Small business payroll services help simplify our complex regulatory environment. With around 5,000 different taxing jurisdictions in the United States, it’s easy to see why DIY business owners get penalized for payroll related errors.
To avoid making costly mistakes on tax withholding or over-and-under paying employees, using a small business payroll service can help save time and reduce compliance related issues.
What is a Payroll Service?
A payroll service is an online platform available for businesses of all sizes to help process paychecks, pay federal and state taxes, and keep your business in compliance with the various filings required by the government.
SMB payroll services differ from more complex enterprise solutions by offering simpler features while still having solid reporting. Small business payroll solutions can handle tax withholding, deductions, health benefits, and filing — but they might not be set up to calculate dividend payments or handle multiple currencies.
Best Small Business Payroll Services for 2023
Our methodology to find the best small business payroll services involved looking at the most important features and what’s included with each service. We also interviewed businesses using each of the solutions to learn about reliability and ongoing customer service.
|Payroll Service||Best For|
|Gusto||New payroll managers|
|OnPay||Mid to large size companies|
|Wave Payroll||Very small businesses with one or two employees|
|Square Payroll||Those using other Square products|
|Justworks||Businesses looking to outsource HR to a PEO|
|Zenefits||Small to midsize businesses|
|RUN by ADP||Under 50 employees|
|SurePayroll||Companies with up to 100 employees|
Gusto is an all-in-one HR platform offering full-service payroll features, such as payroll processing and tax filings, plus other employee management tools. Gusto also offers health insurance in many states, so you can provide a benefits package to attract and retain workers. Check their Concierge and Select plans for more HR services, such as benefit advisement and workers compensation administration.
Gusto makes payroll taxes simple by calculating and filing the taxes for you, even if your business has employees in multiple states.
What you see is what you get with Gusto, meaning there aren’t a lot of extra fees that other payroll services typically charge. For businesses only hiring independent contractors, Gusto has a scaled-down plan (only $6 a month per contractor).
- Payroll direct deposit and via postal mail
- E-sign capabilities within the Gusto platform
- Employee accessibility for payroll information
- Plan upgrades include benefit administration
- Health insurance options
- No extra fees
- Tracks lunches and breaks
- Live support not available 24/7
- No mobile app
Gusto Pricing Plans
All levels of Gusto’s plans include automated payroll (for salaried employees), direct deposit, tax filings, unlimited payroll runs, end of year filings (W-2s and 1099s), and it integrates with many 3rd-party applications like Asana, Dropbox, and many more.
|Gusto Plan||Per Month Fee||Additional Per Employee|
OnPay focuses on offering complete payroll solutions with HR compliance and benefit management features. Managers can choose to onboard employees and enter the important data or have new employees set up their own employee profiles to access tax documents, pay stubs, and vacation hours.
Pay schedules are also flexible—users can set one or multiple payroll schedules, and you can pay by direct deposit, paper checks, or pre-paid debit cards.
OnPay also offers options for providing health insurance or a retirement plan to employees and can act as your broker, helping you find the best plans and managing administrative tasks.
- Expense reimbursement management
- Unlimited payroll runs
- Payroll calculation and payroll taxes
- Payroll tracking and auditing
- Offer letters, onboarding, and first-day task assignment
- Employee self-service
- Flexible pay schedules
- Optional brokerage services for health and retirement plans
- Integrates with accounting software, online lenders, time tracking apps
- 30-day trial period
- Doesn’t have a mobile app
- OnPay charges $5 per employee to mail W2s
OnPay Pricing Plans
|OnPay Plan||Base Fee||Per Person|
|Full-Service Payroll||$36 per month||$4 per month|
With OnPay your first month and set-up are both free.
Wave Payroll can be used as a stand-alone payroll service or as a component of a complete accounting package. Wave’s payroll service includes direct deposit, tax payments and filings, employee access to payroll information, and year-end tax forms.
For an extra fee, Wave also offers an add-on service called Wave Advisors, which gives users access to an accountant or bookkeeper to handle regular finance duties such as reconciling, preparing statements, and more.
