6 Best Free Payroll Software: Pros, Cons & More

The best free payroll software overall is Payroll4Free because of it has plenty of features and impressive live support options, including phone and email.

Payroll4Free’s combination of functionality and ease of use makes it the winner, but other standout free software for managing payroll is Square Payroll, which is best for paying contractors rather than employees.

Many payroll services include integrations that streamline additional business operations such as tax filing, employee management, or a human resources department.

In this article, we’ll break down the best free payroll software, letting you know which features and integrations each one has to offer. But, if you’re interested in paid payroll software — which offer stronger features and are easier to scale — you can take our free online payroll quiz to get match your business to a suitable solution in minutes.

In this guide:

• What Is the Best Free Payroll Software?
• Why Do Businesses Need Payroll Software?
• Is Free Payroll Software Worth It?
• Methodology: How We Test Free Payroll Software
• Find the Best Payroll Software for Your Business
• Frequently Asked Questions

What Is the Best Free Payroll Software?

Payroll4Free, Square Payroll, and ExcelPayroll are the best complimentary payroll services we’ve reviewed. Read our full list of contenders, and their individual best fors, in the list below.

1. Payroll4Free – Best free payroll software overall
2. Square Payroll – Best for contractors
3. ExcelPayroll – Best for spreadsheet lovers
4. HR.my – Best for international use
5. TimeTrex – Best for employee management
6. Toast Payroll – Best for restaurants and bars

1. Payroll4Free – Best Free Payroll Software Overall

Payroll4Free offers one of the most competitive free payroll software systems on the market. It’s easy to use, has customer support to guide users through difficult issues, and comes with more features than any other payroll software on this list — making it the best free payroll software overall, especially for small businesses.

Its free package offers more comprehensive features than providers like TimeTrex — making the payroll process even easier. While it’s only suited to businesses with less than 25 employees, it does include direct deposit and a self-service portal, which is essential if you business needs to prioritise spend in other areas.

Pros

Payroll4Free lets managers compile reports to better understand their data, tracks taxes across the state and local level including federal. It also gives employees access to a portal that lets them view personal information, track vacation days, and reprint paystubs or W-2s if needed.

The service offers a simple interface, 24/7 customer support, and a great range of the features you’ll need to manage your payroll, all for free. Live customer support for a free software isn’t a guarantee, particularly if it is unlimited support via both phone and email.

Cons

Like most free software, Payroll4Free isn’t perfect. One big restriction is the employee cap, which limits the number of individuals on the payroll to 25 — a number that’s fine for many small businesses, but could be too limiting as a company grows. ExcelPayroll, on the other hand, offers a much higher employee limit — with a cap of up to 50 employees, however it doesn’t provide the same level of features and functionality that Payroll4Free offers for US businesses, making it less desirable. Still, with Payroll4Free, users will have to put up with advertisements in the interface and MacOS isn’t supported at all, so you’ll have to have rely on Windows to run the software.

Time tracking is not included, either, although integrations can be added to import that data into the platform.

Features

Payroll4Free is at the top of our list in large part due to the wide range of features it offers. Here’s a quick list of the key abilities that it can handle for your business:

• Pays employees and contractors
• Determines federal, state, and local taxes
• Supports paper checks and direct deposit
• Employee portal
• Vacation time calculation
• Generate reports
• Data export for accounting integrations
• Data import for time tracking integrations
• Customer support: Phone and email

The reporting ability tracks data that can be turned in a variety of reports — earnings, tax, benefit, accrued time, and payroll journal reports.

Any hidden fees?

Payroll4Free offers an impressive amount for free, but not everything. You’ll have to pay a $15 per month subscription to get Payroll4Free to handle all your end-of-year tax calculations, including deposits, filings, and sending the W-2 forms every employee must receive. With the free version, you’ll still have the tools to manually calculate your taxes, but you’ll need to personally file taxes and send forms.

In addition, if you surpass the 25-employee cap, you will be charged $35 per payroll cycle. So, if you anticipate company growth down the road, Square might be the best free offering for you.

2. Square Payroll – Best for Contractors

Square Payroll is the biggest name on this list, and is best known for its paid plans. In comparison to Payroll4Free, Square Payroll’s free plan leaves a lot to be desired. It doesn’t offer the functionality and level of features that you’ll find with Payroll4Free, however it does include custom reports and good software integrations that make accounting relatively easy.

Pros

Perks include the ability to create detailed custom reports and tax support for sending 1099-NEC forms, although you’ll still need to file the taxes themselves. Cash App payments are supported, in a feature that no other service in this guide offers.

Square Payroll offers a QuickBooks Online integration, for accounting help, but has no data migration support.

Cons

What are the downsides? First, you’ll only be able to pay contractors, not full-time employees.

Second, Square Payroll charges $5 per person per month —  it’s free to have everyone in the system and data collection is free, but the core reason you’d want the service will cost money. But that payment process makes Square great for a business that contracts seasonal or irregular independant work, since there’s no monthly price charged when it’s not being used.

