Updated March 25, 2021

Best Payroll Companies for Small Business

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What is the best payroll company and how much does it cost? Find out how a payroll service can help your business.

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Handling payroll by yourself is time-consuming and confusing. But deciding to use a payroll outsourcing company or service can be just as daunting—where do you begin?

No matter the size of your small business, there are many factors to consider, from adjustment management to multi-state tax filings.

Whether you want to start using payroll outsourcing companies or switch to a new one, read on for ways to find the perfect pick for your business.

Here are the 10 best payroll companies for small businesses:

What Does a Payroll Service Do?

Hiring employees is not as simple as just sending paychecks. There's a lot of recordkeeping and regulations to keep track of. A payroll service can help you handle the time-consuming tasks.

Payroll services have two basic functions:

  • Payroll Processing
    Payroll services calculate and distribute salaries to employees. They begin by determining gross wages and then deducting any necessary items, such as payroll taxes and health insurance. Net wages are then given to each employee by direct deposit or physical check.

  • Tax Statements
    Payroll services help prepare the required tax statements. They also prepare year-end tax filings for your business and your employees, including 1099s and W-2 forms, saving you hours of manual data entry and bookkeeping.

However, some payroll services will offer added help with select HR tasks, healthcare and benefits management, PTO, time and attendance tracking, and 401(k)s.

How many employees do you have on payroll?

How much do payroll services cost?
You can expect to pay between $25 and $200 per month for payroll services. The prices for different payroll software companies will vary.

Evaluate what's included for the cost. Some companies may charge extra for services outside of payroll processing, like healthcare, HR assistance, or payroll tax preparation.

Best Payroll Services

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A basic Google search brings up thousands of payroll options. So how do you find the best payroll for you? Here are some of the most popular payroll services to start your search.

Payroll CompanyMonthly PriceDirect Deposit?W2 and 1099?Federal, state, local taxes?
GustoStarting at $39, plus $6/employeeYesBothYes
QuickBooks PayrollStarting at $22.50, plus $4/employeeYesW2Yes
Square PayrollStarting at $35, plus $5/employeeYesBothYes
PayUSAPricing is customYesBothYes
ADPPricing is customYesBothFederal, state
PaychexStarting at $59, plus $4/employeeYesBothFederal, state
OnPayStarting $36, plus $4/employeeYesBothYes
Rippling$8/employee (HR, IT not included)YesBothYes
Bank of AmericaPricing is customYesBothYes
SurePayrollStarting at $19.99, plus $4/employeeYesBothYes

How do you currently handle payroll?

Gusto: Best for Startups

  • Good for startups
  • Includes payroll, HR, and benefits
  • Easy to use and set-up
  • No employer app
  • Customer service can be slow

Gusto is an all-in-one payroll software that automates many standard payroll functions, as well as HR and benefits services. All plans offer a baseline of comprehensive services, including:

  • Unlimited tax filings in all 50 states
  • W-2 employees and 1099 contractors
  • State and federal unemployment insurance
  • Garnishments
  • Multiple pay rates and schedules
  • Tip credits
  • Direct deposit
  • New hire reporting
  • Payroll reports

Gusto integrates with your accounting and time and attendance tracking software. You can add extra benefits, like 401(k)s, FSAs, and more, to any plan for an added cost.

Gusto offer 3 pricing plans:[1]

1. Gusto Core: Offers streamlined payroll for small businesses; costs $39 per month, plus $6 a month per employee.

2. Gusto Complete: Mid-level plan with added features; costs $39 per month, plus $12 a month per employee.

3. Gusto Concierge: Top-tier plan with a large variety of payroll of HR services for a relatively affordable price; costs $149 per month, plus $12 a month per employee.

Gusto has a great resource hub to help small businesses navigate through the Covid pandemic. Find the latest news and policies, including information about relief options.

Gusto is a great option but every business has different needs. Stick around to the end to see how to choose a payroll service.

Intuit QuickBooks Payroll: Cheapest Pricing

  • Affordable, plus free trial
  • Good reporting tools
  • Smooth payroll process
  • Employee portals could be better
  • Mobile app missing some desktop features

QuickBooks Payroll management is one of the cheapest payroll companies for small businesses. It offers an excellent intro price and low per-employee cost.

The services also integrate with QuickBooks. Even if you don't use QuickBooks, you can still sign up for Payroll and receive a discount.

With Intuit's mobile app, you can even manage payroll on your own.

All of Intuit QuickBooks plans have a 30-day free trial.

