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

Running payroll isn't just about paying your team—it’s about getting it right every time. The best solutions take care of most of the busywork for you. That means less time crunching numbers, and adding all your year-to-date payroll information and employee data in just a few clicks.

Finding the best payroll software for small business means balancing features, cost, and ease of use—especially when you have an hourly team to run. 

So let's cut through the noise and go on a little shopping trip. We'll show you exactly how to choose payroll software for your small business.

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What to look for in payroll software for small business

Before you start shopping, just note that not all payroll software is created equal. When considering how to choose payroll software for your small business needs, focus on these key features:

Never miss another payday. 

Look for payroll systems that run on autopilot with scheduled payroll runs, multiple pay rate handling, and automatic overtime and bonus calculations. Save hours every month by streamlining your entire payroll process.

File taxes like a pro. 

The best software calculates payroll taxes accurately, files forms automatically, makes deposits on your behalf, and stays current with changing tax laws so your business stays protected from costly penalties.

Keep your team on the same page. 

No more admin questions like "Can I see my pay stub from three years ago?" Empower your team to view their own pay stubs, update personal information, and manage tax withholdings and direct deposit details.

Track time without a hitch. 

If you have hourly workers, then you know time tracking integration is a need, not a want. Eliminate double-entry and ensure accurate paychecks with features like mobile tracking, PTO management, and overtime alerts.

Benefits for everyone. 

As your business grows, look for systems that handle health insurance deductions, retirement contributions, and other health benefits like HSAs, keeping everything connected in one place.

Best payroll software for small business in 2025

We've compared the top online payroll software for small businesses to help you find your perfect match.

Homebase

Best for: Small to medium businesses with hourly employees in retail, food service, and service industries needing strong scheduling and time tracking.

Pricing: Payroll costs $39/month plus $6/person/month on top of plans starting with a free basic option.

Key features: 

• Comprehensive employee scheduling with drag-and-drop functionality
• Precise mobile time tracking with geofencing
• Team communication tools with read receipts
• Built-in labor law compliance tools
• Customizable payroll reports for detailed financial records
• Efficient processing payroll to manage payroll operations seamlessly

Pros: Homebase excels at scheduling and time tracking for hourly workers, offering a free basic plan with substantial value and an all-in-one system that eliminates the need for separate scheduling and payroll platforms.

“We used ADP for 6 years. When we moved to Homebase we decreased our time doing payroll and onboarding. The system is rock solid and very easy to use. When I have a question, they are very responsive. The Homebase team is fantastic!” — Tom (Capterra reviews of Homebase)

Cons: The payroll features, while perfect for small businesses, aren't really designed for larger corporations.

“It's designed very simply which could be looked at as a positive or negative.” — Mike (Capterra reviews of Homebase)

Gusto

Best for: Growing businesses with 5-100 employees seeking a user-friendly system with integrated HR features.

Pricing: Starting at $49/month plus $6/person/month, with a current promotion of 25% off higher-tier plans.

Key features: 

• Automated payroll with unlimited runs and tax filings
• Ability to pay employees, including both domestic and international staff
• Handling multiple pay rates for employees
• Health and retirement benefits administration
• Comprehensive HR tools with onboarding
• Time tracking and PTO management.

Pros: Gusto offers an exceptionally user-friendly interface with comprehensive HR features for businesses without dedicated payroll staff.

"I thought Gusto as a platform made the onboarding process at my new job very efficient. I also like how I can access everything I need (PTO, payslips, Tax info, paperwork, etc) in one place." — Madison (Capterra reviews of Gusto)

Cons: The service becomes expensive as your team grows, with advanced features locked behind higher-priced tiers.

"The pricing model is a bit expensive and can be intimidating to new businesses. They also don’t really have a good sales team that communicates features productively to ensure transparency." — Sarah (Capterra reviews of Gusto)

QuickBooks Payroll

Best for: Businesses already using QuickBooks accounting who need seamless data integration and tax compliance.

Pricing: Starting at $50/month plus $6/person/month, with a current 50% discount for 3 months.

Key features: 

• Automated payroll processing with direct deposit
• Comprehensive tax calculations and filings
• Self-service employee portal
• Integrated time tracking with QuickBooks Time
• Seamless integration with QuickBooks Online for efficient payroll processes and third-party services

Pros: QuickBooks Payroll integrates perfectly with QuickBooks accounting software, offering robust reporting capabilities across multiple service tiers.

"It was easy to track and update payroll. The automatic payroll updates with tax tables were very helpful. The liability payments and tax filings were very simple." — Emily (Capterra reviews of QuickBooks Payroll)

Cons: The software can become expensive with add-ons and suffers from system glitches requiring regular support intervention.

