May 1, 2021

Best Payroll Software for Small Business 2021

Popular Payroll Software Companies 360 Overall Rating Monthly Fee $59 + $4/Payee and Up Direct…

Popular Payroll Software Companies

Payroll software isn’t just for the large enterprise companies that have to pay out wages to more than 1,000 employees. Small businesses have a lot to gain from reliable payroll software. And while mitigating expenses is the main priority for most small businesses, investing in payroll software may actually save you time and money. Of course, you will need to pay an upfront fee to use payroll software for your company, but automating the payroll process and getting help on filing your payroll taxes gives you hours of your day back to put into building your business. In fact, Intuit QuickBooks reports that managing payroll taxes takes up nearly five hours of a business owner’s time each pay period.

However, every business has its own set of unique needs. What is good for one company may not be right for another. So our Best Payroll Software for Small Businesses of 2021 rating was created to help you navigate some of the small business-specific factors that may make payroll software better for your business.

Portrait of a business manager doing the books at a restaurant using a tablet computer.

(andresr)

Below you will find our rating of the best small business payroll software and a guide to help you answer the questions you may have about how a payroll system can help your company. Our list is based on the companies to make our Best Payroll Software of 2021 rating because even if your business is just starting up, you shouldn’t have to sacrifice quality.

Best Payroll Software for Small Businesses of 2021

OnPay  »

OnPay

Best Small Business Payroll Software of 2021

Monthly Fee
$36 + $4/Payee and Up
Direct Deposit
Trial Period
30 Days
Priority Support

OnPay: OnPay is No. 1 on our Best Small Business Payroll Software of 2021 rating. It offers straightforward pricing that will cost your small business $36, plus $4 per person per month. That fee gets you access to all of OnPay’s features, including unlimited payroll runs, state and federal tax filings, and accounting and time tracking software integrations. OnPay’s customer service will set up your account for you, including adding in your employees’ information and helping you integrate any compatible business software. The payroll software comes with OnPay’s human resources (HR) software that gives you access to tools for onboarding, tracking paid time off (PTO), document storage, and HR auditing. Your company will also have the ability to add and manage employee benefits.

OnPay is also ready to help small businesses in special situations, such as restaurants with minimum wage tip makeup, agricultural workers that need to file Form 943, workers on H-2A visas, and nonprofits and churches that are exempt from federal unemployment taxes (FUTA).

Patriot  »

Patriot
Monthly Fee
$10 + $4/Payee and Up
Direct Deposit
Trial Period
30 Days
Priority Support

Patriot: Patriot comes in at No. 2 on our Best Payroll Software for Small Businesses rating. It offers the most affordable plan in our payroll software ratings, starting at just $10, plus $4 per payee per month for its Self-Service plan. Small business owners may be attracted to Patriot by the price alone, but even at such a low cost, Patriot offers its users comparable features to most other payroll providers. Patriot will set up your account for you and allow you to process unlimited payroll runs, at any frequency, across multiple office locations. You can integrate payroll with Patriot’s accounting software or QuickBooks, and use Patriot Time and Attendance or TSheets to track your employees’ hours. And Patriot offers an add-on HR service for $6, plus $2 per employee per month.

However, Patriot’s Self-Service plan does not cover your payroll taxes. If you want to automate your local, state, and federal taxes, you will need to get Patriot’s Full Service plan for $30, plus $4 per payee per month.

Square  »

Square
Monthly Fee
$29 + $5/Payee and Up
Direct Deposit
Trial Period
N/A
Priority Support

Square: No. 3 in our small business ratings is Square’s payroll software. Another payroll software with simple pricing, you get access to everything Square offers for $29, plus $5 per employee per month. And if your business only needs to pay contractors, Square waves the monthly fee of $29 and will only charge you $5 per payee per month. Square is ideal for small businesses that are already using one of Square’s other business products, such as its point-of-sales (POS) system. The payroll software integrates with Square’s POS and the Square Team app to help you manage your business. It will sync all of your business’s data together, including your employees’ hours and your company’s sales data. And payroll can be run from anywhere using the Square Payroll App from your cell phone.

