9 Best Payroll Software For Small Business (2024)
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Growing your team as a small business owner is exciting. It means that your business is growing and more folks are willing to invest their time into your vision. The logistics of managing them, on the other hand? Not that much fun (for most of us).
Online human resources (HR) and payroll software takes a lot of the work off your plate so you can focus on the work you go into business to do. Below, we’ve rounded up the best payroll software to help you compare and select the platform that’s best for your business.
- Featured Partners
- Best Payroll Software of 2024
- Best Payroll Software of 2024
- OnPay
- Gusto
- ADP RUN
- Paychex Flex
- Justworks
- TriNet
- Wave Payroll
- Paycor
- Deluxe
- Forbes Advisor India Ratings
- Methodology
- What Is Payroll?
- Payroll Processing Stages
- How To Process Payroll Using A Payroll Software
- How Does A Payroll Software Work?
- How To Use a Payroll Software
- How To Choose The Best Payroll Software
- Featured Partners
- Next Up In Business
Featured Partners
Best Payroll Software of 2024
- OnPay: Best Overall
- Gusto: Best for Automating Processes
- ADP RUN: Best for Customization
- Paychex Flex: Best for Simplicity
- Justworks: Best for Complex Hiring
- TriNet: Best for Employer of Record
- Wave Payroll: Best for Solopreneurs and Contractors
- Paycor: Best for Growing Enterprises
- Deluxe: Best for Marketing & Business Development
OnPay
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 (INR 3,200) plus
$6 (INR 490) per employee
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 (INR 3,200) plus
$6 (INR 490) per employee
OnPay is a straightforward, all-in-one payroll and HR solution for small businesses. It comes with just one competitive price that includes all services.
Get access to payroll for workers, automatic tax payments and filing and an employee self-service portal for self-onboarding, documents and PTO tracking. You can manage benefits including insurance and retirement plans with access to most major providers.
OnPay doesn’t include built-in accounting tools, but it integrates with popular HR and accounting tools including QuickBooks, Xero and more.
Who should use it:
OnPay caters to small businesses, including startups, entrepreneurs, local shops, nonprofits, religious organizations and farm owners.
- Straightforward, comprehensive pricing
- Easy employee and contractor payroll
- HR and benefits included
- No free trial
- Plans aren’t customizable
Gusto
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 (INR 3,200) plus
$6 (INR 490) per employee
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 (INR 3,200) plus
$6 (INR 490) per employee
Gusto is designed with dynamic startups and small businesses in mind, and it specifically targets the solutions these types of companies need that weren’t previously available on other platforms.
The platform provides payroll for both employees and contractors—and even offers a low-cost contractor-only plan. It facilitates employee benefits including health care, wellness, retirement plans and more.
Gusto includes features that might appeal particularly to modern startup workers, including automated charitable donations and a wallet that gives employees greater control of and access to their money.
Who should use it:
Gusto is made for startups and growing small businesses with a mix of employee- and contractor-based workforces. It’s best for small business owners and entrepreneurs who want to automate business processes as much as possible so they can minimize administrative hires and focus their resources on the business’s mission.
- Easy employee and contractor payroll
- Automatic tax filing and compliance guidance
- Integrated free checking and high-yield savings accounts with paycheck advance for employees
- Per-person pricing gets costly at scale
- No invoicing or accounts receivable features
- No payments outside of the U.S.
ADP RUN
Benefits administration
Yes, at extra cost
Contractor payments
No
Base monthly price
$40 (INR 3,200) per month, depending on company size and needs
Benefits administration
Yes, at extra cost
Contractor payments
No
Base monthly price
$40 (INR 3,200) per month, depending on company size and needs
ADP is the largest and one of the most trusted payroll providers in the world. RUN is its small business solution and a good place to start if you’re a small business expecting to grow into a large enterprise. ADP RUN is a simple payroll and benefits administration platform with room to grow into enterprise plans with the main ADP platform.
ADP RUN offers tiered plans with payroll by direct deposit, a self-service employee platform, new hire onboarding and optional benefits administration for additional fees. You can also add on tax form filing.
More advanced plans include a robust HR platform, including an employee handbook, document management, training programs and employee toolkits.
Who should use it:
ADP RUN is a fit for businesses that need a customizable platform for payroll and benefits. It’s designed for companies with fewer than 50 employees, but is a good fit if you expect to grow beyond that, because you could easily migrate to the ADP enterprise platform.
- Easy employee payroll
- Automatic tax filing and reports
- Add-ons for marketing and legal assistance
- Customizable plans
- Requires an additional product to pay contractors
- Added cost for benefits administration
- Added cost for tax form filing
- Pricing estimates are hard to get
Paychex Flex
Benefits administration
No
Contractor payments
Yes
Base monthly price
$39 (INR 3,000) per month, plus $5 (INR 400)
Benefits administration
No
Contractor payments
Yes
Base monthly price
$39 (INR 3,000) per month, plus $5 (INR 400)
Paychex is a payroll and HR service provider for businesses of all sizes. Paychex Flex is its simplified payroll platform designed for small businesses with fewer than 50 employees.