Quickbooks offers 3 plans at different service levels:[2]

1. QuickBooks Payroll Core: This basic package costs $22.50 per month if you pay for the first three months in advance (normally $45/mo.). Each employee costs an additional $4 per month.

2. QuickBooks Payroll Premium: Their most popular plan; costs $37.50 per month is you pay for the first three months in advance (normally $75/mo.). Each employee costs an additional $8 per month.

3. QuickBooks Payroll Elite: This top-tier plan costs $62.50 per month if you pay for the first three months in advance (normally $125/mo.). Each employee costs an additional $10 per month.

Affordable pricing isn't always enough. Find out why Square might be a better choice if you work with contractors.

Square Payroll: Best for One Employee & Contractors

  • Affordable
  • Good for independent contractors
  • Fully integrates with all Square products
  • Customer service can be slow
  • Basic employer dashboard

Square, the popular payment processing company, also offers payroll services. You don't have to use Square processing to use Square Payroll.

It's affordable at $35 per month plus $5 per person paid. It's also especially great if you hire contractors. The cost is only $5 per contractor with no subscription fee.[3]

If you do use Square processing, the payroll service is fully integrated into all Square products. You can manage your entire business all from one POS app.

PayUSA: Best for Flexibility

  • Flexible plans
  • Good suite of features
  • Custom pricing
  • Doesn't file taxes in all states
  • Some fees apply for year-end tax services

PayUSA customizes payroll services for small businesses of up to 1,000 employees. There is no pricing online because the quotes are based on your custom needs.

It offers the flexibility to choose which payroll features you want. Features include:

  • Direct deposit: Employees can deposit their money into one account or several accounts at the same time
  • Check-stuffing services with signatures printed on the check, if you need physical checks
  • New hire reporting
  • Workers' compensation
  • Federal, state and local tax filings and payments
  • Quarterly state and federal unemployment payments
  • ACA Compliance
  • W-2/W-3 printing
  • Additional payroll tax services

What's the cheapest way to process payroll? Contrary to what you might think, the cheapest way to do payroll is not by doing it yourself. A payroll provider can process payroll more quickly, efficiently, and help protect you from liabilities and legal risks. That's why outsourcing to a trustworthy company is the most cost-effective way to process payroll.

ADP: Best Full Service Payroll

  • Automated payroll processing
  • HR and HCM solutions
  • Plenty of integrations
  • Charges per payroll
  • Must request demo to try it out

ADP is one of the oldest payroll companies in the US. Out of the 600,000+ businesses that use ADP, 80% are small businesses. Despite their size, they have thousands of positive reviews.

ADP has four different options for small businesses of up to 50 employees. It doesn't provide pricing on its website since each plan is custom to your business needs and size. Each option includes these basic features:

  • Online payroll via desktop and mobile
  • Direct deposit
  • Payroll delivery
  • Robust reporting
  • Reporting
  • New hire reporting
  • W-2 and 1099 filings
  • Tax filings
  • ADP employee access
  • State and federal forms and resources
  • HR checkups
  • Healthcare compliance
  • Insurance
  • Retirement

The 4 plans are:[4]

1. ADP Essential Payroll
The basic of the four systems is best for startups and small businesses looking for basic payroll services.

It lacks any HR services. If you're looking for HR integration as well as payroll, read on.

2. ADP Enhanced Payroll
Enhanced Payroll includes wage garnishment payments, state unemployment insurance (SUI), and labor law posters to display in your office.

3. ADP Complete Payroll & HR Plus
ADP's Payroll & HR Plus combines advanced payroll features and basic HR support into one monthly package.

4. ADP HR Pro
ADP's most advanced option for small businesses includes enhanced HR support and payroll.

Learn More: ADP Review

Paychex: Flexible Plans for Growing Businesses

  • Basic plan is quick to set up
  • Good customer support
  • Good features
  • Fewer custom reporting tools
  • Timesheet approval can take a while

Paychex is a cloud-based payroll company that offers 3 plans for businesses of different sizes.[5]

1. Paychex Go
Paychex's most basic option works best for very small and new businesses. You can open an account online and start running payroll in less than 24 hours. The cost is $59 per month + $4 per employee.

This plan doesn't give you access to the Paychex mobile app.

2. Paychex Flex Select
Paychex Flex Select is most popular for businesses with less than 49 employees. It includes all the features in Paychex Go, plus a dedicated payroll specialist and other tools.

You'll have to speak to a rep to get a custom quote.

3. Paychex Flex Enterprise
This is designed for large businesses. Again, you must get a custom quote for this plan. Includes the features of Paychex Go and Paychex Flex Select, plus garnishment services, custom analytics, and much more.

