Best Free Payroll Software for Small Businesses in 2026

Payroll mistakes can lead to additional tax, interest, or penalties depending on the error — and tracking hours and calculating taxes by hand turns the process into a second job fast.

The good news: genuinely free payroll software exists. But "free" means different things across the tools in this list, and the difference matters most at tax time. Several free tools on this list calculate payroll taxes but leave filing and payment to you. Knowing that upfront changes which tool makes sense for your business.

Here are the five best free payroll options for 2026, what's actually free on each, and where each one hits its limit.

The best free payroll software for small businesses depends on your team size, technical comfort level, and how much manual work you're willing to own.

The full breakdown, screenshots, and honest tradeoffs are below.

We're Homebase. We make scheduling, time tracking, payroll, and HR tools for small businesses with hourly teams. We have a stake in this topic — so Homebase isn't in the ranked list below, and every tool there was evaluated on its own merits. We don't accept payment or backlinks for a mention.

That said, we've spent years working alongside more than 150,000 small businesses on exactly this problem. Further down, we explain how Homebase fits in a clearly labeled publisher note so you can weigh us yourself.

Homebase is best for: hourly teams that want scheduling, time tracking, and payroll connected in one place — so hours flow to paychecks without re-entry or manual prep.

Rating: G2 4.6/5 (~600 reviews) · Capterra 4.6/5 (1,156 reviews)

Key features:

Pricing: The Basic plan is free for up to 10 employees at one location and includes scheduling and time clock tools. Payroll is a paid add-on: free for your first six months as a new customer, then $49/month base fee plus $6 per employee paid per month. See full pricing →

What users say: Rhasaan Sherrill, founder of Beat Box Dance Academy, runs payroll for a team of part-time dance instructors spread across California. She sets payroll to populate automatically from her team's schedule. "There's an easier way to do things," she says. "There are systems in place so you can focus on the things that truly inspire you. Because consistency wins the race." The whole process takes her about 10 minutes.

What users criticize: Recent Capterra reviews flag that useful features sit behind paid tiers. One reviewer wrote: "You have to pay for even the most simple uses, since they don't include those in the free basic option." Others mention occasional syncing glitches and support response times during busy periods.

This list was put together by Cambria Wallace, a Certified Payroll Professional (FPC) on Homebase's payroll implementation team with more than 15 years of experience helping small businesses navigate payroll onboarding and compliance.

We evaluated each tool on six criteria: whether it offers a genuinely free tier (not just a free trial), the employee cap on that free tier, whether tax filing is included, whether direct deposit is included, ease of setup, and user review sentiment where current reviews exist. We cross-referenced publicly available pricing pages, product documentation, and user review aggregators including Capterra and G2.

Read our full methodology

Free payroll tools vary widely. Some offer payroll calculations, HR functions, time tracking, or full payroll processing at no software cost. Some free tools leave tax filing, direct deposit, or both to the employer, while others offer those services only through paid editions or add-ons. Here's what each one does, who it fits, and where it runs into limits.

Best for: Small teams of 10 or fewer who want genuinely free payroll — wage calculations, tax forms, and an employee portal — and are comfortable handling tax filing themselves.

Payroll4Free is desktop software that handles wage calculations, PTO tracking, W-2 and 1099 generation, and payroll reports at no cost for 10 or fewer unique employees, contractors, or payees. The payroll software is primarily desktop-focused and Windows-based, while employees can access their pay information online from any device. Tax filing is a paid add-on, while direct deposit to employees can be free when you use your own bank. Payroll4Free also offers a paid Direct Deposit Service if you want to use its bank. For a first-time owner running simple payroll for a small crew, it's a low-risk place to start.

Rating: Capterra 3.1/5 (13 reviews)

Key features:

Pricing: The core system is free for up to 10 unique payees, but the free one-batch-per-month allowance applies to teams paying 9 or fewer people. Unlimited batch posting for that group is $15/month. For larger teams: $10 per batch for 10–24 employees; $35 per batch for 25 or more. Tax filing add-on: $35/month for the first two tax authorities, plus $15/month per additional authority. Payroll4Free's optional Direct Deposit Service: $35/month. Verify current pricing here— the fee schedule was last marked updated June 1, 2025.

