Article
Best Payroll Software for Small Business in 2025
Compare the top payroll software solutions of 2025. Our experts analyzed leading payroll services to find the best options for automating payroll, filing taxes, and managing HR.
Managing payroll manually is time-consuming, error-prone, and risky. The right payroll software automates calculations, files taxes, manages benefits, and ensures compliance—saving you time and reducing costly mistakes. Whether you have 2 employees or 200, today’s top solutions offer powerful features at competitive prices.
Our team analyzed the leading payroll software providers, comparing pricing, tax filing capabilities, HR features, and user satisfaction. Here are the 5 best payroll software solutions for small businesses in 2025.
Quick Comparison
| Software | Best For | Starting Price | Rating |
|---|---|---|---|
| 1. Gusto | Best Overall for Small Business | $49/month + $6/employee | ★4.7/5 |
| 2. ADP Run | Best for Growing Businesses | $79/month + $4-6/employee | ★4.6/5 |
| 3. QuickBooks Payroll | Best for QuickBooks Users | $45/month + $5/employee | ★4.5/5 |
| 4. Paychex Flex | Best for Mid-Sized Companies | $39/month + $5/employee | ★4.6/5 |
| 5. Patriot Payroll | Best Budget Option | $17/month + $4/employee | ★4.8/5 |
Our Top Picks in Detail
Gusto
Gusto stands out as the most intuitive payroll platform with a 4.7/5 satisfaction rating. Its automated payroll processing, tax filing in all 50 states, and benefits administration make it perfect for small businesses with 2-50 employees wanting streamlined payroll without complexity.
Pros
- ✓Most user-friendly interface with minimal training needed
- ✓Automated tax filing for federal, state, and local taxes
- ✓Unlimited payroll runs on all plans
- ✓Integrates with 180+ apps including QuickBooks and Xero
- ✓Affordable pricing even cheaper than budget competitors
Cons
- ✗No free plan available
- ✗Some tax filings and benefits services have additional fees
- ✗Not ideal for companies over 100 employees
ADP Run
ADP is a global leader in HR and payroll solutions, offering flexible services that scale from small startups to enterprises. With 75+ years of expertise, AI-powered features, and the strongest multi-state compliance support, it's ideal for growing businesses with complex needs.
Pros
- ✓24/7 customer support even on base plan
- ✓AI-powered mobile app (ADP Roll) for easy payroll
- ✓Handles contractor and employee pay together
- ✓Multi-state tax filings without additional fees
- ✓Comprehensive HR suite with job listings
Cons
- ✗Steep learning curve for new users
- ✗Pricing increases quickly with add-ons
- ✗Must contact sales for custom quote
QuickBooks Payroll
QuickBooks Payroll is the natural choice for businesses already using QuickBooks accounting software. With seamless data integration, automated tax filing, and comprehensive features across three plan tiers, it streamlines payroll and bookkeeping for small to medium-sized businesses.
Pros
- ✓Seamless integration with QuickBooks accounting
- ✓Same-day direct deposit (Premium plan)
- ✓Tax penalty protection up to $25,000 (Elite plan)
- ✓Works as standalone or integrated with QuickBooks Online
- ✓Next-day direct deposit on Core plan
Cons
- ✗Recurring bugs and syncing problems reported
- ✗Poor customer support with long hold times
- ✗Frequent price increases
Paychex Flex
Paychex Flex is a comprehensive payroll and HR solution ranked #1 on the top payroll software leaderboard. With automated processing, 24/7 support, and scalability up to 1,000 employees, it's ideal for mid-sized companies needing robust features and extensive integrations.
Pros
- ✓Saves businesses average of 7 hours per week
- ✓Integrates with nearly 300 third-party vendors
- ✓94% customer satisfaction rating
- ✓Mobile app rated 4.6/5 on app stores
- ✓AI-assisted recruiting and performance management
Cons
- ✗Difficult to get pricing quotes from sales team
- ✗Advanced features only as paid add-ons
- ✗Can be pricey for very small businesses
Patriot Payroll
Patriot Payroll is the most cost-effective solution for very small businesses with 2-10 employees. At just $17/month + $4/employee, with full-service tax filing available for $37/month, it delivers essential payroll features with exceptional customer support and no hidden fees.
