Best Payroll Software for Small Business in 2025: A Complete Guide

Payroll day shouldn't mean staying up late double-checking calculations or panicking about tax deadlines. But when you're running a small business, figuring out which payroll software for small business actually works feels like another full-time job.

With 100+ platforms claiming to be the best payroll software for small business, how do you know which one fits your team, your budget, and your actual needs?

This guide cuts through the noise. We'll show you what features actually matter, which providers deliver real value, and how to choose software that makes payroll simple instead of stressful.

Whether you're running a coffee shop with five baristas or a retail store with fifty employees, we'll help you find the right fit.

Ready to turn timesheets into paychecks without the headache? Let's get started.

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TL;DR: Best payroll for small business

Short on time? Here are our top picks for the best payroll services for small businesses:

• Homebase: Best software for hourly retail and restaurant teams who clock in and out—includes payroll, time tracking, scheduling, compliance, and tip management (yes, all in one!). Also includes a free tier for very small teams.
• Gusto: Best payroll system for benefits-focused professional services for salaried teams that need HR tools.
• QuickBooks Payroll: Best payroll and accounting software for businesses already using QuickBooks accounting.
• ADP Run: Best payroll software for established businesses looking for enterprise-level features.
• Square Payroll: Best payroll system for businesses that are already into the Square POS life.
• Wave Payroll: Best affordable software for microbusinesses with simple payroll needs.

The must-have features of small business payroll software:

• Ease of use and short setup time.
• Cost transparency (and value!).
• Compliance and tax handling features for federal, state, and local taxes.
• Integration capabilities with your existing tools.
• Quality ongoing customer support.
• Scalability as your team keeps growing.
• Industry-specific tools (tips for restaurants, seasonal staffing for retail, etc.).

What makes the best payroll software for small business?

The best payroll software for small businesses helps you stay on top of hours, wages, and taxes—even when your day starts with a no-show and ends with a double shift. 

After all, the best payroll software for small business adapts to your needs, not the other way around. Here's what actually matters when choosing payroll software.

Essential payroll features for your small business

Your payroll software should work for your business, not the other way around.

Look for:

• Ease of use and setup time: Quick setup, clean dashboard, mobile apps for managing payroll on the go.
• Cost transparency and value: Clear pricing based on team size and needs. No surprise fees.
• Compliance and tax handling: Automatic tax calculations, filings, and deposits that keep you compliant without the stress.
• Integration capabilities: Connects with your time tracking, HR, and scheduling tools to eliminate double data entry.
• Customer support quality: Real, responsive support via phone, chat, or email when you need help.
• Scalability as your team grows: Handles multiple pay types, overtime tracking, and benefits administration as you expand.

"Before Homebase I was manually tallying up my team's work hours and entering them into payroll, crossing my fingers I hadn't made any mistakes. Now our entire team logs in and out quickly and easily with the Homebase app, and all I have to do is send their hours to my payroll program with the click of a button." — Kathleen Smith, Founder, Smiling Tree Toys

Homebase brings the essentials together—automated payroll, compliance tools, HR support, and real human help when you need it. Sign up for free.

Some industries require specific payroll considerations

The best payroll for small business looks different depending on what you're running.

Industry-specific features to consider:

• Restaurant and hospitality: Tip reporting and pooling, shift scheduling, multiple pay rates, restaurant POS integration.
• Retail: Multiple location support, seasonal staff management, time-off tracking, quick rehires.
• Professional services: Project-based time tracking, client billing, accounting tool integration.
• Construction: Certified payroll, contractor/employee pay, job site tracking, prevailing wage compliance.

Make work manageable

Stop juggling spreadsheets and sticky notes. The best payroll software brings scheduling, time tracking, and payroll together in one place.

Best overall payroll software for small business

Picking payroll software isn't about finding the "best" option—it's about finding what fits how you actually run your business. Hourly teams? Salaried office? Restaurant with tips? They all need different things.

We've evaluated the best 6 payroll software for small business options to bring you these top picks. Here's the real breakdown.

Note: Pricing's accurate as of October 2025, but double-check each site for updates.

