Best Free Payroll Software for Small Businesses in 2026

Does the thought of running payroll for your small business give you some extra grey hairs? While you might be tempted to save some cash by going the spreadsheet route, manually tracking hours and calculating taxes can become another full-time job.

Luckily, there are plenty of options for free payroll software for small businesses. Using a free payroll service doesn't just save you money—it saves you time, helps keep you tax compliant, and prevents payday from feeling like a chore.

Here are our top picks for small business payroll, a comparison of their top features, and how to know if it's time to upgrade to a paid plan.

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TL;DR: Comparing Free Payroll Software for Small Businesses

Short on time but need your payroll questions answered? We got you.

Here's your cheat sheet for the best free payroll software picks this year:

1. Homebase: Best all-in-one payroll solution for hourly teams and small businesses. Time tracking, team messaging, scheduling, and payroll compliance rolled into one. Basic plan free for up to 10 employees.
2. Payroll4Free: Best free payroll system for tiny teams (9 or fewer employees) who need basic payroll and tax forms but don't mind a little manual work.
3. HR.my: Best free payroll software for global teams needing a free HR management tool with payroll baked in (crowdfunded, ad-supported).
4. ExcelPayroll: Best offline payroll software for spreadsheet die-hards who know Excel inside-out.
5. TimeTrex: Best open-source, full-suite alternative for tech-savvy businesses wanting unlimited employees and customization.
6. TMetric: Time tracking with payroll support for service businesses and small teams up to 5 users.

What Is Free Payroll Software and Can It Really Work?

Free payroll software is simple payroll software that calculates employee wages, tracks hours, and generates pay stubs without a monthly subscription. These tools come in three types:

• Always-free platforms with basic features at no cost
• Freemium models where core features are free but premium features cost extra
• Trial-based software that's free temporarily

Can free software handle payroll? Absolutely—for small teams with straightforward needs. Most trusted free payroll software include:

• Wage calculations
• Basic tax form generation (W-2s, 1099s)
• Pay stub creation
• Time tracking integration
• Employee self-service portals

The benefits of free payroll software

• Time savings. Secure payroll software eliminates spreadsheet errors by automating pay calculations and tax withholdings.
• Streamlined workflow. Trusted free payroll software integrates time tracking, wage calculations, and tax forms into one smooth process—no more endless tabs or paper piles.
• Compliance built-in. Stay payroll compliant with automated tax deductions that keep up with changing wage laws and FLSA rules while storing accurate records.
• Team empowerment. Employee self-service portals let your team access pay stubs and tax forms independently, eliminating constant admin requests.

The tradeoffs of free payroll software

• Limited automation. Free versions rarely include automated tax filing, requiring you to handle quarterly filings and year-end forms yourself.
• Employee caps. Most free tools limit you to 5-10 employees before requiring paid upgrades.
• Manual workarounds. Direct deposit to external banks typically isn't included—you'll handle this through your own bank or write checks.
• Basic features only. Multi-state taxes, contractor payments, and complex benefits usually require paid plans.

Think of free payroll software as training wheels—it gets you moving without the investment, but you'll eventually want something that can keep up as you grow.

Want to skip the training wheels phase entirely? Homebase connects your time tracking and payroll automatically, so hours worked flow straight into paychecks without manual entry.

I honestly have not thought about payroll since switching to Homebase Payroll—which is the best endorsement I can give a platform designed to make you more efficient or take away a once tedious task. WE LOVE IT.

— Eric Murphy (Owner, The Gear Attic in Athens, GA)

How to choose free payroll software for your small business

Free small business payroll software should save you time and money—not create more headaches. Make sure your software:

Supports your team size

Most free payroll software caps out between 5-10 employees. Know your limits before you commit.

Includes essential features

You need W-2 and 1099 generation, accurate wage calculations, and professional pay stubs at minimum.

Feels intuitive to use

The best payroll app for small business free of unnecessary complexity should feel natural from day one—no manual required.

Offers support when you need it

When something breaks at 10 p.m. before payday, you need answers. Look for chat support, knowledge bases, or active user communities.

Integrates with your tools

Your payroll data should flow into QuickBooks, Xero, or your bookkeeping system automatically. Bonus points for payroll software that integrates with scheduling and time tracking.

Handles multi-state employees

If your team works across state lines, make sure the software manages different tax jurisdictions without manual calculations.

Keeps data secure

Look for bank-level encryption, secure logins, and regular software updates that stay compliant with changing tax laws.

