Running a small business involves juggling numerous tasks, and managing payroll can be one of the most complex. Ensuring employees are paid accurately and on time, while complying with various tax laws, is crucial. Fortunately, payroll software can simplify this process. Here, we review the 10 best payroll software options for small businesses in 2024, detailing their features, pricing, pros, and cons to help you make an informed decision.

1. Paychex Flex

Paychex Flex is a flexible and scalable payroll solution suitable for small to medium-sized businesses. It offers extensive payroll and HR features, making it ideal for growing businesses.

Key Features:

• Payroll processing and tax administration
• Employee self-service portal
• Benefits management
• Time and attendance tracking
• Compliance support

Pricing: Customized pricing based on business needs.

Pros:

• Comprehensive feature set
• Scalable solutions
• Strong compliance support

Cons:

• Can be expensive for very small businesses

2. Gusto

Gusto is a comprehensive payroll software that provides a range of features tailored to small businesses. It handles payroll processing, tax filing, benefits administration, and time tracking.

Key Features:

• Automatic payroll runs
• Employee self-service portal
• Integrated time tracking
• Benefits administration
• Compliance with federal, state, and local taxes

Pricing: Starts at $39 per month, plus $6 per employee.

Pros:

• Easy to use
• Excellent customer support
• Wide range of integrations

Cons:

• More expensive than some alternatives

3. QuickBooks Payroll

QuickBooks Payroll is part of the QuickBooks suite, making it an excellent choice for businesses already using QuickBooks for accounting. It offers robust payroll and tax management features.

Key Features:

• Automatic payroll calculations
• Tax penalty protection
• Same-day direct deposit
• Employee benefits management
• Mobile app

Pricing: Starts at $45 per month, plus $4 per employee.

Pros:

• Seamless integration with QuickBooks
• User-friendly interface
• Strong customer support

Cons:

• Higher cost compared to some competitors

4. ADP Run

ADP Run is designed specifically for small businesses, offering a streamlined payroll processing solution along with HR tools and compliance support.

Key Features:

• Automated payroll processing
• Tax filing and compliance
• Employee self-service
• HR support and resources
• Time and attendance tracking

Pricing: Customized pricing based on business needs.

Pros:

• Reliable and trusted brand
• Comprehensive payroll and HR features
• Strong compliance support

Cons:

• Higher cost compared to some small business-focused solutions

5. OnPay

OnPay offers an affordable, user-friendly payroll solution with robust features. It is designed to handle payroll, HR, and benefits administration seamlessly.

Key Features:

• Automated payroll runs
• Tax filing and compliance
• Employee self-service portal
• Benefits administration
• Integration with accounting software

Pricing: $36 per month, plus $4 per employee.

Pros:

• Affordable pricing
• Easy to use
• Excellent customer support

Cons:

• Limited advanced features

6. Wave Payroll

Wave Payroll is a cost-effective solution for small businesses, especially those already using Wave’s free accounting software. It offers essential payroll features and integrates well with Wave Accounting.

Key Features:

• Automated payroll processing
• Direct deposit
• Tax filing and compliance (available in select states)
• Employee self-service
• Integration with Wave Accounting

Pricing: $20-$35 per month, plus $6 per employee, depending on state.

Pros:

• Affordable for small businesses
• Seamless integration with Wave Accounting
• Simple and easy to use

Cons:

• Limited tax filing support in some states

7. Square Payroll

Square Payroll is designed for small businesses and integrates seamlessly with other Square products. It offers straightforward payroll processing and tax filing features.

Key Features:

• Automatic payroll runs
• Tax filings and payments
• Employee and contractor payments
• Benefits administration
• Timecard integration

Pricing: $29 per month, plus $5 per employee.

Pros:

• Simple pricing structure
• Easy integration with Square POS
• User-friendly interface

Cons:

• Limited advanced features

8. Patriot Payroll

Patriot Payroll offers an affordable and easy-to-use payroll solution for small businesses. It provides essential payroll features along with strong customer support.

Key Features:

• Automated payroll processing
• Tax filing and payments
• Direct deposit
• Employee self-service
• Integration with Patriot Accounting

Pricing: $10-$30 per month, plus $4 per employee, depending on the plan.

Pros:

• Very affordable
• Easy to use
• Strong customer support

Cons:

• Limited features compared to more expensive options

9. Zenefits

Zenefits is an all-in-one HR platform that includes robust payroll features. It’s ideal for small businesses looking for an integrated HR and payroll solution.

Key Features:

• Automated payroll processing
• Tax filing and compliance
• Employee benefits administration
• Time and attendance tracking
• Comprehensive HR tools

Pricing: Starts at $10 per month, per employee, with additional fees for payroll.

Pros:

• Integrated HR and payroll features
• User-friendly interface
• Scalable for growing businesses

Cons:

• Additional cost for payroll features

10. Rippling

Rippling is a modern payroll and HR platform that offers a wide range of features. It’s highly customizable and integrates well with various business tools.

Key Features:

• Automated payroll processing
• Tax filing and compliance
• Employee benefits management
• Time and attendance tracking
• Integration with numerous business tools

Pricing: Starts at $8 per month, per employee, with additional fees for payroll and benefits.