If you're a small company, it doesn't make sense to pay for robust features. See how you save and still get your basic payroll needs covered below.

OnPay: Payroll + HR Combined

  • Doesn't charge for direct deposit
  • Free to migrate your existing info
  • Easy to use
  • Printed checks and payment cards cost extra
  • Interface is a little dated

OnPay is a basic payroll and tax filing service with a transparent fee structure. It also comes with HR tools at no extra cost. It works best for businesses with basic needs.

The payment structure is simple: a $36 base fee per month, plus an additional $4 fee per month for each employee.[6]

OnPay will set up everything and migrate your information for free. Their plan includes payroll tax filings, PTO approvals and tracking, HR resources, auditing, and more. It also integrates with multiple accounting programs, including QuickBooks.

Unlike other services, OnPay does not charge extra for direct deposit, debit cards, or printing your own checks. There are also no added fees for withholding, remitting, or filing payroll taxes.

OnPay has several add-on features: HR tools, workers' comp, 401(k) contributions, and health benefits. The costs vary, but even using these may be cheaper than going with an alternate option, depending on your needs.

If you regularly want printed checks or payment cards, opt for another provider. OnPay charges extra for each of these features. If you need printed checks often, it can become pricey.

Rippling: Employee + IT Management

  • Affordable
  • Plenty of integrations
  • Smooth processing overall
  • HR and IT comes separate
  • Clock in/out feature can be buggy

Rippling offers several employee management services all on one platform: payroll, IT management, benefits administration, and hiring tools.

The cost starts at $8 per month, per user.[7] You can purchase HR and IT services separately. You'll need to get a custom quote depending on how many employees you have and what features you want.

Payroll features include:

  • Automatic federal, state & local tax filing
  • W2, W4, 1099 & new hire filing
  • Direct deposit and checks
  • Workers comp' & garnishments
  • Track hours and PTOs
  • Job codes & multiple pay rates

A unique service Rippling offers is IT management. This allows you to manage employee devices remotely. You can set up and disable app access for each employee, see who used which app and when, and much more.

It also offers onboarding and HR management, with tools like new-hire paperwork, compliance training, employee benefits enrollment, and more.

Rippling works with over 400 app integrations, so you can integrate almost any business tools you already use.

Bank of America: Best for Existing Customers

  • ADP comes with added HR features
  • Intuit has transparent pricing
  • Good for Bank of America customers
  • Must request demo to try out ADP

BoA partners with Intuit's payroll program and ADP. If you already use Bank of America as your small business checking provider, using their payroll system can be a simple and convenient integration.

Intuit and ADP offer similar payroll services. However, ADP offers added access to human resource professionals to help understand labor laws and HR policies. Intuit, on the other hand, lets you manage your payroll with their software.

While Intuit is transparent about their pricing, ADP requires you to call for a quote.

ADP (via Bank of America)
ADP offers the same services through Bank of America as they do for their customers, in addition to 24/7 payroll customer support (find the detailed plan-by-plan analysis above).

For more information on ADP via Bank of America, you can also call 866-543-2808.

Intuit (via Bank of America)
There are three payroll options through Intuit: Intuit Basic, Intuit Enhanced, and Intuit Full Service Payroll. All services support a maximum of 150 employees.

Whichever option you pick, expect full reports, processing for multiple payment types, and a tax accuracy guarantee. But you will need a Bank of America business checking account and access to Small Business Online Banking.

Plans:

  1. Intuit Online Payroll: Basic
    This works best for small businesses with few employees and basic needs. It's completely free if you pay all employees through direct deposit to a Bank of America account.

  2. Intuit Online Payroll: Enhanced
    A middle ground between their basic and full-service options, this plan fits best for growing and developing businesses with a diverse workforce.

  3. Intuit Full Service Payroll
    The most expensive (and most convenient) option is ideal for business owners with a dedicated income for payroll systems and little free time to spare.

Under each Intuit plan, Bank of America lets you offer your employees a low-cost 401(k) (through Merrill Edge).

Keep in mind, good customer service can make or break your HR and payroll experience. Take a look at one of the most highly-rated providers below.

SurePayroll: Best for Small Niche Businesses

  • Good for niche businesses
  • Assists with compliance
  • Fairly affordable
  • No personal account manager
  • Fees consistently increasing

SurePayroll is unique in that it provides payroll solutions for niche businesses like nannies, caretakers, churches, farmers, restaurants, and nonprofits.

