Choosing the Best Payroll Software for Your Small Business in 2025

Paying an hourly team usually means tracking down missing hours, juggling last-minute shift swaps, and figuring out how tips actually get taxed. With so much on your plate, researching the best payroll software for small businesses probably isn’t at the top of your list. 

Good news: we did it for you. So, you can skip the spreadsheets and mental math—and get back to work.

TL;DR: Best Payroll Software for Small Businesses

Short on time? Here are the top payroll solutions for small businesses:

Top picks based on your needs:

• Homebase: Best for hourly teams who clock in and out—includes payroll, time tracking, scheduling, compliance, and tip management (yes, all in one).
• Gusto: Ideal for startups and salaried teams that need payroll with integrated HR and benefits tools.
• OnPay: Good for small teams with straightforward payroll needs and light HR requirements.
• Square Payroll: Makes sense if you’re already deep into the Square POS life.
• SurePayroll: Works for household employers or very small businesses needing simple payroll.

Key features to look for:

• Built-in time tracking and scheduling
• Automated payroll and tax filing
• Tip pooling and POS integration
• Compliance support with break tracking and labor law alerts
• Mobile access and employee self-service
• Employee self-service tools and mobile access
• HR and accounting integrations that reduce manual work

Before you decide, consider:

• Your team structure—is it hourly, salaried, or a combo? 
• How much time you’re spending on scheduling and compliance
• Whether you need to sync payroll with your POS or accounting tools
• Your budget and how pricing scales as your team grows

What to look for in payroll software for small businesses

The best payroll software for small businesses will help you stay on top of hours, wages, and taxes—even when your day starts with a no-show and ends with a double shift.

To keep things running smoothly (and legally), here are the payroll management tools and features worth prioritizing.

Automated payroll software that makes payday easy

Payroll shouldn’t require a finance degree or a crystal ball. Look for payroll software that’s easy to set up, guides you through onboarding, and automates the heavy lifting—like tax calculations and direct deposit. Bonus points for a clean dashboard and mobile access that works, even when you're nowhere near your laptop.

Built-in payroll and HR compliance

Labor laws are complicated, especially if your team works across state or provincial lines. The best payroll and HR software for small businesses automatically tracks breaks, overtime, and tax filings based on your location. So you can stop googling overtime laws at midnight and get the sleep you deserve.

Payroll software with HR integration

Smart payroll management software makes life easier by automating time-consuming tasks like pulling time clock data straight into payroll. That’s why it’s important to choose a platform that integrates easily with the tools you already rely on. Homebase includes payroll that plays nicely with everything from job boards and time tracking to POS systems and accounting software—so you get smoother workflows, fewer mistakes, and less time spent on manual entry.

Payroll software that grows with your business

As your business grows, your payroll system should grow with it. Whether you’re adding more employees, adjusting pay schedules, or rolling out new benefits, flexibility matters. Look for payroll management software that can handle different pay structures and overtime rules, so your tools don’t hold you back when you’re ready to take the next step.

A responsive payroll service provider

Sometimes you just want to talk to a real person. That’s why the best payroll service providers for small businesses offer more than just chatbots and help articles. Whether it’s a setup question or mid-payroll panic, responsive support—via phone, email, or live chat—can make all the difference. 

Ready to check every box? Homebase brings all these essentials together—automated payroll, compliance tools, HR support, and real human help when you need it. Try Homebase free today and see how much easier payday can be.

What is the best payroll software for small businesses?

Finding the right payroll software comes down to what your team actually needs. For some, that’s built-in time tracking or scheduling. For others, it’s a simple way to stay compliant. We’ve broken down the top options to help you choose the right fit for your team.

Note: Pricing is current at the time of writing. Be sure to check each provider’s site for updates.

Homebase

Overview: Homebase is built for small businesses that run on hourly work. Think restaurants, salons, retail shops, and home service teams. It brings payroll, time tracking, scheduling, and team communication together into one easy-to-use app.

