5 Best Payroll Software Services for Small Business

If you’re starting a small business and hiring employees, mastering payroll is likely to be one of your first major hurdles. Dealing with payroll is often quite complex and time-consuming, which is why many entrepreneurs turn to a professional payroll service. 

Payroll providers can handle the entire payroll process for you, making it nearly seamless and automated while offering additional services so you can focus on building your business. 

But with so many payroll services in the market, how do you know which are the best services for small businesses? And which is the right choice for you? This review takes a closer look — putting ourselves in the shoes of an entrepreneur — to help you determine which option is the right payroll service for your business. 

1. Patriot Payroll

Patriot is one of the more affordable payroll service options in the market. Their plans offer flexible payroll services that can be customized for your business. If you opt for their Full Service plan, they will also handle your tax filings. 

Pricing and features

The Basic Payroll plan includes unlimited payrolls, accounting, time and attendance, and HR integrations, as well as W-2s and 1099s. 

If you’re just looking to outsource payroll and handle your tax filings yourself, the plan is a great value compared to competitors. You’ll still be able to generate reports that will give you all the information you need for your tax filings. 

Full Service offers full payroll services and handles all your payroll tax filings. It also includes year-end payroll tax filings and a tax filing accuracy guarantee. 

This plan is well priced compared to the competition, but most payroll services include HR tools and support, which Patriot does not. 

Pros and Cons

Our Verdict

We were pleased with our Patriot experience. The site is easy to use, information is readily available, and customer service was excellent. In addition, most customer reviews are positive.

Patriot’s plans are priced well compared to the competition. The only issue is that neither includes HR services or benefits administration. 

Overall, if you’re looking for a robust and affordable payroll-only service, we strongly recommend Patriot. 

2. Zenefits

Zenefits’ platform of HR business solutions was made specifically for small and mid-sized businesses, which often face challenges disproportionate to their size and resources. 

Zenefits’ mission is to “level the playing field for the other 99.7%”, meaning the smaller businesses that keep our economy running. The company provides “innovative and intuitive HR and payroll software and services purpose-built” for smaller firms.

Pricing and features

Zenefits’ Essentials plan comes with a variety of features and benefits. The automated onboarding feature includes offer letter generation, background check support, and digital documents with electronic signature capabilities. There’s also an employee self-onboarding feature where employees can complete and submit their new hire paperwork. 

The Essentials plan also comes with time tracking and reporting features to help businesses manage their PTO policies. The scheduling feature allows management to create and edit shifts and integrates seamlessly with the Zenefits payroll system. There’s also a user-friendly mobile app for employers and employees to access information on the go.

The Zenefits Growth plan includes all of the features from the Essentials plan plus compensation and performance management benefits. The compensation management features include real-time comparison salary data that can be integrated into an organizational chart. You can also create custom salary benchmark reports.

With the performance management benefit, businesses can improve employee performance with user-friendly, easy to administer tools. A full suite of performance review templates are available as well as goal-setting and tracking features.  

The Zen plan includes all the above plus employee engagement survey tools and an interactive social platform called the People Hub. The employee engagement tools enable clients to customize their own surveys or use pre-built templates. 

The reporting features allow results to be filtered by employee demographics and you can view answers on a question-by-question basis. Feedback is collected anonymously to help keep employee responses private and confidential. 

The Zenefits People Hub is a customizable company social feed where administrators and employees can post announcements. It has interactive features such as the ability to like posts and ask questions. 

Pros and Cons

Our Verdict

Overall, we were pleased with our Zenefits experience. The site is easy to use, information is readily available, and sign up is fast. The ability to demo the product before committing to a purchase is a huge plus. 

Our experience with customer service was mostly positive. We had good interactions over the phone and email, though the live chat feature was ineffective. 

Zenefits’ services are an outstanding value and include a variety of features and benefits. The one major downside is that payroll services are an add-on. Still, the pricing is attractive and considerably more affordable than competitors. 

3. Gusto Payroll

Gusto offers full-service payroll including tax filings. They also offer HR tools, health care insurance, and financial benefits administration, including 401Ks and health care savings accounts.

Pricing and features

The $40/month plus $6 per month per person Simple plan offers full-service single-state payroll including W-2s and 1099s, basic hiring and onboarding tools, Gusto-brokered health insurance administration, and an employee financial benefits service.

It also offers payroll and time-off reports and custom admin permissions that allow you to set access to various functions for different people. Integrations for accounting functions are also included, along with basic customer support.

The Simple plan provides a lot of bang for your buck, with many services offered for only $40 per month, plus the employee fee. 

The Plus plan, at $80 per month plus $12 per employee per month, adds multi-state payroll services, next-day direct deposit, and advanced hiring and onboarding tools. It also offers PTO management, time and project tracking, and workforce costs and custom reports. You also get team management tools and access to full customer support.

The plan offers many advantages and tools, but you’re paying double the price, so the Simple plan seems a better value. But if you have employees in multiple states, the Plus plan is a must. 

The exclusively-priced Premium plan offers a robust suite of services, along with everything mentioned above. It’s hard to judge the value, since it’s uniquely priced for each customer, but it’s a strong full-service plan that includes:

• HR Resource Center

• Compliance alerts

• Access to certified HR experts

• Full-service payroll migration and account setup

• Health insurance broker integration

• R&D tax credit discount

• Waived fees and exclusive pricing

• Performance reviews

• Employee surveys and insights

• Dedicated support

Pros and Cons

Our Verdict

Our experience using the Gusto website was good, as it’s very user-friendly. Their pricing is competitive and even their Simple plan offers an extensive package of services. In that respect, they are superior to most competitors.

