13 Best Small Business Payroll Software of 2021 (Free Guide)
Everyone loves payday (except for maybe the HR department). Managing payroll software can be a gigantic task that no one looks forward to. In fact, payment of accurate salaries or wages is one of the more complex parts of most accounting systems.
Apart from making wire transfers and producing paychecks, business owners need to be on the top of their game regarding underlying calculations that include taxes, salary deductions, leave accruals, and other benefits. Aside from this, filing taxes has to be accurate every time with the IRS.
Whether you're running your own S Corp, outsourcing to a PEO company, or running an entire HR department, you need the best payroll software that addresses your unique challenges and enhances the efficiency of your process.
Let's get started.
What is the Best Payroll Software?
Here are my picks for the best payroll software to try this year.
Gusto offers a robust and efficient list of payroll features that makes it one of the most preferred choices for payroll software. It provides an intuitive and easy to use interface that makes the complete user experience enjoyable and hassle-free.
Moreover, it is capable of handling both general human resource management and essential administrative duties.
Its highly user-friendly interface and administrative capabilities make it the most suitable option for small businesses.
- Robust Security: It offers bank-grade security with 256-bit encryption of data flowing between authorized stakeholders
- Child-support Garnishments: It automates the payments for all employees in all states except California
- Automatic Wage Adjustment: Gusto is capable to adjust wages of employees automatically to ensure minimum is paid to everyone and comply with FLSA Tip Credit minimum wage compliance
- Automates the payroll management system
- Calculates and pays off payroll taxes of employees automatically
- HR teams can integrate their payroll setup with multiple accounting tools
- It offers a free trial
- Gusto leverages a nine-step wizard to ensure the setup is easy and accurate
- Employee onboarding – HR experts can use the software to enable self-onboarding for new hires
- Offers faster processing of basic payroll data
- It allows users to save the data and start working at any point in time
- Its customer support is not available on weekends
- There’s no option to pay from prepaid debit cards
- You need to download reports to view them especially
Gusto offers a 30-days free trial with all the features. Its paid subscription plans start from $39 per month. Moreover, businesses need to pay $6 extra for adding a new user to the system.
OnPay offers faster performance, sleek design, and excellent features. The software offers an end-to-end payroll solution through which business management can easily maintain a comprehensive workforce record and handle unlimited payrolls each month.
It is a capable tool for small and medium-sized businesses that are looking for an end-to-end payroll solution that offers great value for money.
- Document Vault: It offers document vault in which employees can easily save all the important documents in a safe and secure manner
- Robust Integration: This software solution offers robust third-party integrations with various applications including Xero, Humanity, Guideline, QuickBooks, Kabbage, and more
- 401(k) Planning: This feature helps employees efficiently plan for their retirement while managing deduction, compliance and investment portfolios efficiently
- It enables employees to enter and edit their details to allow human resource staff to focus on more essential things
- You can process the payments to employees through several methods, including online and cheque
- You can do an unlimited number of pay runs without any extra fees
- It efficiently handles tax forms to calculate and pay state and federal taxes accurately. The software guarantees tax compliance
- OnPay retains all the details of the employees even when they are not working with the company to provide them access to pay stubs and W-2 forms online
- Users can read about employment laws through its extensive HR library
- It leverages multi tier-user permission and security passcode for call-ins to ensure organizational security
- Only knowledge base comes with too many layers that could confuse new users
- There is no smartphone application
- No customer support on weekends
OnPay offers a free trial initially. After that, the base is $36 per month, plus $4 per person.
If you are looking for a simple payroll system for small businesses or households, then SurePayroll has you covered. The latest version of SurePayroll has come up with a lot of tax and compliance updates that you can get at a highly discounted base price.
The reduced subscription cost of the software has made it an excellent value for money offering in the payroll market.
The software is best known for its excellent customer support, in-depth record-keeping, and faster payroll processing capabilities.
- Flexibility: It offers same day or next payment of employees in case you forget to process the payment
- Robust Customer Support: It provides efficient customer support for setup and post servicing of the software to ensure a hassle-free experience
- Mobile Access: The payroll software offers robust iOS and Android apps for a seamless mobile experience
- It provides 100 percent tax filing guarantee
- The cloud-based payroll software is easily accessible from any part of the work. Its intuitive smartphone application enables users to leverage all its features easily on a smartphone
- SurePayroll automatically sends the details of new employees to the concerned government department, including employee's name, address, and Social Security number.
