Best Payroll Software for Small Business in 2025

Finding the right payroll software can transform how you manage employee compensation, tax compliance, and HR processes. With dozens of options available, choosing the best solution for your small business requires understanding your specific needs and comparing key features.

What Makes Great Payroll Software?

The best payroll software combines ease of use with comprehensive features. Look for platforms that offer:

Automated tax filing - The software should calculate, file, and pay federal and state payroll taxes automatically, reducing your compliance burden.

Direct deposit - Employees expect fast, reliable payment. Look for solutions offering same-day or next-day direct deposit with no per-employee fees.

Benefits administration - As you grow, integrated benefits management for health insurance, 401(k), and other perks becomes essential.

Time tracking integration - Seamless connection between hours worked and payroll processing eliminates manual data entry and errors.

Reporting and compliance - Generate year-end forms (W-2s, 1099s), maintain audit trails, and stay compliant with changing regulations.

Top Payroll Solutions Compared

Gusto - Best Overall for Small Businesses

Gusto leads our rankings for its combination of powerful features, user-friendly interface, and excellent customer service. Starting at $39/month plus $6/person, Gusto handles full-service payroll, automated tax filing, benefits administration, and HR tools.

What we love: The interface is intuitive enough for non-accountants to run payroll confidently. Employees get a self-service portal for tax forms, pay stubs, and benefits enrollment. Gusto's health insurance and 401(k) integrations are seamless.

Potential drawbacks: Pricing increases with headcount. Larger teams (50+ employees) might find per-employee costs adding up. Some advanced HR features require the Premium plan.

Best for: Companies with 5-50 employees seeking an all-in-one HR and payroll solution with excellent support.

QuickBooks Payroll - Best for QuickBooks Users

QuickBooks Payroll integrates seamlessly with QuickBooks accounting, making it ideal if you already use QuickBooks for bookkeeping. Starting at $45/month plus $6/employee, it offers full-service payroll with same-day direct deposit.

What we love: The integration eliminates duplicate data entry. Payroll expenses automatically sync to your books. QuickBooks' tax penalty protection covers IRS penalties if they make errors.

Potential drawbacks: The platform is less intuitive than Gusto for users not familiar with QuickBooks. Some HR features are add-ons rather than included.

Best for: Existing QuickBooks customers who want integrated accounting and payroll.

ADP - Best for Enterprise Features

ADP Payroll & HR serves businesses from 1 to 10,000+ employees with scalable solutions. While pricing is custom and typically higher, ADP offers enterprise-grade features, dedicated support, and proven reliability.

What we love: ADP's expertise in compliance, particularly for multi-state employers. Their HR modules rival standalone HRIS systems. Integration capabilities are extensive.

Potential drawbacks: Complex pricing, longer implementation, and features that may exceed small business needs. Customer service quality varies.

Best for: Growing businesses (50+ employees) or those with complex payroll needs like multi-state operations, union workers, or industry-specific requirements.

Key Features to Compare

When evaluating payroll software, create a checklist of must-have features:

Core payroll functionality:
- Automated tax calculations and filing
- Direct deposit and payment flexibility
- Unlimited payroll runs
- Employee self-service portal
- W-2 and 1099 generation

HR and benefits:
- Benefits administration
- PTO tracking and management
- Onboarding workflows
- Document management
- Performance management

Compliance and reporting:
- Multi-state tax support
- New hire reporting
- Workers' compensation administration
- Custom and standard reports
- Audit trails

Integration and support:
- Accounting software integration
- Time tracking connectivity
- HR apps and add-ons
- Customer support quality
- Mobile app functionality

Pricing Considerations

Payroll software typically charges base fees plus per-employee costs:

Budget tier ($20-40/month + $4-6/employee): Basic payroll and tax filing. Suitable for very small teams (1-10 employees) with simple needs.

Standard tier ($40-75/month + $6-12/employee): Full-service payroll, benefits, HR tools, and integrations. Sweet spot for most small businesses (10-50 employees).

Premium tier ($100-200+/month + $8-15/employee): Advanced HR, dedicated support, compliance tools, and custom features. For growing companies (50-200 employees).

Enterprise (custom pricing): Tailored solutions for 200+ employees with complex requirements.

Calculate total cost by multiplying per-employee fees by your headcount and adding base fees. Factor in implementation, training, and potential integration costs.

Making Your Decision

Choose payroll software based on:

1. Current size and growth plans - Select a platform that fits today but can scale to your 3-year projection.

2. Existing software stack - Integration with your accounting, time tracking, and HR tools matters more than standalone features.

3. Compliance complexity - Multi-state employers, seasonal workers, or contractors need more sophisticated compliance features.

4. Budget and ROI - Calculate time saved versus cost. If payroll takes 10 hours monthly at $50/hour ($500 value), spending $200/month on software that reduces that to 2 hours creates net value.

5. User experience - The best software is the one your team will actually use correctly. Prioritize intuitive interfaces and good support.

Conclusion

The best payroll software for your small business depends on your specific situation. Gusto offers the best balance of features, usability, and value for most small businesses. QuickBooks Payroll is ideal for QuickBooks users. ADP suits growing companies with complex needs.

Start with free trials to test interfaces and features with your actual payroll data. Most platforms offer implementation support and migration assistance to make switching easy.

Ready to streamline your payroll? Compare our top-rated payroll solutions and find the perfect fit for your business.