8 Best Payroll Software for Small Business (2024)

Payroll is the compensation a company pays its employees. It is usually provided on a weekly, bi-weekly, or monthly basis, paying workers for the hours worked during a set, recurring pay period.

Payroll software is an incredibly useful tool for anybody who owns a business, even if they only have a few employees. Payroll software helps process payroll faster, ensures accuracy, and prevents mistakes. Some payroll software even prepares payroll taxes and integrates into other systems your organization already uses for easier reporting and record keeping.

In this article, we’ll look at payroll software for small businesses. We have ranked some of the best payroll programs using criteria like customer support and reviews, pricing, features available, and scalability. Let’s explore what each of the top small business payroll software options has to offer.

Table of Contents 

• FreshBooks
• ADP
• QuickBooks
• OnPay
• Justworks
• Paychex
• Wave
• Patriot
• How To Choose Payroll Software

1. FreshBooks

FreshBooks has the best payroll software for small businesses, offering automation for repetitive tasks while reducing user errors by maintaining accurate numbers for each pay period. You can set up direct deposit through this easy-to-use software, track business transactions, and create important tax forms like W-2s, and there are no limits to the number of payroll runs you do in a month.

Not only does FreshBooks streamline the payroll process, but it also makes it easier to do your taxes at the end of the year by compiling the information you need for your tax documents. With award-winning support from a responsive help center, easy integration, and a user-friendly interface, running payroll has never been simpler than it is when you choose FreshBooks for your all-in-one small business payroll solution.

Features 

• Fully automated payroll features make payday simpler for small business owners and keeps your books and reports accurate and organized
• The FreshBooks suite offers all-in-one software integration, allowing your billing, accounting, and payroll software to seamlessly work together, simplifying your books and making tax time a breeze
• Excellent customer service, with help available online, or on the phone when you need it

Pricing

• A 1-month free trial is available
• Pricing is $19.00 per month for the Lite plan, $33.00 per month for the Plus plan, and $60.00 per month for the Premium plan
• You can save an additional 10% by paying annually instead of monthly
• Add-ons are available

2. ADP

ADP is an excellent small business payroll software with powerful reporting that allows you to automate reports for insightful analytics. ADP has a small business tier for 1 to 49 employees and another tier that works well for companies who are growing their business. Growing businesses are expanding, innovating, selling more, and hiring more employees.

It’s an easy-to-use software for small businesses, allowing you to process payroll in just a few clicks and employees will love the features offered on the mobile app. You have to call ADP for a quote if you want to find out their pricing tiers, but the 3-month free trial of their online payroll services may make it worthwhile. 

Features

• User-friendly mobile app
• Flexible options for integration

Drawbacks

• The lowest-tier plan does not come with all tax and payroll features
• Add-ons required for international employees and benefits administration

Pricing

• Pricing is not available without speaking with customer service representatives 

3. QuickBooks

QuickBooks Payroll is the best payroll service if you’re already using QuickBooks Online as your business software, as it integrates seamlessly into the program. Integration means that it works smoothly with accounting, time tracking, and other programs within your software bundle. It calculates and pays wages, files and pays federal and state payroll taxes automatically, and allows small businesses to do pay runs.

Features

• Easy integration into QuickBooks Online
• A wide variety of features
• A sturdy Workforce Portal for employees 

Drawbacks

• May be more expensive than other payroll software companies, especially if you have a large staff

Pricing

• A 1-month free trial is available
• Pricing is $45 per month plus $6 per employee per month for the Core plan, $80 per month plus $8 per employee for the Premium plan, and $125 per month plus $10 per employee for the Elite plan
• Add-ons are available 
• While each tier offers excellent payroll features, the higher tiers offer more personalized customer care, like the option to speak with a personalized HR advisor and help with setup by an expert. 

4. OnPay

With OnPay, you can enjoy features that simplify calculating an employee’s paid time off (PTO), benefits, insurance, and more. The company offers high-quality customer service with transparent pricing options without surprise additions to your monthly bill. 

Simplicity is what they do best, meaning easy software integration, automated tax payments, and nearly hands-off payroll processing. It is the best payroll for small business owners who want their software to do the work for them. 

Features

• Excellent selection of HR and benefit tools
• A simple interface that’s easy to master

Drawbacks

• No built-in time tracking
• No option available to automatically pay salaried employees

Pricing 

• $40 per month, plus $6 per employee per month
• No complex price tiers or add-ons 

5. Justworks

Justworks is the best payroll service for small businesses that have complex payroll needs. Companies that have complex payroll needs means that they may require the option to set up profiles for full-time and part-time workers along with salaried employees, contractor payments, and vendors. 