- You can either pay the employee through direct online deposit or cheques
- It allows employees to login into the mobile application to gain access to their year-end tax documents and pay stubs
- Managers can easily export the data into general ledger after every month’s payday
- Efficiently manage all the tasks through its customizable and interactive dashboard
- It provides support to multiple payroll formats
- Efficient record-keeping and processing of payroll data
- The user interface is cluttered and might overwhelm the new user
It is one of the most cost-efficient payroll software in the market. However, to check the prices, you have to fill up a short form so that their customer executives can get in touch with you. The good news is that you get a 1-month free trial before making the final purchase.
Intuit Enhanced Payroll offers a robust and efficient setup that you can do easily for accurate processing of payroll data. It provides a capable and reliable solution to manage the payroll of employees and pay taxes simultaneously.
It is affordable and doesn’t come with additional bells and whistles. Hence, it is most suitable for small businesses that just want to handle payroll efficiently.
- Robust Tax Integration: It guarantees accurate calculation of taxes so that you can pay them on time to the concerned authorities
- Customized Reports: Managers can create customized reports of payment and employee data as per the business requirement
- Secure Data: Since the software is on the cloud, it offers excellent data security and flexibility to use the software from anywhere securely
- It provides mobile payroll management that you can do through Android and iOS mobile applications efficiently
- The cloud-based solution secures all the information safely. Users can access the software from any location
- It offers a robust mechanism to manage federal, state and local taxes of the land efficiently
- Users can easily track information or set up a pay run through its intuitive mobile application
- The software comes with a 30 days free trial that includes all the features
- Offers capable payroll processing tools
- It offers capabilities to customize reports easily
- Even after several updates, the interface is not user-friendly and looks dated
- Comes with limited features
- The subscription cost of this software among some of the highest payroll tools
It comes with a fully-featured free trial. Its paid subscriptions start from $51.25 per month when paid annually.
Sage is, without a doubt, one of the best payroll systems on this list. The best part is that it comes equipped with all the essential elements required for a competent payroll software offering.
- Easy Setup: The software offers smooth setup and integration among its other competitors
- Accuracy: It offers robust accuracy and efficiency in terms of tax compliance, payment processing, and payroll data
- Money-back Guarantee: It provides a six months long money-back guarantee. Without any doubt, it is one of a kind offer
Sage Payroll offers highly customizable plans that can meet specific requirements of businesses of all types and sizes.
- The software offers highly scalable features; a good for small businesses that are registering brisk growth and plan to expand their business in the near future
- It offers automatic processing of the payments based on the schedule of payday
- Capable of building walls that only authorized users can access
- To win the support of its customers, it offers a six-months extended money-back guarantee
- It is capable of incorporating all the minute details of employees in the record
- Users can create a plethora of customized reports
- It provides robust integration support with other accounting software
- You can pay the employees through pay cards, direct deposits or business generated cheques
- The dashboard is cluttered and inefficient
- The user interface looks dated and difficult to use
- The software is not optimized for mobile use
Sage Payroll Essential offers customized pricing plans based on the requirements of a particular business.
Over the last 17 years, Patriot Software Full Service has become a highly functional and dependable software. It is capable of delivering end-to-end payroll solutions to its clients. The software helps HR professionals to automate trivial tasks and focus more on mission-critical things of the business.
It is a perfect option for small business payroll due to its robust support that its customer service team provides from starting to end.
- Robust Support: Patriot Software offers robust support from the very start to ensure all the necessary tasks are easily automated and the workflow becomes more optimized to focus on crucial tasks
- Live Customer Support Assistance: The software provider offers live customer support assistance to help its customers integrate the software efficiently and accurately into their business process. Users can reach its customer support through email, online chat, and phone free of cost
- Accounting: It offers all the essential for basic accounting
- Patriot Software is easy to set-up and use
- Requires a smooth learning curve, that means people with limited technological IQ can also operate the software efficiently
- It streamlines the payroll process by providing all the payroll related data and processes at a single place
- It offers a free software setup for businesses that wish to change their payroll software to Patriot Software
- Its pricing plans start from a few dollars to help small enterprises to leverage the goodness of a payroll software
- The software also offers seamless accounting integration
- There is no online setup wizard
- The user interface looks a bit old and cluttered
- The dashboard and employee portal aren't one of the best among other options mentioned here
Its basic plan starts from $10 per month and charges another $4 extra per user.
