What is payroll software?

Payroll software automates common payroll tasks, including wage calculations, common deductions and employee payments. Most software types also include reporting and recordkeeping functions.

Modern payroll software is usually cloud-based, allowing easy access from any device or location. Providers typically charge a monthly fee or a per-payroll rate, often with an additional per-user fee. The exact costs may depend on whether you choose a standalone payroll system or an integrated human resource information system that includes payroll tools.

Well-designed payroll software may benefit your business in the following ways:

• Enhanced productivity

• Precise calculations

• Employment law adherence

• Tax law compliance

• Better data security

• Reduced accounting needs

• Reliability

• Professional support

If you’re on a tight budget, free payroll software tools might be a better option.

Related: Frequently Asked Questions About Payroll Processing

14 payroll software tools to consider

As you search for the best payroll software for your business, consider these popular options.

1. APS Payroll

APS Payroll is a payroll and HR software that offers custom solutions for small and medium-sized businesses (SMBs) and growing businesses. The payroll features are flexible, so you can configure them to meet your company’s needs.

They include error checking, imports and exports, controls for wage limits, tax compliance tools and wage garnishment services. APS also offers add-ons for employee benefits, carrier connections, recruitment, onboarding new hires, scheduling and other helpful business functions.

Key features:

• Guaranteed payroll tax compliance for state and federal tax laws

• Customized report building and sharing

• Batch error checking function for accuracy

• Included help center for answers to common questions and troubleshooting

• Free demo

Price: APS Payroll offers customized quotes upon request.

2. Gusto

Gusto is a user-friendly payroll, HR and benefits solution for SMBs. The basic plan includes single-state payroll, robust customer service, benefits tools and basic hiring and human resources (HR) functions. Higher-tier plans come with additional features, such as PTO management, company policies, labor costing, performance reviews and more.

Key features:

• Full-service multi-state payroll available in the second plan tier and higher

• Support for employee profiles and self-service

• Contractor payment tools

• Varying direct deposit timelines

Price: Gusto pricing ranges per team size and features. A contractor-only plan is also available.

3. Intuit QuickBooks Online

Intuit QuickBooks Online streamlines full-service payroll processes for SMBs. The basic Core plan includes payroll, automatic payments, 1099 E-file and pay and high-level support. Higher tiers include same-day direct deposit, time tracking, tax penalty protection and 24/7 support.

Key features:

• Next-day direct deposit for all plans

• Workforce portal for easy employee access

• Calculations for garnishments and other deductions

• 30-day free trial

Price: Three paid plans are available. You can also add accounting features for an additional fee.

4. Justworks

Justworks includes a range of payroll and HR services, with options to add benefits, compliance and insurance support. It can simplify paying employees and contractors while streamlining tax form generation and forecasting. HR tools include employee onboarding and time-off management. Justworks also offers add-ons for benefits and time tracking.

Key features:

• 24/7 customer service with higher tiers

• User-friendly software portal

• No free trial or demo

Price: Justworks payroll software offers three plan tiers. The Payroll plan includes payroll, HR and time tracking. The PEO Basic plan offers additional compliance support, HR tools and commuter benefits. The top-level plan, PEO Plus, includes insurance, HSA accounts and other health services.

5. Namely

Designed for SMBs with up to 1,000 employees, Namely is a cloud-based HRIS software payroll functions. Paycheck managers and HR professionals can use the software to process payroll, manage time and attendance, generate reports and perform other payroll and time-tracking functions.

Key features:

• Automated benefit deductions

• Basic business tax filing

• Payroll reporting feature for valuable insights

• iOS and Android apps

Price: You can contact Namely for a quote.

6. OnPay

OnPay payroll software solutions are designed for businesses of any size or industry. It includes tipped wages calculations for restaurants and categorized tax filings for farm workers and non-agricultural employees. Other special categories include nonprofits, churches and organizations with more than 500 workers.

OnPay’s features include multiple permission levels, job duty delegation, powerful reporting and PTO management. Self-service features help employees handle onboarding, manage paycheck information and access pay stubs and tax documents. OnPay integrates with popular business software tools, including QuickBooks and Xero.

Key features:

• Simple, transparent and all-inclusive pricing

• Unlimited monthly pay runs

• Free one-month trial

• Payments via debit cards, direct deposit or paper checks

Price: OnPay offers a monthly per-employee plan for up to 1,000 people.

7. Patriot

Patriot is a payroll software tool best suited for businesses with fewer than 100 employees. Plans include free direct deposit, an employee portal and unlimited monthly payments. You can also integrate workers’ compensation and 401(k) plans for free.

The higher-tier plan comes with local, state and federal tax filings and deposits with guaranteed accuracy. You can also add HR software and attendance features for an additional fee.

Key features:

• US-based payroll support between 8am and 8pm on weekdays

• Free payroll setup

• Add-on services for HR and time management

• AP Intego partnership for easier workers’ compensation insurance premiums

• 30-day free trial

Price: Choose from Basic or Full Service payroll services at various monthly per-person rates.

8. Paychex Flex

Paychex Flex offers three tiers to suit small businesses. The basic plan comes with payroll processing, tax administration and flexible payment options. It also provides analytics and reporting. The Pro and Enterprise plans include more advanced services for wage garnishment, ledgers and HR features including pre-employment screening and performance management.

Key features:

• Two-factor authentication for data security

• Customizable reports

• Nontraditional payment options, including online tip sharing

• Employee self-service options

Price: Quotes are available on request.

