The best payroll services for small businesses automate payroll processing while maintaining tax and human resources (HR) compliance. Companies can streamline payroll with automatic tax filing, state new-hire reporting, and paid time-off tracking (PTO). Discover the top payroll services for small businesses and get tips for narrowing your list based on payroll software costs, features, and more.
Best payroll services for small business owners
After deciding that you need a payroll service, look for budget-friendly options that solve your payroll processing challenges. The best payroll providers update tax compliance and HR features regularly to ensure your system meets the latest payroll trends and standards. Compare payroll services to find the right solution for your small business.
Gusto: Best full-service payroll for small businesses
Gusto is a full-service payroll provider offering automatic federal, state, and local tax filing for small businesses in all 50 states. It has three plans starting at $40 plus $6 per person monthly. All subscriptions include unlimited payroll runs, PTO policies, holiday pay, and state new-hire reporting. Gusto provides employees with lifetime access to tax forms and digital pay stubs. In addition, it automatically generates and sends digital copies of 1099s and W-2s to your staff.
[Read more: The Benefits of Outsourcing Payroll]
Wave: Best payroll add-on to free accounting software
If you use its paid or free accounting software, Wave's payroll service is a natural addition. It provides full-service payroll and tax-filing support for businesses in 14 states (Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin). Wave payroll with tax filing costs $40 plus $6 per active employee or independent contractor monthly.
For companies outside of these states, you can choose the self-service option. In this case, Wave calculates your payroll taxes, but you file the documents and pay the taxes yourself. This version costs $20 plus $6 per active employee or independent contractor monthly.
OnPay: Best payroll software for recordkeeping and HR compliance
OnPay is ideal for small businesses wanting digital document storage, detailed payroll records, and HR compliance tracking for workers' compensation and 401(k) plans. It supports record retention guidelines and allows administrators to customize employee profile forms with various data fields, including drop-down lists and text boxes. Plus, OnPay payroll integrates with QuickBooks Online and Xero. OnPay payroll software pricing is $40 plus $6 per person monthly.
The best payroll providers update tax compliance and HR features regularly to ensure your system meets the latest payroll trends and standards.
Rippling: Best automated payroll for small business and HR integration
Rippling is an excellent fit for tech-savvy companies or startups wanting automated payroll processing and integrations with HR, information technology, and benefits software. You can add modules for professional employer organization (PEO) services, device management, and more. It integrates with more than 500 third-party tools and can sync to your general ledger.
Rippling provides mobile apps for employers and employees, allowing small business owners to run payroll on the go and workers to check pay stubs from their cell phones. Pricing is available by contacting the company.
[Read more: Decoding PEO vs. Payroll Services: A Small Business Guide]
Intuit QuickBooks: Best payroll software for paying contractors and freelancers
Intuit QuickBooks offers a freelancer payroll service with automated 1099 filings, direct deposit, and integration with QuickBooks accounting software. The payroll software for contractors costs $15 monthly and includes unlimited payments to up to 20 freelancers, and you can add more contractors for $2 per person.
Each contractor can set up a free account to complete their W-9 forms and provide banking information online, so you don't need to handle their confidential data. QuickBooks accounting software users benefit from fully integrated payroll processing and can add payroll services to their current plan.
ADP: Best scalable payroll solution for growing small businesses
ADP is a good long-term payroll service for companies planning to hire more employees over time. Its small business payroll solutions support one to 49 employees with multistate tax compliance, HR tools, and unlimited payroll runs. ADP files and reconciles payroll on your behalf, and new-hire onboarding tools come with all subscriptions.
As your business grows, you can move into ADP Workforce Now for companies with 50 or more workers. It includes advanced reporting and HR features. Pricing is available by contacting ADP.
Patriot Software: Most affordable small business payroll service
Patriot Software is a budget-friendly payroll service with affordable pricing plans for small teams and startups. Self-service payroll starts at $17 plus $4 per employee or contractor monthly, and full-service payroll costs $37 plus $5 per employee or contractor monthly. Along with low-priced payroll software, Patriot provides free payroll setup. You give them your information, and they handle the rest, or you can use the payroll startup wizard.
