The Best Payroll Software For Small Businesses

Mark c
Mark Thomas
July 6, 2022

The Best Payroll Software For Small Businesses

The average small business owner spends nearly five hours per pay-period processing payroll (Try saying that five times fast). 65% of small business owners said they would rather outsource their payroll processing. 45% said that outsourcing payroll was too costly. 82% of small business owners said they checked their payroll manually. If you want to save time and get payroll right every time, check out these payroll software solutions for small businesses.

What Does Payroll Software Do?

Payroll software’s main selling points are time savings, accuracy, and compliance. A fully automated system can run payroll in five minutes or less. This gives you most of that five hours back to invest elsewhere in your business.

The second benefit is accuracy. Software, once correctly configured, is not prone to making errors. There is about zero chance of it pressing a five instead of a three because it’s 6 o’clock on Tuesday and it had had several chaotic meetings today. A lack of errors leads to happier and more productive employees.

Finally, payroll software helps to maintain compliance. Federal, state, and local pay regulations and rules can change regularly. As the busy owner of a growing small business, it can be difficult to keep track of legislative and bureaucratic changes. Payroll software companies do this for you, allowing you to avoid the unwanted attention of government agencies while focusing on running your business.

What to Consider?

Many payroll packages have very similar basic feature sets. These include the type of workers they cover (most workers are either W-2 or 1099s), frequency of payroll, off-cycle payroll, and hourly and salaried wage support. These features are all pretty standard among leading payroll providers.

Some other important features to consider are:

  • Payroll Taxes: This is probably the most important consideration. Does the software file payroll taxes or simply withhold the money? Does the software charge extra to file year-end forms. Does the payroll package handle federal and state unemployment taxes?
  • Benefits Plans and Administration: Important questions include: Does the software package include this? Will the vendor act as a broker for health insurance plans? Does the software administer retirement accounts? Does the vendor or an associated company provide retirement advice? Are there any other benefits or insurance packages that the software administers?
  • Usability and Customer Support: What forms of support are provided? In particular, does the vendor provide phone support? How knowledgeable are the customer support personnel? If the vendor doesn’t provide phone support, how long is the turnaround?
CompanyMonthly Starting PriceFree Trial/VersionStandard Direct Deposit TimelineUnique Features
$17 + $4/employee30-Day Free Trial4-DayLow-Cost Plan
$39 + $5/employeeNone2-DayDedicated-Account Manager
$45 + $4/employee30-Day Free TrialNext DayNative Integration with Accounting Software
N/ANone2-DayStrong HR tools
$39 + $6/employee30-Day Free Trial2-DayVery Well Rounded
$36 + $4/employee30-Day Free Trial2-Day or 4-DayWell Rounded and Excellent Customer Support

Gusto – Best Overall Payroll for Small Businesses

Gusto provides small businesses with the best all-around full-service payroll. Not only does it fully cover the basic feature set of payroll software, but the software provides numerous additional features. Gusto calculates, files, and pays payroll taxes. Multi-state payroll is a breeze. The product allows for both unlimited payroll runs, including bonus and off-cycle payroll runs. Gusto will file federal forms 8974, 940, and 941 as well as the Federal Unemployment Tax (FUTA). Users can also set up customizable deductions and garnishments.

Gusto payroll page

Gusto also provides a set of helpful HR tools. This includes new hire reporting and employee self-onboarding.  Team leaders can easily and quickly set paid time off (PTO) policies such as vacation and sick leave. The Core plan, Gusto’s base package, includes health benefits and worker’s comp administration. Gusto will act as your broker and allows employees to self-enroll online from your pre-selected health insurance plans. All you have to do is pay a premium.

As a generalist software, staff will get a wealth of features as well as management. Their mobile app, Gusto Wallet, can help employees with money managment. The online self-service portal gives staff access to digital pay stubs that they can access even if they leave the company. Finally, Gusto provides early direct deposit, which some employees may enjoy.

The software’s basic pricing is a little steeper than other packages, starting at $39 + $6/employee. However, Gusto’s full feature set and intuitive payroll system can make it worth the extra cost.

Gusto has mixed support ratings, which is one of its lower scored areas by our reviewers. Many reviewers say that more technical topics can take a very long time to get appropriate help. Simpler topics receive more timely and accurate answers. Many reviewers also note that Gusto is straightforward enough that they have not had to interact with support.

Patriot Software – Best Value for Small Businesses

We have already discussed that the biggest obstacle to moving past manual payroll is cost. Of the providers on this list, Patriot Software’s online payroll wins hands down on the cost front. Its cheapest package, the basic package, cost only $17 + $4/employee every month. This makes it almost $20 per month cheaper than the next package. And it provides almost all of these same features you would get from other payroll providers.

patriot payroll page

But almost all isn’t all. So what is missing? Patriot’s basic package does not include the ability to file and deposit federal, state, and local payroll taxes. The next-level package will file and deposit those taxes, but it is also very comparable in price to other packages on this list. So the biggest question for Patriot is if having to deal with payroll taxes is worth about $240 a year. If it is, then Patriot Software is an excellent choice. If not, the software is still a good and competitive package but lacks definitive advantages.

That isn’t to say Patriot is bad. In fact, the software is quite excellent. Your team can run payroll an unlimited number of times, including off-cycle payroll. It handles multiple jurisdiction payroll runs. Setup and support are free. The turnaround of a 2-day direct deposit is very competitive. Patriot’s payroll software is also mobile-friendly and has a free employee portal. The support ratings are excellent and provide phone, email, or chat support is provided Monday through Friday, 9 AM – 7 PM.