What users like: One 2024 Capterra reviewer said payroll took about 10–15 minutes per month and praised the support team's responsiveness: "I made a user guide that I can follow every month end to do payroll. Takes me 10 minutes incl. printing checks and filing my reports. Support responds fairly quickly and professionally every time I have a question."

What users criticize: A 2025 reviewer flagged a new surcharge for multiple payroll runs per month and system lockups: "Used to be reasonably priced, just added a 'surcharge' for processing more than one paycheck run per month, system locks up if you try to pay 2X per month." Several reviewers also criticize the dated interface and setup experience, noting that multiple forms are required before the first payroll can run.

Our take: Payroll4Free offers a genuinely free core payroll system for very small teams, but tax filing and some processing services cost extra. The interface is dated, and reviewer reports on setup-team responsiveness are mixed. It earns its spot for owners who want zero monthly software cost and can handle manual filing. Once you're past 10 unique payees in a month or need automated filing, the economics shift quickly.

Best for: Owners who want unlimited employees at zero cost and are comfortable navigating setup and support through an online user guide and forum.

HR.my is free indefinitely and funded through optional user sponsorships rather than conventional paid software tiers. It handles unlimited payroll runs, PTO and leave tracking, a time clock, attendance, expense claims, and an employee self-service portal. Employee self-service is accessible from mobile devices and desktop browsers. The UI is dated and setup requires reading the manual, but HR.my has one of the broadest feature sets among the free tools on this list.

Rating: G2 4.3/5 (20 reviews) · Capterra 4.6/5 (8 reviews)

Key features:

Pricing: Free, indefinitely. No conventional paid upgrade path. Optional sponsorship at $5/month for an ad-free experience, extra storage, and early access to new features. See hr.my/doc/crowdfunding.html for current sponsorship details.

What users like: Some Capterra and G2 reviewers praise HR.my's mobile access, breadth of features, and unlimited employee count. One Capterra reviewer noted: "Payroll management is really helpful. Time clock allows you to track the working hours of all the employees... It gives useful features in low budget."

What users criticize: HR.my directs users to its user guide and HR/payroll support forum for help, and Capterra reviews flag the limited support options as a real limitation. One reviewer wrote: "The absence of technical support forced me to purchase an alternative." The outdated dashboard design and navigation requiring too many clicks are also recurring complaints.

Our take: HR.my has one of the broadest feature sets among the free tools on this list, and the unlimited employee count is a genuine differentiator. The tradeoff is that you're navigating setup on your own and relying on a community forum when something breaks before a payroll deadline. If your team is large, you're comfortable configuring software without hand-holding, and you'll handle tax filing yourself, it's worth the patience it takes.

Best for: Owners who already live in Excel, want full offline data control, and run simple single-state payroll for up to 50 employees.

ExcelPayroll is a free Excel workbook that runs payroll offline. It calculates wages, deductions, and taxes and prints W-2s, 1099s, 940s, and 941s. Starting in 2026, ExcelPayroll runs on open code with no embedded macros. It's built for owners who are comfortable in spreadsheets and want complete control over their data without a cloud dependency.

Rating: No current reviews on G2 or Capterra as of October 2026. The assessment here is based on product documentation from excelpayroll.org and FitSmallBusiness's independent evaluation (scored 3.05/5 using their internal rubric, July 2026).

Key features:

Pricing: Free to download with Microsoft Excel. State tax table updates are a one-time purchase per state. No subscription.

Product limitations: Because no current G2 or Capterra reviews exist for ExcelPayroll, the limitations below come from product documentation and FitSmallBusiness's evaluation rather than user sentiment. No automatic backups, no time-clock integration, no mobile access, and no cloud sync across computers. State tax table updates must be purchased and installed separately. The interface is dated.