Pros:

• Highly customizable
• Wide range of integrations
• Strong HR features

Cons:

• Can be expensive depending on the features selected

How to Choose Payroll Software for Small Businesses?

Selecting the right payroll software for your small business is crucial to ensure smooth and efficient payroll processing, compliance with tax regulations, and overall employee satisfaction. With numerous options available, making an informed decision can be challenging. Here are key considerations and steps to help you choose the best payroll software for your small business.

1. Assess Your Business Needs

When choosing payroll software for your small business, the first step is to assess your specific needs. Consider the size of your business, the number of employees, and your payroll complexity. If you have a small team and straightforward payroll requirements, a basic solution might suffice. However, if you need advanced features like benefits administration, time tracking, and compliance support, look for software that offers these capabilities. Understanding your unique requirements will help narrow down your options and ensure you select a solution that meets your business needs.

2. Evaluate Ease of Use

Ease of use is a critical factor when selecting payroll software. The software should have an intuitive interface that allows you to manage payroll tasks efficiently, even if you don’t have a background in accounting or HR. Look for solutions that offer a straightforward setup process, user-friendly navigation, and clear instructions. Many payroll software providers offer free trials or demos, so take advantage of these to test the software’s usability. The goal is to find a tool that simplifies payroll processing, reducing the time and effort required to manage employee payments.

3. Consider Integration Capabilities

Integration capabilities are essential for seamless business operations. Payroll software that integrates with your existing accounting, HR, and time-tracking systems can save you time and reduce errors. Integration ensures that data flows smoothly between different platforms, eliminating the need for manual data entry. When evaluating payroll software, check if it supports integration with the tools you already use. This compatibility will streamline your workflow, improve accuracy, and enhance overall efficiency.

4. Review Compliance Features

Payroll compliance is a complex area that involves adhering to various federal, state, and local tax laws and regulations. Non-compliance can lead to penalties and legal issues, so it’s crucial to choose software that helps you stay compliant. Look for payroll software that automatically updates tax rates, handles tax filings, and generates compliance reports. Some solutions also offer compliance support and alerts to keep you informed of regulatory changes. Robust compliance features will give you peace of mind and reduce the risk of costly mistakes.

5. Assess Customer Support

Reliable customer support is vital when dealing with payroll software. Issues can arise at any time, and having access to knowledgeable support staff can make a significant difference. Evaluate the customer support options provided by each software vendor. Look for 24/7 support, multiple contact methods (such as phone, email, and chat), and comprehensive online resources like FAQs and tutorials. Reading reviews from other users can also give you insight into the quality of customer support. Choose a vendor that offers prompt and helpful assistance to ensure a smooth payroll experience.

6. Compare Pricing Plans

Pricing is a key consideration for small businesses, so it’s important to compare the cost of different payroll software options. Pricing models can vary, with some providers charging a flat monthly fee and others charging per employee or per payroll run. Be sure to factor in any additional costs for features like tax filing, direct deposit, or benefits administration. While it’s tempting to go for the cheapest option, remember to balance cost with functionality and support. Investing in a reliable, feature-rich payroll solution can save you money in the long run by improving efficiency and reducing errors.

7. Look for Scalability

As your business grows, your payroll needs will evolve. It’s important to choose payroll software that can scale with your business. Look for solutions that offer flexible plans and can accommodate an increasing number of employees and more complex payroll requirements. Scalability ensures that you won’t need to switch software as your business expands, saving you time and resources. Assess the vendor’s track record and customer base to ensure they can support businesses of various sizes and growth stages.

8. Examine Security Measures

Security is paramount when dealing with sensitive payroll data. Ensure the payroll software you choose has robust security measures in place to protect your information. Look for features like data encryption, secure servers, regular security audits, and user access controls. The software should comply with industry standards and regulations for data protection. Additionally, check if the vendor has a clear policy for data backup and disaster recovery. Strong security measures will safeguard your business against data breaches and other security threats.

9. Read User Reviews and Testimonials

User reviews and testimonials can provide valuable insights into the performance and reliability of payroll software. Reading about other businesses’ experiences can help you gauge the software’s strengths and weaknesses. Look for reviews on independent review sites, industry forums, and social media. Pay attention to common issues and how the vendor has addressed them. Positive reviews and high customer satisfaction ratings are good indicators of a reliable and effective payroll solution.

10. Take Advantage of Free Trials and Demos

Many payroll software providers offer free trials or demos, allowing you to test the software before making a commitment. Taking advantage of these offers can help you determine if the software meets your needs and is easy to use. During the trial period, explore the features, test the integration capabilities, and assess the overall user experience. This hands-on evaluation will give you a better understanding of the software’s suitability for your business. Make sure to involve key team members in the trial to gather their feedback and ensure the software aligns with your operational requirements.

Conclusion

Choosing the right payroll software for your small business depends on your specific needs and budget. Gusto and QuickBooks Payroll are excellent choices for their comprehensive features and ease of use. OnPay and Patriot Payroll offer more affordable options without sacrificing essential functionality. For businesses needing integrated HR solutions, Zenefits and Rippling provide robust platforms. Evaluate the features, pricing, and support of each option to find the best fit for your business in 2024.