Best Payroll Software for Small Business: 2023 Buying Guide

After putting the top options to the test, we found that Rippling is the best payroll software for small business because of its customizable HR packages, stand-out payment and reporting features, and impressive payroll expertise.

However, growing businesses may be better off opting for ADP Run, a software that offers unbeatable scalability and live training sessions, while Paychex is ideal if you're looking to pay your employees in real-time.

As the high cost of outsourcing payroll becomes increasingly unaffordable for small businesses, payroll software offers a reliable way to manage HR processes for less. To help connect you with your perfect solution, we've independently tested, evaluated, and narrowed down the five best payroll software systems for small businesses.

This article will also shed light on our research method and explain why some major names like QuickBooks are Square didn’t make the list, to give you full transparency over our decision-making process. Scroll down to read our reviews, or let us do the hard work for you by taking our free payroll quiz. We'll match you with suitable payroll software providers, who'll offer no-obligation quotes that have been carefully tailored to your small business, so you can compare your options easily.

In this guide:

• Top Payroll Software Providers
• What Is Payroll Software for Small Businesses?
• Buying Guide: How to Choose the Best Payroll Software for Your Small Business
• Managing Payroll for a Small Business
• Methodology: How We Test Payroll Software
• Verdict: What Is the Best Payroll Software?
• Frequently Asked Questions (FAQ)

Top Payroll Software Providers for Small Businesses

Now that you've got a better idea of what kind of providers are available when it comes to payroll software, let's take a deep dive on some of your options to help you make the right decision for your business.

The top providers of payroll software for small businesses are:

1. Rippling – Best Overall Payroll System
2. ADP – Best for Growing Businessnes
3. Paychex – Most Flexible Payment Options
4. Gusto – Great for Maintaining Complience
5. Zenefits – Excellent Data Security

Some of the most well-known and searched-for providers — like QuickBooks Payroll and Square Payroll for instance — haven't been included in our list of the best payroll software. This is because while these solutions are some of the biggest names in the industry, our research found they fall majorly short when it comes to versatility and scalability.

Unlike the options that made our top five, payroll providers like QuickBooks and Square offer extremely limited HR capabilities, and their packages are geared exclusively toward smaller businesses without much room for growth. This makes the providers much less capable of scaling alongside businesses as their needs evolve, and ultimately, caps their potential.

This being said, scroll down to learn more about the payroll providers that did make the cut.

1. Rippling – Best Overall Payroll Software for Small Businesses

After putting the best payroll software through its paces, Rippling in our research with an overall score of 4.6/5 because of its advanced features, wealth of payroll expertise, and impressive scalability – all core needs for a small business that does a lot with a little.

Whether you're looking to manage straightforward or complicated payroll tasks, Rippling's user-friendly platform will be up to the task. It offers top-notch payment features like automatic payroll runs, advanced reporting, and analytics capabilities, and even boasts its own employee-centric app.

However, despite Rippling's strengths, it doesn't integrate with large-scale HCM platforms and it only offers two or four-day payment timings. Therefore, if you want to pay your staff in less time we'd recommend opting for ADP or Paychex instead.

Check out our full Rippling review to learn even more.

Rippling's features

Rippling offers everything you'd expect from a piece of quality payroll software. Businesses can use the app to automatically calculate sick pay, pay employees outside their normal payroll, track precise hours worked, and even send payments to non-employees. Its payment features are so strong we gave it a score of 4.9/5 for control, second only to Paychex who secured a perfect score in the category.

Unlike our runners-up Paychex and Zenefits, Rippling even has automatic alerts for when businesses breach US federal and state labor laws, helping business owners stay in the clear and giving them one less thing to worry about.

Even though Ripplings is our top-rated payroll software for small businesses, it won't be right for everyone. The provider's lack of HMC integrations like Sap and Oracle makes it less suitable for businesses looking to scale to a full HR platform in the future and its run-of-the-mill payment times will deter it from businesses that prioritize prompt payments.

If you're able to look over these hitches, we break down its pricing structure and scalability below.

Rippling's pricing

Rippling's pricing structure is a little complex. Users can get started on the provider's Unity Plan for $35 per month, plus an additional $8 per user, per month. If businesses want to add on extra features like administration or applicant tracking (ATS) they can add these to their packages but will need to pay a premium.

