20 Best HR Software for Small Businesses in 2025

Running a small business means juggling everything—payroll headaches, compliance nightmares, and keeping your team coordinated without losing your mind.

Here's the thing: Finding the best HR software can transform how you manage your team. No more scrambling through spreadsheets at 11 PM trying to figure out who worked what hours. No more playing phone tag to cover shifts. No more crossing your fingers that you got payroll taxes right.

The right HR management software for small business handles the boring, time-consuming stuff automatically, so you can focus on what actually matters.

Whether you need an all-in-one solution that does everything or just want to solve your biggest problems, we've got you covered. In this guide, we'll break down the top HR software options for 2025, compare real pricing, and help you find the perfect fit for your team.

Ready to stop drowning in paperwork? Let's dive in.

TL;DR: Best HR Software Quick Picks

Don't have time to read the full guide? Here are our top picks for the best HR software for small business in 2025:

🥇 Homebase - Best overall for small businesses with hourly teams

Perfect for restaurants, retail, and service businesses. Free scheduling and time tracking, plus built-in payroll and team messaging. Great for managing shift workers without the complexity.

🥈 Gusto - Best for easy payroll and benefits

Simple, automated payroll with tax filing and employee benefits. Ideal for first-time business owners who want payroll handled without the headaches.

🥉 BambooHR - Best for growing teams

Strong hiring tools and employee management features. Perfect for businesses expanding their team and needing centralized HR processes.

Rippling - Best all-in-one solution

Combines HR, payroll, and IT management in one platform. Great for tech-savvy businesses that want everything integrated.

Paychex - Best for compliance support

Robust payroll and compliance features with expert guidance. Ideal for businesses with complex tax needs or those wanting professional HR support.

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What is HR Software?

Here's what's happening in the small business world: Small and medium enterprises are driving the highest growth in HR software adoption, and 20% of companies are planning to increase spending on HR tech in 2024. The message is clear—small businesses are done with outdated HR processes.

So what is HR software exactly? Think of it as your digital assistant for everything people-related. Human resources software handles employee records, scheduling, payroll, hiring, and compliance—all the stuff that used to require spreadsheets, filing cabinets, and way too much of your time.

What HR Software Actually Does for Small Businesses

HR systems for small business automates admin and paperwork so you can focus on the important stuff. Instead of manually calculating hours, chasing down timesheets, or trying to remember who requested time off, the software handles it automatically.

Here's what it typically covers:

• Employee scheduling and shift management
• Time tracking and attendance monitoring
• Payroll processing with automatic tax calculations
• Hiring and onboarding new team members
• Employee records and document storage
• Compliance tracking for labor laws

Who Needs HR Software?

If you have employees, you probably need some form of HR software. It's especially valuable for:

• Small business owners handling HR themselves
• Growing teams outgrowing spreadsheets and paper processes
• Businesses with hourly workers needing schedule and time tracking
• Companies wanting to offer benefits without the administrative headache

Why HR Software Matters More Than Ever

The numbers don't lie. As many as 45% of businesses spend nearly a day a week on administrative HR issues, and 40% of small businesses incur $845 in IRS penalties annually due to payroll errors.

The right HR software eliminates these costly mistakes. Instead of playing HR administrator, you can focus on growing your business and taking care of your team.

Types of HR Software Explained

Not all HR software is created equal. Understanding the different types of HR software helps you pick the right fit instead of paying for features you'll never use—or missing ones you actually need.

But where do you start? The HRIS vs HRMS vs HCM debate might seem confusing, but it's simpler than it sounds. Think of them as different levels of complexity, from basic record-keeping to full-blown strategic planning tools.

HRIS & HRMS (The Practical Options)

HRIS is basically a digital filing cabinet for employee information—contact details, job titles, employment history. HRMS takes that foundation and adds the tools you actually use daily: payroll processing, benefits administration, and time tracking.

Best for: Small to medium businesses that want payroll, scheduling, and employee management in one place without enterprise complexity.

HCM (Human Capital Management)

HCM is the full package—everything in HRMS plus advanced analytics, workforce planning, and strategic reporting. Think predictive analytics about turnover and detailed labor cost analysis.