These types of businesses often have more unique needs, like different tax forms and regulations. SurePayroll helps to make sure you're in compliance and correctly file year-end forms. For example, if you have household workers, you're required to pay "nanny tax" on time.

SurePayroll starts at $19.99 per month plus $4 per employee for the self-service plan with self tax filing. The full service plan costs $29.99 per month plus $5 per employee. This plan handles tax filings for you.[8]

Some features include:

  • Run unlimited payrolls
  • 2-day payroll processing
  • Pay multiple rates and bonuses
  • Direct deposit or print physical checks
  • Options for same-day and next-day payroll
  • Auto generated W-2 and 1099s
  • Integrated time tracking and attendance
  • Benefits for your employees (at extra cost)

Next, use this cheat sheet to figure which features to get.

What Should Small Businesses Look for in Payroll Service?

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Payroll services should be able to do basic functions like payroll processing and tax statements. But depending on your needs, your payroll company may need to do more.

Here are some of the factors to consider when you look for payroll services:

Opt for Base Rate + Per-employee Pricing
Most small businesses will want to look for a payroll company that charges a base rate with an additional per-employee fee. The base rate will cover:

  • Payroll processing
  • Tax filings
  • Payroll taxes

This is better than fixed pricing, which usually puts a cap on how many employees you can add. If your business is growing or you have an inconsistent employee count, opt for base rate + per-employee pricing.

Be wary of companies that are not transparent about pricing. There's no way to know if payroll services will raise prices down the line. Understanding the pricing structure before signing up. Some companies will list prices online and others will require you to call for a quote.

Prioritize Ease-of-Use
Payroll processing is supposed to save you time. If it's too complicated or time-consuming to understand relatively quickly, you'll want to look for a different program.

Always Look for a Tax Filing Services Guarantee
Most payroll companies offer a guarantee that you will not be responsible for any mistakes that they might make, like missing deadlines or making payments.

It's rare that companies make major errors, but you still want to sign with a service that agrees to absorb the cost of their mistakes.

Payroll errors, made by employers themselves, are a bit more common. According to a study from Workforce Institute, a staggering 82 million Americans have experienced paycheck errors.[9]

Employee Self-Service is a Must-Have
Payroll companies don't only serve the employers. Your employees should benefit, too. Make sure your provider offers a portal just for employees to access their payroll information, payroll stubs, and PTO requests.

Ensure that the portal is available 24/7/365, as well. You never know when your employee may need to view their financial information.

Look for Robust Reporting
The value of payroll reporting can't be overstated. Having all your business's payroll data at your fingertips can even save you money in the long run if you use it wisely. There are even specific reports you should look out for:

  • Analysis Reports: Access to analysis and data can help show you how your business grows.
  • New Hire Reports: Some states—like Texas—require companies to report information about new hires. If your business is based in one of these states, your payroll service can handle this for you.

There are several reasons why some states require new hire reporting. For example, the Office of Child Support Enforcement uses them to locate parents who owe child support.[10]

Make Sure It Integrates with Your Software
If you use multiple programs for payroll, HR, and other systems, they should "communicate" with one another. This enables you to manage your employees more efficiently.

When all your software is integrated, it's less likely that you'll have to make big, manual adjustments with every new business update or development.

Direct Deposit Paychecks are a Must
Ensure that your payroll service also offers direct deposit services as well as printed paychecks. Direct deposit specifically will save paper—and time.

Not to mention, the added convenience has made direct deposit an expected feature by most employees. Don't make getting paid inconvenient for them.

Look for a Varied Pay Rules Engine
If your business has many different types of employees, your payroll service needs to support different types of pay, from overtime to shift differentials to location and more.

Added Perks from a Payroll Provider

  • 401(k) Management: The ability to manage and distribute 401(k) payments is a great perk for your employees.
  • Mobile Access: If you prefer working on the go, look for mobile accessibility, including an app.
  • Alerts: Some businesses may want alerts for things like employees approaching overtime or benefits eligibility.
  • Adjustment Management: Ensure that your business will be able to handle tips for employees, bonuses, reimbursements, and more.

You're almost ready to outsource your payroll needs. But before you sign-up, make sure you ask the provider these following questions.

Questions to Ask a Potential Payroll Service

Your initial research may raise additional questions. If possible, get on the phone with a representative from a specific payroll service. This ensures you'll get the answers you need.

Here are some additional questions BEFORE you sign a contract:

What is your pricing structure? What services are included at each price point?
Get an exact quote for the services your business needs right now and may need in the future. If the pricing will change, it's important to know whether it's in your budget.