The platform offers an easy-to-use basic payroll processing platform to pay employees and contractors, but no HR and benefits administration. It strips away the complex features of the broader Paychex platform to stand out as a provider of easy employee payroll.
While it doesn’t offer the full HR suite, Paychex Flex does integrate with other Paychex products to meet your payroll and HR needs, as well as with third-party accounting systems to automatically keep your bookkeeping updated with payroll data.
Who should use it:
Paychex Flex is made specifically for small businesses that need a quick and simple payroll software solution. It’s stripped down for businesses that just need easy payroll, with flexibility to add on services as you grow.
- Easy employee payroll
- Garnishment payment service included
- Customizable plans
- Extra fee for payroll tax filing
Justworks
Benefits administration
Yes, at extra cost
Contractor payments
Yes
Base monthly price
$59 per month (for up to 49 employees)
Benefits administration
Yes, at extra cost
Contractor payments
Yes
Base monthly price
$59 per month (for up to 49 employees)
Justworks is a professional employer organization (PEO) that appeals to remote teams. The company engages yours in a co-employment relationship—i.e., it’s an employer of record for your employees—so it can handle HR and payroll on your behalf.
The co-employment relationship means Justworks takes on some legal liability as an employer that you don’t have to bear, which isn’t the case for software-based payroll services. In exchange, you hand over control of some things like the employee handbook and workplace policies.
The PEO model also means that Justworks handles all of your HR and payroll duties, so you don’t have to hire or manage HR in-house. Its monthly per-employee fee looks high at first glance, but it could be well below the cost of an HR hire and goes lower the more employees you have.
Who should use it:
PEOs like Justworks are a good fit for small businesses with complex hiring and potential business liability—for example, if you hire international employees or have a lot of turnover.
- Hand over 100% of your HR duties
- Smooth employee self-service interface
- PEO (co-employment) relationship reduces your liability as an employer
- High cost compared with software-based solutions
- PEO (co-employment) relationship reduces your control over HR policies
TriNet
Benefits administration
Yes
Contractor payments
No
Base monthly price
Contact for quote
Benefits administration
Yes
Contractor payments
No
Base monthly price
Contact for quote
TriNet is a professional employer organization (PEO) for HR outsourcing. Your company leases employees to TriNet—TriNet becomes an employer of record—and it takes care of HR and payroll for you.
Through this so-called co-employment relationship, TriNet bears some of the legal liability as an employer, which can save you some headaches in case of employment issues. It also takes on 100% of your HR duties, so you don’t have to hire an HR or legal expert in-house. In exchange for your reduced liability, you agree to follow TriNet employment policies and forfeit some control over creating them for yourself.
Who should use it:
TriNet is a good fit for small businesses that want to use an “employer of record” system and offload some legal liability in exchange for not having full control over employment policies.
- Completely hands-off payroll and HR
- PEO (co-employment) relationship reduces your liability as an employer
- Opaque pricing structure requires sales call
- PEO (co-employment) relationship reduces your control over HR policies
Wave Payroll
Benefits administration
No
Contractor payments
Yes
Base monthly price
Varies as per location
Benefits administration
No
Contractor payments
Yes
Base monthly price
Varies as per location
Wave is a relatively new player in small business financial services, and it’s making its name by building a user-friendly and affordable platform that addresses the unique needs of freelancers, contractors and small business owners.
Payroll is Wave’s latest feature. It comes to the platform along with accounting, invoicing and payment processing for small businesses—replacing a laundry list of tools for many entrepreneurs.
Wave doesn’t offer benefits administration, a major drawback, but its recent purchases of companies across the financial sector promise more capabilities and features to come.
Who should use it:
Wave is a unique fit for microbusinesses and solopreneurs who pay a small team heavy in contractors and part-timers, and frequently invoice clients or customers for online payment.
- One platform for payroll, accounting and invoicing
- Clean user interface for employers and employees
- Easy payroll for employees and contractors
- No benefits administration
- Automatic payroll taxes are available in limited locations.
Paycor
Benefits administration
Yes
Contractor payments
No
Base monthly price
$99 (INR 8,000) plus $5 (INR 400) per employee
Benefits administration
Yes
Contractor payments
No
Base monthly price
$99 (INR 8,000) plus $5 (INR 400) per employee
Paycor is a full-service HR platform that supports companies from recruiting to termination.
It offers an employee portal online and through the Paycor mobile app, so employees can access pay stubs, documents, time-off requests, performance evaluations and employee development all from their phones.