Best for: Larger businesses (100+ employees) that need data-driven insights and have dedicated HR teams.

All-in-One HR Solutions

Here's where most small businesses should focus. All-in-one HR software combines the best parts of HRMS with specialized tools like applicant tracking, team messaging, and mobile apps—all designed to work together seamlessly.

Psst…here’s what Mandana Shabani, owner of Zood Restaurant, has to say about our all-in-one HR solution: “Homebase simplifies scheduling, payroll, and HR in a way that is easy to navigate and understand. We highly recommend it.”

Ready to give all-in-one HR software a try? Try Homebase for free today.

Best for: Small businesses with hourly teams that want everything integrated. No juggling multiple apps or wondering if your scheduling software talks to your payroll system.

Complete Reviews: 20 HR Software Solutions

Here's our complete HR software comparison with honest breakdowns of what each tool actually offers. We've organized them by strengths so you can find what fits your needs.

1. Homebase – Best All-in-One HR Solution for Hourly Teams

Best for: Retail, hospitality, healthcare, and service-based businesses managing shift workers

Key features:

• Specifically designed as HR software for hourly employees
• Free scheduling and time tracking with shift trading
• Built-in payroll with automatic tax calculations
• Team messaging and communication tools
• Hiring and onboarding with digital offer letters

Pricing: Free plan for basic scheduling. Paid plans start at $30/month per location, payroll add-on available.

Pros:

• Actually free scheduling and time tracking (not a limited trial)
• Mobile app that hourly workers will actually use
• Labor cost tracking helps control your biggest expense
• Customer support that understands small business challenges

Cons:

• Payroll costs extra, though still competitive
• More focused on hourly teams than salaried employees
• Some advanced HR features require higher-tier plans

Bottom line: The clear winner for small businesses with hourly teams. Does the essential stuff well without unnecessary complexity.

2. Gusto – Best HR and Payroll Software for Small Businesses

Best for: Small businesses wanting simple, automated payroll with employee benefits

Key features:

• Full-service payroll with automatic tax filing
• Health, dental, vision, and 401(k) options for employees
• Time tracking that syncs with payroll
• Paperless onboarding with e-signatures

Pricing: Starts at $49/month + $6 per employee for basic plan.

Pros:

• Payroll just works—handles all the tax complexity
• Real employee benefits at competitive rates
• User interface feels modern and intuitive
• Excellent tax compliance and filing

Cons:

• More expensive than competitors for very small teams
• Limited scheduling features for shift-based work
• Benefits options can be overwhelming for simple needs

Bottom line: Perfect for businesses that want professional payroll and benefits without the enterprise complexity.

3. BambooHR – Best HR Software for Growing Teams

Best for: Companies expanding beyond 20 employees who need structured HR processes

Key features:

• Applicant tracking system with job posting automation
• Employee self-service portal for updating information
• Performance management with goal tracking
• Time-off management with approval workflows

Pricing: Custom pricing based on company size—expect to request a quote.

Pros:

• Best-in-class hiring and applicant tracking tools
• Employee database keeps everything organized as you grow
• Performance management helps develop your team
• Clean, professional interface that employees actually like

Cons:

• No built-in payroll—requires separate provider
• Pricing isn't transparent (have to contact sales)
• Can be overkill for very small businesses
• Limited scheduling tools for hourly workers

Bottom line: Great choice for growing businesses that hire frequently and want structured HR processes.

4. Paychex Flex – Best HR Software for Payroll & Compliance

Best for: Businesses needing expert payroll support and compliance guidance

Key features:

• Full-service payroll with dedicated support
• HR compliance assistance and labor law updates
• Employee benefits management including 401(k)
• Mobile app for employee self-service

Pricing: Custom pricing starting around $39/month + $5 per employee.

Pros:

• Professional payroll handling with human support
• Compliance expertise helps avoid costly mistakes
• Scales well as your business grows
• Strong benefits administration options

Cons:

• More expensive than simpler alternatives
• Interface feels dated compared to newer tools
• Can be complex for straightforward payroll needs

Bottom line: Worth considering if you want professional payroll services and compliance peace of mind.

