Anyone that has done or is doing payroll by hand knows the process is very tedious and error-prone. It’s for those reasons that using one of the best payroll providers makes a lot of sense for small business owners. After all, who wants to spend their time processing payroll when they can spend it creating new products?
Payroll processing services have greatly improved in recent years thanks to the cloud and automation. Before, it was common to outsource payroll to an expensive team of professionals. That’s no longer necessary. Simply fill in some initial data to set up your payroll account, then for each payroll run, click a few buttons for verification, and you’re done.
Modern payroll services are cost-effective, efficient, and easy to use. But what should you look for when deciding on a payroll service? Here are a few of the main areas to research:
- Pricing — look for a base fee plus a few dollars per employee or contractor.
- Support — there are going to be issues. Ensure you have access to someone on the phone at no extra charge.
- Simplicity — there’s no reason to make it more complicated than it needs to be. You also want each payroll run to be no more than a few clicks. If it’s the same payroll each period, it should be automated. Look for a demo and run through the process before you make a decision.
- Year-end filings — part of any payroll service should include the necessary tax filings along with preparation of W-2s and 1099s.
Here’s our list of what we believe are the best payroll providers for online small businesses.
Note: The payroll provider offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all payroll providers or all payroll offers available in the marketplace.
Gusto’s base service is also called Core. It is $39 per month and $6 for each employee/contractor. The Core service includes full-service payroll, employee self-service, phone support, and paid-time-off policies.
It also has larger plans to support your business as it grows.
What's great about Gusto is how easy it makes payroll. You can setup all sorts of integrations easily (think healthcare, dental, solo 401k contributions, reimbursements, and more).
Plus, you can setup AutoPilot so your payroll runs automatically. So great.
QuickBooks’s Core payroll service is $22.50 as a base fee for the first three months, then $45 per month. Each employee/contractor is $4. The Core service includes automatic payroll and expert support. Additional services can be added to each plan. Taxes and year-end filings are automatically calculated.
As your business grows, QuickBooks has plans that can scale with you.
ADP is a well-known payroll processor that has been in the game for a very long time. In addition to payroll, they also provide services for HR, benefits, and insurance. Despite being a large company with large clients, ADP can handle payroll for the smallest companies, including single owner-employee companies.
ADP’s payroll service calculates all necessary taxes and includes time tracking, automated payroll processing, and has professionals available by phone to help you with any questions or issues. ADP integrates with a number of other financial applications.
ADP provides employee/contractor access, as well. There is also a mobile app available, which employees can log into.
ADP pricing is not available on their website. Unfortunately, you have to call them for a quote, which means they’ll probably try to upsell you additional services. However, ADP’s pricing is competitive.
Like ADP, Paychex provides payroll and HR services. It can handle single-employee companies and those with over 1,000 employees. Also, like ADP, you have to call Paychex to get a price quote.
Paychex lets you enter payroll information through its website, mobile app, or by calling it on the phone. Payroll taxes are calculated automatically with each payroll run.
Employees/contractors have access to payroll through the website, providing them with services such as new-hire onboarding, personal information, tax forms that they can fill out, and payroll data.
Paychex’s interface is easy to use, and you’ll have access to phone support.
OnPay has a simple pricing model — a $36 base fee plus $4 per employee/contractor. Some of the services OnPay provides are onboarding, employee/contractor self-service, automated tax calculations, and W-2 and 1099 filings.
OnPay also integrates with other software applications. OnPay has an easy-to-use interface. Payroll can be run in minutes. Expert phone support is also available.
Square is also upfront about their pricing — there is a $29 base fee plus $5 per contractor/employee.
Square is a full-service payroll provider. It will file the necessary end-of-year taxes and calculate taxes for each payroll run. You can also add services such as health insurance, 401(k) plans, workers’ comp, and pre-tax benefits.
Square also has a mobile app if you feel the need to run payroll on the go.
Phone-based support is also available.
SurePayroll doesn’t publish their prices online, but they do offer one free month of service. SurePayroll is a Paychex company, which you might remember from our second review. SurePayroll includes Auto Payroll, which lets you run the same payroll each period automatically.
Phone-based support is available.
From the above reviews, you can probably tell that they all look the same. That is certainly true — there is very little difference in feature sets. Pricing is competitive and not much of a differentiator either.
Choosing a service may come down to a friend or colleague’s experience with a specific payroll service.
Also, it is worth it to create a list of questions, call up each provider, and decide based on the one you feel will meet all of your needs and you are most comfortable with.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.