Payroll: Don't Get It Wrong
Payroll errors — late deposits, miscalculated taxes, wrong withholdings — trigger IRS penalties, employee frustration, and state compliance issues. For small businesses without dedicated HR staff, payroll software is the safety net that handles tax filing, compliance updates, and direct deposit automatically.
What Good Payroll Software Does
- Automatic tax calculation — Federal, state, and local taxes calculated per employee
- Tax filing — W-2s, 940/941 filings, state returns handled for you
- Direct deposit — Pay employees on time without writing checks
- New hire reporting — State-required new hire reports submitted automatically
- Benefits administration — Health insurance, 401(k), PTO tracking
- Contractor payments — 1099 filings for freelancers and contractors
Top Payroll Software for Small Business
Gusto — Best for Small Business
Gusto is the clear first choice for small businesses hiring their first employees. Its onboarding flow walks you through every step, taxes are filed automatically, and the employee self-service portal handles pay stubs, W-2s, and benefits enrollment without HR involvement.
Strengths:- Full-service payroll with automatic tax filing
- Employee benefits (health, dental, 401k) administration
- Contractor payments and 1099 filing
- HR tools (offer letters, onboarding checklists, org chart)
- Excellent customer support
- Simple: $40/month + $6/person/month (basic payroll, no benefits)
- Plus: $80/month + $12/person/month (multi-state, hiring tools)
- Premium: custom (dedicated support, compliance alerts)
OnPay — Best Value
OnPay offers full-service payroll at a flat $40/month + $6/employee/month — with no tiered feature gates. Every plan includes unlimited payroll runs, multi-state payroll, W-2 and 1099 filing, and basic HR tools. Exceptional customer service (phone, chat, email).
Strengths: Simple flat pricing, no feature tiers, excellent service, unlimited pay schedules Weaknesses: Fewer HR extras than Gusto or Rippling Pricing: $40/month + $6/employee/month (flat rate, no upsells) Best for: Budget-conscious small businesses that want straightforward, reliable payrollADP Run — Best for Growth
ADP is the most recognized payroll brand globally. ADP Run is its SMB product (1–49 employees). It's more expensive than Gusto or OnPay but offers deeper compliance tools, HR advisory services, and a clear upgrade path to larger ADP products as you scale.
Strengths: Deep compliance features, HR advisory add-on, recognizable brand Weaknesses: Pricing not transparent (custom quotes); customer service can be inconsistent Pricing: Custom quotes (typically $59+/month base + per-employee fee) Best for: Businesses planning significant headcount growth; companies wanting compliance supportRippling — Best for Integrated HR + IT
Rippling combines payroll with HR (benefits, compliance) and IT (device provisioning, app access) in one platform. When you hire someone, Rippling can set up their laptop, provision their SaaS accounts, and run their first paycheck simultaneously.
Strengths: Automation across HR + IT, global payroll capability, powerful reporting Weaknesses: More expensive; complexity overkill for very small teams Pricing: Core from $8/user/month + $35/month platform fee (modules priced separately) Best for: Tech companies scaling fast, especially with remote/global hiringQuickBooks Payroll — Best for QuickBooks Users
If you're already using QuickBooks for accounting, QuickBooks Payroll integrates natively — payroll journal entries post automatically, eliminating manual reconciliation. Same-day direct deposit is available on higher tiers.
Strengths: Seamless QuickBooks integration, same-day direct deposit (Premium+) Weaknesses: More expensive than standalone options; customer service mixed reviews Pricing: Core $22.50/month + $5/employee/month; Premium $37.50/month + $8/employee/month (first 3 months discounted) Best for: Small businesses already on QuickBooks OnlineDecision Framework
| Situation | Best Choice |
|---|
| First-time employer, need guidance | Gusto |
|---|---|
| Best value, simple pricing | OnPay |
| Planning to scale headcount quickly | ADP Run |
| Need HR + IT automation together | Rippling |
| Already on QuickBooks | QuickBooks Payroll |
The Bottom Line
For most small businesses with under 25 employees, Gusto or OnPay delivers everything needed at a reasonable price. Gusto wins if you also want benefits administration; OnPay wins if you want simplicity and flat pricing.
Don't buy payroll software based on brand recognition alone — ADP's market size doesn't translate to a better experience for small teams. Pick the tool your HR person (or you) will actually find easy to use every pay period.