5. Rippling – Best All-in-One HR, Payroll, and IT Solution

Best for: Tech-savvy businesses managing remote teams and complex IT needs

Key features:

• Combined HR, payroll, and IT management
• Employee device management and software provisioning
• Global workforce support for international hiring
• 500+ app integrations

Pricing: Starts at $8 per employee per month including a base $40 per month, with additional features priced separately.

Pros:

• True all-in-one solution including IT management
• Powerful automation and workflow capabilities
• Great for remote and global teams
• Extensive customization options

Cons:

• Pricing can add up quickly with additional features
• More complex than needed for simple HR needs
• Longer setup time than simpler alternatives

Bottom line: Excellent for growing tech companies but potentially overwhelming for traditional small businesses.

6. ADP Workforce Now – Best for Businesses Looking for Payroll Support

Best for: Small to mid-sized businesses wanting enterprise-level features

Key features:

• Comprehensive payroll with automatic tax compliance
• Benefits administration including health insurance
• Time and attendance tracking with scheduling
• Background checks and compliance tools

Pricing: Custom pricing based on business size and needs.

Pros:

• Established company with strong customer support
• Scalable solutions that grow with your business
• Comprehensive compliance and benefits features
• Professional implementation and training

Cons:

• Pricing requires custom quotes (not transparent)
• Can be more complex than small businesses need
• Interface feels corporate rather than user-friendly

Bottom line: Solid choice for businesses wanting enterprise features but may be overkill for simpler needs.

7. Zoho People – Best Affordable HR Software for Small Teams

Best for: Startups and small businesses needing basic HR management on a tight budget

Key features:

• Employee database with customizable fields
• Time tracking and attendance management
• Performance management with goal setting
• Leave management with approval workflows

Pricing: Free for up to 5 employees. Paid plans start at $1.50 per employee per month.

Pros:

• Very affordable with generous free plan
• Customizable workflows and automation
• Simple interface that's easy to learn
• Good integration with other Zoho products

Cons:

• No built-in payroll functionality
• Limited reporting compared to premium tools
• Basic features may not scale with growth
• Customer support can be slow

Bottom line: Great starting point for very small teams, but you'll likely outgrow it as your business expands.

8. Workday – Best for Growing Businesses with Advanced HR Needs

Best for: Fast-growing companies planning to scale beyond 100 employees

Key features:

• Advanced analytics and workforce planning tools
• Comprehensive talent management suite
• Financial planning integration
• Mobile-first employee experience

Pricing: Custom pricing based on business size and modules selected.

Pros:

• Powerful analytics for data-driven decisions
• Scales effectively for large organizations
• Strong talent management capabilities
• Modern, intuitive user interface

Cons:

• Expensive for smaller businesses
• Complex implementation process
• Requires dedicated admin resources
• Overkill for basic HR needs

Bottom line: Excellent for ambitious growing companies but too complex and expensive for most small businesses.

9. UKG Ready – Best for Businesses Looking for Strong Workforce Management

Best for: Retail, healthcare, and manufacturing businesses with complex scheduling needs

Key features:

• Advanced scheduling and labor optimization
• Time and attendance with biometric options
• Comprehensive payroll processing
• Employee self-service mobile app

Pricing: Custom pricing based on employee count and features needed.

Pros:

• Excellent for shift-based workforce management
• Strong compliance and reporting features
• Robust time tracking capabilities
• Good for multi-location businesses

Cons:

• Complex interface can overwhelm small teams
• Expensive compared to simpler alternatives
• Requires significant setup time
• Customer support inconsistency reported

Bottom line: Powerful workforce management but may be too complex for small businesses without dedicated HR staff.

10. TriNet – Best for Small Businesses Who Need Full HR Outsourcing

Best for: Small businesses wanting to outsource HR completely without hiring internal staff

Key features:

• Full PEO services with co-employment model
• Fortune 500-level employee benefits
• Dedicated HR consultants
• Risk management and compliance support

Pricing: Custom pricing based on employee count and features needed.