Key features:

• Automatic calculation of hours, overtime, PTO, and wages
• Set payroll to run automatically at scheduled times
• Built-in labor law compliance, including breaks and overtime alerts
• Direct deposit, automated tax filings, and digital storage of payroll records
• Tip pooling, tip distribution, and POS integrations to eliminate manual calculations
• Employees get paid notifications, early wage access, and 24/7 pay visibility in the app
• Free setup and support from real payroll specialists when you need help

Pricing: Free basic plan for up to 10 employees + payroll add-on at $39/month + $6 per employee/month.

If you're managing a team that punches in and out, Homebase simplifies the process—tracking hours, calculating wages, filing taxes, and even sending reminders about breaks or overtime rules. Hire, schedule, and pay your team all in one place, without wasting time or switching between tabs.

Try Homebase today and see why USA Today rated it as the best payroll for hourly teams. 

Gusto

Overview: Gusto is geared toward startups and salaried teams with growing HR needs.

Key features:

• Gusto Wallet app lets employees track pay and manage finances
• Automated payroll and contractor payments in 80+ countries
• Handles tax filing and compliance
• Health benefits administration
• PTO tracking and new hire onboarding.
• Integrations with accounting tools like QuickBooks, Xero, and FreshBooks

Pricing: Basic plans start at $49/month + $6 per employee/month.

OnPay

Overview: Affordable payroll for small businesses with simple needs, but lacks built-in tools for hourly team management.

Key features:

• Full-service payroll for W-2 and 1099 workers
• Automated federal, state, and local tax filings
• Health benefits and workers’ comp available
• Customizable payroll reports
• Employee app for self-service access
• Integrates with tools like Xero, QuickBooks, and When I Work
  
  

Pricing: Plans start at $40/month + $6 per employee/month. 

SurePayroll

Overview: A basic payroll tool suitable for household employers and very small businesses.

Key features:

• Automated payroll and tax filings
• Mobile payroll access
• Optional 401(k) and benefits

Pricing: Basic plan starts at around $20/month + $4 per employee/month.

QuickBooks Payroll

Overview: A solid choice for businesses with more complex payroll or accounting needs, especially those already using QuickBooks for bookkeeping and reporting.

Key features: 

• Autopayroll runs on a set schedule
• Approve timesheets and send invoices from anywhere
• 24/7 expert callback support
• Guided payroll setup assistance
• Creates and e-files 1099-MISC and 1099-NEC forms
• Direct deposit for on-time contractor payments
• Tax penalty protection included with the Elite plan

Pricing: Starts at $50/month + $6 per employee/month.

Paychex

Overview: Feature-heavy payroll software for larger teams—often more than small businesses need.

Key features: 

• Payroll processing, onboarding, and benefits
• Calculates, files, and pays payroll taxes.
• 24/7 US-based customer support
• Time and attendance tracking
• ERTC Service that helps identify available credits and file amended returns.

Pricing: Customizable plans start at $39/month + $5 per employee/month.

RUN Powered by ADP

Overview: A scalable payroll solution for growing teams, though it may feel less intuitive for smaller or leaner operations.

Key features: 

• Schedule payroll cycles ahead of time
• Run payroll without manually reviewing timesheets each pay period
• Automatically calculates and remits payroll taxes
• Supports compliance with federal, state, and local regulations
• Integrates easily with HR systems
• Simple self-service tools for employees
• Access to expert support when needed

Pricing: Custom.

Square Payroll

Overview: A solid option for businesses already using Square POS, though limited compared to more comprehensive platforms.

Key features:

• Integrates with Square POS and Team Management
• Direct deposit and tax filing
• Timecards, tips, and commissions sync automatically
• Supports W-2 and 1099 payments by hour, salary, or custom rate
• Visual reports to monitor labor cost trends

Pricing: $35/month + $6 per employee/month.

Wave Payroll

Overview: A basic payroll add-on to Wave accounting that’s light on features.

Key features:

• Direct deposit
• Tax filing
• Accounting integration
• Basic self-service access for employees
  
  

Pricing: Plans with tax filing start at $40/month + $6 per employee/month.

How to choose a payroll software

Finding software that simplifies payroll management for small businesses is about more than features. It’s about finding something that fits how your business operates daily. Whether you’re managing a small, hourly team or growing into a more complex operation, here’s what to keep in mind.

