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The 5 Best Budget-Friendly Payroll Services for Your Small Business

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Forty percent of small business owners in the U.S. say that taxes and bookkeeping are the worst part of running a business.

With fewer employees, a good chunk of responsibilities fall into the hands of the owner.

This may include managing and hiring personnel, purchasing inventory and supplies, promoting the business, acquiring new clients and customers, and doing everything you can to make sure operations run smoothly.

One task that demands a significant amount of time and resources is payroll.

As a business owner, you have to make sure employees get paid on time, take care of tax withholding, manage their benefits, health insurance, and retirement plans, and more.

All these can take a good amount of your resources and time on a monthly basis.

Small business owners can save precious time and energy by hiring a payroll company to handle this all for them.

In this round-up, we’ll show you our top picks for the best payroll providers for small businesses.

We’ll take a look at their features, pricing, extras, and pros and cons.

We’ll also share what to consider when choosing the best payroll service for your needs so you can stop wearing your accounting hat and start building the business of your dreams.

What Do Payroll Companies Do?

Payroll companies provide you with everything you need for running payroll and managing employee compensation.

With payroll services, business owners simply have to enter and submit their employees’ payroll information for the pay period.

The payroll company’s software will do all the work from there: it’ll make all the necessary calculations, apply the appropriate payroll taxes, and account for employee benefits.

They will then send the money directly to the employee’s bank account via direct deposit, pay cards, or paper checks.

The payroll company will also take care of generating payroll reports and year-end tax forms for both W-2 and 1099 employees.

An online employee portal allows workers to log in and view their pay stubs and tax returns.

Most payroll providers have full HR services in their packages or offer it as an add-on.

It’s like having your own human resources department running entirely online.

What Do Small Businesses Need From a Payroll Company?

Small businesses need to hire the right payroll company that can manage all their needs like a full-time team.

The right payroll provider should be able to supply your business with tools that will keep payroll and tax processing simple and secure so you can focus on more critical tasks.

These third-party payroll providers allow you to manage your employees’ compensation and benefits through payroll software and online support.

Since these are web-based, you can run payroll data from anywhere.

Launch a web browser, log in with your credentials, and voila — you can run full-service payroll solutions in just a few clicks.

Most of them also integrate with popular accounting software like QuickBooks, Xero, and Sage.

Some payroll providers even have a mobile app, which makes running payroll outside the office much more manageable.

It also makes employee access to any compensation or HR-related inquiries more convenient.

Now that you know what payroll providers are for, the next (and most important) step is to pick one.

To help you choose, let’s go over the most crucial factors to consider when checking out your options.

Things to Consider When Choosing a Payroll Service

Every business is different, and you need to pick the right solution for your particular business needs

For example, a 50-employee company will require a complete payroll solution and HR services, while a small business made up of only 10 employees might get by with the most basic package.

Here are some critical elements to consider before signing up with a payroll provider.


How much are you willing to pay to have someone take the burden of all payroll processing tasks for your small business?

The answer will vary, but one primary consideration that will affect your choice is the number of features your company needs.

You have to hit that sweet spot between price and value to get the most out of what you’ll pay.

When it comes to price structure, these payroll services usually charge via monthly or per-payroll basis.

Base monthly fees typically range from $30 to $150 plus an additional $2 to $15 per employee.

Payroll providers like ADP and Paychex charge for each time you run payroll (ranges from $10 to $100, plus per-employee fee) while others like Gusto and SurePayroll allow you to run unlimited payrolls on a monthly payment structure.

Also, some payroll companies like ADP and Paychex charge fees for running year-end tax reports like W-2s and 1099s.

They also have initial setup fees that can run anywhere between $25 to $200.

Number of Employees

The number of employees will play a significant role in determining which type of plan to get from your payroll provider of choice.

Companies with less than 50 employees often find an excellent price-to-benefits ratio from online payroll providers like Gusto and OnPay as they offer complete payroll solutions fit for starting companies with just a few employees.

Beyond that number, companies might want to take a look at more full-featured offerings from ADP and Paychex but should expect to pay a higher price.

They include all essential elements plus add-ons like 24/7 support, poster compliance, paycheck mailing service, and others.

Features and Benefits

All the payroll providers who made our list have all the essentials for running full-service payroll.

Aside from the main payroll processing tools, they offer HR services, time-tracking tools, payroll tax filing, and employee onboarding features.

So how will you choose?

It would be best if you decide based on the feature set that your small business needs.

For example, if you have less than five employees, you won’t really need add-ons like employee onboarding tools or new-hire reporting.

Small business owners can manage that with a company of this size.

Your best choice will be something with just the basics like payroll processing and tax filing.

Do you have employees who work from home?

Make sure to get a payroll service that has a time-tracking feature.

If you have several employees who work remotely, a payroll provider that has an extensive employee management system will allow you to meet compliance requirements and easily provide tax reports as needed.

A growing business, on the other hand, might want to look for a more robust payroll solution with built-in HR services features, more employee self-service tools, and full 24/7 support.

