncluttered. The setup is simple enough, with a guide that leads you through the process. It’s almost no more work for you after you’ve set up the time clock. Employees clock in and leave using the app. However, Workful doesn’t appear to get along with others regarding integrations. You can connect QuickBooks Online to your computer, but that’s all. Workful is attempting to be a one-stop-shop for software hence it includes document storage, time tracking, and HR features.
Workful is a cost-effective and simple-to-use program, although it has certain limitations. It doesn’t, for example, do your taxes for you automatically. However, it receives our vote for top customer service and is the best application for small companies since it gives quick assistance with simple instructions for a small company owner.
|Priced reasonably||Mediocre smartphone experience|
|A straightforward and clean user experience||Payroll is not automated.|
|Geolocations are supported via a built-in time clock.|
|Employee records, apps, and portals|
|Help files are excellent.|
1.5 Onpay – Best For Small Businesses
OnPay is a full-service payroll company that also provides HR assistance for things like health insurance, retirement programs, and workers’ compensation. OnPay is a simple, low-cost online payroll system perfect for small businesses. There are also no hidden costs, which is crucial for a small firm on a tight budget. Your local, state and federal payroll taxes are calculated and filed automatically by the full-service Payroll. You’ll still need to run and confirm Payroll regularly.
Setting up Payroll for the first time with a new application can be tedious, but OnPay’s setup tutorial makes it simple. You should be alright if you follow the procedures and double-check your information. If you wish to import data from another payroll provider into OnPay, you can obtain assistance, and OnPay promises accuracy.
OnPay, unlike the majority of its competitors, offers only one plan. It has a monthly base charge of $36 plus an additional $4 per employee, although it is more expensive than Workful and Payroll4Free you get much more for your money, making it our top pick for small company owners looking to streamline Payroll and HR. In addition to a complete automatic payroll that OnPay provides, you’ll also receive free W-2 and 1099 filing. There are also other HR tools to aid in the hiring of new workers, including offer letters, e-signing, automatic onboarding, and document storage—all of which are often provided as add-ons.
|At a reasonable fee, you may get a comprehensive service.||There are no same-day or next-day direct deposits available.|
|Creating various customized payroll schedules||Does not have automatic payroll options|
|Customer service is available 24×7 online.|
1.6 ADP – Best For Large Firms
ADP is a well-known name in the payroll and HR industries. It is suitable for huge firms or enterprises that expect to develop quickly due to its brand awareness and years of expertise. Direct deposit, full-service Payroll, reports, and a self-service employee portal are all included in the cheapest package. Higher-priced plans come with more features and HR services.
ADP has traditionally been primarily a professional employer organization (PEO), but it has grown to include a payroll solution tailored to small enterprises. However, if only to prevent moving data to a new provider in the future, it’s a great idea to select a payroll solution that can expand with your organization. With its ADP RUN service, suited for organizations with less than 50 employees, ADP makes this feasible. As you go through the ADP plans, you’ll go from using a simple payroll solution to an all-encompassing HR management platform that can handle everything from hiring to managing Payroll and benefits for the whole organization.
Unfortunately, because ADP does not publicize its price, it is difficult to compare the costs of its plans to those of competing providers. To obtain a personalized quotation for your business, you’ll need to complete forms that will be dependent on your requirements and the number of employees you have.
|Products are created to promote business growth in mind.||There isn’t any transparency in the pricing.|
|Many HR add-ons options.||For small firms, there may be too many features.|
|Reporting that is comprehensive and customizable.|
|With a variety of plan possibilities, it’s scalable.|
1.7 Payroll4Free – Best Free Option
Payroll4Free is the greatest true free payroll solution you’ll find—as long as you’re ready to perform some manual labor. Unless you’re prepared to pay a little fee, you won’t be able to pay your employees or submit payroll taxes by direct deposit. It is a huge upgrade from the pen-and-paper payroll system if your company has less than 25 employees.
Payroll4Free seems to be the only free payroll software that includes all necessary administrative features. Payroll4Free essentially allows you to enter hours for the Payroll of your business while leaving many of the administrative responsibilities to you. It will, however, compute things for you. The setup is manual, although it contains a setup tool to assist you in entering the correct data in the right locations. This allows for mistakes, but that is true of most payroll software programs.
Unless you have over 25 workers or want Payroll4Free to submit your payroll taxes, there are no costs to utilize Payroll4Free. Payroll tax filing is a monthly fixed rate of $15. It will cost you an additional $15 per month to pay your staff by direct deposit. Otherwise, money will be placed into your account so that you may pay your employees via check. However, consider investing in the check printing software. Even if you pay for such services, you’ll spend less than you would for most other services.
|Pay W-2 or 1099 workers||Manual setup|
|All necessary payroll functions are provided.||Works only on Windows|
|Compatible with a variety of accounting programs.|
|Tax preparation and payment via direct transfer are both inexpensive.|
1.8 Rippling – Best For Integrations
Rippling is an HR software featuring Payroll as just an add-on feature. However, if you simply use it for Payroll, you’ll find it less expensive and more helpful than other solutions because of its deep connection with other applications. Accountancy and attendance software collaboration make all payroll software more valuable, and Rippling achieves that and more.