- Independent contractor payments and compliance
- Direct deposit
- Employee self-service portal
- Year-end tax forms for employees and contractors
- Timesheet creation
- User-friendly interface
- Tax administration offered in only 14 states:
- Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin
- If your employees live in one of the other 36 states, you will have to pay and file taxes yourself
- No pre-paid debit card option
- Payroll tax processing is not available to household employers in the United States
Wave Pricing Plans
|Wave Plan||Base Rate||Per Person|
|Tax Service States||$35 per month||$6 per month|
|Self-Service States||$20 per month||$6 per month|
Wave offers a 30-day free trial so you can get a feel for the system without a long-term commitment.
Square Payroll is a full-service payroll solution primarily designed for small businesses to handle payroll management and payroll taxes. It is an especially good fit for users familiar with Square’s POS systems that have hourly employees.
One of Square Payroll’s particularly useful features is its plan for paying independent contractors. Square’s program lets you pay them via direct deposit and automatically generates and files the proper tax form for you.
Square’s Team app is available to all Square Payroll users. It allows managers to create employee schedules and digitally send them to workers, plus employees can access their earnings and ask for an advance via the payroll system.
Square Payroll Features
- No annual commitment
- Multistate payroll
- Integrates with 3rd-party apps
- Mobile app
- Time tracking
- Unlimited payroll runs
- Flexible payment options
- Employee-generated pay advances
Square Payroll Downsides
- Limited reporting
- Per employee fee
- No free trial
Square Payroll Pricing Plans
There’s a single all-inclusive payroll plan that includes paycheck advances, tax calculations by location, and year-end W2s/1099s. Also, if you want to offer employee benefits, Square’s partners make it easy to add those features.
|Square Payroll Plan||Base Cost||Per Person Paid|
|Pay Employees & Contractors||$35 per month||$5 per month|
|Pay Contractors Only||none||$5 per month|
Justworks is a PEO (professional employer organization), which, as a group organization, can help businesses get better pricing on employee benefits like medical insurance. Justworks can also help you stay compliant by filing W2s, 1099s, payroll taxes, quarterly payroll reports, and more.
Justworks is significantly more than just a payroll service. As mentioned, Justworks is a PEO and HR platform with features that help businesses manage their staffing needs, such as onboarding, creating an employee directory, job listings, COBRA, state employment laws, accessing health benefits, and other services usually available to larger companies.
The Basic plan gives you payroll management, compliance help, and HR tools. Payroll includes the ability to make a wide variety of payments (bonuses, commissions, reimbursements, overtime). It handles various types of workers (full-time employees, part-time employees, hourly employees, contractors, and vendors).
- Payroll management, compliance, and HR tools
- No set-up fees
- Direct deposit
- Reimbursement management
- Salary adjustments
- PEO capability to offer health insurance
- Onboarding tools
- Labor law compliance
- HR consultants
- Pricey full-service offering
- No hiring tools
- No e-sign capability
Justworks Pricing Plans
|Justworks Basic||Features Payroll, Benefits, HR tools, and Compliance|
|<50 Employees||$59/mo per employee|
|50+ Employees||$49/mo per employee|
|Justworks Plus||Plus Access to Medical, Dental, and Vision|
|<50 Employees||$99/mo per employee|
|50+ Employees||$89/mo per employee|
Zenefits is an online HR platform that offers payroll management, employee management, compliance, taxes, and benefits. Take note: Payroll is an add-on feature to its HR plans, so you’ll need to select it to have payroll features.
The three plans have varying HR features, including onboarding and time tracking. As your company grows, more sophisticated capabilities such as compensation and performance management are available. For HR extras, Zenefits stands out by offering features like paid time off, commuter benefits, termination modules, and unemployment insurance.
As far as payroll features, Zenefits syncs its HR platform, so worker profiles are integrated, and timesheets are automatically fed into payroll. Detailed paystubs have everything workers want to know, plus you can customize them with other information, such as added special payments. Zenefits payroll also handles direct deposits, tip reporting, and garnishments. Labor codes can help you analyze data by department, location, and position.