Its relatively steep base rate makes Rippling slightly less suited to smaller companies operating on a shoestring budget. However, if you run a larger company or have precise payroll requirements, Rippling's modular pricing system will come in useful, by allowing you to pay for everything you need and nothing more.

Rippling's scalability

Rippling's unique pricing system means that it's able to morph and evolve alongside growing businesses. The platform offers just about every payroll feature imaginable too. This makes it near impossible to outgrow once your needs develop. However, as we've already noted, unlike providers like ADP and Paychex, Rippling lacks integrations with major HR solutions. Because of this, we were only able to give the software a score of 4.8/5 for scalability, a rating that falls slightly short of our most scalable solution, ADP.

2. ADP – Best for Growing Businesses

ADP is an extremely capable payroll solution with excellent data security and one of the best knowledge centers we've reviewed. While it isn't quite strong enough to top our charts, its variety of HR integrations and open API makes it the most scalable piece of software we've reviewed, suggesting that it's especially useful for small businesses set on future expansion.

It's super easy to get to grips with the service too. Unlike vendors like Zenefits, ADP provides live training sessions to help users develop a solid understanding of the product. ADP cuts no corners when it comes to data security too. From TLC encryption to ISO 27001 certification, the software takes a number of measures to keep threats at bay, which is why we awarded it a perfect 5/5 score for data security.

Check out our full guide to the top ADP Payroll competitors for more information.

ADP's features

ADP offers a very advanced suite of payroll features that lend themselves to startups and growing companies respectively. The platform offers a range of payment controls from time-tracking and 24-hour payments, and it even boasts its own employee app like our front-runner, Rippling.

ADP makes it easy for businesses to keep tabs on their financial status too, with a range of reporting features from tax reporting, payroll registers, individual employee reports, and even custom report builders. However, unlike Rippling and Paychex, ADP lacks Changes Reports, making it impossible for users to track the differences between their current and previous payroll system.

ADP lacks email support options too, making it less suitable for businesses that prefer resolving their queries using this format. Because of this, we only gave it a score of 3.8/5 for customer support, which is the poorest customer service score on this list, second to Zenefits.

ADP's pricing

ADP's pricing system is fairly opaque. The provider offers four packages for smaller businesses, Essential, Enhanced, Complete, and HR Pro.

Since ADP has custom pricing, it will be less suitable for businesses looking for straightforward pricing. However, if you're after powerful payroll capabilities, ADP will be worth the investment as it offers just about every feature under the sun. Businesses don't need to sign up blindly either, as ADP lets you trial the service for three months before committing to a contract, which is a pretty great deal.

Check out our guide to ADP's pricing for even more details.

ADP's scalability

If you're after a scalable payroll solution, look no further than ADP. Its pricing packages offer escalating capabilities, so businesses can simply upgrade to a different plan when their needs evolve.

ADP offers two payroll and HR tiers too ‘Complete' and ‘HR Pro'. This, combined with ADP's seamless integrations with large-scale HCM platforms like SAP and Oracle makes it ideal for those looking to branch into HR in the future. If this wasn't impressive enough, ADP offers an open API that lets businesses develop their own integrations with the service, stretching its potential even further.

Because ADP's scalability impressed us so much, we gave it a perfect score in the category – the only provider on the list to win this accolade.

3. Paychex Flex – Most Flexible Payment Options

Paychex is a user-friendly tool that gives users a granular level of control over their payroll processes. It offers customizable packages that help business find a solution that best fit their budget and needs, and it offers some of the best payment features we've reviewed.

It was the only vendor to receive a perfect 5/5 help & support score in our research, because the Paychex support center is extremely versatile, letting small businesses resolve queries through phone, email, and live chat support channels.

Paychex isn't strong across the board, though. It lacks some fairly basic features like international payment features and labor law compliance alerts, so businesses should be aware of this before moving forward with the software.

Paychex's features

Paychex was the only provider we gave a perfect 5/5 score to for control because the software lets users manage their payroll processes to their precise needs.

Aside from customary payment controls like automatic salary deductions, off-cycle payments, and time tracking, Paychex offers a real-time payment option called Paychex Real-Time Payments. This service allows employers to send payments to their employee's bank accounts instantly – a feat that no other provider on this list was able to achieve.

