Best Payroll Software for Small Businesses

Our research suggests that the best payroll software for small businesses is QuickBooks. With very reasonable pricing tiers (the lowest being $45/month), unlimited payroll runs, and a massive amount of integrations, small businesses have a lot to gain from using QuickBooks.

However, what works best for one company may not be the same for another, so it's important to find the payroll system that will integrate best with your specific business' existing setup, budget and goals. Square offers more flexible payment plans than Quickbooks, for example, while Gusto is great for managing benefits, and Sage will solve your Accounting needs at the same time.

Read on to view the pros, cons and pricing of each top-rated provider, as well as our methodology for ranking them.

On this page:

• QuickBooks Payroll – Best Overall Payroll System
• Square Payroll – Most Flexible Payment Plans
• Sage 50cloud Payroll – Best for Accounting
• Gusto Payroll – Best for Benefits Management
• Our Research Methodology
• Frequently Asked Questions

Managing Payroll for a Small Business

No matter what industry your business is in, if you have employees, you’ll need to operate a payroll. But with all the taxes, deductions, and various salaries, it can be easy to get lost in the numbers and forms.

That’s where payroll software comes in handy. All a business owner needs to do is enter their employees’ information into the software, and their employees will be paid the correct amounts, with taxes and deductions being done automatically.

Payroll software saves small businesses from confusion, errors, and having to pay for in-house Payroll Manager. Plus, the top payroll providers offer additional useful features and integrations with other software – let’s see which payroll software is the best fit for your business.

QuickBooks – Best Payroll System

We’ve done our research, and determined that QuickBooks is the best payroll software out there. QuickBooks doesn’t just make payroll software – it’s also a big name in the accounting and HR software world, so you’ll be in safe hands.

QuickBooks covers everything you’d want in a payroll software, allowing you to pay employees, manage taxes and benefit deductions, and offer employees a self-service portal to inspect their payslips. And even on the lowest tier, QuickBooks promises a next-day direct deposit.

QuickBooks is the easiest payroll software to get to grips with, as it offers a load of resources to help newcomers. Live webinars and video-based training allow people to get to grips within a day or two. Premium and Elite members can also receive help with setup and data migration, which can be a daunting task otherwise.

As far as shortcomings go, QuickBooks doesn’t have any major faults. You’re unable to create custom reports or store HR documents on the QuickBooks system, but that’s pretty much it.

There's a reason that QuickBooks is so popular – it's just that well-rounded. ADP RUN is another well-rounded payroll software, but it's a bit more expensive, so you may want to look at alternatives.

QuickBooks Scalability

Unlike other software that peaks at around 40 users, there is no employee limit on QuickBooks, meaning your small business is free to grow. However, it does claim to be intended for small businesses, so if you’re looking to really expand your business, you might find yourself outgrowing QuickBooks. If this is the case, you could look at bespoke payroll software, like Dominion’s iSolved People Cloud or Heartland Payroll.

QuickBooks Pricing

As far as free options go, QuickBooks offers a 30-day free trial. Otherwise, there are three paid tiers available.

The first, the Core tier, costs $45 per month, plus $4 for each employee you pay. Outside of payroll functionality, it also offers health benefit management, 401(k) help, and next-day direct deposit.

The Premium plan costs $75 per month, with each added employee costing $8. The highlights of this tier include same-day direct deposit, workers’ compensation, an HR support center, and time tracking.

Finally, the Elite plan costs $125 per month, plus $10 for each additional employee. On top of everything in the previous tiers, you’ll be given expert setup help, 24/7 product support, a personal HR advisor, and project management capabilities.

Square Payroll – Best for Flexible Payment Plans

Square Payroll is one of the most versatile payroll software platforms on the market, as well as being very affordable. Through Square, you can run unlimited payrolls in a month, manage multiple benefits simultaneously, and create custom reports to summarize pay periods.

Square offers automated payroll and tax filing, which means it will happen in the background, not needing a dedicated accountant or employee to push it through every pay period.

It also offers HR functionality, which is a huge boon for such a small price. However, it should be noted that this isn't a comprehensive HR system, only containing employee profiles and onboarding documents.

There’s also a Square app for both iOS and Android, meaning you won’t have to be stuck behind a desk to stay on top of your payroll.

Setup help is provided via a phone service, which means you won’t be completely in the dark if it’s your first foray into the world of payroll software. However, beyond that, things can be a bit difficult, as there isn’t much help beyond initial setup.

As far as Square's other weaknesses go, there aren’t many integrations available. The most popular integration available is QuickBooks Online, which can help you sync Square up with any QuickBooks accounting you use. You also won’t be able to migrate data, and the only software training service available is video-based. This can make the software somewhat difficult to get used to.

Square Payroll Scalability

There is no hard limit on employees that can be paid through Square Payroll. However, the platform does claim to be intended for small businesses, so you wouldn’t want to enroll hundreds of employees into the system.

