The Best Payroll for Small Businesses

According to our extensive market research, Paychex is the best payroll software for small businesses. Our expert testers were impressed with the fact that Paychex enables you to pay your employees instantly, as appreciated its live training courses.

But why is payroll software important? According to legal powerhouse Ernst & Young, 1 in 5 company payrolls contain errors, with each one costing an average of $291 to correct. Using payroll software can reduce the risk of errors, therefore saving you money and protecting your reputation as a business that pays employees and taxes correctly.

That said, when you choose a payroll software provider for your small business, you should make sure its pricing, features, and support offering fit the bill and meet your needs.

The quickest way to find the best payroll software for your small business is using our free quote comparison tool. Answer a few questions about your needs, and we’ll match you with trusted providers who’ll get back to you in no time with custom, no-obligation quotes to compare.

However, if you’d like to know more about our research into the best payroll software for small businesses, just check out our ranking and reviews below.

What Is Payroll Software for Small Businesses?

Payroll software is an application that allows business to automate and manage payments to their employees, including tax deductions and pension contributions, as well as keep records of these payments. The best payroll companies offer software that is easily integrated to your venture’s existing structure, and that can be scalable according to your needs.

Small businesses can use payroll software to process employee pay in bulk. You can use payroll software that’s integrated with HR to oversee time and attendance, manage employee benefits, and more.

By automating tasks that would be performed by humans, small business owners can reduce payroll errors and amp up the productivity of their accounting and HR teams.

1. Paychex

If you want payroll software that pays your staff instantly

What Do I Need to Know About Paychex?

What Makes Paychex Good for Small Businesses?

Paychex’s greatest strength is that it allows small businesses owners to instantly pay their staff, massively improving employee satisfaction. Due to its Paychex Real-Time Payments feature, the software boasts the quickest payment time of all those our researchers tested. In comparison, the quickest Rippling allows you to pay your employees is in two days.

With prices starting at $44 per month, Paychex isn’t the cheapest provider on the market — and unlike Gusto, it doesn’t offer a free trial. Paychex is more expensive than Rippling (whose prices start at $8 month) and Zenefits (whose starting price is $14 per month).

That said, if they invest in it, small business owners can benefit from Paychex’s 24/7 customer support, an unique benefit among the payroll companies we analysed. Paychex also offers live training sessions that can ease its onboarding process, along with plentiful resources that allow you better understand your payroll-related tax requirements.

However, Paychex doesn’t handle the payment of international employees and doesn’t alert you of any labor law compliance breaches. If you need a provider that packs these features, Rippling is a better choice.

2. Rippling

If you want payroll software with compliance breach alerts

What Do I Need to Know About Rippling?

What Makes Rippling Good for Small Businesses?

Rippling is a provider that’s big on labor law compliance, with stringent data security procedures and features to help you stay on top of data-related requirements. For starters, it has achieved three data security certifications (ISO: 27001, SOC I, and SOC II), which is the highest number among all the providers our expert team evaluated. It also automatically alerts you of compliance breaches your business might be in — a feature Paychex and Zenefits lack.

Onboarding-wise, Rippling has an asset in its Implementation Managers, which are specifically designated to businesses and can teach them how to use and set up the platform.

Unfortunately though, Rippling doesn’t offer a 24/7 support channel, unlike Paychex, and it doesn’t offer fully transparent pricing, like Gusto does. That’s because, despite advertising its minimum charge of $8 per month per employee, it actually operates a custom price model based on add-ons, meaning you pay according to each solution you need. Also, its payment time of two working days or four working days didn’t particularly impress us, as it simply follows the average industry standard.

Rippling is particularly suited to small businesses owners that have staff in other countries, as it handles international employee payment. However, it doesn’t pack any ready-made integrations with third-party HR systems, which can be a problem if you’d like to integrate Rippling with your current HR software. ADP will serve you serve better if you’re looking to do that.

