The Best Payroll Software for Small Businesses in 2025
Estimated reading time: 8 minutes
Running a small business is no easy feat. Between managing employees, keeping up with finances, and staying compliant with tax laws, payroll can quickly become a headache. But what if there was a way to simplify payroll, save time, and reduce errors?
That’s where payroll software comes in. The right payroll system can automate wage calculations, handle tax filings, and even manage employee benefits freeing you up to focus on growing your business.
In this guide, we’ll break down the best payroll software for small businesses, based on pricing, features, and ease of use. Whether you’re a startup founder, a growing business, or an entrepreneur looking to streamline operations, you’ll find the perfect fit here.
What to Look for in Payroll Software
Before diving into the best options, let’s cover the key features that make payroll software worth investing in:
- Automated Tax Filing – No more late-night tax calculations. Good payroll software files federal, state, and local taxes automatically.
- Direct Deposit & Payroll Processing – Employees get paid on time, without manual checks.
- HR & Benefits Management – Some tools include health insurance, retirement plans, and PTO tracking.
- Integration with Accounting Software – Syncs with QuickBooks, Xero, or other financial tools.
- Affordable Pricing – Payroll shouldn’t break the bank. Look for transparent pricing with no hidden fees.
Now, let’s explore the top payroll software options for small businesses.
1. Gusto – Best Overall Payroll Software
Why It’s Great for Small Businesses
Gusto is a favourite among entrepreneurs for its simplicity and robust features. It handles everything from payroll processing to tax filings and even offers health benefits with no admin fees.
Key Features:
- ✔ Unlimited payroll runs
- ✔ Automatic tax filing and payments
- ✔ Health insurance, 401(k), and workers’ comp integrations
- ✔ Supports international contractors
Pricing:
- Basic Plan: $49/month + $6 per employee
- Complete Plan: $79/month + $12 per employee (adds HR tools)
Best For: Small businesses that want an all-in-one payroll and HR solution.
2. Square Payroll – Best for Restaurants & Retail
Why It’s a Top Choice
If you already use Square POS, this payroll software seamlessly integrates with your system. It’s perfect for businesses with hourly employees and contractors.
Key Features:
- ✔ Flat-rate pricing
- ✔ Easy tips and overtime calculations
- ✔ Contractor-only payroll option
Pricing:
- Employees: $35/month + $6 per employee
- Contractors Only: $6 per contractor
Best For: Restaurants, retail shops, and businesses using Square POS.
3. Rippling – Best for HR & Payroll Automation
Why Businesses Love It
Rippling goes beyond payroll it’s a full HR and IT management platform. Automate onboarding, benefits, and even device management for remote teams.
Key Features:
- ✔ Automated payroll and tax filings
- ✔ Customizable HR workflows
- ✔ App and device management for remote employees
Pricing:
Custom pricing based on business size and needs.
Best For: Fast-growing businesses needing HR and payroll automation.
4. QuickBooks Payroll – Best for QuickBooks Users
Why It Works
If you already use QuickBooks for accounting, this payroll software integrates perfectly. It offers next-day direct deposits and tax penalty protection.
Key Features:
- ✔ Seamless QuickBooks sync
- ✔ Same-day or next-day direct deposit
- ✔ Auto tax filings and penalty protection
Pricing:
- Core Plan: $45/month + $6 per employee
- Premium Plan: $80/month + $8 per employee (adds HR support)
Best For: Businesses already using QuickBooks accounting software.
5. RUN Powered by ADP – Best for Scaling Businesses
Why It Stands Out
ADP is a payroll giant, and RUN is its small business solution. It’s great for companies planning to scale, with strong compliance support.
Key Features:
- ✔ Full-service payroll and tax filing
- ✔ HR support and compliance tools
- ✔ Mobile app for payroll on the go
Pricing:
Custom pricing based on business size.
Best For: Growing businesses that need enterprise-level payroll support.
6. Patriot Payroll – Most Affordable Option
Why It’s Budget-Friendly
Patriot offers a simple, low-cost payroll solution with solid features. It’s ideal for small businesses that need basic payroll without extra frills.
Key Features:
- ✔ Basic and full-service payroll options
- ✔ Free setup and support
- ✔ No long-term contracts
Pricing:
- Basic Plan: $17/month + $4 per employee (manual tax filing)
- Full-Service Plan: $37/month + $4 per employee (auto tax filing)
Best For: Small businesses on a tight budget.
7. Paychex Flex – Best for HR & Reporting
Why It’s a Strong Contender
Paychex Flex is packed with HR tools, advanced reporting, and excellent customer support.
Key Features:
- ✔ Extensive payroll and HR features
- ✔ Custom reporting and analytics
- ✔ 24/7 customer support
Pricing:
Custom pricing based on business needs.
Best For: Businesses that need advanced HR and reporting tools.
How to Choose the Right Payroll Software
Still unsure which one fits your business? Ask yourself these questions:
- How many employees do you have? (Some software is better for small teams, others for scaling.)
- Do you need HR features? (If yes, Gusto or Rippling might be best.)
- What’s your budget? (Patriot is great for cost-conscious businesses.)
- Do you use accounting software? (QuickBooks Payroll syncs seamlessly.)
Final Thoughts
Payroll doesn’t have to be complicated. With the right software, you can automate payments, stay tax-compliant, and even manage benefits all while saving time.
If you’re just starting out, Gusto or Patriot Payroll are excellent choices. For retail or restaurants, Square Payroll is a no-brainer. And if you’re scaling fast, RUN by ADP or Rippling can grow with you.
The best part? Most of these tools offer free trials, so you can test them before committing.