What industry do you specialize in?
Pick a company that specializes in your industry, so they're familiar with the structure of your business and the related tax laws.

What insights do you offer through the dashboard?
Insights can help your business better understand the financial breakdown.

Is the payroll system customizable?
This question will be especially important for small businesses with different types of employees like:

  • Freelancers
  • Salaried full-time employees
  • Hourly part-time employees

Payroll services should be able to accommodate all types of pay structures.

What customer support does your service offer?
Many companies will promise many types of customer service, but the best way to check is to give them a call. See who picks up and how they help you. Call at different times of the day to see if there is a wait time.

Will you be assigned a representative to help, or do you get the next available customer service representative? Is support available during business hours or around the clock?

How secure is your service?
Payroll involves lots of sensitive information, from Social Security numbers to tax information.

As a business owner, you need to be confident your employees' information is secure: ask how they protect the data on their servers.

Is there an added cost to file taxes in multiple states?
Clarify all costs associated with filing taxes in multiple states.

What am I responsible for and what will the company handle?
Narrow down what you will need to handle and what the payroll service will take care of.

A few more questions to consider:
What payroll taxes do you include in your service and which taxes cost extra?

Do annual fees fluctuate? How have they changed in the past?

Can they integrate with your current accounting software?

How often will I receive reports from your service?

How to Choose a Payroll Service

Here are a few ways to ensure you found the best payroll services for your business:

Ask for References
Speaking to their references—real customers—will allow you to talk to someone who has been using the service.

However, some larger companies, like ADP, may not have personal references to offer aside from testimonials on their site.

Seek recommendations from similar businesses. They'll likely be honest in their assessment.

Check with the BBB
The BBB gives you a better sense of the business, including:

  • How many years it's been in business
  • Customer complaints
  • Reviews
  • An overall rating

If the company has any complaints, take time to read those too.

Read Online Reviews
Check Google and Yelp to see what customers are saying. Just be sure not to take every negative review so seriously—weigh all the reviews.

Ask for a Sample Report
Make sure the analysis reports are easy to read and simple to understand right off the bat. You need to be able to understand all important information.

Payroll providers can save you a lot of time but it doesn't mean you get to be on autopilot. Here's what you need to do on your end.

What Happens After You Sign With a Payroll Service

When signing with a payroll service, you should understand what tasks you will do yourself and what the payroll service will take care of.

In most cases, you will provide employees' information, such as:

  • Names
  • Addresses
  • Wages
  • Deductions
  • Void checks for direct deposit

W-2 forms will be provided by your payroll service. But employees will have to fill out the W-2 forms.

Most businesses will keep their old payroll system for the first month or so after switching over to ensure a smooth transition. Double-check the numbers for the first few pay cycles to make sure your new company works correctly.

If you find your payroll service is not working the way you want it to, consider switching.

There are two ideal times to make the switch:

  • The start of the year, when the pay cycle starts over

  • The end of a quarter, when your previous payroll service wraps up the quarterly reports.

What the Experts Say

As part of our series on small businesses, CreditDonkey asked an industry expert to answer readers' most pressing questions. Here's what they said:

THE BOTTOM LINE

Finding new payroll services can be tricky. But with the right amount of research and planning, your small business will find the best payroll fit.

Start by asking for recommendations from similar small businesses. They'll likely be honest in their assessment and offer helpful insight.

And remember: If the payroll system doesn't work out, you can always switch to another provider and start again.

References

  1. ^ Gusto Pricing, Retrieved 10/19/2021
  2. ^ Intuit Quickbooks Payroll Services Pricing, Retrived 12/09/2020
  3. ^ Square Payroll Pricing, Retrieved 09/15/2021
  4. ^ ADP Small Business Payroll Pricing, Retrieved 12/08/2020
  5. ^ Compare Paychex Payroll Packages, Retrieved 12/08/2020
  6. ^ OnPay Pricing and Payroll Costs, Retrieved 12/08/2020
  7. ^ Rippling Pricing, Retrieved 12/10/2020
  8. ^ SurePayroll Pricing & Plans, Retrieved 12/09/2020
  9. ^ "82 million US workers have experienced paycheck errors": Workforce Institute, 2017.
  10. ^ "Employers": Administration for Children and Families, 2022.

Write to Samantha Tatro at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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How many employees do you have on payroll?
77% Less than 5
8% 5 to 10
6% 11 to 25
4% 26 to 50
6% More than 50
Source: CreditDonkey. Totals may not add to 100% due to rounding.
How do you currently handle payroll?
74% Myself
12% An accountant
14% Online payroll service
Source: CreditDonkey
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