Paychex Flex: Best small business payroll for customer support and HR help
Paychex Flex works in all 50 states and offers 24/7 customer service, even with its base plan Paychex Flex Essentials. It automatically calculates, files, and pays payroll taxes. Employers can perform payroll tasks with voice assistant integrations with Siri and Google or receive text notifications. Paychex Flex pricing varies.
Square: Best payroll service for seasonal and hourly employees
Square Payroll is an excellent payroll solution for retail, hospitality, and seasonal businesses that need flexible payroll processing. The pay-as-you-go pricing means you can pause payroll services for seasonal inactivity. Full-service payroll costs $35 plus $6 per employee or contractor monthly. Square Payroll automatically files your federal, state, and local payroll taxes and can handle multistate payroll for no extra charge.
[Read more: Managing Your Own Payroll and Benefits? Why It Might Be Time to Consider a PEO]
SurePayroll: Best small business payroll service for tax filing and compliance
SurePayroll by Paychex is the cheapest payroll service for small businesses with one to four employees who want automated tax filings backed by a no-penalty tax filing guarantee. However, its full-service payroll software easily handles payroll for 25 and costs $29 monthly plus $7 per employee. The payroll provider also offers self-service and household payroll solutions.
How to choose the best payroll service for your business needs
The best small business payroll solutions offer affordable plans with core features. However, consider your current challenges and future needs when choosing payroll software for your business.
Here's how to evaluate your options:
- Assess your payroll needs. Consider your payroll frequency, number of employees, and whether you need multistate support, contractor payments, or direct deposit alternatives, like payroll cards or on-demand pay.
- Look for payroll automation and integration. The top small business payroll services calculate wages and taxes based on your company policies and employee hours. But syncing payroll to time tracking and accounting software can reduce manual steps and errors.
- Research tax compliance features. Look for small business payroll service providers that withhold state and federal payroll taxes, prepare year-end W-2s and 1099s, and provide compliance updates.
- Compare payroll pricing models. Most small business payroll companies charge a monthly rate plus per-employee fees. Check if the service charges extra for year-end reporting, tax filings, or other HR or payroll features.
- Check customer support availability. Payroll and accounting mistakes can affect employee paychecks, so access to responsive customer service is vital. Make sure you can reach the payroll provider during your business hours through phone, chat, or email.
- Review payroll security and compliance measures. Payroll services handle confidential financial data, so look for software with multifactor authentication, role-based user access levels, strong encryption, and fraud prevention measures.
- Read reviews and request demos. Check out feedback from small business owners to determine if the payroll software meets their expectations for ease of use, customer support, and timely tax filings. See how the payroll system functions through free trials or demos.
Payroll costs for small businesses: Pricing breakdown and tips
The average cost of a payroll service for a small business is $40 monthly plus $6 per employee for unlimited pay runs and tax filing services. However, payroll services pricing and functionality vary between providers and subscription tiers.
When comparing the cost of payroll services for your small business, consider these pricing models and solutions:
- Free payroll software options: Startups and small businesses with 10 or fewer employees can use free payroll applications like Payroll4Free.com, which display advertisements in the software.
- Full-service vs. self-service solutions: The cheapest payroll services calculate employment taxes, but you remit the taxes. Full-service payroll companies file taxes on your behalf.
- Payroll and HR services for small businesses: Some payroll providers offer human resource information systems with benefits administration, hiring, and performance management tools.
- Contractor-only payroll software: If you only hire freelancers and contractors, consider a low-cost payroll service for 1099 workers.
- All-inclusive vs. add-on fees: Payroll pricing may bundle tax filing, year-end forms, and employee payments into the base fee. Others charge extra for end-of-year tax prep or HR tools.
- Accounting and payroll services: Online accounting programs may offer payroll services, which can be convenient for small teams because everything is in one familiar tool.
How payroll services simplify tax filing and compliance
Keeping up with changing tax laws across multiple jurisdictions is challenging. The best small business payroll solutions provide built-in tax compliance tools, like onboarding checklists listing legal requirements for hiring employees. When processing payroll, full-service software automatically calculates, withholds, and remits federal and state taxes, including tax form 941.
Some payroll providers offer no-penalty accuracy guarantees to protect your business from vendor or system errors. In addition, multistate labor law and payroll tax support enable companies to expand with fewer compliance risks.
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