Best Free Payroll Software for Small Businesses (2025)

Let’s be honest—nobody starts a business because they love running payroll. You opened your doors to serve customers, grow something amazing, and maybe even enjoy your weekends. But calculating taxes, tracking hours, and making sure everyone gets paid on time? That’s a full-time job in itself.

And it gets messy fast.

Sweating over spreadsheets. Googling “how to calculate FICA taxes” at midnight. Worrying you’ve missed a decimal (again). Payroll can suck up your time, your patience, and your brainpower.

That’s where free payroll software comes in.

For small business owners like you, free payroll tools aren’t just about saving money, they’re about saving time, staying compliant, and making payday feel less like a chore and just another smooth part of running your business.

You’ve got options. And we’re about to walk you through the best of them.

TL;DR: Best free payroll software for small businesses (2025)

Short on time but still need to run payroll without pulling your hair out? We got you. Here’s your cheat sheet for the best free payroll software picks this year:

Homebase: Best all-in-one payroll solution for hourly teams and small businesses. Time tracking, team messaging, scheduling, and payroll compliance rolled into one. Free for up to 20 employees.

Payroll4Free: Good for tiny teams who need basic payroll and tax forms but don’t mind a little manual work.

HR.my: Great for global teams needing a free HR management tool with payroll baked in (crowdfunded, ad-supported).

ExcelPayroll: If you’re a spreadsheet die-hard, this Excel-based tool gives you payroll processing without bells, whistles, or a price tag.

TimeTrex: Solid for businesses needing free time tracking, scheduling, and basic payroll automation in one dashboard.

Must-have features to look for:

• Integrated time tracking + payroll (bye-bye, manual data entry)
• Direct deposit and tax calculations
• Compliance support for federal, state, and local laws
• Cloud-based access so you’re not chained to a desk
• A user-friendly interface your team will actually use

Things to consider:

• Team size and complexity (hourly vs. salaried, multi-location, remote)
• Whether you need payroll tax filing included (or just calculated)
• If the software plays nice with your existing systems (time clocks, POS, accounting)
• How much you want to automate (hint: more automation = less admin stress)

For small businesses that want to skip the headaches, Homebase brings it all together in one simple app, without charging you a dime for your first 20 employees.

What does free payroll software for small businesses do?

In plain English? It takes the payroll chaos off your plate.

Free payroll software helps you calculate wages, track taxes, manage paid time off, and actually pay your team. No finance degree needed.

Here’s what it typically handles for you:

• Adds up wages and salaries (accurately, not “close enough”)
• Calculates and withholds payroll taxes (federal, state, and local)
• Tracks PTO, sick days, and those “I need next Friday off” requests
• Generates pay stubs and handles direct deposits
• Whips up payroll reports for you (and your accountant’s peace of mind)
• Files payroll taxes so you don’t miss a deadline

The best payroll systems also play nice with your time tracking software, so you’re not manually typing in clock-in times like it’s 1998.

Most small businesses go for cloud-based payroll software because it’s easier, faster, and doesn’t require you to be an IT wizard with your own server.

Long story short? Free payroll software takes the grunt work out of payday and helps keep you compliant.

How payroll software makes life easier for small business owners

Running a small business is already a juggling act, you don’t need payroll adding more pins to the routine. Good payroll software helps you get your time (and sanity) back by making complex tasks simple and repeatable.

Let’s break down how free payroll software pulls its weight (so you can focus on the real work).

Greater efficiency

Manual payroll eats hours you don’t have. Payroll software automates the number crunching, tax calculations, and direct deposits, cutting a job that takes hours down to minutes. More time for your customers, your team—or maybe even that lunch break you’ve been skipping.

Improved accuracy

Spreadsheets and mental math? Risky. Payroll software reduces human error by automating pay calculations and tax withholdings. When you eliminate the guesswork, you also eliminate costly mistakes.

Heightened security

Employee pay information is sensitive stuff. Reliable free payroll software for small businesses uses encryption and secure data storage to protect your business and your team’s privacy. No more stressing about Excel files living on your desktop.

Streamlined processes

Why bounce between tools when payroll software can pull it all together? The best solutions integrate time tracking, wage calculations, tax filings, and payments into one smooth workflow. Fewer steps = fewer headaches.

Data transparency

With all your payroll data in one place, you get a clear view of what’s going on with your business finances. Easy-to-read reports let you track labor costs, taxes, and trends without digging through piles of paperwork.

Customizability

No two small businesses are the same. Good payroll software lets you tailor pay rates, deductions, PTO policies, and reports to fit how you operate. Start with free features and add more as you grow.