However, you don’t have to use other Square products to make Square payroll software a good choice for you. It is compatible with third-party software, such as QuickBooks Online, and it has free seasonal inactivity, which will benefit small businesses, like pop-up shops, that only run certain months of the year.

Intuit QuickBooks: The Best Payroll Software for Small Businesses rating is rounded out with Intuit QuickBooks in the No. 4 spot. Intuit QuickBooks offers three tiers of payroll software. The Core plan offers a great deal of value for small business owners. It will help you automate your payroll and federal and state taxes for $45, plus $4 per employee per month. You can also add 401(k) retirement plans and health benefits for your employees to the Core plan. If you want HR support and workers compensation administration, you will need to go with one of QuickBooks’s higher-tier plans, known as Premium or Elite. However, the higher-tier plans are more expensive and may be out of the standard small business’s budget.

A key difference between Intuit QuickBooks and the rest of the payroll providers in our ratings is that all of its plans provide quick direct deposit. While the average direct deposit in our ratings takes four days after payroll processing, with some companies offering faster deposits at higher-tier plans, QuickBooks Core has next-day direct deposit, and Premium and Elite provide same-day deposits. This can make all the difference to your employees because the American Payroll Association reports that “49% of U.S. workers will leave a job after experiencing just two problems with their paychecks,” including late payments.

Intuit QuickBooks is also the ideal choice for accountants. It provides its Elite payroll plan for free to accounting firms using QuickBooks Online Accountant. The construction industry can also benefit from QuickBooks. Its payroll services are used by 30,000 construction small businesses to help manage the tax laws surrounding their industry.

Payroll Software is the modern solution to paying your employee’s wages and filing your payroll taxes. While the process used to require hours of a business owner’s time or hiring HR or accounting staff to manage a payroll calendar, payroll software offers an efficient means of automating much of the payroll process.

Instead of manually calculating payroll, tracking your employee’s hours, writing checks, and deducting taxes, payroll software can automatically process your company’s payroll using integrated time and attendance software to sync your staff’s hours. And the American Payroll Association states that “organizations using a solution that has both timekeeping and payroll capabilities were 44% more likely to have a payroll error rate at 2% or less.” Therefore, payroll software offers small businesses a more efficient way to manage their payroll process, cutting back on manual effort and giving business owners more time to invest in running their business.

Best Small Business Payroll Softwares of 2021 Features

OnPay »

4.2 out of 5

Monthly Fee $36 + $4/Payee and Up
Direct Deposit
W2
1099
Federal, State, & Local Taxes
HR Add Ons
View Plans »
Patriot »

4.0 out of 5

Monthly Fee $10 + $4/Payee and Up
Direct Deposit
W2
1099
Federal, State, & Local Taxes
HR Add Ons
View Plans »
Square »

3.8 out of 5

Monthly Fee $29 + $5/Payee and Up
Direct Deposit
W2
1099
Federal, State, & Local Taxes
HR Add Ons
View Plans »

Even for the non-tech savvy business owner, working with payroll software is an easy process that will save you time and effort in managing your payroll calendar. First, you will want to set up your payroll software. And while this is generally a simple process, and many payroll providers offer help or even set up your account for you, you may find our guide on How to Choose a Payroll Software System helpful.

While setting up your account, you or a customer support representative will supply the software with banking information for both your business and employees. The information provided will allow the payroll software to directly deposit wages into your staffs’ bank accounts, calculate your payroll taxes, and keep track of employee’s wages, PTO, personal records, and more. Then, you will set up your payroll calendar, deciding the day of the week and the frequency at which your employees are paid.

Once your payroll calendar is squared away, you will have the option to integrate your payroll software with accounting, time and attendance, and HR software provided by your payroll provider or a third-party provider. Integrations offer a streamlined approach to the payroll process, syncing up your payroll with your employees’ hours of work. This makes automating your payroll calendar even easier. However, you will still want to check over everything even if you decide to automate your payroll.

