9 Best Payroll Software Options For Startups and Small Businesses
Seamless employee benefits administration is crucial in keeping your company’s top talent, ensuring accurate pay and benefits credit per employee, and eliminating manual data entry. Payroll and HR software tools are typically one of the first tools a startup or small business will sign up for as they start to add employees.
This list highlights the best payroll software for small businesses and startups, with features to help you jumpstart benefits management at a reasonable price.
What Is the Best Payroll Software for Small Businesses?
Like any automation tool, payroll software varies in capabilities and add-on features. This article focuses on payroll management software fit for startups and small businesses looking to enhance their current systems or scale up in the future.
My team has selected the top three payroll software for small businesses and other great alternatives.
Among the nine payroll platforms that made it to our final cut, we’ve chosen Gusto, QuickBooks Payroll, and OnPay as our top three all-rounders, packed with must-have payroll features like tax filing, direct deposit processing, and add-on HR administration features.
9 Best Payroll Software Options for Small Businesses This 2023
Gusto is a full-service payroll software ideal for startups or growing businesses with a mix of full and part-time employees.
It combines payroll solutions, HR management, and benefits administration in one package, offering cost-saving opportunities for companies who want to automate administrative tasks instead of hiring more professionals.
- Dedicated Gusto Wallet app for employees to personalize their paycheck allocation, spending, and savings
- Superior integration capability with other HR support applications like BambooHR, Xero, FreshBooks, and Time Tracker
- Manual and autopilot mode for processing direct deposits
- Full e-sign technology for calculating payroll taxes and paying them automatically
- Easy and customizable payments, cancellations, and reimbursements with flexible payment frequencies (bi-weekly, bi-monthly, or monthly)
- Intuitive payroll reports, contractor payments, tax filing history, and more
- Unlimited payroll runs
- Facilitates benefits administration like health insurance plans, wellness, and retirement
- Automatic tax filing and compliance guidance
- Employee self-service or self-enrollment feature
Gusto offers three pricing options that are charged per user. All plans don’t require a long-term contract.
- Simple – $4o per month
- Plus – $60 per month (limited-time offer)
- Premium – personalized quote to be decided after discussion with Gusto’s sales team
Gusto is an efficient payroll solution whose flexibility is an advantage for a hybrid workforce. It’s a powerful tool for automating payroll processing at a decent base price.
Its option to contribute to charities, which is accessible through its mobile app, is also a unique feature that you might want to enhance community engagement.
While its per-person pricing can be costly at scale, Gusto’s user-friendly interface remains a strong contender for startups who want fully automated payroll software requiring no technical skillset to set up.
2. QuickBooks Payroll
QuickBooks Payroll is a trusted payroll service, ideal for businesses already using QuickBooks accounting software.
Its payroll capabilities include real-time payment processing, payroll tax administration, and business performance tracking, suited for small businesses who want full access to a payroll and HR platform in one place.
- Free same-day direct deposits on its higher-tier plans to save you cost and time in payroll management
- Real-time syncing of payroll and accounting data, allowing easy adjustments of payments per employee
- Customizable reports, providing current business cashflow data and spending projections
- Unpaid bills viewing feature
- Automated payroll tax filings, calculations, and payments to ensure compliance with federal and state taxes regulations
- Advanced scheduling of payroll data to avoid last-minute direct deposit errors
- Tax penalty protection coverage of up to $25,000 in cases of payroll tax filing errors committed while using the software
- Mobile-supported time-tracking feature for approving timesheets and creating invoices on the go
- Automated data backup and recovery
- 24/7 customer support
QuickBooks has three package pricing that all come with a 30-day free trial, giving you time to try out the features before deciding on a long-term commitment.
- Payroll Core+ QuickBooks Simple Start – $37.50 per month
- Payroll Core+ QuickBooks Essentials – $50 per month
- Payroll Core+ QuickBooks Plus – $80 per month
All plans have an add-on monthly fee for each additional employee.
QuickBooks is an easy-to-use payroll platform covering all you’d need to process workers’ compensation. While it’s not an affordable payroll system for starters, its pricing makes sense, especially when you start to add more employees.
If you’re already within the QuickBooks ecosystem, getting this as your payroll software is imperative.
Plus, the tool’s available in all 50 states, which makes it extremely handy in filing and preparing year-end tax reports.
