The Best Payroll Services for Small Businesses in 2024

Running payroll shouldn’t give you a headache, but for small business owners, it can be one of the most stressful parts of your job. Between tax calculations, compliance requirements, and making sure everyone gets paid accurately and on time, payroll can eat up hours of your week. 

The good news? The right payroll service can simplify this complex process. Let’s dive into how to choose the best payroll service for your small business in 2024.

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Key features to look for in the best payroll service

Before you pick a payroll service, know what separates the great from the merely good. These core features make the difference between struggling with payroll and breezing through it each pay period.

Ease of use

Stop wasting time figuring out complicated software. Modern payroll services should work as intuitively as your favorite apps. Look for a payroll service that offers:

• Clear navigation and straightforward set-up processes. Your payroll system should guide you step by step through each process, from adding new hires to running your first payroll.
• Mobile-friendly interface that lets you run payroll and approve timesheets from anywhere. Your service should work just as easily on your phone as it does on your desktop. 
• Employee onboarding tools. Adding new team members should take minutes, not hours. The best payroll services let you send digital onboarding packets and automatically store completed documents. 

Compliance support

You don’t have to become a tax expert to keep your business protected. Your payroll service should handle:

• Automatic tax calculations and filings. Good payroll providers handle all tax calculations and submit your payroll taxes on time, every time. This includes federal, state, and local taxes, without any extra work from you.
• Regulation tracking and updates. Look for services that adjust your payroll when laws change. Whether it’s a new minimum wage or overtime rules, your system should update automatically.
• Compliance alerts. Your payroll service provider should notify you about important deadlines and compliance requirements specific to your location and industry. Think of it as your personal compliance assistant.

Time-tracking integration

Time tracking that connects directly with your payroll service helps eliminate costly mistakes like double-entry. Your system should automatically calculate overtime, handle multiple pay rates, and flag potential errors before you pay your team. This means your employees' hours flow straight from clock-in to paycheck, with all the proper calculations handled behind the scenes.

Key benefits of integrated time tracking:

• Automatic overtime calculations based on local laws
• Multiple pay rate support for different roles or shifts
• Real-time labor cost tracking
• Break enforcement and compliance

Employee self-service

Put control in your team's hands with a robust self-service portal. The right tools empower your employees while reducing your workload. Look for small business payroll software that offers:

• Mobile app access. Give your team the freedom to check payroll wherever they are.
• Digital document management. Your employees should easily access their pay stubs and W-2s, direct deposit settings, tax withholding forms, or personal information updates.
• Schedule viewing and availability. The best payroll companies let employees check schedules, request time off, and update their availability while syncing these changes automatically with your scheduling and payroll.

Customizable plans

Your business isn't static, and your payroll service shouldn't be either. The best services make it easy to add features, locations, or seasonal staff without requiring a complete system overhaul. Your payroll service should also play nice with your other business tools. 

Cost transparency

Nobody likes hidden fees. Look for providers that spell out all costs upfront, including base fees, per-employee charges, and any extra costs for tax filings or year-end forms. Before signing up with a provider, make sure you understand the fine print:

• Does your provider require a 1-2 year contract?
• Does your contract renew automatically if you don’t cancel it in time?
• Are there penalties if you end the services early?
• Are the rates stable or will they increase after the first year?

Top payroll services for small businesses in 2024

Ready to find your perfect payroll match? These providers lead the pack in 2024, each bringing something unique to the table. Let’s break down what makes each one special.

Homebase Payroll

With Homebase, you can run payroll even when you’re on the run. Homebase is ideal for small businesses with hourly employees, offering payroll, time tracking, scheduling, and team management in one platform.

Best for: Perfect for restaurants, retail stores, and service businesses with hourly teams. Especially valuable when you need scheduling, time tracking, and payroll to work together seamlessly.

Features:

• Built-in time tracking syncs automatically with payroll
• Automated federal and state tax filings
• Multiple pay rates and overtime calculations
• Mobile app for running payroll anywhere
• HR and compliance tools available

Pricing: Pricing starts at $39/month + $6 per active employee. From now until December 31, 2024, if you register for Homebase Payroll, you’re eligible for a 3-month free trial.

Gusto

Gusto is a comprehensive payroll and benefits management that makes HR tasks manageable for small businesses.

Best for: Growing businesses ready to offer comprehensive benefits packages. Ideal for companies with salaried employees who need integrated HR tools.

Features:

• Full-service payroll processing
• Automated federal, state, and local tax filings
• Employee onboarding tools
• Comprehensive employee benefits administration
• Direct deposit options

Pricing: Tiered plans for different business sizes, starting with the Simple tier at $40 per month + $6 per employee. 