There are unlimited payroll runs, even when they’re off-cycle payments, and the program offers features like easy self-serve employee access, 24-hour support, payroll tax filings, access to time-tracking, and HR consulting.

Features

• Automatic tax filing
• Easy accounting software integration
• Employee self-service portal 

Drawbacks

• May be more expensive than other online payroll services
• No mobile app

Pricing

• Pricing is $59 per month per employee for the Basic plan ($49 if you have 50+ employees) or $99 per month per employee for the Plus plan ($89 after 50 employees). 

6. Paychex 

Paychex is an excellent choice of payroll company for small businesses because it offers customization. This means that when you use Paychex, you can purchase your Essentials payroll setup and then customize the add-on features that you need for your business. 

Customization features include general ledger services, mobile apps and employee self-service options, HR features, analytics and reporting, employee benefits, new hire reporting, health insurance, accounting software integration, and more. Customization essentially allows you to build your own online payroll platform.

Features

• Direct deposit
• HR support
• Compliance experts 

Drawbacks

• Tax administration with W-2/1099 costs extra
• Some users report that customer service may need improvement

Pricing

• $39 per month plus $5 per employee for the Essentials plan
• Customized select or full-service pro plans are available after speaking to a representative about your needs

7. Wave

Wave may be a bit limited when compared to most payroll providers, but it’s also one of the most affordable options, with plenty of useful payroll options, making it one of the best payroll software providers for small business owners. Wave offers Monday to Friday customer support and it’s user-friendly, meaning the interface is simple to use and navigate without a lot of training required. Another user-friendly feature is that Wave makes it easy to migrate your data if you want to switch payroll providers.

Although it doesn’t automatically file and pay taxes, the program generates W-2 and 1099-required tax forms, making tax time easier for those in “self-service states,” where businesses don’t have the option to automatically file taxes. 

Features

• Direct deposit
• Automatic payroll journal entries
• Employee access

Drawbacks

• Wave doesn’t automatically file and pay taxes
• No employee benefits administration is available

Pricing

• A 30-day free trial is available 
• A free starter plan is available for those looking for the basics
• Pricing is $20 per month plus $6 per employee or contractor for the Pro plan

8. Patriot

When you choose Patriot, you have two tiers to choose from. In the Basic plan, you will handle your taxes, while the Full-Service plan handles tax filing to simplify your next tax season. Patriot streamlines payroll management, record keeping, and reporting and it integrates smoothly into most accounting software setups.

We’ve rated Patriot as the most affordable payroll system for small businesses because of its low monthly fees, low per-employee cost, and because you can stop service at any time without penalty thanks to their month-to-month subscription option.

Features

• Month-to-month subscriptions
• Low prices
• Excellent customer service 

Drawbacks

• Setup can be labor-intensive
• There is no automated or international payroll 
• Third-party integrations are also limited

Pricing

• There’s a 30-day free trial available
• Pricing starts at $17 per month plus $4 per employee or contractor for the Basic Plan, and $37 per month plus $4 per employee or contractor for the Full-Service Plan.

How To Choose Payroll Software 

When choosing payroll software for your small business, you may want to look for the following features:

• Cost: Along with the monthly subscription cost, you’ll want to check if there are other fees or costs per employee. 

• Self-Service Options: Software that allows you or your HR team to make changes to payroll-related data will give you more control over how things are done in your company.
• Files/Pays Taxes Automatically: Federal and state taxes must be paid on time, which is made easier by software that does it for you. This feature is especially useful if you have international employees or employees working in different states. Automatic compliance updates will ensure you remain compliant with new tax and payroll regulations when you pay employees.
• Unlimited Payroll Runs: Unlimited payroll runs offer the flexibility to pay employees when it best suits your unique business workflow. 
• Mobile App: As a small business owner, you may be working remotely, driving to job sites, or simply needing to take care of things when you’re not in the office, and a mobile app will make this easier for you and your employees.
• Employee Self-Service Portal: Allowing your workers to enter their hours, check how much they’re being paid, or request tax forms will make life easier for them, and for your HR department.
• Customer Support: When you inevitably run into a snag, make an entry error, or have questions, you’ll want quick, efficient, and friendly customer service.
• Software Integration: If you are already using accounting software, incorporating a payroll program that fits seamlessly into your workflow will make life much easier.
• Reporting: Payroll solutions can provide important insights into the amount your company is spending on payroll and taxes, giving you a way to keep track of spending, deductions, taxes paid, and total compensation.