Scales with your growth

Check what paid tiers look like now. You don't want to switch platforms in six months when your free option hits a wall.

Best free payroll software options (2026)

Not all free payroll software is created equal. When you're choosing a payroll provider, make sure your pick ticks all the right boxes.

Let's break down the details:

1. Homebase: Best all-in-one payroll software for small businesses

Homebase connects time tracking, scheduling, and payroll in one mobile payroll app. We automatically calculate hours, breaks, overtime, wages, and taxes based on your city, state, and federal laws. Process payroll in just a few clicks—or set up auto-payroll and let it run itself.

Why it works: 

• Seamless time-to-payroll integration
• Auto-calculates taxes, overtime, PTO
• Built-in compliance support
• Unlimited next-day payroll runs
• Tip management
• Payroll is 6 months free for new customers

Platforms: Windows, Android, iOS, Mac | Integrations: QuickBooks, Gusto, Square, Clover

Employee limits: Basic plan free for up to 10 employees. Payroll add-on: 6 months FREE, after that it’s $39/month + $6/month per active employee.

Ready to get payroll off the brain?

2. Payroll4Free: Best free desktop payroll software for basic needs

Payroll4Free covers the basics: wage calculations, tax forms, PTO tracking, payroll reports, and an employee portal. It's straightforward for simple payroll software needs, though you'll handle direct deposits and tax filing yourself.

The catch: No automated tax filing or direct deposit on the free plan. Best for businesses comfortable with manual processes.

Platforms: Windows only | Integrations: QuickBooks

Employee limits: Free for 9 or fewer employees monthly.

3. HR.my: Best free HR and payroll software

HR.my is a full HR platform that includes unlimited payroll processing, PTO tracking, leave management, time clock, attendance tracking, and expense claims—all free forever. The interface is dated but the features are robust.

What makes it unique: Ad-supported and community-funded, so truly free with no upgrade path. Unlimited employees.

Platforms: iOS, Android, Mac, Windows | Integrations: None

Employee limits: Unlimited

4. ExcelPayroll: Best offline payroll software

ExcelPayroll is free software for payroll in excel—perfect if you're already comfortable with spreadsheets. Calculates wages, deductions, and taxes offline. Prints W-2s, 1099s, 940, 941, and PTO reports.

Ideal for: Spreadsheet pros who want offline access and complete data control without cloud dependency.

The downside: Requires Excel 2007/2010/2013. No mobile access or automatic backups. State tax table updates cost $50-$100 per state.

Platforms: Windows only | Integrations: None

Employee limits: Up to 50 active workers

5. TimeTrex: Best open-source payroll software

TimeTrex is open-source workforce management with unlimited employees on the community edition. Includes scheduling, time tracking, payroll processing, tax calculations, direct deposit, and W-2/1099/T4 generation.

Perfect for: Tech-savvy businesses that want full control and customization without per-employee costs.

Tech requirements: Self-hosted (Linux/Windows server) or cloud-hosted. Requires technical setup. API available.

Platforms: Web-based interface | Integrations: Custom via API

Employee limits: Unlimited

6. TMetric: Best time tracking with payroll

TMetric is time tracking software that calculates payroll based on tracked hours. Perfect for consulting firms, agencies, and professional services that bill by the hour.

Key features: Automatic time tracking • Payroll calculations • Project-based billing • Integrates with 50+ tools (Jira, Asana, QuickBooks, GitHub)

Platforms: Windows, Mac, iOS, Android, browser extensions

Employee limits: Free for up to 5 users (payroll features require Professional plan)

How to Run Payroll Yourself for Free

Wondering how to do payroll yourself for free? It's possible for small teams if you're willing to handle the details. Here's your step-by-step guide for DIY payroll software for small business free of expensive service fees:

Setting up & running payroll:

1. Collect employee paperwork. W-4s, I-9s, Social Security numbers, state tax info, and direct deposit forms.
2. Register tax accounts. Get your EIN from the IRS, register for state unemployment and income tax, and set up EFTPS for federal payments.
3. Choose pay frequency. Weekly, biweekly, or monthly—check your state's requirements and stay consistent.
4. Track hours. Use time clocks, spreadsheets, or paper cards to record regular hours, overtime, and breaks. 
5. Calculate payments. Multiply hours by wages, add overtime (1.5x after 40 hours), subtract taxes (federal, Social Security 6.2%, Medicare 1.45%, state) and deductions. 
6. Generate pay stubs. Create detailed stubs showing gross pay, deductions, and net pay (legally required in many states). 
7. Process payments. Write checks, use your bank's ACH for direct deposit, or use payment apps. 
8. File tax forms. Submit quarterly 941s, pay state unemployment, and file annual W-2s, 1099s, and 940s.