QuickBooks Payroll

Part of the QuickBooks family, QuickBooks Payroll service integrates seamlessly with QuickBooks accounting software—keeping your accounting and payroll in one system.

Best for: Businesses already using QuickBooks for accounting who want seamless financial integration and robust tax support.

Features:

• Same-day direct deposit
• Automated tax payments and filing for state and federal taxes
• Health insurance benefits and 401(k) plan offerings
• QuickBooks accounting integration
• Tax penalty protection up to $25,000

Pricing: Tiered plans, starting with the Core tier at $42.50 per month + $6 per employee. Discount available when bundled with QuickBooks.

Paychex

Paychex is a full-service payroll and HR solution designed for businesses of all sizes.

Best for: Mid-sized businesses needing comprehensive HR solutions and personalized support beyond basic payroll.

Features:

• Payroll processing and tax filing
• Flexible employee pay options
• Employee management (screening, performance management, recruiting and applicant tracking, employee onboarding, time and attendance tracking)
• HR analytics
• Benefits administration

Pricing: Contact sales to get a quote.

ADP

ADP is an HR and payroll system suitable for businesses of all sizes.

Best for: Rapidly growing businesses or enterprises who need sophisticated HR and payroll tools.

Features:

• Payroll capabilities offered in different tiers
• Automated tax filings
• Integrated time tracking and scheduling
• HR services offered in different tiers
• Robust mobile app

Pricing: Custom quotes based on business size.

OnPay

OnPay is a straightforward payroll service provider known for its simplicity, transparent pricing, and solid benefits options.

Best for: Small businesses with remote teams looking for simple, transparent pricing and solid core payroll features without the complexity of larger systems.

Features:

• Full-service payroll software
• Unlimited monthly payroll runs
• Handles federal, state, and local taxes
• Advanced onboarding and HR tools
• Integrated employee benefits

Pricing: Starts at $40/month + $6/person/month.

How to choose the right payroll service for your small business

Finding the best payroll provider for your small business comes down to more than just features and price. Let’s break down what really matters when making this critical decision. 

Evaluate business needs.

Start with a thorough assessment of your current needs and future growth plans. Assess how many employees you have, how often you process payroll, and whether you need additional features like benefits management or HR tools.

• Workforce composition affects your choice significantly. A restaurant with 30 part-timers needs different features compared to a tech startup with 10 salaried employees.
• Multiple locations require tax filing in different jurisdictions and location-specific reporting. 
• Pay frequency options should match your industry standards and requirements set out in your jurisdiction. Restaurants often need weekly payroll with tip pooling, while offices might run biweekly or monthly cycles.
• Variable pay rates get complicated fast. If your employees earn different rates for different roles or shifts, your payroll system needs to track these automatically.
• Benefits and deductions can multiply quickly. Health insurance, 401(k), garnishments, and other deductions need careful tracking and proper tax treatment.

Compare costs.

Make sure to compare pricing between different providers, keeping in mind that sometimes premium services come with added features that could save you time in the long run. But don’t stop there: Smart cost comparison goes beyond the advertised monthly rate. You should also look at:

• Initial costssome text
  • Set-up fees can range from free to several thousand dollars depending on your data migration needs and training requirements.
  • Implementation costs often include time spent training staff, setting up integrations, and configuring your account.
  • Hardware costs might include time clocks, biometric readers, or POS system upgrades.
• Ongoing expensessome text
  • Tax filing fees. Some services include this, others charge per filing.
  • End-of-year processing (W-2s, 1099s). Costs may already be included or may range from $5-30 per form.
  • Pay run fees. Watch for limits on monthly payroll runs.
  • Direct deposit fees. Most of the time, this should be included but some providers do charge extra.
  • Support fees. Premium customer support may cost extra.
• Hidden costssome text
  • Contract termination fees can trap you in an expensive service.
  • Price escalators might kick in after 6-12 months.
  • Additional state tax ID set-up fees.
  • Premium support charges during tax season.

Assess features.

The right set of features can transform payroll from a weekly headache into a simple task. Look for capabilities that match your workflow.

• Customizationsome text
  • Pay schedule flexibility. Some teams need weekly payroll, others monthly, and some need both.
  • Custom earning types for special pay like hazard pay or shift differentials.
  • Personalized report builders for your specific metrics.
  • Department-specific overtime rules.
• Integrationssome text
  • Time clock systems that feed directly into payroll.
  • Benefits platforms that automatically sync deductions.
  • Scheduling tools that connect to time tracking.
  • Banking integration for faster payments.
• Automationsome text
  • Tax calculations and filing without manual input.
  • Recurring payroll runs for salaried employees.
  • Automatic wage garnishment processing.
  • Year-end tax form generation.