OnPay is the most straightforward tool that focuses on payroll processing essentials. Its minimalist design and simple navigation eliminate the steep learning curve many payroll services have on their systems.
Any small business owners looking for a payroll solution with minimal add-on integrations and functionalities best fit this software’s features.
- Employee self-service portal for employee onboarding and uploading documents
- Automated payroll tax administration and payment routines
- Easy payroll data adjustment with details like work hours, tips, bonuses, and reimbursements for contractor payments
- Process unlimited payroll runs for 1099 contract workers and W-2 employees every week
- Simple to navigate user interface and seamless integration with other software like TSheets and ThinkHR
- Ability to run payroll, review and approve data from mobile devices
- Report Designer feature, allowing users to customize items they’d want to generate regularly
- Lifetime accounts for employees
- Tax compliance guarantee with its error-free tax deductions and payroll services
- Integrated insurance benefits and 401(k) administration
OnPay doesn’t have tier pricing. Instead, it offers a fixed monthly fee of $40 plus $6 per person per month. It also has a one-month free trial, which already includes expert-guided software setup.
We’re a huge fan of payroll software that gets the job done with easy navigation. OnPay gives that convenience at a reasonable price.
Coupled with its superb customer support, OnPay’s an easy pick for users who want the least hassle and a responsive tech team on standby should the need arise.
Its direct deposit feature is probably one of the aspects that need to be improved. It’s currently available to employers who specifically apply for the feature and pass OnPay’s risk assessment test.
4. Patriot Payroll
Patriot Payroll is an online payroll service with one of the most affordable base prices in the industry, making it an attractive go-to software for startups.
This software’s basic plan supports all necessary payroll software features for small-scale operations like multiple pay rate calculations, contractor payments, and time and attendance integration.
- Round-the-clock payroll process, including direct deposits and checks
- Full-service package supports payroll taxes preparation and filing
- Detailed payroll and tax liabilities reports
- Free employee portal for complete transparency, allowing employees to view paycheck details, tax updates, and wage calculations
- Options to go paperless with direct deposit transactions or print pay stubs and paychecks
- Comprehensive payroll reports, including employee contribution history, work locations, total payments, and more
- Integrated workers’ compensation per employee
- Free payroll setup and expert support
- Unlimited, fast, and customizable payroll runs
- Options for printable or electronic W-2s
Patriot offers two plans, each with its 30-day free trial and no long-term contract requirement.
- Basic – $17 per month, plus $4 per employee
- Full-service payroll – $37 per month, plus $4 per employee
Patriot Payroll is a competent payroll provider for any small business that wants to get its payroll system up and running fast without paying much. It’s also ideal for users who don’t need any HR features integrated into their system.
Its customizable filtering feature for pulling out reports is a must-have for monitoring and quality check. Small businesses that want full transparency in the initial stages of their operation will find this element a plus in their overall data recording.
While filing taxes isn’t available on its Basic plan, upgrading to the Full-service option to take care of your tax forms still has a more affordable price point compared to the others on this list.
Rippling is an all-in-one payroll software with HR features and IT capability. This being said, small businesses looking at expanding their workforce can benefit from this tool’s high potential for scalability and automation.
Elements like onboarding, employee benefits tracking, payroll services, offboarding, and most processes happening in between can be monitored closely using this tool.
- Automated salary proration, 401 (k), and payroll tax deductions
- Solid analytics showing factors like productivity metrics, compensation trends, and attritions, helping enhance businesses’ employee development initiatives
- Supports third-party communication app integration like Zoom, Slack, and Office 365
- Handles filing and processing of relevant company forms, perfect for legal assistance
- A dedicated mobile app, useful for tracking employee attendance through its mobile clocking and customizable timesheets
- Options for physical or virtual corporate cards to track company-paid expenses
- 90-second payment processing for local and global employees
- Unified employee database, making it easier for businesses to employee benefits like workers’ compensation insurance
- Supports processing of payroll taxes globally
- Customizable payment schedule and off-cycle pay runs
Rippling starts at a monthly fee of $8 per employee. Getting a custom quote is recommended for users who want to mix and match software features.
Rippling is a nice payroll software solution that doubles as HR software. Its ability to unify records in a single platform is an attractive feature for businesses that want to save labor costs by having everything stored in a single database, accessible by authorized personnel.
Still, Rippling’s customer service could use some improvement. Many users reported slow response time, which can be a bummer for a small business that needs all the technicalities taken care of instantly.