The reality? DIY payroll works great for 1-5 employees with straightforward wages. Once you're juggling multiple pay rates, tips, multi-state taxes, or contractors alongside W-2 employees, the time investment costs more than software would. 

Using payroll software simplifies steps 3-8. With simple payroll software, your time tracking flows directly into calculations, taxes compute automatically, and pay stubs generate instantly. 

Choose a trusted free payroll system, create your account, add employees and tax forms, set your pay schedule, and run your first payroll.

Is Free Payroll Software Safe? What Are the Limitations?

Yes, free payroll software can be safe and reliable when you choose reputable providers. The best secure payroll software uses the same protection measures on free and paid plans.

Security features to look for:

• Bank-level encryption. Trusted free payroll software uses 256-bit SSL encryption to protect employee data, Social Security numbers, and payment information.
• Individual login credentials. Each team member gets their own secure login with multi-factor authentication available.
• Audit trails. Reliable systems track every payroll change—who edited what and when—protecting you during disputes.
• Automatic backups. Cloud-based systems back up your data regularly and let you export records if needed.
• Compliance recordkeeping. Stores records per FLSA requirements (3 years for payroll, 2 years for time cards).

Established platforms like Homebase and Wave use enterprise-grade security for all users. The security isn't where they cut costs on free plans.

Red flags: No HTTPS encryption, no privacy policy, no contact information, data breach complaints, or no data export option.

What you give up with free plans:

• Employee limits. Most cap at 5-20 employees before requiring upgrades.
• Manual tax filing. Free versions calculate taxes but won't file them—you submit quarterly 941s and annual W-2s/1099s yourself.
• No direct deposit. You'll handle this through your bank or write checks.
• Limited integrations. No automatic connections with QuickBooks, Xero, or POS systems means manual data exports.
• Basic support. Help articles and forums only—no live chat or phone support at 11 p.m. before payday.

Free tools work great for small teams with straightforward needs. As you grow beyond 10 employees or add complexity (multi-state, contractors, tips), you'll likely need paid features.

Free vs. Paid Payroll Software: When to Upgrade

Free payroll software handles basic paycheck calculations and recordkeeping but typically lacks automated tax filing, direct deposit, and integrations. Paid plans add these features plus benefits management and better support. 

Affordable payroll software options start around $40-60/month—often worth it when you factor in 5+ hours saved and avoiding costly tax penalties.

Time to upgrade when:

• You hit 5-10 employees. Free plans cap here. Plan your upgrade before you're forced to switch mid-payroll.
• Tax season becomes stressful. Spending hours researching forms and deadlines? Automated filing pays for itself in stress reduction.
• Your team wants direct deposit. Writing checks or coordinating bank transfers eats time. Paid plans include this.
• Manual entry takes hours. Calculate what your time is worth. If payroll takes multiple hours per pay period, software likely pays for itself.
• You need integrations. Payroll data flowing into QuickBooks or combined time tracking and payroll requires paid features.

Making payroll work on a budget

Good payroll software doesn't just do the math—it gives you back your time, your sanity, and your weekends. Whether you're looking for simple payroll software for basic needs or the best free payroll app with mobile access, the right choice makes running payroll feel effortless instead of overwhelming.

What to look for in affordable payroll software:

• Easy payroll software free of unnecessary complexity that you can set up in minutes
• Trusted free payroll software with security and compliance built-in
• Mobile payroll app access so you can run payroll from anywhere
• Integration with time tracking to eliminate manual data entry
• Scalability to grow with your team without forcing a complete platform switch

Want scheduling, time tracking, and payroll in one place? Homebase offers free scheduling and time tracking tools on our Basic plan, with payroll available as an add-on. 

Try Homebase payroll free for 6 months to see if it's the right fit for your small business.

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Frequently asked questions about free payroll software for small business

Is there a free way to do payroll?

Yes, there are free ways to do payroll for small businesses. Many owners use spreadsheets or free online payroll systems like Payroll4Free, HR.my, or ExcelPayroll. These options handle basic wage calculations and tax forms but lack automated features like tax filing or direct deposit.

