What Is the Best Payroll System for Small Business

Who is the best payroll system for small business? Payroll is one of the most important chores in a business. It is a must to keep your employees up to date with their salary, tax and any eventual deductions from their salaries in order to stay out of trouble with the IRS. There are different payroll systems that exist in the market and many new software programs being created every year, but how do you decide which one is better for you and for your business?

When looking for the best payroll system for small business, how can you know which program is going to be the best for you? There are a lot of programs available to help small businesses with their payroll. Some have more features than others. Some small businesses like to use the same systems they used before they got big and needed to switch over. How do you know what is the best program out there?

Gusto

Gusto is our best overall payroll service because it is easy to use and provides an all-in-one solution that works for most businesses. Their pricing is competitive and Gusto’s features are loaded with everything that businesses without an internal payroll team will love. From automating your entire payroll to servicing businesses in many states, Gusto is a great option for any business but really tops the other options for small businesses that need the most help.

Here’s a more detailed breakdown of Gusto’s payroll service:

Pricing: $39 to $149 + $6 to $12 per employee per month
Ease of Use: Very Easy
Tax Services: Offers a penalty-free tax guarantee, automatically calculates taxes and withholdings, and automatically formulates end-of-year tax forms
Year-End Fees: Issues year-end W2s and 1099s, included in the price
Accounting Integrations: QuickBooks, Xero, and most other accounting software

Additionally, Gusto’s customer service is highly rated. They offer phone, chat, and email support. Chat is available from 6 am to 4 pm PT, while phone hours are between 7 am and 3 pm or 4 pm PT based on what level of service you select. Both are available Monday through Friday. Users can even get a dedicated team that intimately knows their account if they opt for the most expensive plan.

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.

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 2.1 (yikes!) out of 5 from nearly than 1.3K 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 competitorsNo extra fee for payroll tax filingNo extra fee for insurance add-onsConsPoor customer service ratingsHigh monthly per-payee feeLimited HR management and administration

Intuit QuickBooks Payroll

Intuit QuickBooks Payroll offers many of the same features that Gusto does, even down to health benefits for employees. QuickBooks Payroll is our runner-up for best overall because of how well-rounded their offering is combined with their ability to connect so seamlessly with QuickBooks, which is the most widely used accounting software for small businesses. While slightly more expensive than Gusto, Intuit still offers a competitive price, a solid service, and overall is a good fit for just about anyone, especially if you use QuickBooks.

Here’s a more detailed breakdown of Intuit Payroll’s services:

Pricing: $45 to $125 + $4 to $10 per employee per month
Ease of Use: Easy overall with the easiest QuickBooks integration on the list
Tax Services: Tax penalty protection, 1099 e-file, auto-calculates withholdings, and company tax payments are integrated directly into QuickBooks accounting software
Year-End Fees: Issues year-end W2s and 1099s, included in the price
Accounting Integrations: QuickBooks accounting (which they also make), most other major accounting platforms

Intuit also has a strong customer support system built around all of their products. Their payroll service isn’t the most popular part of their business, but they support it the same as QuickBooks accounting. You can reach their support from 6:00 a.m. to 6:00 p.m. Pacific time via both phone and live chat. They also offer a payroll support center online where you can get additional help through various guides, FAQs, and other resources they’ve curated.

Wave Payroll

Wave Payroll is our best option for pricing because they have a flat rate, depending on what state you’re in, instead of increasing the price by tiers of features. Wave also offers free accounting and invoicing software that you can combine with Payroll, making it even more of an affordable option. Wave offers a simple payroll software that is easy to use, and you can try it free for 30 days. The only drawback is that the free tax filings are only available in 14 states.

Here’s a more detailed breakdown of Wave’s payroll service:

Pricing: $35 per month in the 14 states they file taxes in, $20 per month in all other states, + $6 per employee or independent contractor per month
Ease of Use: Very easy, especially if you’re using Wave’s accounting software
Tax Services: Free tax filings, employee W2s, and contractor 1099s, only available in 14 states but does include California, New York, and Texas
Year-End Fees: Issues year-end W2s and 1099s in 14 states, included in the price
Accounting Integrations: Wave Accounting, QuickBooks

Wave has average customer service reviews online. Many users feel like Wave was not very helpful when they called into the team, but most reviews seem to be related to their payments product. For support, they offer customers the opportunity to submit a support ticket, chatbot, live chat, and a Help Center with articles and tutorials.

Paychex is the best payroll company for growth

Best for growthPaychex

4.0

Starting at $39.00/mo. + $5.00/payee/mo.
Automatic payroll tax administration (additional fee may apply)
Workers compensation and health insurance add-ons (additional fee applies)
Direct deposit, check, and debit card payment options

View Plans

Data as of 12/13/21. Offers and availability may vary by location and are subject to change.

Does your business need thorough HR assistance without full-on HR outsourcing? Paychex Flex combines cloud-based payroll management and human resources software for small and midsize businesses that want thorough, affordable HR management.

All Paychex payroll programs include new-hire state reporting, payroll tax filing, and an employee financial wellness program. And with three customizable packages, Paychex is one of the most scalable payroll options on our list. Growing businesses won’t have to look elsewhere for plans that support additional employees—growth is built into Paychex’s model.

Paychex’s payroll app for employers

If you frequently run payroll on the go, Paychex might be the best small-business payroll software for you. Only a few payroll providers offer employer-facing mobile payroll apps. Of the five or so that do, Paychex’s is easily the best: the Paychex Flex app has 4.8 stars (out of five) on Apple’s App Store and 4.3 on Google Play.^2,3

Even though Paychex’s cheapest plan has a lower per-employee fee than Gusto, Paychex’s add-on fees can dramatically increase your monthly payroll costs. Unlike Gusto, OnPay, and QuickBooks Payroll, Paychex may charge additional fees for payroll tax administration, time and attendance software integration, accounting software integration, and workers comp and employee benefits administration. With all the extra fees, Paychex is better suited to midsize businesses that care more about built-in scalability than cost.ProsCombined HR and payroll plansAffordable starting per-payee priceCustomizable plans for growing businessesConsAdditional fees for payroll tax administrationAdditional fees for third-party software integrationPricier plans with limited pricing transparency

OnPay – Best Small Business Payroll Software of 2021

Best Small Business Payroll Software of 2021360 OVERALL RATING

4.2 out of 5MONTHLY FEE$36 + $4/Payee and UpDIRECT DEPOSITTRIAL PERIOD30 DaysPRIORITY SUPPORTMORE DETAILS SEE REVIEW

OnPay: OnPay is No. 1 on our Best Small Business Payroll Software of 2021 rating. It offers straightforward pricing that will cost your small business $36, plus $4 per person per month. That fee gets you access to all of OnPay’s features, including unlimited payroll runs, state and federal tax filings, and accounting and time tracking software integrations. OnPay’s customer service will set up your account for you, including adding in your employees’ information and helping you integrate any compatible business software. The payroll software comes with OnPay’s human resources (HR) software that gives you access to tools for onboarding, tracking paid time off (PTO), document storage, and HR auditing. Your company will also have the ability to add and manage employee benefits.

OnPay is also ready to help small businesses in special situations, such as restaurants with minimum wage tip makeup, agricultural workers that need to file Form 943, workers on H-2A visas, and nonprofits and churches that are exempt from federal unemployment taxes (FUTA).