Check customer support.

Even the best payroll systems need backup sometimes. The best small business payroll services offer dedicated representatives who know your account history and industry-specific challenges.

Besides support quality, also look at response time. Look for providers that guarantee response times and offer support hours that align with your business schedule. 

If you’re running payroll on weekends or late nights, make sure help will be available when you need it. Some providers may charge extra for premium support or after-hours assistance—factor these potential costs into your decision.

Finally, look into training and implementation support. Will your payroll provider offer dedicated specialists to help migrate your data and set up your account? Are there live training sessions in addition to traditional self-paced resources?

Look at reviews and case studies.

Real-world experiences speak volumes. Start by seeking out reviews from other small businesses in your industry—a restaurant’s payroll needs differ dramatically from a law firm’s. 

Implementation stories also deserve careful attention. Look for detailed accounts of the setup process, including any unexpected challenges or costs. How long did implementation really take? What kind of support did the provider offer during the transition? 

If you spot negative reviews, look for patterns instead of isolated incidents. Every provider will have some unhappy customers, but consistent complaints about specific issues, such as tax filing errors, hidden fees, or poor support, should raise red flags. Plus, pay attention to reviews mentioning system downtime, data breaches, or security issues. 

Find your perfect payroll service today.

Whether you're managing hourly employees or salaried staff, there’s a payroll system that fits your needs, budget, and future growth plans. Take the time to evaluate your options, compare pricing, and assess the features that will benefit your business. Payroll doesn't have to be a headache when you have the right tools in place.

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FAQs

What is the best payroll provider for a small business?

​​The ideal provider depends heavily on your business type and team structure. For businesses with hourly employees—like restaurants, retail stores, or service companies—look for strong scheduling and time tracking integration. 

Homebase Payroll, for instance, combines these features seamlessly, making it easier to manage variable schedules and multiple pay rates. On the other hand, professional service firms with salaried employees might benefit more from providers like Gusto, which excels at benefits administration and contractor payments. 

What is the best way to do payroll for a small business?

The most efficient approach combines automation with careful oversight. Start by setting up a payroll system that integrates with your time tracking and scheduling tools. This eliminates manual data entry and reduces errors. Establish a consistent payroll schedule and checklist to ensure nothing gets missed.

Modern payroll services handle most calculations and tax filings automatically, but you should still review reports before each payroll run to prevent errors.

How much should payroll cost for a small business?

Expect base monthly fees between $30-$50, plus $4-$10 per employee. However, the true cost often includes additional services:

• Tax filing fees (typically included in better services)
• Year-end forms (W-2s and 1099s can cost extra)
• Benefits administration
• Setup and implementation fees

Many providers offer tiered pricing. This means basic payroll might be affordable, but adding features like HR tools or benefits administration increases costs significantly. Calculate your total annual cost, including all potential fees, before committing.

Can I run payroll myself instead of using a service?

While technically possible, running payroll manually creates several risks:

• Tax calculation errors could result in penalties
• Staying current with changing regulations becomes your responsibility
• Manual calculations increase the chance of mistakes
• Time spent on payroll takes you away from running your business 

Most small businesses find that payroll services pay for themselves in time saved and peace of mind (did you know most small business owners spend almost five hours calculating, filing, and managing payroll and taxes per pay period?) The cost of fixing even one major payroll mistake often exceeds a year's worth of service fees.

What’s the best payroll service for hourly employees?

For hourly teams, the best services combine payroll with time tracking and scheduling. Look for features like:

• Automatic overtime calculations
• Multiple pay rate handling
• Break law compliance
• Mobile clock-in options
• Schedule integration
• Tip reporting and pooling tools

How do payroll services handle tax compliance?

Good payroll services manage the entire tax process:

• Calculate federal, state, and local tax withholdings
• Make tax payments on your behalf
• File quarterly and annual returns
• Generate and distribute W-2s and 1099s
• Update tax tables automatically when rates change
• Monitor regulatory changes that affect your business

Many providers also offer tax penalty protection, covering any fines if they make a mistake with your taxes.

Do payroll services integrate with accounting software?

Most modern payroll services offer integrations with popular accounting platforms, but the depth of these connections varies. Some provide basic journal entries, while others sync detailed transaction data. Consider:

• Which accounting software you use
• What data needs to be transferred
• How often syncing occurs
• Additional costs for integration
• Setup complexity

Check if your preferred accounting software has recommended payroll partners—these integrations tend to be more reliable and feature-rich.