Our take: ExcelPayroll is right for a specific owner: someone in Excel daily, with simple single-state wages, and zero appetite for a monthly subscription. The moment payroll gets more complex — contractors, tips, multi-state employees, or seasonal headcount swings — the manual overhead outweighs the free price tag. It's a starting point, not a long-term home.

Best for: Tech-comfortable owners who want unlimited employees and comprehensive payroll, scheduling, and time tracking in one open-source tool. The open-source Community Edition can be self-hosted; TimeTrex also offers hosted editions separately.

TimeTrex is open-source workforce management software. Its free Community Edition includes payroll calculations and reporting, scheduling, time and attendance, leave management, and HR for unlimited employees. Tax filing and other automated payroll services vary by edition — the Community Edition is intended for businesses comfortable handling their own infrastructure and payroll-related filing work. The feature set is broad for a free tool — but setup requires technical comfort regardless of deployment method.

Rating: G2 4.2/5 (12 reviews) · Capterra 4.7/5 (21 reviews)

Key features:

A note on mobile and direct deposit: The Community Edition does not include the paid editions' mobile app or customer-support services. Verify direct-deposit availability for your specific Community Edition setup before building your workflow around it. See portal.timetrex.com/community-edition for the current feature comparison.

Pricing: Free Community Edition (open-source). Paid hosted Professional Edition starts at $50/month for up to 10 employees.

What users like: Long-term Capterra users highlight customer support quality and the tool's ability to handle complex payroll scenarios. Karen M., owner of a hospitality business, wrote after more than 10 years of use: "It's their support team and the quality of their software that makes it the only software and company I'd recommend and use to help run any business with staff." A 2023 reviewer who evaluated 17 time-tracking tools specifically cited self-hosting as a draw: "I like that it can be self-hosted, so I don't have to worry about the company going out of business. And the Community Edition offers all the features we needed."

What users criticize: Setup complexity is the most consistent criticism. One Capterra reviewer noted: "The interface needs to be a little upgraded to be more user-friendly. Lots of things need to be tweaked by code and I don't like that in the community version." Others describe the breadth of features as a double-edged sword — powerful once configured, intimidating at the start.

Our take: TimeTrex's Community Edition has an unusually broad free feature set, combining payroll, scheduling, time and attendance, leave management, and HR. The tradeoff is that the free edition requires more technical setup and ongoing administration than hosted payroll products, and you should verify exactly which features are available in the Community Edition before building your workflow around it. For a restaurant, retail shop, or service business without in-house technical knowledge, this isn't the right starting point.

Best for: Owners who need a quick, one-off paycheck calculation with no account, no software download, and no cost.

eSmart Paycheck offers a free online payroll calculator that computes wages, federal and state tax withholdings, and deductions for a single pay run — no account required. It's a straightforward option when you need to check your math on a paycheck, generate a pay stub quickly, or pay one or two people infrequently. The paid annual plan adds saved company and payroll data; additional tax-deposit and filing services are available for extra fees. The free version maintains no employee database between sessions.

Rating: No current reviews on G2 or Capterra as of October 2026.

Key features:

Pricing: Free calculator, no cost, no account. Paid annual plans currently appear to start at $75/year, with higher tiers reaching $450/year for up to 40 employees. Figures sourced from FitSmallBusiness and Software Finder.

Product limitations: No current G2 or Capterra reviews exist for eSmart Paycheck. The primary limitation of the free version is that it maintains no employee database — every pay period means re-entering all employee and company data from scratch. For anyone running payroll more than occasionally, that becomes tedious fast.

Our take: eSmart Paycheck is the zero-friction entry point on this list. It's a calculator, not payroll software in the traditional sense — the free version is designed for individual paycheck calculations, not a recurring employee payroll database. For a business owner who isn't ready to commit to any tool and needs to pay someone this week, it's a straightforward option. Once payroll becomes a recurring task, you'll want something that saves your data.