Pros:

• Access to enterprise-level benefits at small business scale
• Professional HR expertise without hiring internally
• Comprehensive compliance and risk management
• Takes HR administrative burden off your plate

Cons:

• More expensive than DIY HR software
• Less control over HR processes and policies
• Co-employment model isn't right for every business
• Limited customization options

Bottom line: Excellent for businesses that want professional HR management without the internal overhead.

11. QuickBooks Workforce – Best for Businesses Already Using QuickBooks

Best for: Small businesses using QuickBooks accounting who want integrated payroll

Key features:

• Seamless QuickBooks integration
• Basic payroll with automatic tax calculations
• Employee self-service for pay stubs
• Simple time tracking

Pricing: Free add-on with ongoing Intuit QuickBooks membership plans.

Pros:

• Perfect integration with QuickBooks accounting
• Familiar interface for existing QuickBooks users
• Simple setup process
• Reliable payroll processing

Cons:

• Very limited HR features beyond payroll
• No scheduling or advanced workforce management
• Basic employee management capabilities
• Not ideal for complex HR needs

Bottom line: Good choice if you're already using QuickBooks and just need basic payroll, but limited for comprehensive HR management.

12. Namely – Best for Mid-Sized Businesses Wanting Customizable HR

Best for: Growing companies (50-500 employees) needing flexible HR processes

Key features:

• Customizable HR workflows and reporting
• Integrated payroll and benefits administration
• Performance management with goal tracking
• Employee engagement surveys and tools

Pricing: Starts at $9 per employee per month.

Pros:

• Highly customizable to fit specific business needs
• Strong employee engagement features
• Good performance management tools
• Scales well with growing companies

Cons:

• Pricing not transparent—requires sales contact
• Can be complex for small teams to manage
• Interface feels less intuitive than competitors
• Limited scheduling features for hourly workers

Bottom line: Good for mid-sized companies wanting flexibility, but may be too complex for small businesses.

13. Justworks – Best PEO Solution for Small Businesses

Best for: Small businesses wanting professional employee organization (PEO) benefits with transparent pricing

Key features:

• PEO services with co-employment model
• Access to large-group health insurance rates
• Automated payroll and tax compliance
• Workers' compensation and unemployment insurance

Pricing: Starts at $8 per employee per month for basic PEO services, plus a $50 per month base fee.

Pros:

• Transparent pricing (rare for PEO services)
• High-quality employee benefits at competitive rates
• Strong compliance support
• Easy-to-use platform

Cons:

• More expensive than non-PEO HR software
• Co-employment model limits some control
• Less flexibility than traditional HR software
• Limited customization options

Bottom line: Great PEO option with honest pricing, but consider whether you need full co-employment services.

14. Deel – Best for Hiring Global Remote Teams

Best for: Companies hiring contractors and employees internationally

Key features:

• Global payroll for 150+ countries
• Contractor management and compliance
• International employment law compliance
• Multi-currency payment processing

Pricing: Starts at $20 per employee per month.

Pros:

• Handles complex international compliance
• Supports both contractors and employees globally
• User-friendly platform for global teams
• Strong legal and tax compliance support

Cons:

• Unnecessary for businesses with only local employees
• Can be expensive for larger international teams
• Limited traditional HR features
• Focus on global rather than local small business needs

Bottom line: Essential for international hiring but overkill if your team is all local.

15. Breezy HR – Best for Small Businesses Focused on Hiring

Best for: Growing businesses that hire frequently and need streamlined recruiting

Key features:

• Drag-and-drop candidate pipeline
• Automated job posting to 50+ job boards
• Video interviewing and scheduling tools
• Team collaboration on hiring decisions

Pricing: Free plan for one position. Paid plans start at $157/month.

Pros:

• Excellent user interface for recruiting
• Automation saves time on job posting
• Good collaboration features for hiring teams
• Video interviewing capabilities

Cons:

• No payroll or broader HR functionality
• More expensive than some ATS alternatives
• Limited to recruiting—need other tools for HR
• Pricing jumps significantly from free to paid

Bottom line: Great for businesses that hire often, but you'll need separate tools for payroll and other HR functions.

