The Best Payroll Services for Small Business Owners

You know the drill: late nights calculating overtime, double-checking tax deductions, and making sure everyone gets paid correctly. A good payroll service for small business handles all of that automatically, but finding one that actually works? That's where things get tricky.

This guide breaks down the top payroll services for small businesses in 2025. For business owners, here's exactly what each provider offers, what they cost, and which ones actually make sense for smaller teams.
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What is a payroll service for small business?

Think of a payroll service as your behind-the-scenes accounting team. It handles everything from calculating each employee's take-home pay to filing your quarterly tax forms. 

Instead of juggling spreadsheets and tax tables, you just add the hours worked, and the service does the heavy lifting.

Most payroll services for small businesses cover these tasks:

• Calculating wages, overtime, and deductions
• Processing direct deposits or checks for employees
• Handling state and federal tax withholdings
• Filing payroll taxes automatically
• Creating W-2s and 1099s at year-end
• Keeping records for tax purposes

Modern payroll services now include features once reserved for big companies, like employee self-service portals and mobile apps, while staying current with tax laws and labor regulations so you don't miss important deadlines that could cost your business money.

What to look for in a small business payroll provider

Before diving into specifics, let's talk about what really matters when choosing a payroll service for your small business. The right features can save you hours each week, while the wrong ones can leave you paying for tools you'll never use.

Core payroll capabilities that fit your team

Not every payroll service understands the needs of small businesses. In a few clicks, your service should automatically handle:

• Hourly wages
• Overtime calculations
• Tax filings

For businesses with hourly workers, built-in time tracking and tip handling aren't just nice-to-have features, they're essential for running payroll efficiently.

Built-in tax filing and compliance support

Managing payroll tax compliance is one of the biggest headaches for small business owners. The right payroll service should automatically handle tax calculations, deductions, and filings across all states where you operate. 

This includes staying current with changing tax laws and managing year-end forms like W-2s and 1099s, so you don't have to worry about missing deadlines or making costly mistakes.

Integration with your existing tools

Your payroll service needs to work as part of a complete system. When time tracking, scheduling, and payroll all work together, you save hours each pay period. 

But when these systems don't connect, you end up doing double work: copying hours from one system to another or manually tracking changes. Look for a service that fits naturally into your current operations.

Pricing, transparency, and long-term scalability

While base pricing is important, watch out for hidden costs. Some providers advertise low rates but charge extra for essential features like tax filings or direct deposits. The best payroll services for small businesses offer transparent pricing that includes all the features you need, with room to grow as your team expands.

Now that you know what to look for, let's compare the top payroll providers for small businesses. We'll break down how each one handles these key features, what they cost, and which types of businesses they serve best.

Best payroll services for small businesses in 2025

Every minute spent on payroll is time away from your customers and team. We’ve researched these services to see how they handle real-world small business scenarios, like last-minute shift swaps, tip distributions, and multi-state tax requirements.

Homebase: Purpose-built for hourly teams.

Perfect for: Restaurant owners, retail managers, and service businesses juggling multiple shifts

We know we're biased, but here's why small business owners choose Homebase: it's built specifically for how you actually run your business. No corporate bloat, no features you'll never use.

What makes the difference:

• Scheduling and time tracking that flow directly into payroll (no more Excel gymnastics)
• Smart tip calculations that actually understand pooling and distribution
• Run payroll from your phone while you're on the floor
• Handles all state tax headaches automatically
• One clear price that includes everything (because who has time for surprise fees?)

Real example: Gerald Giles of GG's BBQ and Catering was drowning in paperwork before switching to Homebase. Running a bustling BBQ joint in Virginia Beach with multiple locations meant hours spent on scheduling and payroll. Now he handles payroll in minutes and his team manages their own schedules through the app. 

"It's made my life so much easier. I can focus on what I do best – cooking great BBQ and growing my business." — Gerald Giles, GG's BBQ and Catering, Owner

Gusto: Decent for mixed teams.