Software Interface and Integration

Business owners shouldn’t be spending all their time managing their employees’ compensation and tax returns.

They should be concentrating their resources and efforts on running and maintaining the company.

That’s why payroll software should be easy to use and seamlessly integrate with the existing accounting software.

Choose an online payroll provider that suits your taste in regards to interface and usability.

While each payroll service we have picked for this list can integrate with most accounting software, it’s best to check if the one your company uses is supported.

Customer Service and Support

Submitting payroll data might be easy enough, but it’s still not 100% error-free.

You can expect to hit a few snags every once in a while.

Getting timely help is vital in getting back to business as quickly as possible.

Excellent customer service support is especially crucial if you’re new to the payroll service and need a bit of hand-holding at the start.

Our Top Picks: The Best Payroll Services for Small Businesses

The factors mentioned in the previous section gives us a guideline on what to look for in payroll companies.

Let’s take a look at five of the most popular payroll services in the small business niche.

We’ll highlight their strengths and show which ones work best based on the size of the company and its budget.


Payroll services: Gusto's payroll packages

Best for: Startups who need a complete payroll and HR solution for their growing team

Gusto is a popular choice among small businesses thanks to its competitive pricing and complete feature set.

You can perform time tracking, payroll processing, tax form completion, and employee onboarding, which includes a new hire checklist and employee background checks.

For a base price of $39 per month plus $6 per person, you can run payroll as often as you want and have everything you’ll need to make payroll processing as easy as possible.

Plus, there are no setup fees or additional charges unless you want to add some optional features like benefits, workers comp, HR tools, and others.


Payroll services: Justworks payroll packages

Best for: Small businesses who want to outsource their payroll, HR, and compliance needs to a PEO

Justworks is a professional employer organization (PEO) that offers two types of plans to their customers.

Their Basic plan starts at $39 per month for companies with more than 100 employees.

Prices go higher with fewer employees ($99 per month for companies with only 2-4 employees).

Their Plus plan has the same set of features but unlocks the benefit add-ons like medical and dental insurance, 401k, health and wellness perks, and others for a fixed price of $69 per month per employee for companies with more than 100 employees.

Discounts apply if you pay annually instead of monthly.

With Justworks, you’ll get the typical feature set of payroll and tax tools, but with the inclusion of HR consulting and tools to make sure your company meets its compliance requirements.

Gusto also offers this on their most expensive “Concierge” plan, but Justworks has it available on all plans.


Payroll services: OnPay's payroll package price

Best for: The startup looking for an inexpensive payroll service with an optional pay-as-you-go feature

OnPay is an online payroll software solution that comes with a host of features but at an affordable price.

They offer unlimited pay runs (with guaranteed accuracy), lifetime access to pay stubs and W-2 forms (even if the person is no longer employed there), automated payroll taxes, and options to get paid via direct deposit, check, or debit card.

They have a fixed monthly fee of $36 plus $4 per person with no hidden fees, so you only need to pay more if you add more employees.

They also offer an optional “pay-as-you-go” plan that features no upfront premiums.

Intuit QuickBooks Payroll

Payroll services: Intuit Quickbooks payroll pricing

Best for: Small business owners in love with QuickBooks who want to keep things consistent

For small businesses who already use QuickBooks for their accounting needs, Intuit’s full-service QuickBooks Payroll is the perfect match.

The seamless integration between the two makes it easier for business owners to manage accounting and payroll in one place.

The cheapest plan, “Self-Service,” starts at $35 + $4 per employee per month (pricing on the image shows their 70% off Memorial Day discount).

You’ll be able to run unlimited payroll, calculate and file year-end payroll taxes, and do same-day direct deposit.

Their more expensive plans have the same features and integrate QuickBooks for all accounting needs.

Patriot Payroll

Payroll services: Patriot Software's payroll package pricing

Best for: The penny-pinching startup looking for a cheap (but full-featured) payroll service

Patriot Payroll features the cheapest pricing plan on our list.

Their Basic Payroll option is priced at only $10 plus $4 per employee per month.

The Basic plan will provide you with all the essentials to run unlimited payroll.

If you want a more complete option, their Full Service Payroll plan will provide you with all you need for payroll processing while they handle your payroll taxes.

At only $30 plus $4 per employee per month, they’ll file and deposit your company’s federal, state, and local taxes, and take care of your W-2s and W-3s.

Do note, however, that the reason it’s cheaper than other offerings on our list is that HR services and time tracking are not bundled.

You’ll have to pay for these add-ons if you want a more complete solution.

Choose the Right Payroll Service for Your Small Business

Running a small business is tough.

The administrative load and time spent to make sure employees get paid and taxes filed on time can easily add up if you don’t have an efficient system for managing payroll.

Plus, errors in compensation and compliance can be costly and have a negative impact on your business.

With these payroll services, you don’t have to worry.

For a reasonable price, you can make sure your employees get paid on time and all taxes and benefits are accounted for.

Now you can get back to leading your business — and leave the rest to your new payroll team.

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