3. ADP

If you want payroll software that’s easily scalable

What Do I Need to Know About ADP?

What Makes ADP Good for Small Businesses?

ADP packs an incredible suite of integrations, both with the native platforms it sells and with third-party software you may already own, or may be interested in getting. For small business owners, this makes for a highly scalable tool that can be expanded with ease as your venture grows.

ADP also offers live training sessions, which help with its implementation. In this regard, ADP is better than Zenefits, which doesn’t offer this kind of support.

Working solely with custom prices, ADP’s pricing isn’t transparent like Gusto’s. This can pose a problem to business owners who are looking to choose a system quickly and want to know from the get-go whether it fits their budget. As it stands, you’ll have to go through a quoting process to get hold of actual prices.

However, ADP can get your employees paid within 24 hours, which occupies a solid middle ground among most of the providers our research team tested. For example, it beats Rippling’s two working days and four working days options, but it doesn’t trump Paychex’s real-time payments.

All that said, the main area we found ADP to be lacking in is customer support: it doesn’t offer 24/7 customer support and is the only payroll software our experts tested that doesn’t provide an email support channel. If you need more support options, we recommend Rippling.

4. Gusto

If you want payroll software with a flexible contract

What Do I Need to Know About Gusto?

What Makes Gusto Good for Small Businesses?

Gusto is a great choice for startup and small business owners who are testing the waters, as it doesn’t require a fixed-term contract — and it’s the only payroll software we evaluated that offers this benefit. In our deep research into the payroll market, we found that most providers work with annual contracts, so Gusto’s monthly approach is refreshing and gives great flexibility to ventures.

Starting at $41 per month, Gusto’s pricing is similar to (if slightly cheaper than) Paychex’s, which starts at $44 per month, but it’s more expensive than Zenefits’, which charges $14 per month as a minimum. Unlike Paychex, however, Gusto offers a free trial.

Gusto also impressed our researchers when it comes to payment time, as it enables you to pay your employees as fast as on the same day you process their payroll.

With two data security certifications under its belt (SOC II and ISO 27001), Gusto maintains an excellent level of compliance when handling your sensitive data. However, it doesn’t alert your company of any compliance breaches, leaving that monitoring to you. If you need an extra hand with that, Rippling — and its automatic alerts — is a better choice.

5. Zenefits

If you want payroll software but are on a budget

What Do I Need to Know About Zenefits?

What Makes Zenefits Good for Small Businesses?

Zenefits greatest draw to small business owners is its economical, transparent pricing. Its starting price of $14/month is considerably lower than the average payroll services cost. Plus, its simple plan structure allows businesses to predict their expense with the provider quite easily. If you need to know straight away if a provider fits your budget, look no further. You can even test it before you commit, since it packs a free trial, like Gusto.

Zenefits’ payment times of two working days and four working days are the same as Rippling’s and are average considering the industry standards. When it comes to onboarding, the provider offers in-depth materials to help users understand the platform, but it doesn’t offer live training sessions like ADP does. This can delay the process of getting Zenefits efficiently up and running in your small business.

For all its prowess, it’s worth noting that Zenefits lacks 24/7 customer support (a feature Rippling offers), which can pose a problem for small businesses that operate around the clock. It also doesn’t offer ready-made integrations with third-party HR systems, which doesn’t make it an ideal choice if you’re looking to have Zenefits work alongside your current HR software. To do this, we recommend Paychex.

Our Methodology: How Did We Find the Best Payroll Services?

Five researchers carried out in-depth research into payroll services according to a comparison framework designed by our research team leader. For each provider we’ve asked these questions:

• What accreditations and industry recognition do they have?
• How easily can your employees engage with and access the payroll process?
• How compliant are they with data security and privacy?
• Are they a scalable service that includes other HR functions should you grow to need them?

We’ve factored all these questions into our rating system and come out with a ranking of the best payroll services.