A small business payroll, or a freelancing company payroll is a matter of many things. In this blog post I’ll go through some of the best software packages around to help you satisfy all your payroll needs from an army of self-employed contractors to a well-known established company.
In this article I’ll be discussing some of the best payroll software solutions available. From the big brands from Intuit and Paychex to more unknown names with smaller user bases, there is a solution for most businesses. In addition, I’ll also be discussing how these companies work and what kind of benefits they offer.
Gusto
- Starting at $39.00/mo. + $6.00/payee/mo.
Automatic payroll tax administration
Affordable insurance options (in-house brokers)
Two-day direct deposit
Data as of 11/5/21. Offers and availability may vary by location and are subject to change.
The heartily named Gusto is our favorite payroll software for small businesses. Its beautifully designed, full-service payroll system includes plenty of payroll and HR features, including these:
- Automatic local, state, and federal payroll tax filing
- Automatic end-of-year tax-form filing, including W-2s and 1099s
- Automatic state new-hire form filing
- Health benefits administration and workers compensation administration
- Multiple employee benefit options, including HSAs, FSAs, commuter benefits, and college savings plans
- Employee self-service portal for pay stub, direct deposit, and W-2 access
Even better, Gusto includes these features for free when many payroll providers charge extra. For instance, Gusto’s in-house insurance brokers ensure that if you sign up for employee medical insurance and workers compensation insurance through Gusto, you’ll pay the premium only.
In contrast, ADP, which outsources its insurance integrations, charges an extra fee on top of the premium. Ditto Paychex, which does have an in-house insurance team but still charges extra for insurance add-ons. ADP also charges extra for end-of-year tax-form filings. Gusto doesn’t.
Heads-up: Gusto’s Contractor plan
Do you hire contractors on an individual basis instead of working with a full-time team of employees? Gusto’s new Contractor plan has no monthly base cost. You pay only $6 per month per payee.
However, in the last few months, Gusto’s customer service has taken a few hits: for instance, on the review site Trustpilot, Gusto’s rating dropped from nearly four to just 2.2 (yikes!) out of 5 from more than 1.2K reviews.1 In particular, users call out slow response times and payroll errors. Thanks to its expansive employee benefits and built-in free tax filing, Gusto’s still our top payroll solution, but we did lower its star rating to account for its lowering user reviews.
Additionally, while Gusto has more employee add-ons than many other online payroll systems, it’s not a total HR management solution. Our Gusto HR review can tell you more, but if you need more than the most basic HR, you’ll want to look elsewhere—like at Paychex.ProsMore employee benefit options than most competitors
No extra fee for payroll tax filing
No extra fee for insurance add-onsCons
Poor customer service ratings
High monthly per-payee fee
Limited HR management and administration
QuickBooks Online
BUY ON INTUIT.COM
QuickBooks Online is the best overall accounting software for small businesses of those reviewed. Not only do the majority of small business accounting professionals use QuickBooks Online, but there are also endless online training resources and forums to get support when needed. All accounting features can be conveniently accessed on one main dashboard, making bookkeeping more fluid and efficient.Pros
- Scalable
- Commonly used by accounting professionals
- Integration with third-party applications
- Cloud-based
- Mobile app
Cons
- Upgrade required for more users
- Occasional syncing problems with banks and credit cards
Intuit’s QuickBooks Online has been the most common accounting software used by small businesses and their bookkeeping and tax professionals. The software is cloud-based and can be accessed through a web browser or through the mobile app.
After the 30-day free trial, the four options for subscription plans include: Simple Start at $25 per month, Essentials at $40 per month, Plus at $70 per month, and Advanced at $150 per month. Typically there is a significant discount offered for the first few months, and some accountants are able to offer wholesale pricing to small businesses, as well.
The monthly subscription for this software can be upgraded as a business grows, and there are many customization options with the mobile app that can be used to receive payments, review reports, capture an image of a receipt, and track business mileage. For businesses looking for a payroll solution, QuickBooks Payroll fully integrates with QuickBooks Online.
Each plan offers more advanced features like inventory management, time tracking, additional users, and budgeting. Most service-based small businesses will find that Simple Start meets all of their needs. For product-based small businesses, Essentials or Plus will have more options for inventory and customizations. The Advanced subscription is a new offering and provides robust financial reporting that is powered by Fathom. Fathom is an elite online financial report analysis tool used by many large companies all over the world.
All plans allow integration with third-party apps such as Stripe or PayPal. QuickBooks Online’s app store breaks down all of their apps by function and provides helpful examples of the benefits of each app.
Square
You might associate Square with the portable square-shaped credit card reader, but this company has grown to include full-service payroll software as well. Like Gusto, Square’s services are customizable so you can adapt the plan to suit your company’s needs. The software can accommodate full-time employees as well as part-time workers and freelance contractors, paying both hourly rates and monthly salaries. It can also manage health benefits, which employees can see when they log in to their own Square accounts.
Zenefits
Another HR platform that includes comprehensive small business payroll software is Zenefits. It builds time-off tracking, hour tracking, salary upgrades, and benefits into a single one-size-fits-all platform. If your HR and payroll departments are intertwined, it makes it much easier to avoid making double entries. For example, your HR administrator only needs to input a salary change once for it to sync with payroll. As with other software on this list, there are multiple subscription packages to choose from, each with its own features.
Conclusion
If you are looking to improve your small business’s payroll, there are many software that will help you do that. You can find tons of options by doing a simple search for “payroll software” either on the web or at your local business supply store. The real question is, how can you determine which ones are right for your situation?