You can add on benefits administration for an extra fee and let employees manage and enroll in benefits through the self-service portal, as well.
Who should use it:
Paycor offers plans for businesses of all sizes, but the software is best for medium and large businesses with more complex HR needs than smaller companies.
- Easy employee payroll
- Comprehensive HR tools, including recruitment and performance reviews
- No contractor payments
- High cost relative to competitors
- Clunky employee portal interface
Deluxe
Benefits administration
Yes
Contractor payments
$5 (INR 400)
Base monthly price
$45 (INR 3600) plus $7 (INR 570) per employee
Benefits administration
Yes
Contractor payments
$5 (INR 400)
Base monthly price
$45 (INR 3600) plus $7 (INR 570) per employee
Deluxe offers a variety of services to businesses, including marketing and business development, in addition to payroll and HR services.
Deluxe uniquely offers the option to use its HR features in conjunction with your existing payroll provider. This means you could integrate capabilities like benefits administration and paid time off (PTO) tracking without disrupting your existing payroll service.
If you want to move everything under one roof, you can use Deluxe Payroll. This cloud-based payroll software offers packages that include basic HR reporting or robust HR solutions from onboarding to termination.
Who should use it:
Deluxe offers services that fit businesses of any size, from entrepreneurs at launch to large enterprises. This platform is particularly useful if your business needs branding, formation and marketing support along with payroll services.
- One platform for marketing and business solutions
- Ability to blend your existing payroll provider with Deluxe HR
- Easy employee payroll
- Contractor payments carry an extra monthly charge
- No free trial
Forbes Advisor India Ratings
Methodology
To determine the best payroll software for small businesses, Forbes Advisor researched the industry and analyzed 24 different companies and plans. We then scored these contenders across six categories of features with 16 different metrics that were weighted to favor features that small business owners find valuable in a provider.
Here are some of the categories we used to rank the providers that made the top of the list.
Pricing
For pricing, we considered whether a service offers a free trial, as well as the affordability of its lowest and highest price tiers. Companies that offer upfront pricing received higher ratings here than those that require filling out a lead capture form or making a call to a sales department. This accounted for 15% of our weighted scoring.
Features
While our reviews mention a variety of features attractive to small businesses, we maintained consistency in our ratings by looking for these specific features for each provider: self-service employee portal, HR library, new hire reporting, third-party integrations, analytics and ledger reporting.
We found that while the majority of payroll software offer an employee portal, very few offer a well-rounded ledger report. Many providers rely on third-party integrations to handle this aspect of payroll, which we factored into our rankings. We weighted features at 35% of our total score.
Third-party reviews
We researched reviews from real users to gauge their opinion of each platform. This entailed ranking both the overall score from customers and the number of reviews for these scores to give the fullest picture of reality and reduce bias. These accounted for 15% of the total score.
Expert analysis
Based on our market research and the categories listed above, we also ranked additional criteria from customer reviews such as ease of use, any stand-out features, popularity and value for the price. Altogether, these criteria make up 35% of the total score.
What Is Payroll?
Payroll refers to the total compensation a company pays employees for their work. Payroll also refers to the process of calculating employees’ net pay and initiating payment to them. Whether you have one employee or 100, you’ll need to process payroll to ensure they get paid correctly and that proper records are kept.
Payroll Processing Stages
Payroll is a process with multiple steps that start before an employee’s first day. The basic steps include:
- Decide pay cycle. This is the frequency with which you are paying your employees. Most employers choose either a weekly, biweekly or monthly cycle to make payments.
- Collect employee information and tax documents. These documents include the W-4 form, state tax withholding form and bank account information.
- Calculate gross pay. Gross pay is the amount employees are owed before taxes.
- Determine net pay. You will withhold taxes (and any other deductions) from the gross pay and employees will receive the net pay.
- Initiate payment. If you’re running payroll manually, you’ll cut checks and mail them out with pay stubs. If you are paying through direct deposit, you’ll initiate a transfer. If your payroll is managed through a payroll software such as Gusto, the platform will initiate payment based on a predetermined billing cycle.
- Pay taxes and keep records of payment. Lastly, you’ll pay federal and state taxes owed and keep a record of all payroll and taxes.
How To Process Payroll Using A Payroll Software
There are three main ways to process payroll. You can process payroll manually, outsource it or use payroll software.
Processing payroll manually involves using Microsoft Excel or other solutions to calculate the tax owed and how much to withhold from employees. This may work when there are only a few employees, but it can often take more time and increases the chance of error.
Platforms such as Gusto and Wave can gather all the information for you, calculate required tax withholdings and initiate payments to employees directly. Using payroll systems like these can be an easy and cost-effective way to take this process off your plate, particularly for small businesses that do not want to outsource this service.
How Does A Payroll Software Work?