Features

Square Payroll’s core features include:

• Pays contractors
• Supports paper checks, direct deposit, and Cash App
• 1099-NEC form mailing
• QuickBooks integration
• Generate reports
• Customer support: Phone and email

Support hours are on work days from 6 a.m. to 6 p.m. PT, making Square Payroll’s support option not as comprehensive as Payroll4Free’s 24/7 service but definitely better than other free services including HR.my and TimeTrex, which don’t offer email or phone support at all.

Any hidden fees?

Kinda: Square Payroll charges $5 per person paid per month, meaning that this “free plan” requires payment in order to do its primary function. One person can be paid an unlimited number of times within a month for the same $5 charge. Yes, this does mean that this service functions more like a free trial than a free plan, but the distinction still matters for seasonal contracting work, as a business can retain access to all its reports and data during the off season, entirely for free.

The service has a paid plan that supports fulltime employees as well, making it a good option for a small business with future plans to scale up to employees as well as contractors. Square Payroll’s paid plan costs a base $35 per month, plus $5 per person paid per month, and it includes tax filings and payment, timecards with an employee app, and tip tracking. Learn more about Square Payroll pricing plans.

3. ExcelPayroll – Best for Spreadsheet Lovers

The ExcelPayroll software is a great free payroll software for DIY-loving small business owners or managers who enjoy tracking data through spreadsheets. Users may face a tough learning curve if they aren’t already familiar with Excel, but those who know how the popular Microsoft spreadsheet software works should find ExcelPayroll far easier. In comparison to Payroll4Free, Excel is a more intuitive platform, with an interface that’s far easier to get to grips with, however Payroll4Free does offer more features — including direct deposits and automated taxes, which makes it more suited to new businesses.

Pros

Setup and installation with ExcelPayroll is easier than any other software in this guide, as it all runs on Excel, so you’ll just have to download and unzip a file.

Up to 50 employees can be paid at one time through the software, which should be more than enough for any small business. The user cap is intentionally designed by the software’s creator, who wanted only small businesses to be able to use it, although they have noted that non-profit organizations with a greater number of active employees should get in touch to have the cap removed.

Cons

While the service is free, ExcelPayroll is more limited than Payroll4Free and Square Payroll services. For example, direct deposit is not supported, though paper checks can be printed. Users can also print tax forms (W2 forms, W3, 940, 941, DE9), although they can’t file through the software.

Features

ExcelPayroll’s most important features to know are:

• Prints tax forms
• Tracks vacation days
• Generates workers’ compensation reports
• Calculates deductions
• Generates accounting entries
• Offers custom withholding and timecard options
• Live customer support: None

The deductions that the software is designed to automatically add when desired include 401K, 125P, HSA, and Garnishment.

Any hidden fees?

There are no extra fees whatsoever with ExcelPayroll, including no monthly fee, no payroll fee, and no additional services such as tax filing. It’s a stripped-down service with no surprises.

4. HR.my – Best for International Use

Unlike most software on this list, HR.My supports an unlimited number of employees, across any location on the planet. Well, any location that speaks one of the 67 languages that the payroll software supports. That’s an impressive number for any free software, and more than any other service in this guide. As a result, HR.My works well as a way to track worker pay across international borders making it perfect for managing multinational teams.

Pros

HR.my features include basic payroll support and time tracking, but also cover useful employee management tools that will help managers easily field expense claims and employee leave requests. Plus, the software lets a business operate an HR service, a benefit none of the other free offerings in our guide can boast except for TimeTrex.

The HR.my software is crowdfunded, with no paid plans waiting in the wings.

Cons

The downsides of the software are also tied to its focus on international — It doesn’t offer any US labor law compliance, so users in the US will likely need to look elsewhere for tax forms and filing. Also, as with ExcelPayroll, there is no live customer support — offering it would have quite a feat, given the global userbase.

One other limitation worth mentioning is that only four specific salary processing periods are supported — Monthly, Semi-Monthly, Weekly and Bi-Weekly — which isn’t likely to be a problem, but falls short of the effectively unlimited amount of payroll cycles allowed per month by Square Payroll and ExcelPayroll.

Features

HR.My packs plenty of features into its software. Here are the highlights:

• Time tracking
• Employee portal
• Expense claim support
• HR management
• Leave management
• Supports 67 languages
• Live customer support: None

Users of the free service can suggest additional tools online, and HR.My says its software is regularly updated for even more functionality.

Any hidden fees?

No extra fees or cost here: HR.My doesn’t have a fee or offer any tie-in services.

5. TimeTrex – Best for Employee Management

Time Trex is a great business software for managers invested in employee management, since it focuses on tracking hours worked and auto-generating schedules. Unlike other Payroll4Free, its pricing is a little ambiguous, but it does offer a free 30-day trial and demo for users who do want to test out the software.

Pros

Time Trex offers payroll support, time tracking and employee management tools that cover employee scheduling: With this feature, work hours can be set in advance so that even multi-week rotating schedules can be automatically created.

The software is cloud-based, so it can be accessed from any major browser on desktop or mobile, making it easy for a manager to stay up-to-date from any location.