- Review vacation requests, sick leave, time off
- Timecard fraud detection
- Benefits administration
- Reporting capabilities
- Employee mobile app
- Paystub customization
- Payroll integrates into HR platform
- Direct deposit
- Free trial demo plan
- Possibly complicated for very small businesses
- Mobile app lacking some features
- Payroll is an additional price
Zenefits Pricing Plans
|Plan||Features||Cost per Month|
|Essentials||Automated Onboarding, Employee Management, Scheduling||$8 per employee|
|Growth||Compensation Management, Performance Management||$14 per employee|
|Zen||Well-being, Employee Engagement, People Hub||$21 per employee|
|Payroll Add-On||Unlimited Pay Runs, Direct Deposit, Contractor Payments||$6 per employee|
|Advisory Services||Handling Difficult Employees, Overtime Rules||$8 per employee|
ADP payroll solutions have been around for more than 70 years, and they’re widely used by small, midsize, and large businesses. RUN Powered by ADP is their payroll solution for small businesses (under 50 employees).
There are four plans to choose from depending on your company’s number of employees and needs. The Essentials plan, recommended for startups, provides the basics to run payroll, although it has limited HR tools and integrations.
All RUN plans provide a comprehensive start and includes automated payroll, direct deposit, tax filing, new hire reporting, an employee self-service portal, and an employee discount program with ADP partners. Pricier plans have more HR features, such as employee background checks, state unemployment insurance, access to hundreds of HR forms, and more.
- Offers three plan levels and features based on employee size
- RUN powered by ADP is specifically designed for small businesses with less than 50 employees
- Tax filings
- Personalized dashboards
- Employee self-service portal
- Direct deposit
- 24/7 customer support
- Comprehensive HR for upgraded plans
- Employee discount program
- More expensive than other comparable services
- Charge for every payroll run
ADP Payroll Pricing
The Essentials plan starts at $59 per month plus $4 per employee. Request a quote to receive pricing for the other plans.
|Essentials||Payroll, Tax Filing, New Hire Reporting|
|Enhanced||Check Signing Security, State Unemployment|
|Complete||HR Training, Forms|
|HR Pro||Help Desk, Employee Handbook|
Customer support is 24/7 for all plans.
SurePayroll is backed by Paychex, a large, well-established payroll provider. Its intuitive platform can manage payroll tax requirements and payroll processing. Created with flexibility in mind, the system can be customized for various business models, including nonprofit organizations, food businesses, and medical offices.
SurePayroll offers two plans: Self-Service and Full-Service. Depending on your payroll needs and the number of employees you have, the Self-Service plan may suit your needs. It allows direct deposit, unlimited payroll runs, new hire reporting, and tax calculations. However, it does not offer tax filing, a crucial compliance responsibility.
The Full-Service plan contains all the Self-Service plan offerings, plus handles state and federal tax filings. You can also add local tax filing for a fee. In addition, the Full-Service plan comes with an HR advisor and two-day direct deposit processing.
- Offers full-service and self-service plans
- Mobile app
- Direct deposit or printed check
- New-hire reporting
- Federal and state labor law compliance tools
- First three months free
- Unlimited payroll runs
- Numerous integration options
- Extra charge for year-end tax services
- No dedicated account manager
|SurePayroll Plan||Base Cost||Per Employee|
|Self-Service||$19.99 per month||$4 per month|
|Full-Service||$29.99 per month||$4 per month|
Multiple state filings are available as an add-on service for $9.99 per month.
Using a payroll service makes it easier to meet your payroll obligations and deadlines by streamlining the payroll process, automating many of the tasks involved, such as tracking hours, calculating the correct wages and taxes, enabling direct deposits, and more.
As noted in several of the detailed company features, many payroll service providers also offer several HR support services, such as benefits or retirement packages. While this may sound enticing, if your business doesn’t need them, or these services are handled by another provider, such as your accountant, make sure you don’t unwittingly contract and pay for them.
Most important, a payroll service keeps your business compliant with the numerous regulations that come with having employees, such as creating and distributing W2s and 1099s. Finally, not all payroll services offer a free trial period, so make sure you know how and when you can cancel a service before signing any contracts.
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