9. Rippling

Rippling is an automated payroll solution designed to reduce mistakes and increase compliance. It comes with a 100% error-free guarantee. The program offers a range of payroll and reporting features for domestic and international employees, including garnishments, paperless filings and retroactive pay. It’s fully customizable, and you can also add IT, HR and spending functions to the platform.

Key features:

• One-click payroll and HR data sync

• Compliance features for domestic and international laws

• Multiple-factor authentication

• Available demos

Price: Most plans come with a per-user, per-month cost structure, though some may have an additional monthly base fee. Prices are available on request.

10. RUN by ADP

RUN by ADP is a web-based program powered by the ADP platform. The basic Essential Payroll plan includes payroll, built-in tax and compliance features, including payroll processing, check printing, HR reporting and direct deposit. It also comes with new-hire reporting and a general ledger interface.

Three higher tiers come with various advanced payroll, HR and hiring tools. Enhanced Payroll adds more payment features, including prepaid checks and unemployment insurance management. Complete Payroll and HR Plus includes the lower-tier payroll functions and adds recruitment and onboarding tools. Top-level HR Pro covers everything the lower three plans offer, plus legal assistance, training and more support.

Key features:

• Three free months when you sign up for small business payroll processing

• Support for direct deposit

• W-2 and 1099 generation for flexible workforces

• Automatic tax updates for federal and state payroll tax laws

• Self-service for employees

Price: Pricing for RUN by ADP varies based on your company size, desired features and whether you’re currently using the ADP platform.

11. Square Payroll

Square Payroll is ideal for SMBs with up to 100 employees. It has a straightforward interface for easy payroll management. Automated payroll processing helps save time, and the native integration with other Square apps makes it easier to scale.

The worker self-service option may be an effective way to minimize the HR workload. Other helpful functions include automatic tax filings, integrated timecards and mobile access through iOS and Android apps.

Key features:

• Automatic quarterly and annual tax filings

• Separate contractor-only payroll service

• Timecard and tip imports

• Payment options, including paper check, direct deposit or Cash App

Price: Square Payroll software starts with a monthly per-employee or contractor fee. The contractor-only service has a different rate.

12. TriNet Payroll

TriNet Payroll, which runs on the TriNet HR platform, simplifies and automates your payroll tasks. It handles payroll tax filings and direct deposits to ledger reporting and multiple pay rates. Payroll is an add-on option to the TriNet HR services.

Key features:

• Tips reporting

• Support for contractor payments

• Unlimited pay cycles

• Multiple schedules and pay rates

Price: Custom pricing is available on request. The full HR and payroll platform involves a monthly fee and an annual contract for the Zen plan.

13. Wagepoint

Wagepoint is an online payroll software tool that works for startups, sole proprietors and small businesses with up to 100 employees. It’s simple to use and includes basic functions for payroll processing, including direct deposit, automated withholdings and online access.

Key features:

• Transparent pricing

• Support for employee and contractor payments

• Online employee portal for access to W-2s, 1099s and pay stubs

• Bank-grade 2048-bit encryption and two-factor authentication

• Wide range of reporting functions

Price: The Solo plan allows one monthly payroll run for a set cost plus a fee per employee or contractor. The Unlimited plan also includes a set cost plus a per-employee fee.

14. Workful

Workful is a small business software that includes a full suite of payroll and HR services for one price. It lets you manage payroll, create reports and file tax forms. The software also syncs to time clocks to run payroll in four clicks.

You can access time tracking, onboarding, communication, expense reporting, document management and more.

Key features:

• Payroll, time tracking and employee tools

• Expense tracking and mileage reimbursement

• Free 30-day trial

Price: Workful charges a flat fee with an additional monthly fee for each employee.

What to look for when choosing payroll software tools

When choosing payroll services for your company, consider functions and features, including:

1. Scalability

Software solutions should be able to grow with your business, so you don’t have to switch systems as you expand. Available upgrades can support this objective.

2. Security

Consider choosing software with the latest encryption protocols and other high-level security measures to protect from cyber threats.

3. Tax services

Tax compliance is essential for payroll functions. Payroll software that includes and automates this function can save time and reduce the risk of errors.

Related: Payroll Taxes: A Guide for Employers

4. Employee self-service

You might choose a payroll software that gives employees easy access. When workers can log in from anywhere, they can verify payroll information and streamline their financial planning without HR.

5. Cost structure

Price may be an important consideration in your software selection process. Compare pricing structures and overall costs to determine what aligns with your payroll and HR budget.

6. Mobile options

Mobile apps and mobile-responsive websites generally provide extra flexibility and convenience for your audience. This is especially important for startups and small businesses that need access on the go.

7. Reporting functions

Some payroll programs have built-in reporting functions, which can help you leverage data to improve growth and monitor vital performance metrics.

Related: 7 Types of Payroll Reports for Employers

8. Customer support

Investigate the available customer support options and average response times. Experienced, readily accessible support agents can help your team set up and learn the software quickly.

Payroll software FAQs

What types of payroll software systems are there?

You can choose between four types of payroll systems.

• In-house payroll processing (may be a suitable option for small companies with few employees and traditional work schedules)

• Outsourced payroll to a certified public accountant or bookkeeper

• Professional payroll services with full-scale administrative services

• Online payroll software, which offers convenience and cost savings

Do I need payroll software?

If your business has employees or contractors, you need a payroll system. If you don’t have a dedicated professional or company assisting with payroll, software tools can offer an efficient solution. These programs include automation, which saves time and minimizes repetitive tasks while increasing accuracy and legal compliance.