Best Free Payroll Software for Small Businesses in 2026

Does the thought of running payroll give you a few extra grey hairs? You might be tempted to save some cash with a spreadsheet, but tracking hours and calculating taxes by hand can turn into a second job fast.

The good news: there's plenty of free payroll software for small businesses that handles the math for you. A free payroll tool doesn't just save you money. It gives you back your time, helps you stay compliant, and keeps payday from feeling like a chore.

Here are the best free and freemium picks for 2026, what each one does well, and how to tell when it's time to upgrade.

Free payroll software for small businesses, at a glance

Short on time? Here's the quick version. The best free payroll software for small businesses depends on your team size and how much manual work you're willing to do.

• Payroll4Free: best for tiny teams of nine or fewer who want core payroll and tax forms and don't mind handling filing themselves.
• TimeTrex: best open-source pick for tech-comfortable owners who want unlimited employees and full control.
• HR.my: best free HR and payroll combo for unlimited employees, with a dated look but a deep feature set.

The full breakdown, pricing, and a few honest tradeoffs are below.

Why we created this guide

We're Homebase, and we make an app for hourly teams that covers time clocks, scheduling, payroll, and HR. We have a stake in this topic, so we want to be upfront: Homebase isn't ranked in the list below, and every tool here was judged on its own merits.

That said, we've spent years working with more than 150,000 small businesses on exactly these headaches, from timesheets that don't add up to payroll prep that eats an afternoon. Further down, we explain what Homebase offers in a clearly labeled note, so you can weigh us yourself.

How we picked these tools

This list was compiled using publicly available product information, pricing pages, customer reviews, and third-party software directories. We prioritized current information so the picture reflects each tool as it is today, not years ago.

We didn't run payroll on each tool ourselves. Instead, we weighed a few plain factors: who the tool fits best, whether there's a genuine free tier, starting price once you outgrow it, core capabilities like tax forms and direct deposit, and how recent user sentiment leans.

What is free payroll software, and can it really work?

Free payroll software is a simple tool that calculates wages, tracks hours, and generates pay stubs without a monthly subscription. These tools come in three flavors:

• Always-free tools that offer basic payroll at no cost.
• Freemium tools where core payroll is free but extras cost money.
• Trial-based tools that are free for a limited window.

Can a free tool really handle payroll? For small teams with straightforward needs, yes. Most trusted free options include wage calculations, basic tax form generation like W-2s and 1099s, pay stub creation, time tracking integration, and employee self-service portals.

The benefits of free payroll software

A good free tool earns its keep in a few clear ways:

• Time savings. Automating pay calculations and tax withholdings cuts down on spreadsheet errors and late nights.
• One smoother workflow. Connecting time tracking, wage math, and tax forms means no more endless tabs or paper piles.
• Compliance help built in. Automated tax deductions help you stay compliant with changing wage laws and store accurate records.
• A more independent team. Self-service portals let your team members grab pay stubs and tax forms without asking you.

The tradeoffs of free payroll software

Free comes with limits worth knowing before you commit:

• Limited automation. Free tiers rarely file taxes for you, so quarterly and year-end forms land on your desk.
• Employee caps. Many free tools limit employee counts before pushing you to a paid plan, though some support much larger teams.
• Manual workarounds. Direct deposit to outside banks often isn't included, so you'll use your own bank or write checks.
• Basic capabilities only. Multi-state taxes, contractor payments, and benefits usually sit behind a paywall.

Think of free payroll software as training wheels. It gets you moving without the investment, but you'll want something sturdier as you grow.

How to choose free payroll software for your small business

Free small business payroll software should save you headaches, not create new ones. Before you pick, make sure your choice checks these boxes.

Supports your team size

Many free payroll tools place limits on employee counts or advanced features, though some options support much larger teams. Know the limit before you build your whole process around it.

Includes the essentials

At minimum, you need W-2 and 1099 generation, accurate wage calculations, and clean, professional pay stubs.

Feels easy to use

The best free payroll app should feel natural from day one. If you need a manual to run a single paycheck, keep looking.

Offers support when you need it

When something breaks at 10pm before payday, you need answers. Look for chat support, a solid help center, or an active user community.