16. Freshteam – Best Affordable ATS for Startups

Best for: Startups and small teams needing basic hiring and employee management

Key features:

• Applicant tracking system (ATS) with job posting
• Basic employee database and profiles
• Time-off management system
• Onboarding workflows with document storage

Pricing: Free for up to 50 employees. Paid plans start at $1 per employee per month.

Pros:

• Generous free plan for small teams
• Covers both recruiting and basic HR needs
• Simple, clean interface
• Affordable paid plans as you grow

Cons:

• No payroll or benefits administration
• Limited advanced HR features
• Basic reporting capabilities
• Customer support mainly through tickets

Bottom line: Excellent starting point for very small businesses, especially if you're already using other Freshworks products.

17. Factorial – Good All-Around HR Software for Small Businesses

Best for: Small businesses wanting comprehensive HR features at reasonable pricing

Key features:

• Payroll processing with compliance management
• Time tracking and attendance monitoring
• Digital document storage and signatures
• Performance management and employee reviews

Pricing: Starts at $8 per employee per month.

Pros:

• Comprehensive feature set at competitive pricing
• Modern, user-friendly interface
• Good performance management tools
• European compliance expertise

Cons:

• Limited third-party integrations
• Some advanced features require add-ons
• Primarily focused on European markets
• Newer company with less established track record

Bottom line: Solid all-around choice with competitive pricing, though integration options are limited.

18. Hibob – Best HR Software for Company Culture and Engagement

Best for: Modern small businesses prioritizing employee engagement and culture

Key features:

• Employee engagement surveys and pulse checks
• Social recognition and peer feedback tools
• Customizable HR workflows and processes
• People analytics and workforce insights

Pricing: Custom pricing based on company size.

Pros:

• Strong focus on employee engagement and culture
• Modern, social media-like interface
• Good analytics and reporting capabilities
• Highly customizable workflows

Cons:

• More expensive than basic HR tools
• No built-in payroll functionality
• Pricing requires sales contact
• May be too focused on culture for practical needs

Bottom line: Great for companies that prioritize employee engagement, but you'll need separate payroll solutions.

19. Lattice – Best for Performance Management and Employee Development

Best for: Businesses focused on structured employee development and performance tracking

Key features:

• OKR (Objectives and Key Results) tracking
• Continuous feedback and 1:1 meeting tools
• Performance reviews and peer evaluations
• Employee engagement measurement

Pricing: Starts at $10 per employee per month.

Pros:

• Excellent performance management capabilities
• Helps improve employee retention through development
• Modern interface with good user experience
• Strong goal-setting and tracking features

Cons:

• No payroll or basic HR management features
• Can be overkill for very small teams
• Requires commitment to structured performance processes
• More expensive than basic HR tools

Bottom line: Perfect for companies wanting to invest in employee development, but need other tools for payroll and basic HR.

20. Connecteam – Best for Deskless and Mobile Teams

Best for: Field service, construction, retail, and other mobile workforce industries

Key features:

• Mobile-first design for smartphone use
• GPS time tracking and location verification
• Task management and digital checklists
• Team communication and announcements

Pricing: Free for up to 10 users, then $29/month for basic package.

Pros:

• Designed specifically for mobile workers
• Excellent mobile app experience
• Good value with generous free tier
• Easy setup and user adoption

Cons:

• Limited payroll integration options
• Not ideal for desk-based employees
• Basic HR features compared to full platforms
• Fewer integrations than established platforms

HR Software Features to Look For

Shopping for HR software features can feel overwhelming when every vendor promises to do everything. Here's what actually matters when you're figuring out how to choose HR software that won't waste your time or money.

Must-Have and Nice-to-Have Features

Non-negotiables for small businesses: 

• Time tracking and scheduling with mobile apps
• Payroll processing with automatic tax handling
• Employee self-service portals
• Basic compliance support for overtime and record-keeping

Features that make life easier: 

• Applicant tracking for frequent hiring
• Performance management tools for structured reviews
• Benefits administration for health insurance
• Advanced reporting for data-driven decisions

Features That Matter for Hourly Teams

If you manage shift workers, prioritize mobile-first design, shift trading, labor cost tracking, and team messaging. GPS time tracking helps with field workers, and automatic overtime alerts prevent budget surprises.