Pros
- ✓Most affordable payroll software available
- ✓Exceptional 4.8/5 rating with 5 stars on Trustpilot
- ✓US-based responsive customer support
- ✓No setup fees, contracts, or cancellation fees
- ✓Free direct deposit and QuickBooks integration
Cons
- ✗Basic plan doesn't include tax filing ($20/month extra)
- ✗Not suitable for large enterprises or global workforces
- ✗Recent price increases reduce competitiveness
How We Evaluate Payroll Software
Our expert team uses a comprehensive methodology to test and compare payroll software. Here’s what we evaluate:
Pricing and Value
We analyze the complete cost structure including:
- Base monthly fees: Recurring subscription costs for software access
- Per-employee charges: Additional costs that scale with your team size
- Tax filing fees: Whether automated tax filing is included or costs extra
- Add-on costs: Pricing for time tracking, HR support, and benefits administration
- Total cost of ownership: Calculating real costs for typical business sizes
Core Payroll Features
We test essential payroll capabilities:
- Automated calculations: Accurate wage, overtime, and deduction calculations
- Direct deposit: Speed and reliability of employee payments
- Contractor payments: Support for 1099 contractors alongside W-2 employees
- Multi-state support: Handling employees across different states
- Unlimited payroll runs: Flexibility to run payroll as often as needed
Tax Filing and Compliance
We verify tax management capabilities:
- Automatic tax calculations: Federal, state, and local withholdings
- E-filing services: Automatic filing of quarterly and annual tax forms
- New hire reporting: State-mandated new employee notifications
- Tax penalty protection: Guarantees and insurance against filing errors
- Compliance alerts: Proactive notifications about changing regulations
HR and Benefits Integration
We evaluate additional HR capabilities:
- Benefits administration: Health insurance, 401(k), and other benefit management
- Time tracking: Integration with time clocks and scheduling
- Employee self-service: Portal for accessing pay stubs, tax forms, and PTO
- Onboarding tools: Digital I-9s, W-4s, and new hire workflows
- Performance management: Reviews, feedback, and goal tracking
Ease of Use and Support
We assess user experience and support quality:
- Interface design: Intuitiveness and learning curve for new users
- Mobile access: Quality of mobile apps for employers and employees
- Customer support: Availability, responsiveness, and expertise
- Integration options: Compatibility with accounting and HR software
- Setup assistance: Onboarding help and training resources
Frequently Asked Questions
What is payroll software and why do I need it?
Payroll software automates the process of paying employees, calculating taxes, filing government forms, and managing benefits. It saves time, reduces errors, ensures compliance, and eliminates the stress of manual payroll calculations. For most businesses with employees, payroll software pays for itself in time savings alone.
How much does payroll software cost?
Costs vary by provider and company size. Budget options like Patriot start at $17/month + $4/employee, while full-featured solutions like Gusto and ADP range from $45-$79/month + $4-6/employee. Calculate your total cost by multiplying the per-employee fee by your headcount and adding the base monthly fee.
Does payroll software file taxes automatically?
Most payroll software handles automatic tax filing, but not all base plans include it. Gusto, ADP, and QuickBooks include tax filing on all plans. Patriot requires upgrading to the Full Service plan ($37/month) for tax filing. Always verify what’s included before choosing a provider.
Can I use payroll software with my existing accounting software?
Yes, most payroll software integrates with popular accounting platforms. Gusto integrates with QuickBooks, Xero, and 180+ other apps. QuickBooks Payroll offers seamless integration with QuickBooks Online. Paychex supports nearly 300 third-party integrations. Check integration compatibility before making your final choice.
How long does it take to set up payroll software?
Setup time varies by complexity. Simple setups for small businesses can be completed in 1-2 hours, entering employee information, tax details, and payment methods. More complex implementations with benefits and multi-state employees may take several days. Most providers offer setup assistance and onboarding support.
What happens if payroll software makes a tax filing mistake?
Reputable providers offer tax penalty protection. QuickBooks Elite plan includes up to $25,000 in tax penalty protection. ADP and Paychex guarantee accurate tax filing and will pay penalties for errors they cause. Always choose a provider with guarantees, as mistakes can be costly.
Can payroll software handle both employees and contractors?
Yes, most modern payroll software handles both W-2 employees and 1099 contractors. ADP is particularly noted for allowing you to process contractor pay alongside employee payroll. Gusto offers a Contractor Only plan for businesses working exclusively with contractors. Verify contractor support if this is important to your business.