Justworks is a payroll provider that follows the Professional Employer Organization (PEO) model. This means they work as co-employer and take care of all the HR, payroll, and compliance procedures while you focus on running your business.
Justwork’s arrangement is perfect for startups who want to delegate process payroll and file payroll taxes duties to experts.
- Customizable time and attendance features, including time off, vacations, and holidays
- Individual dashboards for employees to view their profile, performance, and other important work-related key data
- Interactive employee portal for requesting time off, checking pay details per employee, and participating in company programs
- Co-employment relationship setup, taking off the legal liability from your end in exchange for items like employee handbook and work policies
- Seamless employee self-service interface
- Worry-free tax season, as it automates tax filing
- Supports integration with top accounting software
- Inclusions of HR tools like consulting, online employee onboarding, and reporting
- Filing of health benefits like life and disability insurance, unemployment and employment practices liability insurance
- 24/7 support
- Basic – $59 per employee, per month
- Plus – $99 per employee, per month
Both plans are charged $10 less starting from your 50th employee onwards.
Justworks takes much of the heavy lifting off your hands in terms of running payroll service and HR management. However, it’s also more expensive compared to other software-based payroll providers in the market.
Nevertheless, its ease and convenience remain attractive for a small business with complex hiring methods and more potential for liability, especially when working with a remote, global workforce.
If you don’t mind giving up control of HR policies and company standards setup, Justworks will be a welcome co-employer.
7. Wave Payroll
If you’re looking for payroll software with free accounting and invoice integration, then Wave Payroll is a nice place to start.
It’s built for small-scale ventures with less than 10 employees or solopreneurs who require the minimal need for full-service payroll.
- A straightforward dashboard that shows you all the information you need on a single page
- Streamlined accounting and invoice processing to regularly pay employees without spending much time tracking expenses and taxes
- Allows scanned receipts and bank account linking for faster transfers
- Supports integrations with popular portals like PayPal, Zapier, Google Sheets, and Etsy
- Automatic generation of W-2 and 1099 tax forms
- Self-service employee portal, allowing team members to view tax documents and update their contact and bank details
- Option to hire a Wave Advisor to assist in completing and filing your personal and business income tax
- Chat and email customer support with guaranteed fast responses
- Inclusion of a time-tracking feature
- Unlimited free direct deposits
Wave Payroll’s pricing is dependent on whether they support automatic payroll tax processing in your state.
- Self-service states – $20 per month
- Tax service states – $40 per month
Each active employee and independent contractor is charged $6 each. Users also get to enjoy a 30-day free trial.
Wave Payroll is a hybrid manual and automated payroll fit for small practices and freelancers who want to automate the payment process but don’t mind doing a bit of work in filing taxes.
This is because this payroll software only supports tax filing services for 14 states, so you’d have to do manual preparation if your operations are outside these places.
8. Paychex Flex
Paychex Flex is the payroll arm of the broader Paycheck ecosystem. It offers all the basics of fully-operational payroll software plus loads of opportunities for upgrades and integration.
Small businesses (with plans to scale) that want an easy payroll system will find this software’s base features essential for automating their tasks. Access to HR tools also becomes easier when integrating the full Paychex enterprise.
- A dedicated mobile app used to manage payroll, update personal information, and clock in and out during lunch and breaks
- Run payroll on the go from your mobile or do it via voice command using Paychex Voice Assist
- Customizable earnings and deductions data
- Useful reports like job costing, tax deposit notices, cash requirements, and payroll journal
- Self-service feature, allowing new hires to log into the portal and complete activities like updating their personal information
- Option to purchase workers’ compensation through Paychex’s partner insurance brokers
- Supports direct deposit, print, and mail checks to contractors
- Supports integration with popular accounting software like QuickBooks and Xero
- Garnishment payment service at no additional fees
- Phone and chat-supported setup, payroll processing, and tax filing
- Essentials – $39 per month, plus $5 per employee
- Select – customized quote
- Pro – customized quote
Paychex Flex is a fine starting point for getting payroll features in one platform. While its additional services like time tracking and employee benefits come at extra costs, a small business will find them handy at scale.
Its customizable plans are also great for achieving the best-tailored payroll and HR service that fits your business needs.
Paychex Flex is up-to-date with all local laws and regulations, so you won’t need to worry about it. Plus, they assign you a dedicated account leader who’s responsive at addressing your queries.