Start with your payroll and HR software needs.

Do you just need to run payroll—or do you also need time tracking, scheduling, and help with compliance? If your team is hourly, it’s often easier to manage everything in one place. 

Psst—Homebase saves small businesses an average of 5 hours a month by turning hours into paychecks in a few easy clicks

Compare affordable payroll software for small businesses.

Pricing models vary and not every system fits every team. Some charge by employee, others by pay run, and some offer free plans with add-ons, which can be a better fit for growing teams. Above all else, make sure you’re not paying for features you’ll never use. 

Prioritize payroll service providers with real support.

Customer support matters—especially if running payroll is new to you. Look for providers with live chat, phone support, or a dedicated team that’s there when you need them. It's the difference between solving a problem in 5 minutes or stewing about it all weekend.

Check reviews of payroll solutions for small businesses like yours.

Case studies and user reviews can offer the clearest picture of how payroll software performs day to day. Look for stories from businesses like yours. Many platforms share real success stories of how their tools save time, reduce errors, and simplify compliance. Trust the people who’ve been in your shoes.

Prioritize automated payroll software.

Manual math is where mistakes happen. The right system should automate wage calculations, tax deductions, direct deposit, and pay stub generation—so you’re not stuck doing payroll at midnight with a calculator and cold coffee.

Look for small business payroll solutions with tax filing built-in.

Payroll isn’t just paying people, it’s dealing with tax laws, too. Choose a provider that automatically calculates and files your local, state, and federal payroll taxes to save time and keep penalties off your plate.

Pick time tracking and payroll software that sync.

Your payroll software should play nicely with your time tracking system—or better yet, come with one. Platforms like Gusto and Homebase allow for easy tracking of employee hours, reducing the need for manual input and increasing payroll accuracy. No copy-pasting. No guesswork. No more “I think I worked 45 hours?”

Check off employee self-service portals.

The best payroll solutions for small businesses make things easier for your entire team. Look for employee self-service portals where staff can view their pay stubs, update personal information, and track their hours. Fewer questions for you. More transparency for them.

Look for mobile payroll management on the go.

Running payroll from your phone shouldn’t feel risky. Great payroll software for startups and busy owners lets you approve hours, run payroll, and send pay stubs—all from a mobile app. 

Common mistakes to avoid when choosing a payroll management system

Choosing the right payroll system for your small business isn’t always straightforward—and the wrong fit can cost you. Here are a few things to watch out for:

Choosing payroll software based solely on price

We know budgets are tight. But the cheapest payroll tools often skip the features that save you time and prevent costly mistakes—like automated tax filing, direct deposit, and compliance alerts. Homebase includes all of that with simple setup and flexible pricing, helping small businesses save up to $3,500 a year.

Overlooking integration with other tools

Payroll shouldn’t live in a silo. One of the biggest missteps small businesses make is choosing a system that doesn’t sync with their time tracking or accounting tools. Homebase is built to work seamlessly with platforms like Square, QuickBooks, and Clover—so hours flow straight from your POS to payroll, without duplicate entries or manual fixes. It keeps everything connected, accurate, and easy.

Not evaluating customer support

When payroll issues come up, reliable support matters. Avoid providers that don’t offer direct, responsive help. Homebase gives you access to real support through email, live chat, and phone—so you can get answers quickly, whether you're setting up for the first time or troubleshooting on a deadline. 

Not prioritizing payroll software that grows with your business

Outgrowing your payroll software can lead to delays, manual workarounds, and compliance headaches. Even if your team is small now, choose a system that can scale—whether that means adding more employees or opening a second location. The right platform grows with you, so you’re not scrambling to switch tools when things get busy.

How to switch to a new payroll provider

Now that you know what to look for (and what to avoid), the next question is how do you know when you should consider switching payroll systems? If clunky integrations, rising costs, or constant manual work are slowing you down, that’s your sign. Payroll and HR software should simplify your day—not add more stress. If it’s not, it might be time for a better fit. Here’s how to switch providers smoothly.

Evaluate new payroll systems

Start by identifying what your current provider is missing. 