Square Payroll Pricing

Pricing for Square Payroll is simple – you can either pay employees and contractors, or contractors only. If you only employ contractors, you won’t be paying any upfront monthly fee – you’ll just need to pay $5 for each contractor for each month you pay them.

However, if you employ standard W-2 employees, you’ll need to pay $29 a month, plus $5 for each employee and contractor you pay each month. There aren’t any other tiers, and the free trial is only free until you start paying people.

Sage 50cloud – Best for Accounting

Sage 50cloud isn’t a payroll software first and foremost – it’s actually accounting software with a payroll add-on. However, that doesn’t mean it’s not worthy of a mention.

The bad news is that you can’t use the payroll software on its own – you’ll need to pay for the accounting software to access it. The good news is that Sage 50cloud accounting software is very good, and it can be helpful to combine your financial software when possible.

Some benefits of using Sage 50cloud’s payroll software are its automated tax and payroll filing, which means you won’t need to stay on top of your payroll every pay period. However, the obvious big benefit is keeping all your financial records and information in the same place.

With this accounting software, you’ll be able to perform all the accounting functions you’d want, including managing inventory, keeping track of expenses, and creating financial reports for investors.

When it comes to ease of use, Sage 50cloud is middling. You can pay a bit extra (pricing varies based on plan) to have an expert help with your software setup, but there isn’t a live setup support option, as all of Sage's resources are in video or text form.

However, since this is already accounting and payroll software bundled in one, you won’t get too much else out of it. There’s no HR functionality, and no mobile app. And while it can be a plus that it’s bundled with accounting software, it’s a shame if you want to use Sage 50cloud payroll software alongside other accounting software, as that means you’d need to pay for two accounting software platforms at once.

Sage 50cloud Scalability

Sage 50cloud’s payroll has a strict 40-employee cap, so you won’t be able to pay your people if your company grows beyond 40 employees.

Sage 50cloud Pricing

This is a tricky one, as these pricing tiers actually apply to the bundle of both the accounting software and the payroll add-on. Their first tier, the Pro tier, starts at $911. The Premium tier starts at $1,194, and finally the Quantum tier starts at $1,748. These prices can all rise based on the amount of employees and users enrolled in the software.

Gusto Payroll – Best for Benefits Management

One of the most frequent deductions that will pop up when operating a payroll are company benefits. The problem is, these can be really tricky to wrangle when dealing with multiple types of benefits, like healthcare, dental, etc.

That’s where Gusto Payroll comes in handy. As you can see on Gusto’s benefits page, Gusto Payroll offers attachments that help with all sorts of benefit systems. From 401(k)s to commuter aid, there is a wide array of benefits on offer. It even offers health insurance help, partnering with companies like BlueCross and UnitedHealthcare to help provide company-wide coverage.

But benefits management is just one of the jewels in Gusto’s crown, as it also offers a comprehensive amount of other features that you’d want in a payroll software. Some highlights include two-factor authentication, automated payroll and tax filing, and even full HR functionality on the highest tier.

Unfortunately, it’s not perfect. There’s not much help when it comes to getting set up – as Gusto doesn't offer any training resources or live setup support at all, so it can be a bit tricky to figure it out. There’s also no mobile app, so you’ll only be able to operate it from a computer.

Read our full Gusto Payroll and Pricing review.

Gusto Scalability

While Gusto does not impose a strict limit on the amount of employees that can be enrolled on its software, it does claim to be intended for small businesses. If your business is rapidly growing, you might want to consider other software, since you don’t want to hit an unexpected wall.

Gusto Pricing

Gusto has four payment methods. The lowest tier, the Core plan, costs $39 per month with an additional $6 per employee. This plan offers basic payroll functionality, as well as all the benefit management features mentioned above.

The Complete plan is $39 per month, with an additional $12 per employee. This will allow for next-day direct deposit, as well as time tracking and project management functionality.

The Concierge plan is $149 per month, plus $12 for each additional employee. This is the Complete tier bundled with Gusto’s HR resources, meaning you won’t have to find another HR software for your business.

Finally, Gusto has a Contractor tier, which doesn’t charge a monthly fee – instead, you'll simply pay $6 each time your business pays a contractor. You won’t be able to pay standard employees on this tier, however, as it’s solely intended for contractors.

Research Methodology

To find the best payroll software on the market, we’ve conducted extensive research into each software platform discussed on this page.

There are a lot of payroll software companies out there, so the first step was to find the most popular software on the market, based on reviews and popular opinion. Then, after finding the software we wanted to cover, the next step was to go granular.

We looked at each software’s website, gathering information on pricing tiers, features, and other noteworthy features that are worth mentioning in a review. Some of these software are quote-based, so some of the information was hidden away, meaning we had to turn to third party websites or other sources.

Finally, we compiled our research into a comparison table, weighing the software against each other and finding out where each software’s strengths and weaknesses lay.

Frequently Asked Questions