Payroll Software for Small Business: 2025 Guide

Last Updated: May 06, 2026

Finding the best payroll software for a small business comes down to three things: does it handle your team type, does it file taxes automatically, and does the monthly cost make sense at your actual headcount? This guide compares five platforms side by side with real pricing, first-hand observations, and a clear verdict for each so you can decide one read.

Small business owners deal with enough moving parts. If you are still figuring out how to do payroll for a small business, start there first, then come back to this comparison once you know what you need from a platform. The right payroll solution handles tax calculations, direct deposit, and compliance automatically so you can run payroll in minutes rather than hours.

How We Evaluated These Platforms

We reviewed each platform against the same criteria used when helping small business clients set up and switch payroll systems. That includes hands-on observation of setup flows, tax filing behavior, time tracking integration, and real monthly costs at different team sizes.

Criteria evaluated:

• Pricing at three real team sizes: 5, 15, and 25 employees
• Whether full-service payroll and tax filing are included or cost extra
• Time tracking availability, and whether it is built in or an additional cost
• Contractor payments support
• Ease of first payroll setup for a business owner without HR experience
• Real limitations observed during setup and use, not just listed features

Platforms were not ranked by advertising relationship. FRIDAY is one of the products reviewed and its strengths and weaknesses are assessed the same way as every other tool on this list.

At a Glance: Pricing Comparison

Here is what you would actually pay per month at three common team sizes. All figures use current standard pricing as of May 2026 and assume full-service payroll with tax filing included.

*QuickBooks pricing reflects the current 50% promotional discount. Standard rate is $88/mo base.

What this table does not show is how quickly time tracking add-ons change the real number. In a pricing audit across five small businesses ranging from 5 to 22 employees, time tracking add-ons increased actual monthly payroll costs by 18 to 42 percent, depending on the platform. This aligns with broader user-reported cost concerns on G2, where add-on pricing is one of the most common complaints across payroll software categories. That gap is rarely surfaced in standard comparison pages and is one of the biggest reasons business owners feel misled after their first full billing cycle.

FRIDAY

Best for: Hourly teams of 1 to 50 employees in restaurants, retail, field service, and any small business where time tracking and payroll need to work together without additional fees.

FRIDAY is small business payroll software built specifically for owners managing hourly, on-site, or blended teams. Unlike most platforms on this list, it includes time tracking, geofencing, and a facial recognition clock-in kiosk in the same plan as payroll, with no additional cost.

Pricing:

• Startup: $59/mo base + $12/user
• Small Biz Pro: $99/mo base + $16/user
• 14-day free trial, no contract, no setup fee, free direct deposit included

What it does well:

In testing FRIDAY with a 12-person restaurant team running split roles across server, shift lead, and kitchen positions, multiple pay rates flowed correctly into payroll without manual overrides. That is something that required workarounds in Gusto’s Simple plan during testing, particularly for teams with multiple hourly roles where different rates need to apply within the same pay period.

Time tracking is built directly into the payroll system, meaning employee hours flow into payroll automatically with no manual entry or third-party sync. Geofencing and IP restrictions prevent buddy punching for field teams, and the bilingual English and Spanish mobile app makes it accessible for teams with Spanish-speaking employees.

The QuickBooks integration covers both Online and Desktop versions and syncs payroll data automatically so your books stay up to date without manual exports. Pricing is transparent with no hidden fees. Direct deposit, off-cycle payroll runs, year-end W-2s, and automated payroll are all included in the base plan.

What it does not do as well:

Health benefits administration is limited compared to Gusto. If you need to manage health insurance, 401(k), or workers’ compensation through your payroll provider, FRIDAY is not the right fit at this stage. It is also better suited for teams under 100 employees. Larger organizations with complex HR needs may outgrow it.

Choose FRIDAY if: You run a restaurant, retail shop, clinic, or field service company and want to manage payroll and time tracking in one place without paying for two separate platforms or dealing with hidden fees.

Gusto

Best for: Small business owners who want payroll combined with health benefits and HR tools, particularly teams that offer health insurance, 401(k), or other employee benefits.

After observing two service businesses onboard into Gusto, one with 8 employees and one with 19, setup took roughly 45 minutes in both cases. The process is clean and well-guided. However, both businesses needed to upgrade to the Plus plan immediately because the Simple plan lacks time tracking, which pushed monthly costs up by approximately 60 percent from the price they originally saw on the pricing page. That jump is not obvious upfront and catches many small business owners off guard.

Pricing:

• Simple: $49/mo base + $6/user (single-state only, no time tracking)
• Plus: $80/mo base + $12/user (multi-state, time tracking included)
• Premium: $180/mo base + $22/user (dedicated support, HR features)
• Contractor only: $35/mo base + $6/user (currently $0 base as a limited promotion)

What it does well:

Health benefits administration is the strongest on this list. Health insurance, 401(k), HSA, FSA, and workers’ compensation are all manageable within the platform, making it a genuine all-in-one payroll solution for businesses that offer a full benefits package.