With your account set up, you will now be able to process payroll quickly while on the go. Many payroll providers offer mobile apps or mobile-optimized websites. And at this point, a few quick clicks on your cell phone is all it takes to run your payroll.

Payroll Software is Good For:

  • Saving time managing your company’s payroll

  • Avoiding costly payroll tax errors

  • Running payroll on the go

Payroll Software is Not Good For:

Small businesses have a lot to gain from working with payroll software. It does require an investment to use payroll software, but ultimately, you may find that payroll software saves you more time and money than opting to go without it.

When deciding to invest in payroll software, consider the cost of employing an HR or accounting team to manage your payroll calendar, and the hours it will take them to properly track your staff’s work hours and calculate your business’s payroll and taxes. Alternatively, a business owner may opt to manage payroll themselves. Regardless, a team member’s time and attention will be required to ensure that your employees are properly paid, your taxes are compliant with all tax laws, and there are no payroll errors that could result in lost revenue.

Payroll software offers an affordable solution to efficiently manage your small business’s payroll, whether you have a team of five or 50. Payroll software works on a pricing model that starts with a base monthly fee, for example, OnPay our No. 1 Best Small Business Payroll Software, charges $36 per month. Then, you will need to pay an additional smaller monthly fee per payee. It costs $4 per employee per month for OnPay’s payroll Software. That means that if you have to pay a team of 20 people, you will pay $80 plus the $36 monthly fee for a total cost of $116 per month to run your business’s payroll. For this cost, you will be able to automate your payroll and taxes, process your payroll an unlimited number of times at any frequency, and reallocate the hours you would have spent on payroll into another area of your small business.

Many payroll software companies also provide additional HR support and tools included in your monthly fee. These tools can help you manage and grow your business, giving you help in areas such as offer letters, onboarding, organization charts, staff directories, tracking PTO requests, and administering employee benefits.

The first step to choose the right payroll software for your small business is identifying how you run your company’s payroll. To help you answer this question, think about the following:

  1. How big is your business? Do you run a small business of fewer than 50 employees or a microbusiness with less than 10 people on staff?
  2. Who works for your small business? Do you pay your workers an hourly wage? Or do you employ salaried workers and contractors?
  3. How frequently do you pay your team? Is payday weekly, bi-weekly, or monthly?
  4. What can my small business afford? What does your budget look like for payroll software and are there any must-have payroll features that your company needs?
  5. Who will run your payroll calendar? Will the business owner, dedicated staff member, or HR team manage your small business payroll?

The key to picking the best small business payroll software is understanding that every business works differently. Your company’s needs are unique to how you run your business and the type of work you do.

A well-established small business with more than 20 employees may prefer to go with OnPay because it includes HR software that may help you manage your team. While a startup may need to cut as many costs as possible and choose Patriot because it offers the most affordable plan in our Best Payroll Software of 2021 ratings. However, if your small business only hires contractors, you could save a lot of money by going with Square, which provides payroll software for only $5 per payee per month with its contractor-only option. Or if you have more room in your budget, you may decide to go with Intuit QuickBooks Payroll because your company already works on QuickBooks Online or QuickBooks Desktop and it will easily integrate with your current business software.

Think about how your company works and consider the features of the software you’re interested in before choosing a payroll provider. The payroll software that is right for you will depend on the specific needs of your small business.

Learn More

Every business is different. Explore our ratings of the Best Payroll Software of 2021 to discover which option is right for you.

Other Ratings from 360 Reviews

Make informed decisions for your business. Read our other reviews, and learn how to save money and operate more efficiently.

Our 360 Methodology for Evaluating Payroll Software

We explain what matters most to consumers, experts, and professional reviewers when it comes to payroll software solutions. Then, we provide an unbiased evaluation of payroll software. Our goal is to empower consumers with the information and tools they need to make informed decisions. More information about our 360 Reviews methodology for evaluating payroll software can be found here.

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