Want to skip software entirely? You can handle the details of payroll at no cost if you're willing to put in the time. This approach works best for a very small team with straightforward, single-state wages — the complexity cost rises fast with variable hours, tips, or contractors.

Primo Stropoli, owner of Tetta's Market in Athens, GA, knows exactly how that manual calculation load adds up: "I was actually manually calculating if someone clocked in at 8:01 and worked until 3:15. You're wasting so much time on things that are so frivolous — as a small business owner you have to dedicate that time to more important tasks."

If that math sounds familiar, here's how Homebase handles it →

Free payroll software isn't automatically unsafe, but you should evaluate how each provider protects, backs up, and lets you export sensitive payroll data. Here's what to look for:

Watch for red flags: no HTTPS, no privacy policy, no contact information, or no way to export your data. Some free tools leave tax filing, direct deposit, or both to the employer, while others offer those services only through paid editions or add-ons — so check what's included before you commit.

Free payroll tools vary widely — some offer payroll calculations only, while others include HR functions, time tracking, or full payroll processing at no cost. Some free tools leave tax filing, direct deposit, or both to the employer, while others offer those services only through paid editions or add-ons. It's worth upgrading when:

Homebase payroll is free for your first six months — a low-commitment way to test whether automated filing and time clock integration are worth it for your team. See how it works.

The core system is free for 10 or fewer unique employees, contractors, or payees. One payroll batch per month is free for teams of 9 or fewer; unlimited batch posting costs $15/month for that group. Tax filing is a $35/month add-on for the first two tax authorities. Direct deposit to employees can be free when you use your own bank; Payroll4Free's optional Direct Deposit Service costs $35/month. Once you exceed 10 unique payees in a month, per-batch posting fees apply.

It depends on team size and how much manual work you're willing to own. Payroll4Free is a free desktop option for teams of 10 or fewer. HR.my stands out for its unlimited employee count and broad HR feature set at zero cost. TimeTrex's Community Edition offers comprehensive payroll and scheduling if you can handle the setup. For a quick, no-account paycheck calculation, eSmart Paycheck's free calculator is a straightforward starting point. For hourly teams that want scheduling and time tracking connected to payroll, Homebase combines all three.

Yes. Free payroll software or a spreadsheet can handle basic payroll for a very small team with straightforward wages. Some free tools on this list leave tax filing, direct deposit, or both to the employer, while others offer those services only through paid add-ons. Factor in the time cost of manual filing before deciding whether free is actually the cheaper option.

Many free tools leave tax filing to the employer, while automated filing is commonly offered as a paid service or add-on. You may need to submit quarterly Form 941s and annual W-2s, Form 940, and 1099-NECs when applicable — or pay for a filing add-on. Payroll4Free, for example, offers tax filing as a $35/month add-on for the first two tax authorities.

Yes, if you already own Microsoft Excel. Tools like ExcelPayroll offer free workbooks with built-in formulas for wage and tax calculations. The tradeoff: no automatic backups, no mobile access, no time-clock integration, and state tax table updates must be purchased separately — $50 per state, or $100 for Alabama and New York.

It varies. Payroll4Free's core system is free for 10 or fewer unique payees per month, with batch fees applying beyond that. eSmart Paycheck's free calculator does not maintain an employee database between sessions. ExcelPayroll is designed for businesses with 1–50 active employees. HR.my and TimeTrex's Community Edition both allow unlimited employees on their free tiers.

If free tools don't meet your needs, Patriot Payroll starts at $17/month plus $4 per employee for its Basic Payroll plan, which requires the employer to handle their own tax filings. Gusto's Simple plan starts at $49/month plus $6 per person per month and includes automated tax filing. For hourly teams that want scheduling and time tracking connected to payroll, Homebase payroll starts at $49/month base fee plus $6 per active employee paid per month, with the first six months free for new customers.

This is not legal or tax advice. If you have questions about your specific situation, consult a CPA, payroll professional, or other qualified advisor.