7. Square Payroll.
Square Payroll offers a remarkable user experience while providing all the functionalities of a capable payroll system. It is an excellent tool for both salaried and hourly employees as it supports both W-2 employees and 1099 contractors.
It is an excellent tool for businesses that are looking for intuitive and engaging user experience along with a capable payroll software
- Taxes: It ensures accurate calculation and payment of federal and state taxes of payroll, including quarterly state and federal filing
- Health Benefits: It has partnered with SimplyInsured to provide health insurance to employees. It also offers partnerships with other healthcare providers based on geography
- Team Management: Its recent update offers Team Management feature to track the work of employees like break duration and who is working at what task.
- The software is entirely cloud-based and requires no installation at all
- It has a robust collaboration with AP Intego’s pay-as-you-go service for worker’s compensation insurance. You don’t need to pay any administration fees, and only the businesses are supposed to pay premiums
- It offers robust integration with PoS and time-in and out software to collect employee data accurately
- It provides unlimited payroll run in all the serviceable states that are completely automated
- Employees can add and edit their personal information on their own
- Payroll item types are limited
- Its services are available only in 32 states
- No smartphone application for easy navigation of the software on mobile devices
The Base Fees for Contractor Only is free and costs $29 per month for Employee + Contractor plan. It charges an additional $5 per employee/ contractor.
QuickBooks Payroll is one of the preferred choices of businesses of all sizes. It comes equipped with all the advanced online payroll features that can help you automate your processes.
It's one of the best solutions for small business owners to run payroll, and eliminate delays, inaccuracies and tax compliance.
- Full-Service Plan: It offers the support of dedicated in-house experts to automate and drive the payroll process completely
- Employee Self-Service Portal: This is a cost-efficient plan that enables users to customize the software as per their needs and run the entire payroll process on their own
- Tax Guarantee: It offers a no-penalty guarantee on its tax filings. It leverages real-time status tracker and built-in scheduler to notify employees of tax requirements months, weeks, and submission dates.
- It offers automated accounting services that are taken care of by QuickBooks Online experts
- The software is capable of transferring funds in one day turnaround time to avoid unnecessary delays
- All payroll requirements and information are readily accessible on the payroll tool
- The executes accounting tasks in real-time to reflect correct payroll data all the time
- It offers hassle-free data collection and submission to the concerned authorities for efficient and reliable tax compliance
- Its advanced data-driven tools deliver smart reporting features for efficient payroll management
- Key reports are missing
- Direct customer support is not present
The monthly subscription starts at $7 per month and ranges up to $75 per month.
Xero offers efficient payroll management solutions along with robust accounting and bookkeeping tools to enable businesses to keep a close watch on their cash flow from every touchpoint.
It is one of the best tools for businesses that are searching for software that can also handle basic accounting tasks regularly.
- Advanced Functionalities: It offers powerful features, including advanced invoicing and quotes, credit card, banking, and PayPal reconciliation. Moreover, it is capable of handling accelerated inventory management, calculate payroll and manage taxes, purchase orders and expense control among others
- Easy-to-Use: Its user interface is well organized, and even a beginner can use it pretty easily
- Smartphone Application: The software comes equipped with dedicated mobile apps for Android and iOS. Employees can leverage the app for time tracking, payslips and to apply for leaves
- The software offers robust integration with over 500 third-party applications
- It is capable of taking a data-driven decision and generate reports, including cash flow records, balance sheet, and income statements
- Through its two-factor authentication and multi-approval model, it reduces the probability of fraud. It creates a detailed trace of every action, including the name of the user, performed action, date, and manual notes, among others
- It offers a variety of advanced functions including identifying alter checks, expense claims and bank accounts among others
- Its intuitive dashboard makes it easy to track work hours and leaves
- Lack of additional reporting features
- Features might not meet the requirements of large corporations
Initially, it offers a free trial. After that, the paid plans start at $20 per month.