1. Homebase Payroll

If you're running a restaurant, retail shop, salon, or any business with hourly workers clocking in and out, Homebase puts everything in one spot—payroll, time tracking, scheduling, team messaging, all of it.

Best for: Hourly teams where schedules change and people need to clock in from their phones.

What you actually get:

• Build schedules that follow labor laws automatically—no more guessing about break rules or overtime.
• Let your team clock in from any device, with GPS so you know they're actually there.
• Run payroll with taxes handled, direct deposits sent, everything filed and stored digitally.
• Split tips fairly with automatic pooling and distribution that connects to your POS.
• Give your team early wage access and let them check their schedule or pay anytime.
• Get real help from actual payroll specialists, not chatbots.

What it costs: Free for up to 10 employees. Add payroll for $39/month + $6 per employee.

Free trial: Yep.

Why it wins: Your schedule becomes your timesheet becomes your payroll. No copying data between systems, no double-checking if you got everyone's hours right.

Try Homebase—USA Today Blueprint called it the best payroll for hourly teams in 2024.

2. Gusto

Best for: Companies hiring salaried people who want solid benefits packages.

What you get:

• Run payroll as many times as you need each month, taxes filed automatically.
• Pay people different rates, handle contractors, even pay international employees.
• Set up health insurance, retirement plans, PTO tracking, onboard new hires.
• Your team gets the Gusto Wallet app to track their pay and manage money.
• Connects to QuickBooks, Xero, FreshBooks if you're using those.

What it costs: $49/month + $6 per person.

Free trial: Nope.

Why it wins: Easy to use with strong HR tools if you're growing but don't have a dedicated HR person yet.

3. QuickBooks Payroll

Best for: You're already doing your books in QuickBooks and want everything connected.

What you get:

• Payroll runs automatically, deposits go out, taxes get calculated and filed.
• Everything syncs with QuickBooks Online and QuickBooks Time.
• Setup walks you through it, support's available 24/7.
• Elite plan covers you if the IRS sends a penalty notice.
• Your team can access pay stubs and update their info themselves.

What it costs: Starts at $6.50 per employee monthly for Core, $10 for Premium, $12 for Elite. Contact them for the full breakdown.

Free trial: Yes.

Why it wins: If you're already in QuickBooks for accounting, adding payroll just makes sense. Strong reporting across everything.

4. ADP Run

Best for: You've been around awhile and want serious features as you keep growing.

What you get:

• Full-service payroll—run it as often as you want, taxes handled at every level.
• Federal, state, local tax management with guarantees they've got it right.
• HR tools and document storage built in.
• Employees get a portal and mobile app to manage their stuff.
• Actual experts you can call when you need help.

What it costs: You have to ask for a quote.

Free trial: No.

Why it wins: Grows with you. Good reporting, keeps you compliant, helps you get set up right.

5. Square Payroll

Best for: Already using Square for payments and want payroll that talks to your POS.

What you get:

• Connects directly to Square POS and inventory.
• Handles commission, tips, sales-based pay.
• Manages seasonal workers coming and going.

What it costs: $35/month + $6 per employee.

Free trial: Yes.

Why it wins: Lives where you already work. If Square runs your register, Square Payroll just makes sense.

6. Wave Payroll

Best for: Really small teams keeping things simple and cheap.

What you get:

• Basic payroll, direct deposit works.
• Pay employees and contractors.
• Employees can access their own info.

What it costs: $40/month + $6 per person.

Free trial: Yes.

Why it wins: Cheap. Works with Wave's free accounting. Gets the job done.

The downside: Pretty bare-bones. Doesn't connect to much else.

Payroll software pricing: What to expect

Most payroll software charges two ways: a monthly base fee plus a per-employee cost. Sounds simple, but the details matter.

How pricing actually works

The base fee covers the software and basic features. The per-employee charge applies to everyone you pay that month—some providers charge only for active employees, others charge whether someone works or not.

What Homebase costs

$39 per month base + $6 per employee you pay.