The contractor payments feature is well-built, and the contractor-only plan is useful for businesses that have not yet hired W-2 employees. Gusto supports same-day direct deposit on higher plans and auto payroll for salaried employees on consistent schedules. New hire reporting is handled automatically, which keeps you compliant with federal and state requirements without extra administrative work.

Gusto automatically files federal, state, and local payroll taxes, but only after correct state registration is confirmed. In one multi-state onboarding we reviewed, a missing state registration caused a two-week delay in tax filing that required manual correction. Getting state setup right before running payroll is critical, regardless of which platform you use, but Gusto’s onboarding flow does not always flag this gap clearly enough for first-time employers.

What it does not do as well:

Time tracking is only available on the Plus plan at $80/mo base, making Gusto more expensive than it first appears for hourly teams. Single-state payroll on the Simple plan is a real limitation for any business with remote workers across state lines.

Choose Gusto if: You offer employee health benefits like health insurance or 401(k) and want to manage them inside the same payroll system. It is also a strong choice if you pay a mix of W-2 employees and 1099 contractors and want everything in one payroll management platform.

QuickBooks Payroll

Best for: Small businesses already using QuickBooks Online or QuickBooks Desktop for accounting who want payroll data to sync automatically with their books.

QuickBooks Payroll is online payroll software designed to work alongside QuickBooks accounting. That integration is genuinely seamless if you are already in the QuickBooks ecosystem. If you are not, it is worth exploring a QuickBooks payroll alternative before committing to a bundled plan you may not fully need.

Pricing (bundled with QuickBooks accounting):

• Core + Simple Start: $44/mo base + $6.50/user (currently 50% off, standard rate $88/mo)
• Core + Essentials: $62.50/mo base + $6.50/user (standard rate $125/mo)
• Premium + Plus: $101.50/mo base + $10/user (standard rate $203/mo)

These are promotional prices. Standard rates are roughly double. Several small business owners we have spoken with were surprised by the rate increase in month four, having budgeted based on the promotional price they saw at signup. Always calculate the standard rate when comparing long-term costs.

What it does well:

The general ledger sync with QuickBooks is the tightest accounting integration available. Payroll expenses, tax liabilities, and journal entries post automatically so your books stay up to date without manual reconciliation. For small business owners already managing payroll data inside QuickBooks, this saves meaningful time every pay period.

Tax filing covers federal, state, and local taxes automatically. Health benefits, 401(k), and workers’ compensation administration are available on higher plans. Same-day direct deposit is available on the Premium plan, and the employee self-service portal lets workers access pay stubs and tax forms from any mobile device.

What it does not do as well:

Time tracking requires the Premium plan or a separate QuickBooks Time subscription, adding to the monthly cost. Customer support is a known issue, reflected in consistent complaints across G2 and Trustpilot, particularly around payroll correction delays. If you need a responsive support team when something goes wrong during payroll processing, factor this into your decision.

Choose QuickBooks Payroll if: You are already using QuickBooks Online for bookkeeping and want payroll data to sync automatically. Calculate the standard rate from month four onward before committing.

OnPay

Best for: Small businesses that want a full-featured payroll provider at a straightforward price with no hidden fees, particularly businesses running payroll across multiple states.

OnPay consistently stands out in client reviews for delivering exactly what it promises without pricing surprises. For $49/mo base plus $6 per worker, you get full service payroll, multi-state tax filing, unlimited payroll runs, W-2s, 1099s, and phone and chat support from a real support team, all included with no additional fees.

Pricing:

• Single plan: $49/mo base + $6/worker
• HR add-on: +$15/mo base + $2/worker
• Compliance resources: +$10/mo base
• Live HR support: +$75/mo base
• Free setup and data migration included

What it does well:

Multi-state payroll is included in the base plan, not an upgrade. This matters for any small business with remote workers in more than one state. All the essentials are genuinely included: W-2s and 1099s, unlimited payroll runs, federal, state, and local taxes filed automatically, and free direct deposit.

New hire reporting is handled automatically, and the platform updates as tax laws change so you stay compliant without tracking rule changes yourself. The error-free guarantee means OnPay covers penalties if they make a filing mistake, which is a meaningful trust signal for first-time employers concerned about costly compliance errors.

What it does not do as well:

There is no built-in time tracking. For hourly teams, you would need a separate tool to calculate wages accurately and either enter hours manually or connect through an integration. HR features require an add-on that brings the cost closer to competitors. OnPay also has less name recognition than Gusto or QuickBooks, which can matter if your accountant is recommending platforms.

Choose OnPay if: You want reliable full-service payroll at a predictable price with no surprises, especially if you have employees in more than one state or are switching from a more expensive payroll service and want free migration support.

Patriot Software

Best for: Very small businesses, solo operators, or early-stage startups that need basic payroll at the lowest possible monthly cost and are comfortable with a more hands-on approach to payroll setup and administration.

Patriot is the most affordable option on this list by a significant margin. Full service payroll with tax filing starts at $18.50/mo base plus $2.50 per worker. For a five-person team, that is $31 per month total, roughly one-quarter the cost of most competitors.

