The Top Payroll Software for Small Businesses in 2021

We’ve all (hopefully) been on the receiving end of a paycheck, but how much time have you spent thinking about the payroll processes necessary to produce a paycheck or direct deposit? Probably none — until you became a business owner. If you do have employees to pay, you’ll need the necessary tools and resources to do so — and to ensure you fulfill your federal and state payroll tax filing obligations.

Top Rated

OnPay

With an affordable, transparent pricing structure, OnPay is an excellent payroll software for small to mid-sized businesses. Additionally, the platform provides HR resources at no extra cost.

Best for SMBs

Paycor

Paycor is a unified HR and payroll software solution. With features such as full-service payroll, timekeeping, and HR capabilities, Paycor will help keep your business running smoothly.

Easiest to Use

QuickBooks Payroll

QuickBooks Online Payroll is perfect for businesses already living in the Intuit QuickBooks ecosystem. This full-service payroll software has three plans to scale with you as your business grows.

Best Features

Gusto

Gusto takes the stress out of payroll with its bright, intuitive design. Designed with small businesses in mind, Gusto is an excellent payroll software for anyone getting started.

Best Value

Payroll Mate

Payroll Mate offers features found in more expensive solutions at a fraction of the price. This payroll software may be a fit for small business owners looking for an affordable tool.

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Whether you’re paying employees for the first time or are looking for a payroll application that is better suited to your needs, finding a product that’s right for you can be an imposing task. To help in your decision-making, we took a look at a variety of payroll applications, some basic, others full-service.

We’ve looked at both on-premise and online applications at all price points, including one free application. So read our reviews, try out a few demos, and find the payroll application that’s perfect for you.

Our top picks for the best Payroll Software:

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Top Rated

1. OnPay

   
Easiest to Use

2. QuickBooks Payroll

   
Best for New Users

3. Patriot Payroll

   
Best Features

4. Gusto

   

5. SurePayroll

   
Best Value

6. Payroll Mate

   

7. RUN Powered by ADP

   

8. Square Payroll

   

9. Paychex Flex

   

10. TRAXPayroll

   

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What The Blueprint looks for in a great payroll software

Before you purchase a payroll application, it can be helpful to answer a few questions that can lead you in the right direction.

  1. What’s my budget?
  2. Do I need online access, or will an on-premise application be okay?
  3. Am I comfortable filing my own taxes?
  4. Do I need to pay contractors?
  5. Do I need access to HR resources?

Once you answer these questions, your search for the “perfect for you” payroll application will become a lot easier.

Purchasing payroll software, like purchasing any software application, requires a lot of research and a little bit of luck. There are lots of choices.

If you’re familiar with how to do payroll and are comfortable taking on the majority of the work, there are numerous payroll software applications available. However, in recent years, more businesses have turned to full-service payroll applications for their payroll processing needs.

Unlike payroll services from 20 years ago, which handled everything from employee setup to entering hours worked, payroll systems today require you to be involved in the process, entering employee information, calculating and entering hours worked, and ensuring the correct pay information has been entered.

Once you provide these details, the application takes care of the rest, printing paychecks, processing direct deposits, and calculating and filing federal and state payroll taxes.

Here are a few things to consider before you select a payroll application for your business.

1. Is it do-it-yourself or full-service payroll?

If you’ve been processing payroll for employees for years, do-it-yourself payroll software may be right for you.

One of the benefits of traditional payroll software is that it’s typically much less expensive than full-service payroll. However, payroll software applications also require you to manage deductions, administer benefits, and handle your own federal and state tax reporting, including form submission and tax remittance.

If you’re new to payroll, full-service payroll may be a much better solution for you. While you’ll still want to familiarize yourself with all of these payroll processes, much of the heavy lifting is done for you.

2. Is it easy to use?

Many payroll applications, from standard software applications to full-service payroll providers, offer a demo. Don’t underestimate the importance of trying out as many applications as you can prior to making a final decision. Unlike other software applications, most payroll applications offer many of the same features and functions; the main differences have more to do with how those features and functions are presented.

When trying out a demo, here are a few things to ask yourself:

  • Am I comfortable navigating through the application?
  • Is there a way to do less data entry?
  • Can I easily find what I’m looking for?
Sure Payroll entry screen with sections for hours, overtime, and extra pay.

The payroll entry screen in Sure Payroll requires little data entry

For instance, with Sure Payroll, just check the box next to a salaried employee’s name to pay them. There’s also an option to add extra pay or one-time deductions from the same entry screen, which can save you a lot of time.

3. Will the software process and pay quarterly taxes?

Taxes are the main reason people use full-service payroll, with new business owners frequently confused by the various forms, agencies, and deadlines involved.

Most importantly, the IRS does not take late tax payments lightly, and being penalized for a late deposit or two can seriously screw up your budget. My recommendation for everyone learning how payroll works for the first time is to use full-service payroll that will handle payroll taxes, including remittances, for you.

As a business owner, there are a lot of things you need to worry about. The IRS shouldn’t be one of them.

4. Can my employees access their payroll stubs?

Years ago, when I was buying a house, I remember requesting a year’s worth of pay stubs from my employer.

Today, most full-service payroll products allow your employees to log into the application and download current and historical pay stubs, along with W-2s and any other employee-related documentation. It’s great for them, and it can save you a lot of time, too.

5. How much does it cost?

While cost should not be the sole determining factor when deciding whether to purchase a software application, for small business owners typically on a tight budget, cost can realistically be a major factor.

While there is free payroll software available, the majority of payroll applications have an annual fee or a monthly cost.

Gusto payroll pricing chart

Gusto Payroll offers three full-service payroll plans for small businesses to choose from

While you’ll always pay more for a full-service payroll application than you will for traditional payroll software, it’s up to you to determine the cost level you’re comfortable with and decide accordingly.


Payroll doesn’t have to be scary

If your business is growing, and you find yourself needing to manage payroll, congratulations! Fortunately, there are more payroll applications available than ever before, giving you more options to choose from. Remember, managing payroll doesn’t have to be scary.

Just make sure you’re using the right payroll application for your business. If you’re not sure where to start, check out The Blueprint’s comprehensive payroll software reviews.


Frequently Asked Questions

Is there a difference between payroll software and full-service payroll?

Although the two terms are frequently used interchangeably, payroll software is usually installed on your desktop or workstation computer. Many payroll software applications have moved to the cloud in recent years, though.

The biggest difference between payroll software and full-service payroll is that if you use traditional payroll software, you’ll be the one to process and file federal and state tax forms and remit tax payments to the proper agencies, whereas full-service payroll will handle this for you (though timely filing remains your responsibility).

Can I pay contractors using my payroll software or service?

Most full-service payroll products let you pay your contractors at the same time you run payroll for your employees. This feature is a little harder to find in traditional payroll software applications.

Can I pay employees in more than one state?

Usually yes, you can, although there are some payroll software applications that only handle state taxes for select states. If you pay employees in more than one state, be sure you can process the required state payroll taxes as well.