"It was slow to process payroll, and it often had glitches. We had to contact Quickbooks support on a regular basis who often had us do unconventional workarounds for known system errors until they could have a software update released." — Emily (Capterra reviews of QuickBooks Payroll) 

Square Payroll

Best for: Restaurants, retail, and service businesses using Square's POS system who need to manage tipped employees or contractors.

Pricing: $35/month plus $6/person/month for employees, or just $6/person for contractors with no base fee.

Key features: 

• Full-service payroll processing with automatic tax filings
• Real-time integration with Square POS
• Automatic import of hours, tips, and commissions
• Digital tip distribution and reporting
• Compliance assistance with payroll tax obligations
• Payment processing for contractors.

Pros: Square Payroll provides reliable tax reporting and extremely simple setup for businesses already in the Square ecosystem.

“So quick and easy to use. Set up is quick and easy! Reports are perfect! Payrolls are always timely and accurate. Agency reporting at state, local and federal level have always been accurate and timely.” — Barbara (Capterra reviews of Square Payroll)

Cons: The service has limited advanced features compared to dedicated platforms. Customer support quality is hit-or-miss.

“Customer service is virtually impossible to reason with, non-responsive at times and in the long run, using this service has caused chaos for my company and distress for my employees.” — Sherri (Capterra reviews of Square Payroll)

ADP Run

Best for: Growing businesses with 10-50 employees who need scalable solutions with strong compliance features.

Pricing: Varies based on quote with multiple plan options requiring contact with sales.

Key features: 

• Full-service payroll processing with multiple payment options, including unlimited payroll runs for flexibility
• Comprehensive tax management with compliance guarantees
• HR document management library
• Self-service employee portal with mobile access
• Easy transfer of funds from a business bank account to a personal bank account for managing personal finances

Pros: ADP Run offers customizable reporting tools and helpful implementation support, with a user interface designed for regular payroll processing efficiency.

“It is very user friendly. I also like that you can save the reports you run every payroll. The customer service is also very good. Setting up was easy and the representative came and helped transfer things over from the other payroll service." — Angela (Capterra reviews of Run by ADP)

Cons: Lacks pricing transparency with inconsistent feature functionality and variable support quality.

“There were many features in RUN that were suboptimal or that just didn't work at all. Their support teams were horrendous.” — Christian (Capterra reviews of Run by ADP)

Paychex Flex

Best for: Established businesses with 20+ employees seeking a complete HR ecosystem beyond basic payroll functions.

Pricing: Varies based on quote with multiple plan options requiring contact with sales.

Key features: 

• Flexible payroll processing with multiple pay options
• Comprehensive tax administration including federal, state, and local taxes
• Extensive HR services including handbook creation and compensation management
• Benefits administration for health and retirement

Pros: Paychex Flex provides a comprehensive suite of HR and payroll services with 24/7 U.S.-based support and strong compliance features.

“Very user friendly. I have been using Paychex Flex for 3 1/2 years and it takes me 5 minutes to run payroll. Setup was very easy with the help of their support team. Anytime I have a question, they respond very quickly.” — Tim (Capterra reviews of Paychex Flex)

Cons: Complex pricing structure makes comparison difficult with poor reporting functionality and inconsistent customer service. 

“I am unable to pull a report showing the punch times and locations. Their report shows coordinates of their location, totally useless.” — Lisa (Capterra reviews of Paychex Flex)

Wave Payroll

Best for: Micro-businesses and solopreneurs with just a few employees who need affordable basic payroll integrated with Wave's free accounting.

Pricing: $40/month plus $6/person/month on top of free or paid accounting plans.

Key features: 

• Basic payroll processing with direct deposit
• Employee and contractor payment options
• Self-service employee portal
• Automatic tax calculations with payroll tax filing in select states
• Comprehensive payroll management to streamline payroll processing

Pros: Wave Payroll is very affordable for small teams with a simple interface that integrates perfectly with Wave's free accounting software.

“I like how simple Wave is for reconciling all my business expenses and auto-categorizing, based on previous years. Invoicing is also fairly straightfoward.” — Ana (Capterra reviews of Wave)

Cons: Tax filing is available in only 14 states. Poor communication during payment issues and insufficient depth for complex business needs.

“Communication is poor when a problem arises. They can't offer detailed explanations if they make a decision to reject or process a client payment.” — Zina (Capterra reviews of Wave)

Best free payroll software for small businesses

When you're just starting out, budget-friendly payroll options can help you save costs and pay your team, too. Check out these affordable alternatives:

Homebase Basic with Payroll Add-on

Homebase's free plan offers time tracking and employee scheduling for one location (up to 20 employees).