Red Flags to Avoid

Walk away if you see 

• Hidden pricing
• Poor mobile experience
• Complicated setup
• Terrible customer support
• Too many add-ons
• No integrations with your existing tools

How to Choose the Best HR Software

Picking the right HR management software doesn't have to be complicated. Follow these five steps to find HR software that actually works for your team—not the other way around.

Step 1: Figure out what you need.

Before you get lost in feature lists, get clear on your biggest pain points. Are you spending hours building schedules every week? Stressed about payroll mistakes? Tired of playing phone tag to cover shifts?

• For hourly teams: Focus on scheduling, time tracking, and labor cost management. 
• For growing businesses: Prioritize hiring tools and employee records. 
• For compliance-worried owners: Look for automatic tax handling and record-keeping.

Don't pay for enterprise features you'll never use. Most small businesses need scheduling, time tracking, payroll, and team communication—that's it.

Step 2: Set your budget and check pricing honestly.

1-10 employees: Budget $50-200 monthly total. Start with free options like Homebase and upgrade when you need payroll.

11-25 employees: Plan for $200-500 monthly. Payroll becomes non-negotiable at this size.

26+ employees: Expect $500+ monthly but demand professional support and compliance guidance.

Skip any HR software that hides pricing behind "contact sales." You deserve upfront costs.

Step 3: Test integration with your existing tools.

Your HR software should play nice with tools you already love:

• POS systems like Square, Toast, or Shopify for labor cost tracking. 
• Accounting software like QuickBooks or Xero for seamless payroll. 
• Communication tools like Slack for team updates. 
• Scheduling apps you might already use.

Homebase integrates with many popular business tools, so you won't have to rebuild your entire system.

Step 4: Try before you buy (and test mobile experience).

Most platforms offer free trials—use them. Test the mobile app especially, since your team will live there. If it feels clunky or confusing during the trial, it won't magically get better.

Pay attention to customer support during your trial. Call with questions and see how quickly you get real help.

Step 5: Pick a solution built for small businesses.

Enterprise HR software is overkill for most small businesses. You need tools designed for teams like yours—simple, mobile-friendly, and focused on what actually matters.

Why Homebase wins for small businesses: Built specifically for hourly teams, free scheduling and time tracking, transparent pricing, mobile-first design, and customer support that understands your challenges.

Ready to try the HR software that actually gets small businesses? Start your free Homebase account today and see why 100,000+ small businesses trust us with their teams.

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Frequently Asked Questions

What is the best HR software for small businesses?

Homebase is the best HR software for small businesses with hourly teams, offering free scheduling and time tracking plus affordable payroll. Gusto works well for simple payroll with benefits, while BambooHR suits growing teams that hire frequently. Homebase consistently delivers for shift workers in retail, restaurants, and service industries.

How much does HR software cost?

HR software costs range from free (like Homebase's basic plan) to $6-15 per employee monthly for HR with payroll. Budget $50-200 monthly for teams under 10 employees, $200-500 for 11-25 employees. Watch for hidden setup fees and per-payroll charges that increase your total cost.

Does HR software handle payroll?

Some HR software includes payroll, others don't—it depends on the platform. All-in-one solutions like Homebase, Gusto, and Rippling include payroll with tax calculations. Others like BambooHR require separate payroll providers. Integrated payroll is usually more convenient and cost-effective.

What's the best free HR software?

Homebase offers the best free HR software with unlimited employees, scheduling, time tracking, and team messaging for one location. Zoho People works for up to 5 employees, while Freshteam provides free hiring tools. Most free plans exclude payroll and priority support.

What HR software works best for hourly employees?

Homebase works best for hourly employees with mobile time tracking, shift trading, labor cost monitoring, and team messaging. It's built specifically for restaurants, retail, healthcare, and service businesses where schedules change frequently and managing labor costs matters most.