But the customer reviews, particularly at BBB, are deeply concerning. Many negative reviews highlighted inaccurate tax filings, which can lead to major issues for business owners.

If you’re looking for an affordable payroll option, Gusto is a good value, assuming the negative reviews refer to rare incidents.

4. Square Payroll

Square Payroll is part of Square, Inc., known for their merchant payment services and an established and respected corporation. Square Payroll offers full payroll services, including withholding and payroll tax filings. 

Square Payroll is one of the few payroll companies with a plan for paying contractors only. Many competitors offer payments to contractors in their payroll plans, but you have to pay the same price as their employee payroll plans. 

Pricing and features

The Square Payroll Employee and Contractor plan offers full service payroll for your employees, as well as payments to contractors, which is not something that all payroll services support. 

They also mail in your 1099s and W-2s and take care of federal, state, and local tax filings and payment. The plan is a fairly good value compared to similar competitor services.

If you just want to pay contractors, this plan, which is rare in the industry, allows you to pay them for $5 a month per person paid. You can pay by direct deposit, paper check, or CashApp. 

The plan also includes the mailing of your 1099s.This plan is a great value, and not offered by most competitors. 

Pros and Cons

Our Verdict

Overall, we were pleased with our Square Payroll experience. The site is easy to use, information is readily available, and sign up is fast. 

Their customer service is a little lacking, as they don’t have live chat support and we did not receive an email response when we asked a question via their site. The customer service phone representative, however, was prompt and polite.

Square Payroll’s services are a good value compared to competitors, even though we were unable to find any positive customer feedback.

5. Paychex

Paychex is one of the country’s top providers of payroll solutions – issuing pay to one out of 12 U.S. private sector employees, according to its website. 

Paychex Flex is a suite of three payroll processing plans that aim to satisfy a wide variety of business types and needs. Key benefits include running payroll via an online platform or free mobile app, 24/7 customer support, full calculation and payment of payroll taxes, and more than 200 compliance experts ensuring your payroll processing is always fully up to date. 

Pricing and features

The Paychex Flex Essentials plan is the lowest-tier plan out of three service offerings. It’s tailored to businesses with fewer than 10 employees. Unlike providers who charge for each payroll run, Paychex subscribers can make an unlimited number of payroll runs. 

This plan includes payroll tax calculations and filings with relevant federal, state, and local bodies. With the standard analytics and reporting benefit, you can review payroll reports and make changes as needed prior to submitting payroll.

Paychex Flex Essentials contains a robust suite of offerings that center around the employee experience. With an included HR library and business forms repository, your HR team will have access to all the relevant onboarding forms and documents. 

The Paychex Flex Select plan is the second-tier payroll package from Paychex and includes everything in the Essentials plan plus a number of features, such as more pay options for your employees. In addition to direct deposit and paper checks, Flex Select offers check signing and a check logo service to subscribers.

Another key feature is access to the Paychex Learning Management System, which offers courses to help your employees stay engaged and focused and boost retention.

The top-tier Paychex Flex Pro plan includes all the above plus access to a dedicated payroll specialist. Business owners and payroll processors are assigned a single point of contact for both payroll and tax related matters.

The Paychex Flex Pro plan provides guided setup to ensure you start off on the right foot. You’ll also be able to integrate Paychex with your existing accounting software, including QuickBooks Online, Sage Intacct, and Xero.

Pros and Cons

Our Verdict

Overall, we have mixed feelings about Paychex Flex. The website is easy to use, with loads of information on plans and benefits, and signing up for the Essentials plan is quick and easy. 

But Paychex’s customer service left much to be desired. For one thing, the initial customer service reps we dealt with were unable to answer our questions. Also, the high number of complaints about specialist turnover and cancellation issues is troubling. 

Paychex has been around for years, gaining the trust of companies across the country. Its pricing and offerings are on par with competitors and each plan includes a robust suite of services, so if you choose to go with Paychex, you’ll probably make out just fine. 

But if customer service is high on your list or priorities, you may be disappointed with Paychex as your provider. 

What to Look for When Choosing a Payroll Software for Your Small Business

With so many payroll services out there, it can be difficult to decide which is best for you. There are three essential elements that can help you make your decision.

Features

Each service comes with a variety of features, and their plans are all designed differently. You and your business may need some features but not others, so it’s important to choose the service that offers just what you want. 

If it’s important to you to have HR services, you’ll want a service that offers that feature. But if your business doesn’t need health insurance administration, on the other hand, you don’t want to end up paying extra for it. 

Choose a service that has everything you need to make running your business as easy as possible. 

Pricing

Of course, you’ll want to get the best value, so it’s a good idea to compare the cost of each service. Plans with more features tend to be more costly, so you’ll probably want to stick with the tier that meets your needs. You’ll also want great customer service, so if you’re considering the cheapest service, check the reviews to see how its customers feel about it. 

Customer Service and Reviews

A good way to learn about the quality of anything you’re buying is to check out what users say about it. When we review services we look at Better Business Bureau ratings and reviews, as well as TrustPilot reviews. It’s wise to look at both positive and negative reviews to find out what people love about the service, and about issues customers have encountered. 

Remember that fake reviews are common, so you might want to question some of the reviews.