Rippling wins a spot on our list because of its ability to integrate with practically any application you already have. It’s much easier and faster to conduct Payroll when you can automatically sync all of your data. Most software allows you to run Payroll as frequently as you like, it’s also crucial to make it a speedy procedure. Rippling enables you to manage your firm’s benefits, Payroll, IT, and HR from a single, contemporary platform. It connects all your personnel systems as well as data and assists you in automating your hectic job. Take, for example, onboarding. Using Rippling, you can set up a new hire’s health insurance, Payroll, 401K, work computer— including Slack, Office 365, and Zoom— all online and without paper in 90 seconds.
According to the quotation we received, you’ll need to contact Rippling for a bespoke price, but you can anticipate spending $35 to utilize the platform and, after that, $5 per month per person for Payroll. On the other hand, Rippling maintains that price starts at around $8 per customer each month on its website. So, if you’re picking and selecting things, the price structure might be a little complicated.
|Affordable pricing with many features||No readily available pricing|
|Can integrate with more than 400 apps||It might not be easy to use for small businesses|
|Available all around the world|
1.9 Square – Best Payment Processing
Since 2015, Square, known best for its payment-processing capabilities, has introduced an online payroll solution. Square Payroll has upgraded its support, incorporated third-party banking services, and added more robust hourly worker management tools. It fits perfectly into workforce management and sales environment using other Square apps, notably Square Point of Sale (POS). From installation to pay cycles to taxation to reporting, the payroll portal covers every key aspect of payroll management.
Square Payroll also included a detailed wizard that guided you through every step of the setup process for your first payroll run. This helpful function has been replaced by a four-step procedure that asks for your team’s size and contact information. Once you’ve finished that, the site’s primary user interface will appear, revealing three of the setup steps: employee data, tax information, and a connected bank account.
Square’s standard pricing for paying W-2 workers and contractors is $29 each month, plus a $5 per worker monthly fee. This makes it a far more cost-effective alternative than other applications. Square Payroll is ideal for companies who currently use Square’s other integrated applications, such as Invoices, Point of Sale, Payments, or Appointments.
|Contractor-only option||Setup tool is rudimentary|
|Square’s Point of Sale app has good connectivity.|
|Benefits from third-parties|
|Online assistance resources have been improved.|
1.10 Zenefits – Best Human Resource Software
Zenefits has been around since 2013, yet it’s already earned our choice for both human resources (HR) software and benefits administration (BA) in that short period. It is one of the finest HR software options for start-ups and small organizations. It comes with a powerful collection of capabilities, including easy-to-use administrative tools and the option to build on other services as needed. Zenefits’ solution is enhanced by access to real-life human advisors.
Zenefits has a slew of additional features that are helping it climb the ranks of its category. Payroll and accounting, productivity, expense reporting applications, performance management, stock options, recruiting, and internal communication apps were among the 40+ connections available at launch. Whether Expensify, Google G Suite, Salesforce, Microsoft Office 365, Slack, or Intuit QuickBooks, the solution’s automated process dynamically updates all essential documents and associated apps. As a result, even if you’re using separate programs inside the Zenefits stack, all the data is transferred to the connected device to your system.
Zenefits’ pricing and versioning strategies are confusing. You will be obligated to pay for at least five of them regardless of how many active workers you have. You can pick from three basic HR program plans that are bill annual or monthly basis:
- Essentials ($8 or $10 a month per employee) adds Scheduling, Time and Attendance, Compliance, PTO Tracking, and mobile access along with the basic plan.
- Performance management and compensation management, which enable you to undertake a range of employee reviews, are included in the growth plan ($14 or $18 per month per employee).
- Lastly, the Zen level ($21 or $27 per employee per month) provides various tools for tracking, assessing, and improving employee well-being. There is a 14-day free trial available.
|Employee records that are detailed.||The mobile app does not support admin tasks.|
|Reporting that is strong in terms of business intelligence (BI).|
|A fantastic employee mobile app.|
|Plan-building functionality and benefits administration are also included.|
2. Choosing The Right Payroll Software For Small Businesses – Things To Consider
- Document the business needs: A written list of payroll software requirements, prioritized in descending order of importance from most to least critical, is a helpful tool you can utilize at any step of the buying process. It helps evaluate the value that each payroll provider delivers to the table and keeps your team focused on what is vital.
- Ask questions: Asking the provider questions about why their product is suited for you is one of the greatest methods to ensure a payroll software application will connect with your business objectives if you understand what you want. Compare the results to find which one seems to best fit your payroll requirements.
