The Best Payroll for Small Businesses

The best payroll companies offer software that is easily integrated into your venture’s existing structure, and that can be scalable according to your needs. According to our extensive market research, Paychex is the best payroll software for small businesses. Our expert testers were impressed with the fact that Paychex enables you to pay your employees instantly, as appreciated its live training courses.

But why is payroll software important? According to legal powerhouse Ernst & Young, 1 in 5 company payrolls contain errors, with each one costing an average of $291 to correct. Using payroll software can reduce the risk of errors, therefore saving you money and protecting your reputation as a business that pays employees and taxes correctly.

That said, when you choose a payroll software provider for your small business, you should make sure its pricing, features, and support offering fit the bill and meet your needs.

The quickest way to find the best payroll software for your small business is using our free quote comparison tool. Answer a few questions about your needs, and we’ll match you with trusted providers who’ll get back to you in no time with custom, no-obligation quotes to compare.

However, if you’d like to know more about our research into the best payroll software for small businesses, just check out our ranking and reviews below.

The Top Small Business Payroll Software: Overview

Here’s a quick side-by-side comparison of the best payroll software for US small businesses:

1. Paychex: Best for Paying Staff Instantly

While the standard across the industry is for staff to receive their salary two to four days after a payroll run, Paychex offers solutions for same-day payments. This is great for busy small businesses that need time to process payroll or experience delays.

Why we recommend Paychex

Paychex’s Real-Time Payments tool can help you improve employee satisfaction by making sure they still get paid on time, and timely payments are particularly important if you employ minimum-wage workers.

In fact, Paychex’s payroll software has several features that make it a good fit for small businesses with low-wage or shift-based workers. This includes a feature that allows employees the power to choose how they get paid, with options including paper checks, direct deposit, and tip disbursement for tipped employees.

There’s also an employee app where they view payroll and tax information. This app can double as a clocking-in clocking-out system if you opt to use Paychex’s time management software.

On your end, you’ll benefit from Paychex’s 24/7 customer support via live chat, a unique benefit not offered by any of the competitors on this page. If you’re an owner-manager who works irregular hours and might be working on payroll late into the night, or on the weekends, you won’t have to worry about getting help if you run into an issue.

Paychex also offers live training sessions that can ease its onboarding process, along with plentiful resources that allow you to better understand your payroll-related tax requirements.

How could Paychex improve?

While Paychex can help your business stay compliant with automatic state and federal tax filings, the Paychex system doesn’t provide alerts when there’s been a breach of labor compliance laws. This means mistakes can pass under the radar if you’re not keeping a close eye on your payroll data. Alternative payroll solutions that provide let’s are Rippling and Gusto.

Paychex also doesn’t handle the payment of international employees. While this won’t be an issue for most mom-and-pop shops, if you do employ one or two employees who work outside the US, we’d recommend Rippling over Paychex.

2. Rippling: Best for Staying Compliant

Rippling offers great tools for staying compliant with US labor compliance laws, including automated system alerts when a compliance issue occurs.

Why we recommend Rippling

Rippling’s payroll software has other tools, besides automatically sending you alerts for compliance breaches, to help small businesses with limited payroll expertise stay compliant.

For example, it offers Rippling University, an online training platform for payroll administration, which can keep you up to date not only on the latest labor laws but also help streamline your payroll admin. Rippling’s reporting tools also include change reports, where changes to employee salaries are flagged, making it easy for you to go in and verify the change is authorized and not a mistake.

Rippling has more to offer than just compliance tools. It’s particularly suited to small business owners that have staff in other countries, as it handles international employee payments as part of its standard payroll package. It’s the only payroll provider that does this, with ADP, the only other provider that processes international payroll, offering it as a separate product.

In addition to this, Rippling has the most comprehensive suite of people management software solutions. Its kit extends beyond HR, time management, and benefits management software to include a learning management solution for upskilling employees.

No other provider on this offers this wide range of tools, making Rippling a great option for small businesses that want to simplify by using an all-in-one system.

How could Rippling improve?

Unlike Paychex, Rippling doesn’t offer a 24/7 support channel, despite offering other support tools in the form of courses and live training.

Additionally, although Rippling has a great suite of native HR tools, it doesn’t pack any ready-made integrations with third-party HR systems. If you already have an HR software that you use and want to keep, and just need a simple payroll software, we recommend Paychex. It has several ready-made integrations and offers open API.

3. ADP: Most Scalable Solution

ADP is the best choice of payroll software for ambitious small businesses looking to scale. It offers payroll software solutions for businesses with between one and over 1,000 employees, meaning you won’t have to switch providers as your business grows.

Why we recommend ADP

Besides offering solutions for businesses of all sizes, ADP packs an incredible suite of integrations, both with the native platforms it sells and with third-party software you may already own, or may be interested in getting. For small business owners, this makes for a highly scalable tool that can be expanded with ease as your venture grows.

Native integrations include time management software, complete with an employee clock-in and clock-out app, which is great for businesses with shift-based employees, and HR software. ADP also integrates with several popular accounting tools, such as Xero, Quickbooks, and Wave.

What sets ADP apart from competitor Rippling, which also offers a wide suite of native people management tools, is that ADP bundles its software together in “packages,” making it easy for businesses to upgrade to using several new tools at once. ADP also offers live training sessions, which help with its implementation. In this regard, ADP is better than TriNet, which doesn’t offer this kind of support.