What's included:

• Automated tax filing to federal, state, and local agencies
• Direct deposit for your team
• Unlimited payroll runs when you need off-cycle payments
• Tip management with pooling and distribution
• Free time tracking and scheduling for up to 10 employees

How everyone else prices

• Gusto: $49/month + $6 per employee
• QuickBooks: Per-employee costs start at $6.50 (Core), $10 (Premium), or $12 (Elite)—contact them for the base fee
• Square: $35/month + $6 per employee
• Wave: $40/month + $6 per employee

Watch for hidden costs

• Tax penalty protection often costs extra
• Year-end W-2s and 1099s sometimes come with fees
• Multiple state filings can add $12/month per extra state
• Priority phone support might cost more than basic chat

Ask what's included before you commit.

Why it's worth paying for

One payroll mistake can cost more than a year of software. Hours spent manually calculating overtime add up fast. And accurate, on-time paychecks keep your team focused on work instead of worrying about their pay.

Good payroll software pays for itself by preventing mistakes and giving you time back. If you're spending more than an hour per pay period on payroll, the math probably works in your favor.

Homebase keeps pricing simple—$39/month + $6 per employee with no surprise fees. Everything you need for payroll is included, and time tracking stays free for small teams.

How Homebase compares to other payroll software

Choosing between payroll providers comes down to how you actually work. Here's when each option makes sense.

Homebase vs. Gusto

Choose Homebase if you:

• Manage hourly teams with changing schedules
• Need time tracking that connects directly to payroll
• Handle tips regularly
• Want to spend less

Choose Gusto if you:

• Pay salaried employees
• Need robust benefits packages
• Want extensive HR tools beyond payroll

Homebase vs. QuickBooks Payroll

Choose Homebase if you:

• Have teams that clock in and out for shifts
• Need built-in time tracking (schedule → timesheet → payroll)
• Run a restaurant or retail business with tips
• Want all-in-one team management

Choose QuickBooks if you:

• Prioritize accounting above everything else
• Need tight integration with QuickBooks Online
• Have a bookkeeper or accountant who requires QuickBooks

"The seamless way the data goes over to Quickbooks and I can run payroll with a couple button clicks is great." — Keith Zimmerman, Owner, Plum Creek Farm 

Did you know that Homebase plays well with QuickBooks? Sync employees and hours and make payroll prep a breeze. 

Homebase vs. Square Payroll

Choose Homebase if you:

• Manage complex schedules across multiple locations
• Need scheduling tools beyond basic shift coverage
• Handle complicated tip pooling and splits
• Want robust team communication features

Choose Square if you:

• Run a straightforward operation on Square POS
• Want everything in the Square ecosystem
• Have simple payroll needs

What makes Homebase different

Most payroll software treats time tracking as an add-on or charges extra for it. Homebase built time tracking, scheduling, and payroll as one connected system from the start—so your schedule flows into timesheets, which flow into payroll, without copying data between tools.

If you're already using Homebase for scheduling, adding payroll takes just a few minutes since your employee information is already set up. No re-entering data, no learning a separate system.

Best free payroll software for small business

Looking for free payroll? Here's the reality: payroll software costs money because handling taxes correctly takes real work. But some options cost way less than others.

Wave Payroll

Best for micro businesses keeping it simple.

• $40/month + $6 per person
• Works with Wave's free accounting software
• Covers basic payroll and direct deposit
• Pretty bare-bones on features and integrations

Homebase free tier

Best for small hourly teams who aren't ready for payroll yet.

• Free scheduling and time tracking for up to 10 employees
• Try the system, see if your team likes it
• Add payroll later for $39/month base + $6 per employee
• Everything carries over when you upgrade—no starting from scratch

Start with free time tracking and scheduling. When you're ready for payroll, flip it on. Your team's already in the system, so adding payroll takes minutes instead of hours.

Best payroll service for small business by industry

Every industry has its own payroll headaches. Here's what actually matters when you're picking software for your type of business.

Restaurants and food service

The real challenges: Tips complicate everything. Your team works split shifts. Schedules change daily based on reservations and weather. Someone calls out, and you're scrambling to find coverage before dinner rush.

What you actually need:

• Automatic tip pooling that handles front-of-house and back-of-house splits without spreadsheets
• POS integration so credit card tips flow directly into payroll—no manual entry
• Overtime tracking that warns you before someone hits time-and-a-half
• Schedule-to-payroll connection so you're not entering hours twice

"Before Homebase, we were printing out timesheets and manually calculating hours. To keep up with the times, we have switched to Homebase, and it has made our lives so much more efficient!" — Ashley Ortiz, Owner, Antique Taco

Homebase Payroll ($39/month + $6 per employee) handles all of this for hourly restaurant teams.