- Make a scorecard: Make a list of features you can’t live without, and give each one a rating based on the importance if your top priority is smartphone access, staff self-service, automated tax filing, or anything else. Then, invite a few of its key payroll software stakeholders to attend vendor demonstrations and score them.
- Check it practically: Before you buy payroll software, make sure the end-users get a chance to see a live recording and, if possible, try it out. Observing or using the application can rapidly indicate which platform has the functionality that best suits your demands and is the most user-friendly.
- Check the reviews: Comparing your demands and preferences to what other clients like and hate about particular solutions is an excellent way to start. Talk to your coworkers at similar-sized companies to gain from their stories and correctly guide you.
3. Benefits Of Payroll Software For Small Businesses
Payroll software can help small businesses save time and money by automating many routine payroll activities. It eliminates time-consuming, repetitive payroll tasks like appropriately computing paychecks. With automated paycheck calculation, all a company has to do is ensure that each employee’s information is entered accurately into the system, then double-check the final month’s pay numbers for accuracy.
Payroll software supports small enterprises in the following areas:
- Reduces Human Error: Reduce Payroll errors by using automated procedures that handle complex calculations, especially if you have many employees with varying pay structures, tax withholdings, and benefits. Employees no longer need to spend hours pouring through spreadsheets and calculators, putting themselves in danger of making mistakes or misplacing decimals.
- Keeps the pay account up to date: When an employee gets an increment, transfers, earns a bonus, or works overtime, the payroll application will automatically alter paycheck calculations.
- Helps administrations: Payroll software can deduct benefits and may be able to make payments to benefit providers automatically. Payroll software can be linked to HR systems to give employers a complete picture of their employees’ benefits.
- Analysis of business: Payroll software can measure employee attendance or combine with time-tracking software to give information into employee productivity and attendance—for example, how frequently employees arrive late, leave early, or take days off. Depending on the program, you may also analyze payroll expenditures by department or location.
- Employees self-service: Many payroll solutions may offer a self-service portal for personnel, allowing them to manage personal information such as address changes and benefits without the need for payroll administrators’ involvement. Employees may also submit time-off requests using portals, which supervisors can examine and approve.
- Regulatory Compliance: Payroll solutions can adapt to changing financial restrictions; leading systems are routinely updated to comply with new payroll tax requirements and wage legislation.
4. Payroll software FAQ
4.1 Are the steps of the payroll process complex?
No, they are very easy to follow. The various steps of a payroll process include:
- Calculating the total number of hours worked by a company’s employees.
- Using the number of hours worked on calculating gross income.
- Calculating tax payments based on employee perks and then subtracting them.
- On-time distribution of accurate pay to each employee.
4.2 What is the difference between Payroll and salary?
A salary is a set sum of money paid to an employee in return for their services. The payroll process includes calculating the salaries of an organization’s employees. The payroll Process entails keeping track of data about your staff, their hourly rate, the number of hours worked irrespective of per week or month, tax and benefits deductions, and computing the final salary to be delivered to them.
4.3 What Is Payroll Software?
Payroll software is a program that determines what an employee receives depending on the number of hours they work and the pay they are paid. It also allocates the necessary payroll taxes, including state, federal, and local taxes. Payroll processing by hand gives many possibilities for mistakes, resulting in significant IRS fines. This is why many employers tend to outsource Payroll, although doing so can be costly. Payroll software is a middle ground solution that is affordable and effective in helping businesses stay compliant and avoid penalties and litigation.
4.4 Who should use payroll software?
Payroll software should be considered by any company employing workers, either full-time, part-time or on a contract basis. It makes submitting payroll taxes, easier by using payroll software. Payroll automation saves time, eliminates human mistakes, and ensures that all are paid correctly and on time. If you run a large organization, it is wise to hire someone to manage your payroll software.
Even though payroll software streamlines computations, manages Payroll for full-time staff, and files payroll taxes, you may still require someone to oversee onboarding new staff, offboarding leaving employees, and handling off-cycle payrolls as needed, depending on the size of your company.
4.5 What would a payroll software cost?
Most payroll software is now cloud-based, making them largely software-as-a-service (SaaS) businesses. You’ll often pay a basic monthly cost, similar to a subscription, which regularly includes access to support and software upgrades. Free choices exist, such as Payroll4Free, but businesses won’t receive a subscription service’s automation. Payroll software typically costs roughly $30 per month for the baseline charge, followed by $4 to $8 per employee each month. The most expensive services start at $150 per month + $12 per month for each additional member.
5. Final Thoughts
Beyond all else, the payroll function is fully integrated with the business’s account. With the rise in popularity of payroll software, manual bookkeeping and HR administration duties connected to employee salaries will become a thing of the past. The majority of them are reasonably priced, and some are specifically developed for small and medium-sized businesses. Boost output by automating the administration portion and can reduce the time spent on the tiresome and crucial areas.
This article provides the best advice for selecting payroll administration software based on the needs and usage of the company. Choosing decent software might be difficult, but this article can guide you and your company in the right direction.
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