Connects to your other tools

Your payroll data should flow into QuickBooks, Xero, or your bookkeeping system on its own. Bonus points if it links up with scheduling and time tracking.

Handles multi-state employees

If your team works across state lines, confirm the tool manages different tax jurisdictions without manual math.

Keeps your data secure

Look for bank-level encryption, individual logins, and regular updates that keep pace with tax law changes.

Scales with your growth

Check the paid tiers now. You don't want to switch tools in six months when your free pick hits a wall.

Best free payroll software options for 2026

Not every free payroll tool is built the same. Here's how the top picks stack up, who each one fits, and where each falls short.

1. Payroll4Free

Best for: tiny teams of nine or fewer comfortable with some manual work.

Payroll4Free covers the basics without charging you: wage calculations, tax forms, PTO tracking, payroll reports, and an employee portal. It's a genuinely free option for simple needs, as long as you're fine handling direct deposit and tax filing on your own. For a budget-strapped owner running their first payroll, it's a low-risk place to start.

What it is: an ad-supported, desktop-based free payroll tool for small teams.

Pricing: free for nine or fewer employees. Some services such as tax filing require paid add-ons.

Key things to know:

• Wage and tax calculations
• W-2, 1099, and basic tax form generation
• PTO tracking and payroll reports
• Windows only; integrates with QuickBooks

A real limitation: you'll still handle more payroll administration yourself than with a full-service payroll provider, and some services such as tax filing require paid add-ons.

2. TimeTrex

Best for: tech-comfortable owners who want unlimited employees and full control.

TimeTrex is open-source workforce management with unlimited employees on its community edition. It bundles scheduling, time tracking, payroll processing, tax calculations, direct deposit, and W-2 and 1099 generation. For an owner who's comfortable with setup, it delivers a lot without per-employee fees, which is rare in the free tier.

What it is: an open-source, self-hosted or cloud-hosted payroll and time tracking tool.

Pricing: free community edition with unlimited employees. Paid hosted plans available.

Key things to know:

• Unlimited employees on the free edition
• Direct deposit and tax form generation
• Self-hosted (Linux or Windows server) or cloud-hosted
• API available for custom connections

A real limitation: setup takes technical know-how, so it's a poor fit if you want something running in minutes.

3. HR.my

Best for: unlimited employees on a true zero-cost plan with HR built in.

HR.my is a full HR tool with unlimited payroll processing, PTO tracking, leave management, a time clock, attendance tracking, and expense claims. It's crowdfunded and ad-supported, which keeps it free forever with no upgrade path. The look is dated, but the feature set runs deep for the price.

What it is: a community-funded, ad-supported HR and payroll tool with no paid tier.

Pricing: free, unlimited employees. No paid upgrade.

Key things to know:

• Unlimited employees and payroll runs
• PTO, leave, and attendance tracking
• Employee self-service and expense claims
• Works across iOS, Android, Mac, and Windows

4. ExcelPayroll

Best for: spreadsheet pros who want offline access and full data control.

ExcelPayroll is a free Excel-based payroll workbook that runs entirely on your PC. It calculates wages, deductions, and taxes offline, and prints W-2s, 1099s, 940s, 941s, and PTO reports. If you already live in spreadsheets and want everything on your own machine, it's a familiar, no-cost route.

What it is: a free, offline Excel-based payroll workbook.

Pricing: free to download with Excel. State tax table updates cost extra.

Key things to know:

• Offline wage, deduction, and tax calculations
• Prints major federal tax forms
• Supports up to 50 active employees
• Windows only, no mobile access

A real limitation: no automatic backups or compliance updates, so you're responsible for keeping tax tables current.

5. TMetric

Best for: service teams and agencies that bill by tracked hours.

TMetric is time tracking software that calculates pay from logged hours, which suits consultants, agencies, and professional services. Its free tier covers up to two users, and payroll-related capabilities sit on the paid Professional plan. If hours-to-pay accuracy matters more than full-service filing, it fits.

What it is: a time-tracking-first tool with payroll calculations on paid plans.

Pricing: free for up to two users, with payroll-related features available on paid plans.