Payroll Processing Stages 

There are several steps involved with processing payroll:

• Choose a Pay Cycle: This is to determine whether to pay employees weekly, biweekly, bimonthly, or monthly
• Collect Employee Information: Collect employee tax forms and personal information, like their W-4 form, tax withholding information, banking information, and Social Security number
• Calculate Gross Pay: Calculate each employee’s gross pay (before taxes)
• Calculate Net Pay: Calculate net pay for each worker after deducting health insurance, taxes, and other deductions
• Pay Employees: Make payments to the employees either by mailing out checks or initiating bank transfers for direct deposit
• Pay State and Federal Taxes: Pay all taxes while ensuring all records of tax payments and payroll are properly recorded and stored

If you have chosen to employ a third-party payroll service provider, they will take care of the calculations, employee compensation, and tax payments on your behalf. 

How To Process Payroll 

Payroll processing is the method an organization uses to pay employees. There are different tactics small businesses can use to process payroll. These are:

1. Manual Processing

The manual method of calculating each employee’s payroll is completed with all pay calculations, data tracking, and storage done by your HR staff. There is more room for human error in this strategy than in others, and because there is little technology involved it’s much more time-consuming than other methods. Manual systems are basic and best used for companies with only a few employees.

2. Outsourcing

Many businesses hire outside payroll companies to complete their payroll. If you choose this route, you can be hands-off with the process but may find it takes some time to obtain access to payment records or make important adjustments. Outsourcing also involves sharing private information about your staff and your business. 

3. Using Payroll Software 

Payroll software is a simpler way to automate your payroll process while keeping full control over your records, company information, and payroll management. It may also cost less than the other 2 options, as it’s fast and you won’t need to pay for an outside party’s services.

How Does a Payroll Service Work? 

How a payroll system works is that a company provides automated tools or software designed to help a business function more efficiently. An automated online system can easily organize and manage your employee pay system. 

No matter which online system you implement for your business, it will deliver similar basic functions. Most are cloud-based, with online portals employees and employers can access to see hours worked, hourly pay or salary, benefits, and more. Workers may be able to enter their payroll direct deposit information, access tax forms, and take advantage of the convenience of having their pay sent through direct deposit, without the need to print and mail physical checks to each worker.

With the FreshBooks payroll system, you can also integrate your payroll software into other helpful services like accounting software and bookkeeping systems. Using FreshBooks will make payroll faster, easier, and more organized than ever before. 

How Much Do Payroll Services Cost? 

While cost is, of course, an important consideration for smaller organizations, it is a good idea to find the balance between a low-cost option and an option that won’t fail you when you need it most. You cannot run your business without paying your employees on time, so accuracy and reliability are key. 

When discussing pricing, some of the services your payroll service provider offers have base costs, with “add-ons” you can pay extra for. Keep in mind that these additions to your base price can add up quickly. Another consideration you may not initially notice is that some payroll services tend to increase in cost as your business scales up as well, charging not only a monthly access fee but also additional charges per employee in the system. Several factors can affect the cost of payroll services:

• The base price (often paid monthly) to subscribe to the payroll service 
• The cost to implement the service, including setup fees and support costs 
• Fees charged per employee 
• Add-on service fees, for example, charging extra for an employee portal
• Taxes
• Compliance fees

It is well worth your time to go over these factors in detail, comparing your options before you decide which service is right for your business. 

Effortless Payroll Management with FreshBooks 

Whether you run a large company or a business with only a few employees, choosing reliable, easy-to-use payroll software can help you run payroll accurately each period, comply with overtime rules and tax laws, and save time. The best payroll software is straightforward, cost-effective, and user-friendly, which is why FreshBooks has been ranked as the best payroll service for small business owners.

FreshBooks can help small businesses by streamlining and automating the payment process, with unlimited payroll runs, automatic payroll tax filing, direct deposit, pay stubs, and tax forms like W-2s. FreshBooks software will also track each pay run so you can update your financial records accordingly. Best of all, FreshBooks takes the stress out of paying your employees, saving you time and energy so you can focus on other aspects of growing your business.

Find out why FreshBooks is rated as the best payroll software of the year. Try FreshBooks free today to see how easily the program can integrate into your business model.

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