Your employees come to work to earn a paycheck. Paying employees correctly and on time plays into employee satisfaction and retention.
However, for your payroll administrator, actually running payroll can be complicated without the proper software. The best payroll software is user-friendly and runs state and federal taxes for you.
Whether your team is five people or 5,000, the best payroll software is affordable and customizable to your organization’s pay structure and growing needs. We breakdown the best payroll software you can find on the market.
Best Payroll Software of 2021
Best Overall: Square
Square started with a small white square-shaped credit card reader—hence the name—and a tablet cash register. But it has since expanded to provide businesses with an array of tools to make doing business easier, including payroll software.
Square’s payroll software enables employers to pay full-time employees and contractors, track hours, and pay salaried and hourly employees with ease. The company touts that its software is an “all-in-one solution," allowing employers to offer health benefits and giving employees online accounts while leaving the payroll tax filings and withholdings to them. For managers on the go, there is even a mobile app so they can pay employees from anywhere.
In terms of cost, the software starts at $34 per month, $29 for the software subscription and then an additional $5 for each person you pay a month. Square tops our list for best payroll software because it works for any size business and can be customized for how and when you pay employees.
Best Value: Quickbooks
If your pay structure doesn’t change frequently and you’re on a tight budget, Quickbooks' software is a great choice. After the initial setup, payroll will run automatically through auto-pay. You’ll receive notifications to keep you updated, but you can mostly set-it and forget it. Quickbooks offers tax penalty protection, so they resolve any errors and pay any penalties for you. By using Quickbooks, even time tracking can be automatic.
A particularly nice feature in the top-two plans is Quickbooks’ same-day direct deposit for employees and contractors. This allows you to keep funds longer and for employees to be paid quicker.
Quickbooks offers three main packages, Core, Premium, and Elite, with up to 50% off for your first three months. Core offers automated payroll, health benefits processing, and next-day direct deposit for $45 per month ($22.50 per month for the first three months), plus $4 per month per employee. The Premium package offers auto payroll, same-day direct deposit, time tracking on the go, and an HR support center for $75 per month ($37.50 per month for the first three months), plus $8 per month per employee. The Elite package offers everything Premium does plus “white-glove” setup, the tax penalty protection, and a personal HR advisor for $125 per month ($62.50 per month for the first three months), plus $10 a month per employee. Quickbooks is a product of Intuit, which had $6.8 billion in revenue in 2019.
Best for Small Businesses: Gusto
Gusto, formerly known as ZenPayroll, began as a way to help small businesses manage their teams through one integrated platform. Gusto is a great pick for growing teams that want to send professional offer letters, offer 401(k)s, as well as other perks. The service offers three plans for clients: Core, Complete, and Concierge.
The Core package is best for small companies looking to keep it simple. The base price is $39 per month, and then $6 per employee per month. The Complete package offers additional tools such as time-tracking and the ability to manage PTO requests. The Complete package also has a base price of $39 per month but costs $12 per employee per month.
The Concierge package has added HR support with all of the payroll features. For mid-sized companies without an HR department or with a small one, this is a great option because there will be HR professionals at Gusto to rely on when necessary. Concierge pricing starts with a base price of $149 per month and then costs $12 per person, per month.
Best Package: Zenefits
Zenefits, which started out as an HR platform, syncs its payroll with its existing HR platform. This means benefits, paid time-off, hour tracking, and salary changes are all in one place. For example, users will only have to enter an employee’s salary change once, and it syncs automatically across the platform to payroll and other areas. The catch with Zenefits is you do first need to purchase the HR software, and payroll is an add-on feature. While the payroll feature is new, it's becoming an industry favorite.
There are three base packages of the HR platform that range from $10 to $27 per employee, per month (though the price drops to $8 to $21 per month when you sign up for annual pricing). Then, to add payroll, it's an additional $6 per employee each month. It also automatically calculates payroll taxes, garnishments support, direct deposit, mobile payments, and the ability to pay at multiple pay structures. Other helpful features include lifetime access for employees to their portal—even after they’ve left the company—and job cost reports for management to understand how payroll expenses are distributed across different types of labor.