In addition, ADP can get your employees paid within 24 hours, of a payroll run. This doesn’t beat Paychex’s same-day service, but it’s above the industry average of two days. For example, it beats Rippling’s two working days and four working days options.

How could ADP improve?

The main area we found ADP to be lacking in is customer support: it doesn’t offer 24/7 customer support and is the only payroll software our experts tested that doesn’t provide an email support channel, which some businesses prefer over phone lines. If you need more support options, we recommend Paychex, which offers all of the above.

ADP also only offers compliance breach alerts and international payroll as separate, add-on products, whereas these are included as standard with Rippling. This means you might end up paying more for them with ADP than you would with Rippling, although since both providers are quote-based, we recommend comparing quotes to be sure.

4. Gusto: Best for Flexible Contracts

Gusto is the only payroll on this list to offer flexible, rolling monthly contracts, making it a great choice for small businesses that don’t want to be roped into a long contract.

Why we recommend Gusto

Gusto’s rolling monthly contract model is a great choice for startup and small business owners who are testing the waters, or experience fluctuating revenue or staff numbers. Most payroll providers work with annual contracts, so Gusto’s monthly approach is refreshing and gives great flexibility to ventures.

On top of this, Gusto is the only provider on this list to still display transparent pricing, with plans starting at a respectable $40 per month, plus $6 per employee. This avoids the lengthy process of having to get a quote to know if a provider is within budget.

Gusto also impressed our researchers when it comes to payment time, as it enables you to pay your employees by 5 pm on the same day you process their payroll. This doesn’t quite match Paychex’s instant payouts, but it’s the next best thing.

The provider doesn’t skimp on features, since it offers tools like alerts for compliance breaches, a tool competitors TriNet and Paychex are missing. It’s also got a healthy range of other people management software, such as time management and HR.

How could Gusto improve?

Gusto doesn’t offer international payroll, so if you employ staff in a different country, we recommend Rippling. It also doesn’t offer 24/7 support, although it’s by no means alone in this, with Paychex being the only provider on this list to offer it.

Lastly, Gusto, like Rippling, doesn’t offer integrations with third-party HR software, forcing you to use its own native product. HR is bundled with payroll from the $60 per month Plus plan. If you already use HR software and want to keep it, we recommend Paychex.

5. TriNet: Best Option for Tight Budgets

Although TriNet (previously Zenefits) no longer publicly advertises its pricing, based on its previous prices, it’s a budget-friendly option for small businesses looking for an integrated payroll and HR solution.

Why we recommend TriNet

TriNet’s old starting price was $14 per month, back when it advertised pricing, which is lower than the average payroll services cost of $20 per month.

In spite of its low cost, TriNet offers an all-in-one platform for people management, with affordable HR, and time management platforms available.TriNet also offers a special service for paying contractors, which allows you to easily pay independents while giving them access to the same mobile app as full-time employees.

Like many competitors, TriNet’s employee self-service app can be used for viewing payroll data. In addition to this, the app can also be used by employees to request time off, and clock in and out. This three-in-one app is a great way for small businesses to boost employee satisfaction by giving them the flexibility to manage everything on the go.

When it comes to onboarding, the provider offers in-depth materials to help users understand the platform, but it doesn’t offer live training sessions like ADP does. This can delay the process of getting Zenefits efficiently up and running in your small business.

How could TriNet improve?

For all its prowess, it’s worth noting that TriNet lacks 24/7 customer support (a feature Rippling offers), which can pose a problem for small businesses that operate around the clock.

It also doesn’t offer ready-made integrations with third-party HR systems, which doesn’t make it an ideal choice if you’re looking to have TriNet work alongside your current HR software. To do this, we recommend Paychex.

How Much Does Payroll Cost for Small Businesses?

With payroll software, small businesses can expect to pay a monthly base fee of around $8-$45 per month. Alongside this base fee, there is also usually a fee per employee, which tends to be around $5-$12 per employee.

The base fee is fairly affordable and the cost for each business will depend on how many employees you have. This pricing structure is a flexible and affordable way to pay for payroll services, as you are paying based on the size of your business.

For a complete breakdown of average payroll costs, head over to our guide.

How to Choose a Small Business Payroll Software

Here’s what to consider when choosing a small business payroll software:

• Price: Cost is perhaps the most important factor when choosing payroll software for a small business. This can be hard to do since most providers operate on quote-based pricing, so we recommend getting quotes from multiple providers to find the best deal. You can also use a low offer from a competitor to negotiate a lower price with the provider you’re interested in.
• Customer support: Most small businesses don’t have an in-house payroll expert, so it’s important to choose a provider with good customer support. This extends beyond having a phone number to contact. A good provider should offer live training or video tutorials and offer a large knowledge base with guides and learning material on compliance with labor and tax laws.
• Scalability: Many small businesses aim to grow and expand, and if that’s the case, we recommend choosing a provider that can grow with you. Changing payroll providers is time-consuming, so it’s best to limit the number of switches you make.
• Employee self-service features: Choosing a provider that offers employee self-service features can boost your employee’s satisfaction, and help create a relationship of trust. Look for providers that offer an online employee portal or mobile app.
• Native integrations: Many payroll software providers offer other types of people management software, and using the same provider for both payroll and HR, for example, can simplify your admin and be cheaper than using two separate providers.
• External integrations: It’s not very common for payroll software providers to offer their own native accounting software, despite the two being linked. So, make sure your chosen payroll software can easily integrate with your accounting tools and any other important business software you use.

Our Methodology: How Did We Find the Best Payroll Services?