Key things to know:

• Automatic time tracking and project billing
• Payroll calculations from tracked hours
• Connects with QuickBooks, Jira, Asana, and more
• Works on desktop, mobile, and browser

6. Wave

Best for: owners who want free accounting with payroll close at hand.

Wave is best known for its free accounting and invoicing, with payroll available as a paid add-on. For a very small business that wants its books and pay runs under one login, it's a tidy fit. The accounting side stays free, which is the draw, but payroll itself is not free in the U.S.

What it is: free accounting and invoicing with paid payroll.

Pricing: accounting is free; payroll is a paid add-on.

Key things to know:

• Free accounting and invoicing
• Paid payroll with tax form support
• Direct deposit on paid payroll plans
• Cloud-based with a clean interface

A real limitation: Wave's free offering is accounting and invoicing. Payroll itself is a paid service, so businesses looking for truly free payroll should look elsewhere.

7. Gusto

Best for: owners who want a free trial of full-service payroll before committing.

Gusto isn't free forever, but it offers a way to test full-service payroll before you pay. It files taxes, runs direct deposit, and handles onboarding, benefits, and PTO. A payroll software free trial for small businesses is a smart way to see whether automated filing is worth it for your team without a long contract.

What it is: full-service payroll with a free-trial entry point.

Pricing: paid plans start at approximately $49 per month plus $6 per employee, with a free trial available. Pricing and promotions may change.

Key things to know:

• Automated federal, state, and local tax filing
• Direct deposit and employee onboarding
• Benefits, PTO, and 401(k) options
• Cloud-based with strong ease-of-use reviews

A real limitation: there's no permanent free tier, so the trial eventually converts to a paid plan.

A publisher note: How Homebase compares

A quick, transparent note from us, separate from the ranking above.

Homebase connects time tracking, scheduling, and payroll so the hours your team works flow straight into their paychecks, with no re-entry. We automatically calculate hours, breaks, overtime, wages, and taxes based on your city, state, and federal rules. You can run payroll in a few taps, or set up auto-payroll and let it handle itself. Our AI Payroll Assistant even flags missed punches before payday, so timecards are right the first time.

Here's the honest pricing picture. Our Basic plan is free for up to 10 employees at one location and includes scheduling and time clock tools. Payroll is a paid add-on, free for your first six months as a new customer, then $39 per month plus $6 per active employee. We work with more than 150,000 small businesses and hold a 4.8-star rating with 90,000-plus reviews on the App Store.

One customer, Eric Murphy, owner of The Gear Attic in Athens, GA, put it simply: "I honestly have not thought about payroll since switching to Homebase Payroll… WE LOVE IT."

How to run payroll yourself for free

Want to skip software entirely? You can run payroll yourself for free if you're willing to handle the details. Here's the step-by-step.

1. Collect employee paperwork. Gather W-4s, I-9s, Social Security numbers, state tax info, and direct deposit forms.
2. Register your tax accounts. As the IRS outlines, get your EIN, register for state unemployment and income tax, and set up the Electronic Federal Tax Payment System (EFTPS) for federal payments.¹
3. Choose a pay frequency. Weekly, biweekly, or monthly. Check your state's rules and stay consistent.
4. Track hours. Use a time clock, spreadsheet, or paper cards to log regular hours, overtime, and breaks.
5. Calculate pay. Multiply hours by wages, add overtime, then subtract taxes and deductions. According to the IRS, Social Security is withheld at 6.2% and Medicare at 1.45%.²
6. Generate pay stubs. Create detailed stubs showing gross pay, deductions, and net pay. Many states require them.
7. Process payments. Write checks, use your bank's ACH for direct deposit, or use a payment app.
8. File your tax forms. Submit quarterly 941s, pay state unemployment, and file annual W-2s, 1099s, and 940s.

DIY payroll works well for one to five employees with straightforward wages. Once you're juggling multiple pay rates, tips, multi-state taxes, or contractors, the time it takes usually costs more than a tool would. Free payroll software simplifies steps three through eight: your hours flow into the calculations, taxes compute on their own, and pay stubs generate instantly.

Is free payroll software safe?