• Get free automated time tracking and scheduling, and add on payroll for $39/month base fee + $6/month per employee paid.
• Essential for hourly employees who need accurate time tracking connected to their payroll.

Wave Payroll (Basic Plan)

Wave offers free accounting software with payroll add-ons starting at $40/month plus $6 per employee. 

• Integrates perfectly with Wave's accounting platform for a unified financial system. 
• Simple interface handles basic payroll needs effectively for very small businesses.

Payroll4Free

Payroll4Free is completely free for businesses with 10 or fewer employees

• Includes features like employee and contractor payments, tax calculations, vacation tracking, HR functions, and an employee portal. 
• Tax filing services and direct deposits (using Payroll4Free’s bank) cost extra ($40/month), but the core payroll features remain free.

How to choose the best payroll software for your business

Finding the right payroll solution means thinking about how it fits your business. 

For example, how the software handles new hire reporting to ensure you comply with state regulations. Or how the solution makes your payroll operation run more smoothly, and provides secure access to payroll data. 

Here’s how to narrow down your options when considering how to choose payroll software for small business operations.

Consider your business size.

The size of your business significantly impacts which payroll solution will work best. Very small businesses might find basic, affordable options perfectly adequate, while growing teams will benefit from more comprehensive features, stronger reporting, and multi-state capabilities.

Check integrations.

Look for payroll software that connects seamlessly with your existing tools: accounting software, time tracking, POS systems, and banking solutions. Good integrations save time and reduce errors from duplicate data entry.

Look for tax automation.

Tax compliance mistakes are costly. Choose systems that calculate taxes correctly, file forms automatically, stay current with changing laws, and offer guarantees that protect you if errors occur.

Review customer support options.

When payroll problems arise, you need help fast. Evaluate support availability around your typical payroll time, and consider what communication channels are available. Quality support makes all the difference during payroll emergencies.

Test free trials.

Take advantage of free trials to run a test payroll, explore the employee portal, and evaluate the interface. Hands-on experience is the best way to find software that fits your workflow.

Simplify payroll and focus on what matters most

Choosing the best payroll software for your small business in 2025 doesn’t have to be overwhelming. Whether you're managing a few hourly employees or opening new locations across the country, the right solution is what makes life easier for you and your team.

But before you wrap up your shopping trip—if you run an hourly team in industries like retail, food service, or hospitality, Homebase Payroll is the real standout. 

With built-in time tracking, employee scheduling, and compliance tools—all wrapped in an interface anybody can use—Homebase turns the hassle of paying your team into a few simple clicks.

Don’t let payroll slow you down. Find the right software that works for your business, and get back to doing what you love.

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FAQs

Can I do my own payroll for my small business? 

Yes, you can handle payroll yourself, especially with just a few employees. This approach saves money but requires attention to detail and tax knowledge.

If you go DIY, you’ll need to calculate wages, manage tax withholdings, process deductions, and file required forms. Tools like spreadsheet templates and the IRS calculator can help, but mistakes can lead to penalties, unhappy employees, and wasted time. 

Once you grow beyond 5-10 employees, the complexity and risk of errors typically outweigh the cost savings. 

At this point, many businesses consider outsourcing payroll services to a professional employer organization (PEO). A PEO can manage payroll, provide HR support, and offer third-party access to payroll data, allowing you to focus on your core business activities.

How much does a payroll system cost for a small business?

Most small businesses pay between $40-$200 monthly for payroll software, with costs including a base fee plus per-employee charges. For a 10-employee business, expect:

• Basic systems: $40-$150/month
• Mid-tier solutions: $150-$300/month
• Premium services: $300+/month

Factors affecting price include payroll frequency, multi-state filing needs, HR features, customer support level, and benefits administration. 

Essential services like automatic tax filing and issuing tax forms such as W-2s and 1099s also impact costs. These features simplify tax-related processes, ensuring compliance and reducing manual intervention. 

Most providers offer tiered pricing to let you start basic and grow.

What’s the easiest payroll software to use?

Based on user reviews and interface design, the most user-friendly payroll systems for small businesses are:

• Gusto: Known for its intuitive interface and simple onboarding
• Square Payroll: Simple setup and straightforward dashboard
• Homebase: Easy to navigate, especially for hourly employees
• QuickBooks Payroll: Familiar interface for QuickBooks users

These platforms also offer features to help manage payroll taxes, ensuring your business can withhold and remit these taxes to the IRS efficiently. And some plans include the filing and depositing of federal taxes, which helps with maintaining compliance and reduces the burden on business owners.

The easiest system for you will depend on your specific needs and technical comfort level. Take advantage of free trials to find your best fit.