Paychex has its own web portal, self-service mobile app, and self-service options for employees too, and is dedicated to making it as easy as possible for workers to access useful payroll data.

However, while Paychex offers flexible payment options for managers paying staff in the US, it doesn't offer international payment features. The service also lacks automatic compliance alerts and offers a weaker tax and payroll knowledge base than its rivals, with an expertise score of 3.5/5, compared to Rippling and ADP's 5/5.

Paychex's pricing

Paychex base rate of $39 per month is fairly typical of a payroll service of its kind. However, the solution lets businesses add users for $5 a pop, which is cheaper than any other software on this list.

This makes Paychex a great option for businesses with large and growing teams, that are looking to keep payroll costs to a minimum. Paychex doesn't offer a free trial though, so if you want to test the product out you'll need to commit to a 12-month contract.

Learn more about the provider's different plans in our Paychex pricing guide.

Paychex's scalability

We gave Paychex a scalability score of 4.8/5 because two of its pricing packages, Select and Pro, are able to be customized to your business's specific needs. These modular options make Paychex a great option for businesses with their gaze set on expansion. However, since it lacks certain HR integrations and doesn't include an open API, its scalability falls slightly short of the category's frontrunner, ADP.

4. Gusto – Best for Maintaining Compliance

One of the most frequent deductions that will pop up when operating a payroll are company benefits. The problem is, these can be really tricky to wrangle when dealing with multiple types of benefits, like healthcare and dental, and that goes double for a small business.

That’s where Gusto Payroll comes in handy. As you can see on Gusto’s benefits page, Gusto Payroll offers attachments that help with all sorts of benefit systems. From 401(k)s to commuter aid, there is a wide array of benefits on offer. It even offers health insurance help, partnering with companies like BlueCross and UnitedHealthcare to help provide company-wide coverage.

But benefits management is just one of the jewels in Gusto’s crown, as it also offers a comprehensive amount of other features that you’d want in a payroll software. Some highlights include two-factor authentication, automated payroll and tax filing, and even full HR functionality on the highest tier.

Unfortunately, it’s not perfect. There’s not much help when it comes to getting set up – as Gusto doesn't offer any training resources or live setup support at all, a stark contrast to QuickBooks, which offers live support and lots of training resources. There’s also no mobile app, so you’ll only be able to operate it from a computer.

Gusto's Pricing

Gusto's pricing is fairly run-of-the-mill for payroll software. The provider offers three plans, Simple, Plus, and Premium.

• Simple – Gusto's cheapest tier is available at $40 per month plus an additional $6 per user, per month. It includes a host of basic payroll features including dedicated payment features, employee profits, and hiring and onboarding tools.
• Plus – Gusto Plus costs businesses $60 per month plus an extra $12 per user, per month. It offers everything in the Simple tier plus next-day direct deposits, time tracking and project tracking, and access to the provider's full support suite.
• Premium – Finally, Gusto Premium offers the providers full range of features including a HR resource center, compliance alerts and performance reviews, and employee insights. Prices for the Premium plan are based on the needs of each business.

While Gusto's prices are slightly steeper than solutions like Rippling and Paychex, its prices aren't bad for what you're getting. And for smaller businesses that only require basic functions, Gusto's Simple plan is more than equipped to help you manage your payroll processes.

Check out our guide to Gusto's payroll pricing for additional information.

Gusto's Scalability

While Gusto does not impose a strict limit on the amount of employees that can be enrolled on its software, it does claim to be intended for small businesses. Therefore, if your business is rapidly growing, you might want to consider other software, since you don’t want to hit an unexpected wall.

5. Zenefits – Best for Excellent Data Security

Zenefits is a reliable piece of payroll and HR software that excels when it comes to payment features, onboarding solutions, and data security. With SOC II certification, end-to-end encryption, and no evidence of a security breach in the last two years, you can rest assured knowing your company data will be safe in Zenefit's hands.

Zenefits' features

Zenefits makes it quick and easy for small businesses to automate their payroll processes, leaving them with more time to focus on other matters.

From time tracking and scheduling to salary updates and benefits deductions, the platform handles a range of tasks with ease, negating the need for managers to enter information more than once. Like many other providers on this list, Zenefits offers its own app for employees too, making it easy for workers to clock in and out of shifts on their own terms.