Free payroll software can be safe and reliable when you pick a reputable provider. The best tools use the same protections on free and paid plans, so security isn't usually where they cut corners.

Here's what to look for:

• Modern security features. Look for encrypted connections, multi-factor authentication, secure employee logins, and clear privacy policies.
• Audit trails. Reliable tools log every payroll change, which protects you during a dispute.
• Automatic backups. Cloud-based tools back up your data and let you export records.
• Compliance recordkeeping. Good tools store records in line with federal rules. As per the U.S. Department of Labor, employers must keep payroll records for at least three years, while supporting records such as time cards and work schedules must be kept for two years.³

Watch for red flags too: no HTTPS, no privacy policy, no contact info, or no way to export your data. And remember what free plans tend to give up: automated tax filing, direct deposit, deeper integrations, and live support.

Free vs. paid payroll software: When to upgrade

Free payroll software handles basic paycheck math and recordkeeping. Paid plans add automated tax filing, direct deposit, benefits, and better support. It's worth upgrading when:

• You outgrow your tool's limits. Many free plans cap employee counts or features. Plan the switch before you're forced into it mid-payroll.
• Tax season stresses you out. If forms and deadlines eat your evenings, automated filing pays for itself.
• Your team wants direct deposit. Coordinating checks and transfers by hand burns time you don't have.
• Manual entry takes hours. Add up what your time is worth. Software often wins that math.
• You need integrations. Payroll flowing into your books or your time tracking usually means a paid plan.

Ready to take payroll off your plate?

Manual payroll has a way of swallowing the time you'd rather spend with your team or your customers. When your hours, schedules, and pay all live in one place, payday stops being a chore and starts running itself. That's what Homebase is built to do for hourly teams. Try Homebase payroll free for six months and see if it fits.

{{banner-cta}}

Free payroll software FAQs

What is the best free payroll app for small business?

The best free payroll app depends on your team. For unlimited employees at no cost, HR.my and TimeTrex's community edition stand out. For nine or fewer employees, Payroll4Free covers the basics well. For hourly teams that want scheduling and time tracking alongside payroll, Homebase combines them in one app.

Can ChatGPT do payroll?

No, ChatGPT can't run payroll for you. It can explain payroll concepts, help with formulas, or draft a policy, but it doesn't calculate withholdings against current tax tables, file forms with the IRS, or send direct deposits. For real payroll, you need dedicated payroll software or a payroll service that stays current with tax law.

Is Excel payroll free?

Yes, Excel-based payroll is free if you already own Microsoft Excel. Tools like ExcelPayroll offer templates with built-in formulas for wage and tax math at no cost. You trade automation for that freedom, though: no automatic backups, no mobile access, no compliance updates, and manual data entry every pay period.

Can I run payroll for free?

Yes, you can run payroll for free using free payroll software or a spreadsheet, especially for one to five employees. Most free tools calculate wages and generate forms but won't file taxes or send direct deposit for you. In one r/smallbusiness discussion on free and low-cost payroll, owners recommended budget names like Gusto, Wave, and Square, while others questioned whether a paid service is worth it for a very small team.

Can free payroll software file taxes?

Usually not. Most free payroll software calculates taxes but won't file them for you. You'll submit quarterly 941s and annual W-2s, 1099s, and 940s yourself, or pay for a filing add-on. Automated tax filing typically requires a paid plan, since it connects directly with IRS and state systems.

How many employees can I have with free payroll software?

It varies by tool. Payroll4Free caps at nine employees, TMetric's free tier covers up to two users, and ExcelPayroll supports up to 50 active employees, while HR.my and TimeTrex's community edition allow unlimited employees. Choose a tool with scalable plans so you're not switching providers the moment you grow.

Sources

1. Internal Revenue Service, "Apply for an Employer Identification Number (EIN)" and "EFTPS: The Electronic Federal Tax Payment System." https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number
2. Internal Revenue Service, "Topic No. 751, Social Security and Medicare Withholding Rates." https://www.irs.gov/taxtopics/tc751
3. U.S. Department of Labor, Wage and Hour Division, "Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)." https://www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping

Remember: this is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.