• Is it automated payroll tax filing? 
• Better scheduling integration? 
• Mobile access?

Make a shortlist of what matters to your business—like time tracking and payroll software in one place, or scalable pricing as you grow. Then compare providers that check those boxes.

Migrate your payroll data (the smart way).

Once you’ve selected a new provider, you’ll need to transfer key payroll data—like employee info, pay history, tax forms, and any active deductions or benefits. Choose a provider that makes this easy—or better yet, does it for you. 

Homebase gets you up and running in under 30 minutes with free setup and data transfer, and support from a dedicated payroll expert—so nothing falls through the cracks.

Prepare your team with employee self-service tools.

Introduce your team to the new system, whether it’s a cloud-based payroll service or a payroll app. Provide training materials or short tutorials to help them understand how to access their pay stubs, clock in and out, and manage benefits, ensuring minimal disruption.

Test the new system before going live.

Run a trial payroll cycle alongside your current provider to catch any issues early. This "parallel run" helps you confirm accuracy in hours worked, tax deductions, and final pay amounts. It's an extra step, but it helps avoid awkward errors on your team’s first paycheck.

Notify your team and set expectations.

Let employees know what’s changing—especially if their pay schedule, deposit method, or login process is different. Send a simple FAQ or group message through your new platform so there are no surprises.

Double-check payroll compliance.

Make sure your new system complies with federal, state, and local tax regulations and labor laws. The best payroll software for startups and small businesses automates these tasks, so you can stay compliant without memorizing labor codes.

Ready to find the best payroll for small businesses?

Homebase isn’t just payroll. It’s your “no more spreadsheets, no more tax stress, no more ‘when do we get paid?’” kind of app. Built for hourly teams and busy business owners, it handles the hard stuff—so you can get back to running the show, not rerunning payroll.

Here’s how Homebase makes payroll simpler, faster, and way less stressful:

• Managers save time every pay period with automated hours, wages, and tax calculations
• Employees feel confident knowing exactly when and how they’ll get paid—with early wage access and pay stubs right in the app
• Business owners avoid late filings, compliance mistakes, and tax-time panic
• Multi-location teams stay connected without switching systems or re-entering data

And payroll is just the start. Homebase brings time tracking, scheduling, HR, and compliance together—so you can:

• Automatically calculate hours, breaks, PTO, overtime, and wages
• Run payroll on your schedule with built-in checks for errors
• Automate tax filings, direct deposit, W-2s, 1099s, and new hire reporting
• Stay compliant with break alerts, labor law tracking, and digital records
• Pay teams across multiple locations and manage tip distribution easily
• Give employees mobile access to hours, pay info, and early wage access
• Get live support from real humans—free setup, no extra fees
• Run payroll from your phone, wherever you are

Try Homebase free today and see why thousands of small businesses rely on Homebase to make payday effortless, accurate, and stress-free.

Best payroll software for small business FAQs

How much do payroll services cost for a small business?

It depends on the provider and features you need. Some charge by employee, some by pay run. Costs can range from $20 to $200+ per month—not including extras like tax filings or HR tools. Homebase offers flexible pricing with a free plan and affordable add-ons built for hourly teams, so you only pay for what you need.

Is there a free payroll software? 

Yes. Some platforms—like Homebase—offer a free basic plan with the essentials, plus the option to upgrade as your team grows or your needs change. It’s a great way to get started without the upfront cost. 

Can I run payroll myself without software?

You can, but it’s a lot of work. You’ll need to manually calculate hours, taxes, deductions, and stay up to date on changing tax laws. One small mistake can be expensive. Software like Homebase automates all that, so you save time and reduce the risk of errors.

Is payroll outsourcing better for small businesses?

It can save time, but it’s often expensive and takes things out of your hands. Homebase gives you the best of both worlds: automation where it counts (like tax filings and direct deposits), and full visibility into what’s happening—without the cost of outsourcing.

How long does it take to process payroll with payroll software?

Just a few minutes. Once your team is set up, software like Homebase does the math for you—calculating hours, taxes, and sending out direct deposits. All you have to do is review and approve. It’s payroll without the scramble.