Best fit: Growing businesses with both hourly and salaried employees, especially if you need benefits management

Gusto works well for businesses managing different types of workers and needing HR features beyond basic payroll. However, small business owners should carefully consider the pricing structure before committing.

What you should know:

• Starts at $40/month plus $6/person (and that's just the basic plan)
• Strong benefits management if you're ready to offer health insurance
• Good for contractors and W-2 employees in the same system
• Built-in HR tools like onboarding and time-off tracking
• Tax filing included, but no integrated time tracking

Watch out for: The basic plan looks affordable, but most small businesses need the higher tiers for essential features like multi-state tax filing or PTO tracking. Those upgrades add up quickly.

QuickBooks Payroll: Strong accounting ties.

Best fit: Small businesses already using QuickBooks for accounting who prioritize bookkeeping integration

If you're already using QuickBooks for your books, their payroll service might seem like the natural choice. The accounting integration is seamless, but there are important trade offs to consider.

What you should know:

• Automatic syncing with QuickBooks accounting (no manual data entry)
• Next-day direct deposit available on higher-tier plans
• Basic workplace portal for W-2s and pay stubs
• Mobile app for running payroll on the go
• Tax penalty protection only on Elite plan ($125/month + $10/employee)

Watch out for: You'll need separate systems for scheduling and time tracking—two critical pieces for most small businesses. This means juggling multiple tools and manually transferring data, which can lead to costly errors and wasted time.

ADP Run: Built for bigger businesses.

Best fit: Growing businesses planning significant expansion or needing extensive HR support

ADP is a household name in payroll for a reason, but their small business solution (ADP Run) often provides more complexity than what most local businesses need.

What you should know:

• Robust compliance features for multi-state operations
• Extensive HR and benefits add-ons available
• 24/7 support team with HR expertise
• Multiple plan tiers with varying features
• Quote-based pricing that varies by location and team size

Watch out for: The base price isn't published online, and most small businesses report paying significantly more than with other providers. You'll also face upsells for features that come standard with more focused solutions.

Paychex Flex: Comprehensive but complex.

Best fit: Businesses with 10+ employees planning expansion into multiple states

Paychex targets growing businesses with their Flex platform, positioning themselves between simpler payroll services and full enterprise solutions.

What you should know:

• Dedicated payroll specialist assigned to your account
• HR support and compliance library included
• Benefits administration available
• Extensive reporting capabilities
• Starting at $59/month + $4/employee (but expect to pay more)

Watch out for: Like ADP, Paychex uses quote-based pricing that often surprises business owners. Many features that small businesses need are only available in higher-priced tiers, and the interface can feel overwhelming if you just need basic payroll.

OnPay: Basic payroll without the extras

Best fit: Small teams looking for straightforward payroll without additional operational tools

OnPay takes a simpler approach, offering just the payroll basics without trying to be an all-in-one solution.

What you should know:

• Flat rate of $40/month + $6/person
• Handles basic payroll tax filing
• Simple employee onboarding
• Basic PTO tracking included
• Multi-state payroll at no extra charge

Watch out for: While the pricing is transparent, you'll need separate solutions for scheduling, time tracking, and team communication. For businesses with hourly workers, this means more tools to manage and potential disconnects between systems.

Why Homebase is built for small business payroll

Here's what makes Homebase standout: we built it specifically for businesses like yours, where managing hourly teams is your daily reality.

Everything you need, nothing you don't

While other providers try to serve everyone from Fortune 500 companies to local shops, Homebase focuses on what matters most to small business owners:

• One simple system for scheduling, time tracking, and payroll
• Built-in compliance tools that keep you protected
• Team communication that actually works for busy operations
• Mobile-first design that fits how you actually work
• Clear, transparent pricing without surprise fees

Real savings for real businesses

The math is simple. When your scheduling, time tracking, and payroll work together, you save hours every week. Our customers typically cut their payroll processing time by 75% or more.

Get started without the hassle

Ready to make payroll easier? Start a free trial today and see why thousands of local businesses trust Homebase. No credit card required, and our team is here to help you every step of the way.
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