Wave is a capable payroll tool that offers a majority of its key functionalities free of cost. You can leverage the software for advanced accounting solutions and expense management needs.
Due to its value, this software option is perfect for freelancers and small businesses that can’t afford to pay subscription costs.
- Free: The payroll and accounting software is available free to use with no hidden charges and undeclared fees to pay
- Pay From Anywhere: It enables the employer to make payments from any geography through direct deposits and online pay stubs to avoid unnecessary delays
- Dashboard: Users can leverage the intuitive dashboard to transfer money via payroll services, tax forms, and pay stubs
- It is capable of handling complex payment schemes
- The software handles the payment efficiently of both hourly and salaried employees
- Offer unlimited income and expense tracking
- Free receipt scanning, accounting and invoicing
- All the payroll data sync in real-time on the platform
- It comes with multi-currency capabilities and offers support to around 180 countries at present
- It generates automated reports including balance sheets and sales tax reports among others
- Its smartphone application can only be used to generate receipts and invoice
- Several key features are missing, required for end-to-end automation of payroll system
- Credit note feature is absent
Wave offers the majority of its features free of charge. However, if you want to buy its full-service plan, then it would cost you $20 per month.
Zenefits is one of the market leaders in the payroll industry. The software is designed with the perspective of human resource professionals to ensure efficient payroll management and administrations. Moreover, it offers advanced tools that simplify the work and brings more accuracy and accountability within the system
It is best for businesses that are looking for a free but capable tool.
- Affordable Care Act Compliance and Taxation: The software is robustly compliant with complicated terms and conditions of the Affordable Care Act. It also helps in identifying the employee eligibility and coverage benefits along with e-filing of taxes with the IRS
- Zenefits Pay Connect: It connects easily with the existing HR software to simplify and minimize the efforts of employee data migration from one system to another
- Human Capital Management: The software is capable to streamline hiring, onboarding, and efficient employee data management efficiently
- It syncs all the employee data in real-time to make sure that the data remains updated and accurate through the HR platform
- The payroll management system is available free of cost
- It efficiently handles all insurance benefits including dental, health, and visual coverage
- The system has tie-ups with other insurance providers through which employees can take hassle-free coverage
- It offers a Time Off application for managers that you can leverage to manage employee attendance on smartphones
- Zenefits easily simplify complex calculations including tax benefits, deductions, earning and taxes against minimal intervention
- There are bugs in the clock-in-out feature
- Customer support is not efficient
Initially, you get a 14-day free demo. The paid plans start at $8 per month per employee.
12. ADP Workforce Now.
ADP Workforce Now is an efficient payroll system designed exclusively to handle the duties of mid-sized organizations. ADP workforce accurately and efficiently processes all the payroll data while including all the schedules accounted for, unique functions, and work hours, among others.
Offers robust tax compliance for both businesses and employees
- Smartphone Applications: It provides highly functional and intuitive smartphone applications for Android and iOS through users can gain access to stats, analytics and manage HR time from any location
- Web-Based Dashboard: Its fully-functional and web-based dashboard helps facilitate efficient workforce management and payroll data. The data of data dashboard syncs immediately with its smartphone apps
- COBRA Management: The application supports COBRA events that automatically triggers the information to employees and other stakeholders
- The software offers absolute tax compliance that apart from filing and submitting tax forms also manages the paycheck deduction for state, federal and local taxes
- It offers greater customization where clients can request for omission or incorporation of specific features depending on organizational requirements
- The software comes with a data-driven approach and hence, provides real-time analytics through customized reports, charts, graphs and spreadsheets
- It offers real-time payroll calculation to minimize the administrative duties of the human resources department
- The software also provides the service of compliance experts to deal with complex filings and avoid tax penalties
- The application some issues with time-off policies like correct accrual of leaves for employees
- Not the best tool for a beginner
The software offers a free trial. After that, you need to request a quote to gain access to its paid subscription.
Justworks is one of the best options to handle complex payroll schemes coverage. It offers robust solutions for businesses working with part-time and one-off workers.
