Best Small Business Payroll 2026
Compare the top payroll solutions for small businesses side by side. Software and full-service options ranked by price, tax filing, direct deposit speed, benefits admin, and contractor support.
Payroll Comparison Table
Annual estimate based on 5 employees. Prices as of March 2026 - verify with vendor before purchasing.
| Provider | Type | Base Cost | Annual (5 staff) | Tax Filing | Direct Deposit | Benefits | Time Track | Mobile | Support | Contractors |
|---|---|---|---|---|---|---|---|---|---|---|
GustoMost Popular | Full-Service | $46/mo + $6/employee | $732 | Automated | 2 days | Built-in | Phone + Chat | |||
QuickBooks Payroll | Full-Service | $50/mo + $6/employee | $780 | Automated | Next day | Add-on | Phone + Chat | |||
ADP RUNBest Support | Full-Service | Quote-based (~$79/mo+) | $1,080+ | Automated | 2 days | Add-on | 24/7 Phone | |||
Paychex Flex | Full-Service | Quote-based (~$59/mo+) | $900+ | Automated | 2 days | Built-in | 24/7 Phone | |||
OnPayBest Value | Full-Service | $40/mo + $6/employee | $720 | Automated | 2 days | Basic | Phone + Email | |||
Patriot PayrollCheapest | Software | $17/mo + $4/employee | $444 | DIY or add-on ($12+) | 2-4 days | Add-on | Limited | Phone + Chat | ||
Wave Payroll | Software | $20/mo + $6/employee | $600 | Manual (tax service states only) | 2-5 days | Basic | Email only | |||
Square Payroll | Software | $35/mo + $6/employee | $660 | Automated | 2-4 days | Limited | Built-in | Phone + Email | Yes ($5/mo contractors only) |
* Annual estimate assumes 5 W-2 employees on the base plan. Quote-based providers will vary. Always confirm pricing directly with the vendor.
Software vs full-service
Payroll software handles calculations and direct deposit but leaves tax filings to you. Full-service providers do everything automatically - calculations, filings, and payments - reducing your compliance risk at a modest price premium. For most businesses with fewer than 20 staff, the peace of mind from full-service is worth $30-50 more per month.
Pricing: what really matters
The base monthly fee matters less than the per-employee fee as you grow. A provider charging $40/month plus $6 per person becomes more expensive than one charging $50/month plus $5 per person once you have more than 10 employees. Always calculate total cost for your actual team size, not the advertised starting price.
Contractors vs W-2 employees
If your team is a mix of W-2 employees and 1099 contractors, check whether the payroll provider charges separately for each type. Some providers charge the same per-person rate for both. Others, like Square, offer a separate contractor-only plan. At year-end, ensure your provider generates and files both W-2 and 1099-NEC forms.
Team Payroll Cost Calculator
Enter your team details to see estimated monthly and annual costs across all 8 providers.
Cheapest Option
Patriot Payroll
$50/mo
$600/year
Most Expensive
ADP RUN
$99/mo
$1,188/year
Potential Annual Savings
Switching could save
$588
per year vs priciest option
| Provider | Type | Monthly Est. | Annual Est. | Notes |
|---|---|---|---|---|
Patriot PayrollCheapest | Software | $50 | $600 | Tax filing add-on $12/mo. DIY option available. |
Wave Payroll | Software | $50 | $600 | Manual tax filing. Limited states with tax service. |
Square Payroll | Software | $64 | $768 | Contractor-only plan $5/mo (no W-2 base fee) |
OnPay | Full-Service | $70 | $840 | Contractors included in per-person fee |
Gusto | Full-Service | $76 | $912 | Upgrade available for benefits |
Paychex Flex | Full-Service | $79 | $948 | Estimate only - requires custom quote |
QuickBooks Payroll | Full-Service | $82 | $984 | Time tracking add-on $8/mo |
ADP RUN | Full-Service | $99 | $1,188 | Estimate only - requires custom quote |
Estimates are approximate. Quote-based providers (ADP, Paychex) may differ significantly. Always confirm pricing with the vendor.
Frequently Asked Questions
What is the cheapest payroll option for a small business?
Patriot Payroll is typically the cheapest starting at $17/month plus $4 per employee. For a 5-person team that works out to roughly $37/month on the basic plan. Wave Payroll is another low-cost option at $20/month plus $6 per person, though its tax filing support is limited to certain states. Keep in mind that very cheap software plans often require you to handle tax filings manually or pay extra for tax service, so factor that into your real cost.
Should I use payroll software or a full-service payroll provider?
It depends on how much time you have and your risk tolerance. Full-service providers like Gusto, OnPay, and ADP automatically calculate, file, and pay all federal, state, and local payroll taxes on your behalf - reducing your compliance risk considerably. Payroll software (Patriot, Wave, Square) costs less but puts the responsibility for accuracy and filings on you, or requires add-ons for tax service. Most small business owners with fewer than 20 staff find the time savings from full-service worth the extra $20-40/month.
What payroll taxes does a small business have to pay?
As an employer you are responsible for: Social Security tax (6.2% on wages up to the annual wage base), Medicare tax (1.45% on all wages), Federal Unemployment Tax (FUTA, 6% on the first $7,000 per employee, usually reduced to 0.6% with state credits), and State Unemployment Tax (SUTA, rate varies by state and your claims history). You also withhold the employee share of Social Security and Medicare from each paycheck. State and local income tax withholding rules vary by location. Full-service payroll providers handle all of this automatically.
How long does payroll direct deposit take?
Most full-service providers offer 2-day direct deposit as standard, meaning employees receive funds 2 business days after you submit payroll. QuickBooks Payroll offers next-day direct deposit on higher-tier plans. DIY software providers like Patriot and Wave typically take 2 to 5 business days depending on your bank relationship and account history. Some providers allow same-day ACH for an additional fee. Always run payroll at least 2 to 4 days before your pay date to allow processing time.
Can small business payroll software handle 1099 contractor payments?
Yes. All 8 providers on this list support contractor payments to some degree. Gusto, OnPay, QuickBooks, and ADP include contractor payments as part of their core service. Square Payroll offers a contractor-only plan at $5/month with no base fee if you only pay 1099 workers. At year-end, full-service providers will generate and file 1099-NEC forms on your behalf. If you have a mix of W-2 employees and contractors, check whether the provider charges separately for each worker type.
What should I look for in payroll software for a small business?
The five most important factors are: (1) Automated tax filing so you do not miss deadlines or make errors on federal and state filings. (2) Direct deposit speed - faster is better for employee satisfaction. (3) Contractor support if you use 1099 workers alongside W-2 staff. (4) Integration with your accounting software such as QuickBooks, Xero, or FreshBooks. (5) Scalability - the pricing model should stay reasonable as you add staff, so check the per-employee fee, not just the base price. Benefits administration and time tracking are valuable add-ons once you pass around 10 employees.