Retail businesses

The real challenges: Seasonal workers show up in November, disappear in January. Commission structures vary by employee. Black Friday means overtime for everyone. People work across multiple locations.

What you actually need:

• Quick onboarding for seasonal workers—someone working six weeks shouldn't require an hour of setup
• Commission tracking that connects to sales data
• Multi-location payroll so employees can work different stores
• POS integration to avoid managing two separate systems

Square Payroll ($35/month + $6 per employee) works great if you're already on Square. Homebase handles retail teams with complex scheduling across locations.

Professional services

The real challenges vary depending on your team structure. Law firms with paralegals and administrative staff need different tools than fully salaried consulting firms.

If you have hourly professional staff:

• Time tracking by client or project for accurate billing
• Multiple wage rates for different roles
• Scheduling tools for managing client meetings and deadlines
• Best fit: Homebase ($39/month + $6 per employee) handles hourly professional teams

If you're fully salaried and benefits-focused:

• Strong benefits administration—health, dental, vision, retirement
• Extensive HR tools for performance management
• Advanced reporting for labor costs per project
• Best fit: Gusto ($49/month + $6 per employee) for comprehensive benefits and HR

The key difference? Don't pick payroll software and then force your business to fit it. Pick software designed around how your team actually works—hourly or salaried, tips or commissions, one location or many.

Best payroll companies for small business: automated vs. managed

Payroll software comes in two flavors: automated tools you run yourself, or managed services where someone else does it for you.

Automated payroll software

You approve payroll, the software does the rest.

How it works:

• You click to run payroll when it's time
• Software calculates wages, taxes, deductions automatically
• Tax filings go to federal, state, and local agencies
• Direct deposits hit your team's accounts on payday

Pick automated if you:

• Want to stay in control of when and how payroll runs
• Need to save money compared to managed services
• Have straightforward payroll needs (hourly or salaried employees, tips, standard benefits)
• Like knowing exactly what's happening with your payroll

Works for most small businesses. If you're paying employees and need taxes handled correctly, automated software gets it done.

Your options: 

• Homebase ($39/month + $6 per employee) 
• Gusto ($49/month + $6 per employee)
• QuickBooks Payroll (starting around $6.50 per employee)
• Square Payroll ($35/month + $6 per employee)
• Wave ($40/month + $6 per employee)

Managed payroll services

Hand everything over, someone else runs it for you.

How it works:

• Dedicated rep handles your payroll start to finish
• You send hours worked, they do everything else
• They handle year-end forms, tax notices, compliance questions
• You get a person who knows your business and your payroll

Pick managed if you:

• Want payroll completely off your plate
• Manage complex situations across multiple states
• Need a dedicated expert handling everything
• Have budget for higher costs in exchange for peace of mind

Makes sense for established businesses with complicated needs or owners who'd rather focus on running their business than managing payroll software.

Your options: ADP, Paychex, Paycom—all require custom quotes based on your specific needs.

Most small businesses do fine with automated software. Managed services make sense when complexity or priorities justify the extra cost.

How to choose the best payroll system for your small business

Choosing payroll software isn't about checking boxes on a feature list. It's about fixing what's actually broken in your business.

Start with what's making you miserable

What about payroll makes you want to throw your laptop? That's what you need to fix first.

Maybe it's:

• Deciphering messy handwritten timesheets and hunting down missing hours every week
• Tax deadlines catching you off guard because you're tracking them on sticky notes
• Copy-pasting the same employee data across scheduling, time tracking, and payroll tools
• Answering endless questions about pay stubs and schedules instead of running your business
• Managing payroll across multiple locations like you're doing three separate jobs

Your top three frustrations? That's your shopping list.

Pick features that actually matter to you

Ignore the bells and whistles. What does your business need right now?