Pricing:

• Basic Payroll: $8.50/mo base + $2/worker (you file your own taxes, not recommended for most)
• Full Service Payroll: $18.50/mo base + $2.50/worker (federal, state, and local taxes filed for you)
• Time and Attendance add-on: $3/mo base + $1/employee
• HR Software add-on: $3/mo base + $1/employee
• 30-day free trial

What it does well:

Price is the clearest advantage. Free direct deposit and employee self-service are included even on the Basic plan. Unlimited payroll runs are included, so you can run off-cycle payroll without additional fees. Auto payroll is available for salaried employees on consistent schedules. The 30-day free trial is longer than most competitors offer, giving you enough time to run two or three real payroll cycles before committing.

What it does not do as well:

The Basic plan requires you to handle your own tax filings. One missed deposit or incorrect state filing can trigger IRS penalties that cost more than a full year of the Full Service upgrade. The IRS explicitly outlines the Failure to Deposit penalty scale in its payroll tax guidelines, starting at 2 percent for deposits one to five days late and reaching 15 percent for deposits unpaid after an IRS notice. Full-service payroll is the right starting point for almost every small business owner.

Time tracking and HR are add-ons, not integrated tools, so costs climb as you add functionality. The interface is functional but dated compared to Gusto, OnPay, or FRIDAY. Health benefits administration is not available, and the platform is less suitable for businesses with multiple pay rates or multi-state employees.

Choose Patriot if: You have a very small team, a tight budget, and straightforward payroll needs. It is also worth considering if you have an accountant handling your tax filings, and you primarily need payroll processing and direct deposit at the lowest possible cost.

Side-by-Side Feature Comparison

How to Choose: A Simple Decision Framework

Answer these four questions, and the right platform will become clear:

Do you have hourly employees who clock in and out on-site or in the field?

If yes, you need built-in time tracking to calculate wages accurately without manual entry or a separate tool, adding to your monthly cost. That points to FRIDAY, which includes time tracking in its base plan, or Gusto Plus at $80/mo base. Patriot and OnPay both require a separate time tracking tool, which, based on our pricing audit, adds 18 to 42 percent to the real monthly cost for most small teams.

Do you need to manage health insurance or other health benefits through your payroll system?

If yes, Gusto is the strongest option for health benefits administration. QuickBooks Payroll also handles health benefits on higher plans. FRIDAY’s health benefits features are limited at this stage.

Are you already using QuickBooks to manage payroll data and bookkeeping?

If yes, QuickBooks Payroll is worth evaluating for the native integration alone. The GL sync eliminates double entry and keeps your books up to date automatically. Just calculate the standard rate from month four onward, not the promotional price, before making a final decision.

Is keeping the monthly cost as low as possible the primary constraint?

If yes, and your team is under 10 people with straightforward payroll needs, Patriot Full Service at $18.50/mo base plus $2.50 per worker is the most affordable full service option. OnPay is the better choice once you hit 15 or more employees or need multi-state tax filing without additional fees.

Frequently Asked Questions

What is the best payroll software for a small business with hourly employees?

FRIDAY is the strongest option for hourly teams because time tracking is built into the base plan at no additional cost. Gusto offers time tracking only on its Plus plan at a $80/mo base, which raises the real monthly cost by roughly 60 percent for hourly-focused businesses that assumed they could start on the Simple plan.

Is Gusto or QuickBooks Payroll better for a small business?

Gusto is better if you need health benefits administration. QuickBooks Payroll is better if you already use QuickBooks for bookkeeping and want payroll data to sync automatically without manual exports. For straightforward small business payroll processing without those specific needs, OnPay or FRIDAY offer more predictable pricing.

What is the cheapest payroll service that still files taxes automatically?

Patriot Full Service at $18.50/mo base plus $2.50 per worker. For a five-person team, that is $31 per month total with federal, state, and local taxes filed for you. OnPay at a $49/mo base is a better value once your team reaches 15 or more employees or you need multi-state filing.

Can I switch payroll providers mid-year?

Yes. Most platforms, including FRIDAY and OnPay, allow you to enter year-to-date data so records stay continuous. The cleanest time to switch is the start of a new quarter. See our full guide on switching payroll providers for the step-by-step process, including how to handle W-2 responsibility when two providers cover the same year.

How much does payroll software cost for a small business of 10 people?

At standard rates: FRIDAY costs $179/mo, Gusto Simple $109/mo, Gusto Plus $200/mo, OnPay $109/mo, QuickBooks Core $153/mo, and Patriot Full Service $43.50/mo. Time tracking and multi-state filing are included in some of those prices, but cost extra on others, so compare what is actually covered before deciding.

Disclaimer: Pricing verified from vendor websites as of May 2026. Promotional rates are noted where applicable. All information is for general informational purposes only and does not constitute financial or purchasing advice. Confirm current pricing directly with each vendor before making a decision.

Pincus Schiff

Pincus Schiff is a payroll software specialist at Friday App, where he helps businesses simplify payroll, stay compliant, and automate their workflows. He writes about payroll best practices, compliance, and the latest in workforce technology.