The compact payroll management suite enables HR managers to create new rules and applies custom PTO policies to manage and track accrual as per the requirements.
It is one of the best options for HR managers who want customized rules and leave policies
- Top Benefits Partnership: Justworks has collaborated with Top Benefits to maximize employee benefits administration. It has also enabled employees to manage their own payroll and online profile for dental, vision, and medical benefits.
- Personalized Dashboard: Justoworks offers dynamic customization capabilities through which every employee can create a unique dashboard based on their preferences. It allows employees to view their complete profile and performance in the organization. Employees can leverage the panel to sign up for improvement programs, access relevant documents, request for leaves, and check out their payment details, among other things.
- Customizable Policies: It enables HR managers to create a highly customized vacation and leave policies. Users can easily gain access to holiday calendars, Time off requests, and sick leaves from a single interface
- It offers seamless access to employee’s payment data
- It enables managers to make individual payment to partners and contractors without any additional cost
- Allows the creation and payment of part-time employees through simple pay card
- Efficiently manage time-off requests
- Easily customize the mode of payments
- Highly efficient and user-friendly
- Offers easy onboarding of employees
- PTO visibility is not great for employees
- Unpaid time off needs to managed manually
Justworks offers a free demo. Its base plan starts at $44 per month per user.
Options not yet reviewed and included on this list include Paycor, Patriot Payroll, and Paychex.
Payroll software helps you automate the entire employee payment process, for both hourly and salaried employees.
In comparison to paper-based systems, an efficient payroll tool expedites the process of releasing employee payments while eliminating errors and gaps. It also empowers HR managers to generate customized paychecks for a particular employee pretty quickly.
The primary functionalities of a payroll system include the automation of withheld deduction calculations, including insurance amount, taxes, and retirement contribution, among others.
The software also comes with the capabilities to process direct paycheck deposits, deduct wage garnishment, and generate tax forms for employees. Administrators are also empowered to create separate checks for employees who are not enrolled for direct deposit.
The majority of payroll systems now enable employees to self serve. This includes entering and editing the information in the payroll system, checking payroll data online on mobile devices, and changing the deduction amount.
When you start researching for payroll information, you may get consumed with different options that claim to be the best on the market.
Thus, it’s crucial to have some basic knowledge about what core functionalities you should be looking for in a capable payroll system. Make sure to do your research and check out step-by-step guides payroll software guides for small businesses.
- Automatic Payment – The software should be able to calculate taxes, deductions of other benefits, and generate salaries based on these variables. It should also be able to automatically generate paychecks and make an online transfer into the account of registered employees.
- File and Pay Taxes Automatically – The software should be capable of holding employee taxes, file payroll tax reports every quarter, and make accurate tax payments to federal, state, and local agencies. It should also be able to issue W-2 and 1099 at year-end. Some full-service payroll software offers a fool-proof guarantee for tax calculation and payment to the concerned authorities.
- Mobile Access – Look for a payroll system that offers cloud-based service for more flexibility and mobility. It will enable managers and employees to leverage software from any machine and location. Also, make sure that the payroll providers offer robust Android and iOS mobile apps to make sure employees are able to use all the features of the payroll system.
- Payroll Reports – Data-driven reports are crucial in any business. Make sure that your payroll options generate data-rich reports about wages, labor, income, and expenses to gain deeper insights into the efficiency of business operations.
With these essential points in mind, choose your payroll application based on some of the criteria above.
These were some of the most capable payroll tools on the market. These tools can help you simplify HR-related tasks, payroll management, attendance tracking, and more.
However, here are a few things that you must keep in mind before making the final decision.
- Subscription Cost: Depending upon the size of your company, you must analyze the value that payroll apps bring. If you are a small organization, you can go with free payroll software to cut down subscription expenditure.
- Relevant Features: Top payroll software might offer a plethora of features and add-ons, but if you aren't using all of the features, then you are wasting a considerable amount of money on an expensive subscription. Make sure you're not overloading your software with time-consuming add-ons and that your system is set up to easily process payroll.
- Customer Support: Look for robust customer support to ensure flawless integration and resolutions of queries after buying the subscription.