Trolley can be the best payroll software for startups working with a global workforce. It’s efficient for global mass payments with a beginner-friendly interface, which anyone can master in a few minutes.
Its integration with the global banking network ensures everyone on the team gets paid on time. Moreover, since it’s focused on its payroll capabilities, you won’t have to worry about extra functionalities that have nothing to do with pay runs.
- Live payment tracking feature
- Fast payment processing to over 215 countries in 135 currencies, available through bank or PayPal transfers
- Supports integration with Enterprise Resource Planning (ERP) and accounting software
- Digital collection and validation of W-9 and W-8 BEN forms
- Customizable approval workflows, saving users time spent on repetitive tasks
- Secure bank-level encryption, ensuring safe data and fund transfers across global and regional banks
- User-friendly interface, perfect for users who want ease in navigation and payment processing
- Reliable customer support for service-related queries
- Automated tax filing and processing, ensuring your company’s compliance with local regulations
- Comprehensive transaction and balance reports to help you monitor your company’s cashflow
Trolley offers three plans with a 30-day free trial each.
- Grow Plan – $49 per month
- Platform Plan – $199 per month
- Enterprise – customized quote
Trolley is a leading payment platform that has gained recognition for its exceptional global payout capabilities. Its bank account verification and PayPal transfer features are seamless and efficient, making it a go-to solution for entrepreneurs seeking to pay overseas contractors promptly and with ease.
For businesses requiring advanced financial reporting, the Platform, and Enterprise plans offer comprehensive tax filing and year-end statement generation. However, for those seeking unlimited payment capabilities, the Grow plan delivers premium features at a reasonable cost.
While Trolley’s primary market is ventures with an international workforce, it remains an excellent payment processing tool for US-based businesses as well. The platform’s intuitive and streamlined payment process has garnered praise from numerous users.
How Is a Payroll Software Used?
Payroll software makes payment and information gathering easier for both the employer and the workers.
Most are cloud-based and offer options for employees to onboard themselves, so they can submit all the required documents and process their applications for company benefits.
From the employer’s side, the system helps in automating payments on a pre-determined pay cycle. The software also helps calculate gross and net pay, initiate direct deposit, and keep records of transactions along with the rest of employee benefits data like health insurance.
What Is the Best Payroll Software for a Small Business?
Payroll providers often have synonymous services, so identifying the best tool for a small business requires you to first identify what your preferences are.
Your best choice is always the tool that you can afford and gets the job done.
A nice place to start is with your budget. Once you’ve decided on the price you’re willing to pay, you can narrow your options to those tools that fit within that range. Or, if you still can’t decide, you may even begin with some free payroll software.
Higher-end systems often combine payroll, accounting, and HR solutions in one, which freelancers and solopreneurs may not need.
Stick to the features you need, and find tools that deliver those minus the extras.
Who Should Invest in a Payroll Software?
Anyone who runs a business or multiple side hustles can invest in payroll software.
Big companies can use a full-service tool with HR capabilities to unify employee details in one place and ensure everybody gets their pay and benefits accurately.
Startups benefit from eliminating manual labor from their list without hiring more professionals to handle the legwork.
For solopreneurs or freelancers, the major advantage of using these payroll tools is the convenience of tracking cash flow and receiving payments.
Can Payroll Software Save You Money?
It can if you choose wisely. Its cost-saving opportunities lie in its ability to automate payment management. Automating can be a faster and more affordable long-term solution compared to the hourly rate you pay a professional to do all the manual entries and calculations.
Plus, many software options offer hybrid functionalities, allowing you to implement processes in one platform instead of creating different departments to handle each of them.
Automating payroll processes reduces stress and helps you maximize your time by focusing on running your business.
These nine payroll providers give you that convenience at varied price ranges that fit your specific needs.
If you’re still on the fence about investing in any of them, begin with those free trials and see if their time efficiency is worth it.
Gregory S. McNeal
Along with being a successful entrepreneur, I am a tenured Professor of Law and Public Policy at Pepperdine University. I teach courses related to technology, law, and policy, and serve as a faculty member with the Palmer Center for Entrepreneurship.
Material Connection: Some of the links in posts on this site are “affiliate links.” This means if you click on the link and purchase the item, my company will receive an affiliate commission. This disclosure is required by the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”