Though each has a unique design with varied features, most online payroll software work basically the same way. They typically include a cloud-based portal for both employers and employees. Employers—or your accountant, bookkeeper or HR employee—set up benefits and salaries for employees and, on some platforms, contractors.
Some payroll software offer automated payroll, so you can set worker pay and employees can track their time (if necessary), and the service runs payroll on schedule. The software let workers enter direct deposit information, and you connect a business bank account on the employer end, so payroll runs without you having to print and deliver checks.
If payroll isn’t automated, you have to run it manually on schedule a couple of days before payday, entering worker pay amounts and scheduling paydays.
Many online payroll software include features that help you administer benefits in the same platform, as well as integrations for accounting software. Many offer workers the option to get a payment card, so they can receive money before payday and use the card directly to make purchases.
Some payroll software are part of comprehensive HR platforms that include not only pay and benefits, but also employee development, education and coaching programs.
How To Use a Payroll Software
How your team uses payroll software will vary depending on the size of your team, the expertise of your employees and the system you use. Most payroll software come with excellent sales and customer service reps who can help you get set up and answer questions you have along the way.
A basic payroll solution helps you pay employees and, on some platforms, contractors. Use it to facilitate direct deposit as well as to manage payroll checks, taxes and reporting.
Most payroll software also include benefits administration, so you can use the platform to set up paid time off, retirement plans, insurance and other benefits for employees, and integrate benefits with payroll.
How To Choose The Best Payroll Software
The best payroll software offer the following features:
- Direct deposit payments
- Payroll tax filing and payment
- Employee self-service and self-onboarding
- Integration with QuickBooks or other accounting platform
- Basic reports
- Automatic compliance updates
Without these features, payroll tools don’t offer much you couldn’t do manually with a spreadsheet.
To further evaluate your payroll needs, answer these ten questions about your business and its payroll system:
What Is the Size of My Business?
Christine Stolpe, CPP, president, and CEO of Wages Creek Consulting, notes this as a key factor that small businesses must consider when choosing a payroll platform so that they don’t outgrow the system too quickly. When considering outsourcing payroll, you don’t need to think about the size of your business in terms of its turnover or number of customers. You need to take into account just two things: how many employees do you have currently and how many more are you likely to add in the near one to two years?
What Types Of Employees Do I Have?
You can have both regular employees and independent contractors on your payrolls. Additionally, you might pay your employees a fixed monthly salary, hourly wages or a base wage plus commissions or tips.
Payment structure and taxation requirements for each of them differ and you need to know these numbers to evaluate your payroll needs. If you have only independent contractors, you might be able to meet your needs using online payroll software, which is usually cheaper.
How Do I Pay My Employees?
Do you need to make direct deposits or handle check payments? Do you need to make international payments via platforms like Stripe and PayPal? Think about how you will get money from your bank account to your employees and make it as painless as possible.
How Often Do I Pay My Employees?
Do you pay all your employees at one time, or do you have different schedules for different categories? For instance, you might be paying them weekly or biweekly. In the case of independent contractors, you might be paying them anytime they invoice you.
The payroll software should be able to handle these payouts in addition to off-cycle payments like expense reimbursements, bonuses, commissions, etc.
Are All Employees Based Out of the Same Location?
If you have employees spread across different states or around the globe, you will need to meet more regulations. With hybrid and remote work becoming commonplace as a result of the pandemic, you must consider if you might have people working from different locations in the future.
Who Is Responsible for Processing Payroll?
If you have a dedicated person or team for processing payroll, you will likely be able to manage with a DIY payroll solution, which could be cheaper. Otherwise, you should consider investing in an outsourced payroll service even if it is more expensive. This will help ensure that payments are processed accurately and on time.
What Are My Local/State Payroll Laws?
The payroll laws depend upon the locality, state and countries where your employees reside. You must know what city, state, federal or international payroll laws you need to comply with. If you’re not sure, contact a payroll professional in your area to get some guidance.
How Do I Want Payroll Taxes Handled?
Payroll taxes can get complex and tedious as your business grows. You need to decide if you want your payroll software to handle taxes or not. If the answer is yes, look closely at the cost for year-end calculations because that usually comes with an extra price tag. If you don’t, make sure to hire a reliable tax professional to handle this process for you.
What Deductions Do I Need To Plan For?
Before disbursing payments, you need to withhold deductions for taxes (income tax, social security tax, etc.), wage garnishments (unpaid loans, alimony, child support, etc.) and benefits (health insurance, etc.).
What Is My Budget?
Cost is an important factor when choosing a payroll company. You must have a ballpark figure in mind that you are willing to pay monthly or annually to meet your payroll needs. This will help ensure that you don’t overextend yourself when you are tempted to pay extra for à la carte features.
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Next Up In Business
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