Best Legacy: RUN powered by ADP
Looking for something beyond a startup for payroll? ADP has been running payroll for over 70 years and is a leader in the industry. RUN powered by ADP provides an easy to use software that enables users to set up new employees quickly, whether they are full-time or contractors. Users can run payroll through their phone or online.
ADP offers packages for companies with one to 1,000 or more employees with multiple plans. The plans start with Essential Payroll, Enhanced Payroll, Complete Payroll with HR Plus, and HR Pro. ADP doesn’t list its prices online and pushes you to talk with a professional for a quote. Typically, for 10 employees, payroll might cost between $150 to $180 a month, but any add-ons would increase the price. ADP also charges per pay period instead of the per month model, so if there's a need for extra payroll, you'll probably pay more. The platform allows employees to have their own logins to look at pay stubs and taxes. ADP promises business owners safety by keeping them up to date about changing HR regulations and payroll rules. A standout feature: ADP provides businesses with a lot of human interaction, such as an account manager that frequently calls to check-in.
Best for Large Businesses: Paychex
Paychex’s software allows you to either import payroll or type it in yourself. Founded in 1971, Paychex offers every client a Learning Management System, which offers employees online courses to learn new skills and increase employee retention within your organization. The platform allows seamless 401(k) integration, calculates federal, state and local taxes for you, and has a free mobile app.
Paychex offers three packages: Paychex Go, Paychex Flex Select, and Paychex Flex Enterprise. The Paychex Flex Select and Paychex Flex Enterprise packages offer additional reporting on workers' compensation and analytics reports, as well as background checks for new employees. For larger companies or companies that want the payroll experience of a large company, Paychex is a great pick. The Paychex Go plan costs $59 a month plus $4 per employee. Businesses will need to reach out to Paychex to obtain quotes for the other two plans since prices are not listed on the website.
Best Cloud-Based: Namely
Namely started in 2012 to “create an HR platform as intuitive as social media.” Namely also provides HR and payroll integration through its cloud-based software, which enables employees to access payroll from anywhere. A company spokesperson said it supports companies with as many as 120,000 employees, and this software is best for companies with at least 50 people.
The platform handles all taxes, compliance, and year-end reporting. Add on services that help with benefits, recruiting, onboarding, and more. The software even has a feature to distribute employee surveys throughout a company to collect feedback. Namely doesn’t list its pricing information online, so businesses need to reach out directly for a quote. Namely is a solid all-purpose solution for mid- to large-sized companies who are looking for one, cloud-based software that will truly encompass all of your HR needs.
What Can a Payroll Software Do?
The best payroll software can pay your team automatically, and differentiate between pay structures. As many start-up tech payroll companies grow, they also offer software that syncs with HR platforms. This allows your company to manage time tracking, paid time off, benefits, and more all on one integrated platform. Many of these platforms also offer employee logins, so your team members can track their pay, taxes, and more.
Is Paying for Payroll Software Worth It?
Paying for good payroll software is absolutely worth it. Even with an accountant on staff, investing in payroll software can help reduce the time it takes for you or your team to collect W-4s, calculate and withhold income taxes, and pay taxes for your employees. While it is possible, it’s time-consuming, leaves room for error, and has the potential for costly penalties if done incorrectly.
How We Chose the Best Payroll Software Companies
We chose these companies as the best payroll software on the market based on how user-friendly they are, how customizable they are, and the support each company offers. In today’s flexible work economy, being able to run payroll from anywhere is a necessity. So, the cloud-based platforms or ones that offer an app rose to the top of our list. The companies that offered either HR support, help with setting up payroll, or integrated HR features also ranked high on the list. Finally, companies that seamlessly enabled employers to pay contractors, full- and part-time employees with ease also ranked high.
Intuit. "Intuit Fourth Quarter Revenue Up 15 Percent, Full Year Up 13 Percent." Accessed December 5, 2020.