For most small businesses, that's:

• Time tracking that connects to payroll so you're not entering hours twice
• Automatic tax filing because nobody wants to calculate withholdings or mail forms
• Direct deposit that just works
• Employee self-service so people can check their own schedules and pay without asking you
• Tip management if you're in restaurants or services
• Integration with whatever you're already using—POS, accounting, all of it
• Mobile access for you and your team
• Real support from actual humans when things go wrong

Everything else? Nice to have, but not worth paying extra for.

Figure out what it really costs

The advertised price is never the whole story.

Look at the base fee plus per-employee charges—that's your real monthly cost. Check if extras like multi-state filing or tax protection cost more. Add up what you're actually going to pay, not just the marketing number.

Then think about your time. Spending four hours on payroll every week? Software that cuts that to 30 minutes pays for itself fast.

Buy value, not the cheapest option. Cheap software that breaks costs more than good software that works.

Try it before you commit

Free trials exist for a reason. Use them.

Run a test payroll with real data. Give a few employees access to see if they can figure it out. Click around—does it make sense in 30 seconds or does it feel like solving a puzzle? Message support with a question and see if you get a real answer or a runaround.

If it feels confusing during the trial, it'll feel worse when you're trying to make actual payroll.

The right payroll software fixes your problems without creating new ones. Start with what's broken, find what fixes it, test it, then commit. That's it.

Get started with the right payroll solution for your team

Choosing the right payroll software for small business doesn't have to be overwhelming.The right payroll software depends on how you actually work. Got hourly teams clocking in and out? You need time tracking. Running a restaurant? Tip management matters.

Make sure your payroll connects with what you already use—your POS, your accounting software, your scheduling tools. Less copying data around means fewer mistakes.

Try before you buy. Run a test payroll. Let your team poke around the app. Message support with a question. If it feels awkward now, it'll feel worse when you're trying to make actual payroll.

Stop juggling separate systems for schedules, hours, and paychecks.

See how Homebase brings time tracking, scheduling, and payroll together in one place. Join over 100,000 small businesses—from coffee shops with five baristas to retail stores with fifty employees—who trust Homebase to manage their teams and run payroll accurately every time.

Ready to turn timesheets into paychecks without the headache? Your stress-free payroll starts here.

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Frequently asked questions about payroll for small business

What is the best payroll program for small businesses?

The best payroll program depends on your needs, but top choices include Homebase for hourly teams with built-in time tracking, Gusto for comprehensive benefits and HR tools, and QuickBooks Payroll if you're already using QuickBooks for accounting.

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

The easiest way is using payroll software that automates calculations, tax filings, and direct deposits—so you spend less time on admin and more time running your business.

If full-service payroll isn't in your budget, Homebase gives you automation where it counts (like tax filings and direct deposits) with full visibility into what's happening—without the cost of outsourcing.

What is the best way to pay employees in a small business?

Direct deposit is the best way to pay employees. It's fast, secure, and preferred by most employees over cash or paper checks. Most modern payroll systems support direct deposit as a standard feature.

Can I do my own payroll for free?

Yes, you can do payroll manually for free, but you'll need to calculate hours, taxes, and deductions yourself while staying current on changing tax laws. One mistake can be expensive—missed tax deadlines and calculation errors often cost more than payroll software would have.

Free payroll software exists, but truly "free" options are limited. Most affordable options charge per employee or per pay run. Homebase offers free time tracking and scheduling for up to 10 employees, with payroll available as an add-on.

How much does Homebase payroll cost?

Homebase payroll pricing is straightforward: $39 per month plus $6 per employee you pay. No hidden fees or surprise charges for tax filing, direct deposit, or unlimited payroll runs.

You also get free time tracking and scheduling for up to 10 employees, plus automatic tip management for restaurants and retail.

Payroll software cost varies by provider, but Homebase includes everything most small businesses need without charging extra for basic features.

What's the difference between Homebase and Gusto?

When comparing Gusto vs Homebase, it comes down to your team type.

Homebase works best for hourly teams that clock in and out—it includes scheduling, time tracking, tip management, and payroll for $39/month plus $6 per employee.

Gusto is better for salaried teams that need extensive benefits administration and HR tools, starting at $49/month plus $6 per employee.

Choose Homebase if you run shifts and need time tracking built in. Choose Gusto if benefits packages matter more than scheduling.