What is free payroll software?

Free payroll software is a tool that calculates employee wages and taxes, tracks hours, and manages basic payroll tasks at no cost. It typically includes wage calculations, pay stub generation, and basic tax form support (W-2s, 1099s) but has fewer features than paid payroll software.

What is the best free payroll software?

The best free payroll software depends on your team size and needs. For unlimited employees, HR.my and TimeTrex Community Edition work well. For 9 or fewer employees, Payroll4Free offers solid basics. For spreadsheet users, ExcelPayroll provides offline access. 

For hourly teams needing scheduling integration, Homebase Basic (free for up to 10 employees) with the payroll add-on combines everything in one place.

What is the best free payroll app?

The best free payroll app for hourly teams is Homebase because it combines mobile-friendly time tracking with payroll processing. You can approve timesheets, run payroll, and manage your team from your phone—whether you're at your kid's soccer game or handling a lunch rush.

Can I use Excel for payroll?

Yes, you can use Excel for payroll if you already have Microsoft Office. Spreadsheet-based tools like ExcelPayroll provide templates with built-in formulas for wage and tax calculations without subscription fees. You get total data control and offline access. 

However, you're trading automation for that freedom—no automatic backups, no mobile access, no compliance updates when tax laws change, and manual data entry every pay period. Excel works for teams of 5-10 people, but beyond that, spreadsheet management time exceeds software costs.

What does free payroll software typically include?

Free payroll software typically includes wage and hour calculations, pay stub generation, and basic tax form support (W-2s, 1099s). Most free versions calculate taxes but don't file them automatically. Features like automated tax filing, direct deposit, benefits tracking, and accounting integrations usually require paid plans.

Is Payroll4Free really free?

Yes, Payroll4Free is free for businesses paying 9 or fewer employees monthly. The software is ad-supported, which allows them to offer basic payroll calculations, tax form generation, and PTO tracking at no cost. Paid add-ons are available for direct deposit and automated tax filing.

Is Excel Payroll free?

Yes, ExcelPayroll is free to download and use if you have Microsoft Excel 2007, 2010, or 2013. The core software comes with templates for wage calculations and tax forms. However, state tax table updates cost $50 per state ($100 for New York and Alabama) if you need current calculations.

Can free payroll software file taxes?

No, most free payroll software calculates taxes but doesn't file them automatically. You'll need to submit quarterly 941s and annual W-2s, 1099s, and 940s yourself, or pay for a tax filing add-on. Automated tax filing typically requires a paid plan because it involves direct integration with IRS and state systems.

Which free payroll software supports direct deposit?

Most truly free payroll software doesn't include direct deposit—you'll handle this through your bank. However, TimeTrex Community Edition includes direct deposit functionality. Homebase includes direct deposit with its payroll add-on. Wave and Payroll4Free offer direct deposit as paid add-ons.

Is Excel payroll safe?

Excel payroll is only as safe as your computer's security measures. Unlike cloud-based systems with automatic encryption and multi-factor authentication, you're responsible for password-protecting files, backing up data regularly, and securing your computer against malware.

If your computer gets compromised or your file corrupts, you could lose critical payroll records.

What payroll software integrates with scheduling?

Homebase integrates scheduling and payroll seamlessly—employee schedules connect directly with time tracking, and hours worked automatically flow into payroll calculations. TimeTrex also offers integrated scheduling and payroll in its workforce management platform. This integration eliminates double-entry and ensures accurate payment for exact hours worked.

How many employees can I have with free payroll software?

Free payroll software employee limits vary by platform: Payroll4Free caps at 9 employees, Homebase Basic supports 10 employees (payroll add-on costs apply), TMetric free tier covers 5 users, ExcelPayroll handles up to 50 workers, while HR.my and TimeTrex Community Edition offer unlimited employees. 

Choose software with scalable plans to avoid switching providers as you grow.

What happens when I exceed the employee limit?

When you exceed the employee limit on free payroll software, the platform typically prompts you to upgrade to a paid plan. Some platforms may pause service or prevent adding new employees until you upgrade. Plan your upgrade before hitting the cap to avoid payroll disruptions.

What happens to my data if I switch payroll providers?

When you switch payroll providers, reputable platforms let you export your data in CSV or PDF formats. This ensures your employee information, payroll history, and tax records move with you. Always verify export options before committing to any payroll software to protect your records.

Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.