Run by ADP – Best HR Platform with Payroll for Small Businesses

Payroll is only one of many administrative functions that a small business needs to take care of on top of its core business. If you are looking for payroll solutions, you might also be looking for solutions to your other administrative problems. Look no further than Run powered by ADP

Run payroll page

ADP has been one of the biggest names in HR software for years. Run only builds on top of that. They provide all of the payroll features you want: direct deposit, tax filing, W-2s and 1099s, and reporting. This is in addition to numerous human resources and employee management features.

Even Run’s most basic package provides several HR features. These include time-tracking, insurance benefits, worker’s compensation, and retirement planning. Higher-level packages provide even more features. HR Tracking, a library of standardized forms, an HR Helpdesk, and other forms of HR support are available at higher levels. Not only that, but ADP provides products for companies of all sizes. This means that their products can adapt to your growing business. This may be a bit of a long play, especially when small businesses need to focus on the here and now. However, if you can make the play, it can pay dividends later. 

Of course, Run’s payroll features are still strong. You can expect the same filing of federal, state, and local tax filing. Multi-state payroll handles employees living in different jurisdictions. Hours input can be handled by ADP’s time and attendance tool. The reporting feature allows you to run various reports straight from your payroll. Finally, even the pure payroll package provides basic HR tools like new hire reporting and onboarding.

ADP provides phone support. Many reviewers complain that wait times are very long. However, there is a call-back feature so it isn’t necessary to sit on hold the entire time.

QuickBooks Online – Best Accounting Software with Payroll for Small Businesses

I don’t know anything about your business, but I’m willing to bet good money you sell something. If you are selling something, you probably need some accounting software (No, Excel is not accounting software). In fact, you know you need accounting software because every product on this list advertises how they integrate with it. Of course, Quickbooks is almost always first on that list of integrations.

quickbooks olnine payroll page

So why not streamline your processes and get your payroll solution and accounting solution from the same vendor. Quickbooks Online’s accounting software provides a ton of features such as

  • Income and expenses
  • Invoicing and payments
  • Receipts capture
  • Sales and sales tax

These are essential features for any small business. But that doesn’t mean Quickbooks payroll solution isn’t a good standalone solution. The software handles provide both the standard W-2 and 1099 tax filings. Quickbooks also files federal and state payroll tax as well as year-end filings. Procrastinators everywhere will be pleased to know the software offers next-day direct deposit. On top of all of that, Quickbooks provides employee benefits administration and 401(k) plans.

Quickbooks payroll pricing is very competitive at $45 + $4/employee per month. It’s definitely not the cheapest option, but its full feature set and native integration will more than justify the cost for many businesses.

Quickbooks has strong support ratings. Reviewers mention that chat support is very responsive, but talking to an actual person is difficult and may take time.

PayChex Flex – Best Support

This ranking is somewhat different than the others on the list. The others on the list have been ranking basic packages. However, PayChex Flex Select provides the key differentiator for PayChex products. What truly sets PayChex Select apart is that you get a dedicated payroll specialist.

paychex flex payroll page

That means that if you have any questions at all about their service, you have a single point of contact to help work through the problem. PayChex doesn’t provide standard pricing for the select plan, but it is likely going to be more expensive than the other basic plans presented here. However, if you have reasons to believe you might need a lot of support, spending a little extra could be very helpful.

Beyond its exceptional customer support, PayChex Flex still provides competitive features. They will file and pay federal, state, and local payroll taxes. Pay can be done both by direct deposit and on-site check printing (something becoming a rarity). Your team can use the convenient  Android and iOS apps. This is in addition to their user-friendly employee self-service portal.

OnPay – Honorable Mention

OnPay rounds out the list. But last definitely does not mean least. In fact, Onpay can be thought of as a cheaper Gusto with better customer support. While the software may not fully match the incredible feature set of Gusto, Onpay is no slouch. Like the other packages, OnPay provides will calculate and file federal, state, and local payroll taxes. However, they also guarantee the accuracy of their calculations.

onpay payroll page

OnPay’s full-service payroll also provides unlimited payroll runs. Multi-state payroll is a breeze and unemployment insurance is handled in every state. Your team can also input customizable deductions and garnishments.

Additionally, OnPay provides several special payroll services applicable to certain industries. The software can calculate tipped wages and file form 8846 for your restaurant. You can use the software to handle payroll for agricultural workers and workers on H-2A visas. The software also handles payroll for nonprofits and churches without extra effort or steps.

Onpay also provides basic HR tools. This includes new hire onboarding and reporting. You can also use the library of legal templates and HR guides to form a company handbook. OnPay provides an employee self-service portal. This provides digital pay stubs and tax forms. All of this is in your employees’ lifetime accounts.

OnPay provides support by phone, chat, and email. They have excellent support ratings. Reviewers consistently say they have fast and accurate support. Remarkably there are very few complaints about the there customer support.

Find Your Payroll Software

If you’re still looking for the right payroll provider for your small business, check out our full listing of payroll software. If you think that saving time on administrative tasks sounds nice, consider investing in HR management or other HR software.

If you have used any of these products, please leave a review. Your experience can help other small businesses select the right software.

About the Author

Mark c
Mark Thomas
Mark is an analyst on the research team at TrustRadius. He holds a BE in Chemical Engineering from Auburn University. When he’s not working, he enjoys running long distances to go nowhere, overanalyzing small pieces of his daily life, and reading about ancient and medieval battle tactics.

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