In terms of its wider software offering, Zenefits even flaunts learning management, benefits management, and applicant tracking systems. However, if you employ international staffers, you'd be better off going for a software like Rippling or ADP, as Zenefits doesn't manage wages for global workers. (Alternatively, you can expand into other countries through an Employer of Record: Check out our guide to the best EOR services for more.)

What's more, while Zenefits provides users with in-depth training material, we were only able to give Zenefits a help and support score of 3.3/5 because it lacks live training courses and 24/7 live support channels.

Zenefits' pricing

Zenefits pricing packages start at $8 per user, per month for the Essentials package, which is a country mile less than most of its competitors.

If you're after advanced payroll features like compensation and performance management, you can opt for the provider's Growth plan which costs $16 per user, per month, whereas Zenefits' most advanced plan, Zen, costs $21 per user, per month.

But if these prices sound too good to be true, it might be because they are. These are just base rates, and businesses will need to pay an extra $6 per user, per month for basic payroll functions, and a minimum of $35 per month for recruiting and onboarding support.

Zenefits has a five-employee minimum of five too, making the software inaccessible to micro-businesses and freelancers.

Zenefits' scalability

Zenefits' modular pricing system is a great fit for growing businesses because they can add on extra services as they expand. The platform has an open API too, allowing users to create custom integrations with a seemingly endless array of third-party apps. Because of these perks, our researchers gave Zenefits a promising 4/5 for scalability, positioning it in the middle of our scalability champ, ADP, and Onpay.

What Is Payroll Software for Small Businesses?

Any business that pays its workers needs a payroll: This automated process will dramatically reduce any mistakes in payment, keeping your workers happy.

As a small businesses, you could outsource payroll services to a third-party company, but we recommend opting for a payroll software instead. After relatively little investment into learning the interface, a payroll software will automatically complete a payrun on a weekly, biweekly, or monthly basis, incorporating any requisite benefits, insurance, and taxes.

Payroll software saves small businesses from confusion, errors, and having to pay for an in-house Payroll Manager. Plus, the top payroll software providers offer additional useful features and add-ons with software integrations. For example, some payroll software can be integrated with survey tracking and attendance tools to help boost employee engagement in your company.

Buying Guide: How to Choose the Best Payroll Software for Your Small Business

A small business faces certain constraints that a large business or a franchise doesn't need to deal with. If your small business has just a dozen or fewer employees, you'll need a cheap solution that's easy to understand and handles all your payroll needs.

Here's our checklist of what to look for in a small business payroll solution:

• Cost – Typical price ranges for payroll software are a base monthly cost of between $35 and $50 along with a per-employee cost that might be between $4 and $10 per month, per employee. Some providers may offer bundles or custom deals that can lower this cost, as well.
• Support – Small businesses may not have as much institutional knowledge about the ins and outs of payroll, compared to a large operation. As a result, good customer support options are key. The best payroll software offers 24/7 email, phone, and live chat support to their customers.
• Ease of use – Just as small businesses may be more likely to need support, they're more likely to benefit from an intuitive interface with a short learning curve.
• Time tracking and attendance – Not every business cares about their employee clock-in and clock-out times, but if these HR records are important to you, be sure to check that your payroll software supports this function. Time tracking is one of the features that some payroll services don't support, but many businesses care about.
• Tax calculations – Tax season can be a nightmare for small businesses, but the right tax preparation can make a world of difference. Your payroll software should be able to calculate and withhold all the needed taxes, and can generate a tax report when needed. This might be an extra cost, depending on the provider.

Finally, different industries require different features, so your business might require a little extra legwork to ensure a payroll software has what you need.

Managing Payroll for a Small Business

No matter what industry your business is in, if you have employees, you’ll need to operate a payroll. But with all the taxes, deductions, and various salaries, it can be easy to get lost in the numbers and forms.

That’s where payroll software comes in handy. All a business owner needs to do is enter their employees’ information into the software, and their employees will be paid the correct amounts, with taxes and deductions being done automatically. So, with this in mind. let’s see which payroll software is the best fit for your business.

Methodology: How We Test Payroll Software

Frequently Asked Questions