Cons

The software will calculate taxes when determining pay and tracks tax data, but comes with no tax filing service. Users on the free plan won’t have access to live customer support, and won’t get additional advanced features. One big feature restriction of the free plan stands out above the rest: There’s no support for direct deposit, an ability that Payroll4Free and Square Payroll both include.

Features

Time Trex’s main features include:

• Time tracking
• Payroll support with deductions
• Supports paper checks
• Calculates federal, state, and local taxes
• Attendance management
• Leave management
• Automatic scheduling
• Cloud-based interface

Live customer support is available for paid plans.

Any hidden fees?

TimeTrex offers three paid plans, but does not make the plan pricing public — instead, interested customers should contact the company for a custom quote. Higher priced plans include features ranging from invoicing to recruitment and applicant tracking.

6. Toast Payroll – Best for Restaurants and Bars

Toast Payroll is a payroll software designed specifically for restaurants, bars, and cafes. Due to its industry specialism, the payroll includes a raft of sector hospitality-focused features like tip management and calculations, and a seamless integration with its POS system. However, while Toast Payroll is free for businesses that already pay for Toast’s POS system, it’s not eligible for businesses that aren’t using the service.

Pros

Since Toast Payroll is an extension of the provider’s POS product, it’ll be a natural fit for most restauranteurs and hospitality businesses – especially if they’re already using Toast POS. The payroll service offers a number of stand-out features, including ‘Toast Tips Manager’ – an automated tip management platform that gathers, pools, and distributes tips – and support for multiple pay rates, for employees on different wages.

Cons 

Despite Toast Payroll’s strengths, it’s not as versatile as other free options on this list as it’s only eligible for hospitality businesses. What’s more, while it’s a great deal for businesses already benefitting from Toast POS, the point-of-sale entry price of $69 per month might be quite steep for users who won’t make full use of the system.

Features

Toast Payroll’s restaurant-specific packages separate it from the pack. Here are some highlights:

• Automated tip-sharing
• Seamless POS integration
• Integrated employee management
• Compliance tools
• Reporting and insights
• Automated tax calculations
• Support for multiple pay rates

Any hidden fees?

While these costs aren’t particularly hidden, businesses will need to use Toast’s POS software to gain access to the payroll service for free. Toast POS’s paid packages start from $69 per month, with enterprise options available too.

Read our Toast POS review to learn more about the user-friendly point-of-sale system.

Why Do Businesses Need Payroll Software?

All businesses need workers, and all workers need to get paid. For that, the manager needs a system for tracking and automating how, when, and how much each employee and contractor is paid — which is what payroll software does.

The key advantages of payroll software include greater efficiency and accuracy for generating paychecks and payslips, as well as the ability to calculate bonuses, expenses, overtime and holiday pay.

Many payroll software options will include integrations with accounting software, so business taxes can be easily calculated as well, and the correct tax forms can be sent to employees. The biggest benefit, though, is increased employee satisfaction: There’s no quicker way to shake your employees’ confidence that you value their contributions than failing to deliver their paycheck on time.

Is Free Payroll Software Worth It?

According to our research, payroll software costs tend to start at $35 to $45 per month for paid services. There’s a reason plenty of businesses pay that fee — the relatively small investment will reap dividends in additional features and integrations with common business management tools from time trackers to HR resources to

Still, starting with a free software makes sense: When a business is getting off the ground, extra features can distract a harried manager from higher priorities. As the company scales up, it can switch to a paid plan to capitalize off of the more detailed functionality.

If you plan to outgrow your free plan, we’d recommend starting with Payroll4Free or Square Payroll, both of which offer paid plans for users who have outgrown employee caps or require more features.

A small business that hopes to keep roughly the same employee base might want to pick ExcelPayroll, as they won’t run the risk of hitting the 50-employee cap and needing to unexpectedly migrate to a new software.

How to Choose Payroll Software

You’ll want to find the best payroll software for your specific needs: You won’t want to overpay for a wealth of features that aren’t actually relevant to your industry or that won’t save enough money to justify taking the time to use them. In general, a smaller business has basic payroll needs, while a larger operation has the scale to fully benefit from a payroll software with expanded functionality.

That extra functionality might include more ways to accomodate employees’ needs, from vacation day accrual to overtime hours, or more ways to analyze data with a greater range of generateable reports.

Payroll software often serves more than one role, or it integrates with other services. The most common of these additional businesses services are accounting, tax filing, time tracking, employee scheduling, and HR support. Your business may need other industry-specific services as well.

If you’re after a way to manage human resources processes, check out our guide to the best HR software.

Methodology: How We Test Free Payroll Software

Find the Best Payroll Software for Your Business

If you know which software matches your needs, whether it’s Payroll4Free, Square Payroll, or another free solution, there’s nothing keeping you from getting started today. After all, it won’t cost anything.

If you’re open to the feature-rich benefits of paid payroll software, we can help you there, too. You can take our free payroll quiz to find the best payroll software for your business in minutes, designed by our in-house team of payroll specialists.

Frequently Asked Questions