Greater control

When you’re in charge of your own payroll system, you call the shots. Need to adjust pay rates on the fly? Run off-cycle payroll? Tweak PTO accruals? You’ve got the power.

Compliance support

Labor laws are complicated (and change constantly). Payroll software helps you stay compliant by calculating overtime, tracking wage laws, and storing payroll records. Some even file taxes for you. Less worry, more doing.

Employee self-service

Give your team what they want: easy access to pay stubs, tax forms, and the ability to update their info. Employee self-service portals save everyone time (and cut down on those “Can you resend my pay stub?” emails).

The 5 best free payroll software for small businesses (2025)

Not all free payroll software is created equal. Some give you just enough to get by. Others (like Homebase) are built to actually help small businesses thrive, not just survive.

Here are five options that can help make payday painless.

1. Homebase: Best all-in-one payroll software for small businesses

Homebase is designed for busy small business owners who don’t have time for spreadsheets, manual tax calculations, or hunting down late timecards.

With Homebase, payroll connects directly to your time tracking and scheduling, so you can run payroll in just a few clicks. We automatically calculate hours, breaks, overtime, wages, and taxes based on your city, state, and federal laws—no mental math required.

Even better? You can process payroll on the go with our mobile app, set up auto-payroll, and rest easy knowing compliance features (like overtime alerts and recordkeeping) are built right in.

Why it works for you:

• Seamless time tracking and payroll in one place
• Auto-calculates taxes, overtime, PTO, and more
• Compliance support without the legalese
• Mobile-friendly for business owners on the move
• Built for small businesses, not corporate giants

Pro tip: Start free, then upgrade as you grow. No surprise fees, no complicated dashboards. Just simple, smart payroll that works.

2. Payroll4Free: Best free desktop payroll tool for basic needs

Payroll4Free is exactly what it sounds like: a no-cost payroll software that covers the basics for small teams. It calculates wages, tracks vacation time, and generates tax forms. You’ll get payroll reports and an employee portal too.

The catch? You’re handling direct deposits yourself unless you pay for their add-on service. So it’s great if you’re comfortable with a little manual work and don’t mind writing checks or handling ACH through your bank.

Best for: Small businesses that want a free, no-frills desktop solution and are okay with DIY direct deposits.

3. HR.my: Best free option for small teams who need HR basics too

HR.my isn’t just a payroll tool, it’s a full-on HR management platform that just happens to be free. It offers unlimited payroll processing, tracks PTO, overtime, and expenses, and even auto-sends pay slips.

It’s ad-supported and community-funded, so you won’t find paid upgrades or fancy add-ons. But for small teams looking for simple, free HR and payroll support, it’s surprisingly robust.

Best for: Small businesses that want payroll plus simple HR tools, and don’t mind a more old-school interface.

4. ExcelPayroll: Best for spreadsheet pros who love Excel

If you’re the kind of person who lives and breathes Excel, ExcelPayroll might feel like home. It’s a free spreadsheet-based payroll program that automates calculations for salaries, deductions, and taxes.

It’s not cloud-based, so there’s no app or fancy dashboard, but if you like full control and offline tools, it gets the job done.

Best for: Small business owners who already manage finances in Excel and prefer offline payroll solutions.

5. TimeTrex: Best for small businesses wanting free time tracking + payroll

TimeTrex offers a free “Community Edition” of its workforce management software, which includes payroll processing, time tracking, scheduling, and HR features. You can automate payroll calculations, manage multiple pay rates, and even handle garnishments and benefits.

The free plan is self-hosted and has limited support, but it’s a solid option for small businesses that want an all-in-one workforce tool without paying upfront.

Best for: Businesses that need payroll plus basic time tracking and don’t mind a little DIY setup.

Make payroll your easiest business win with Homebase

Good payroll software doesn’t just “do the math”—it gives you back your time, your sanity, and your weekends.

With Homebase, you can:

• Save hours every pay period by automating time tracking, tax calculations, and direct deposits
• Stay compliant with built-in wage, tip, and PTO tracking that keeps you on the right side of labor laws
• Pay your team on time, every time
• Give employees easy access to their hours, earnings, and pay stubs.

I honestly have not thought about payroll since switching to Homebase Payroll—which is the best endorsement I can give a platform designed to make you more efficient or take away a once tedious task. WE LOVE IT.

- Eric Murphy (Owner, The Gear Attic in Athens, GA)

And the best part? Homebase goes beyond payroll. We help you track time, manage schedules, hire new team members, and stay compliant—all in one simple app.