Introduction

Running payroll is one of the most critical responsibilities of any small business owner.

Get it wrong, and you risk:

Compliance penalties
Late tax filings
Employee dissatisfaction
Costly errors

Get it right and you gain:

Automated tax calculations
On-time payments
Accurate reporting
Peace of mind

In this guide, we compare the best payroll software for small businesses in 2026, based on pricing, ease of use, compliance features, scalability, and real-world suitability for growing teams.

Quick Comparison: Best Payroll Software (2026)

Software	Best For	Pricing Level	Contractor Support	Tax Filing	Scalability
Gusto	All-around small business payroll	$$	✔	Full-service	High
OnPay	Affordable full-service payroll	$–$$	✔	Full-service	High
QuickBooks Payroll	QuickBooks users	$$	✔	Full-service	High
ADP RUN	Growing / scaling businesses	$$–$$$	✔	Full-service	Very High
Patriot Payroll	Budget small teams	$	✔	Basic + Add-on	Moderate

(Pricing levels are relative. Always confirm current rates.)

What Small Businesses Need From Payroll Software

Unlike large enterprises, small businesses typically need:

1. Automated Tax Filing

Federal & state tax withholding
Quarterly filings
Year-end W-2 and 1099 generation

Manual payroll is risky and time-consuming.

2. Contractor + Employee Support

Many small businesses use:

W-2 employees
1099 contractors

Software must support both seamlessly.

3. Affordable Per-Employee Pricing

Payroll tools often charge:

Base monthly fee
Per-employee fee

Understanding total cost is essential.

4. Compliance & Alerts

Deadlines matter. The best payroll tools:

Send reminders
File taxes automatically
Handle compliance updates

1) Gusto — Best Overall Payroll Software for Small Businesses

Best for: Small businesses wanting an easy, all-in-one solution

Gusto is widely regarded as one of the most user-friendly payroll platforms in the U.S.

Key Features

Automatic tax filing (federal, state, local)
W-2 & 1099 generation
Direct deposit
Employee benefits integration
Time tracking add-ons

Pros

Very easy to use
Designed specifically for SMBs
Strong compliance automation

Cons

Per-employee pricing adds up
Advanced HR features cost more

Ideal for businesses that want full-service payroll with minimal manual effort.

2) OnPay — Best Affordable Full-Service Payroll

Best for: Budget-conscious small businesses

OnPay offers strong payroll functionality without premium pricing.

Key Features

Full tax filing
Multi-state payroll
Contractor payments
Basic HR tools

Pros

Transparent pricing
Strong value per dollar
Good compliance features

Cons

Interface slightly less polished than competitors
Fewer advanced HR integrations

Great option for small businesses wanting full service without enterprise cost.

3) QuickBooks Payroll — Best for QuickBooks Users

Best for: Businesses already using QuickBooks Online

QuickBooks Payroll integrates directly into the QuickBooks ecosystem.

Key Features

Seamless accounting integration
Automated payroll taxes
Same-day direct deposit (higher tiers)
Employee portal

Pros

Native integration with QuickBooks
Accountant-friendly
Strong reporting

Cons

Works best if already in QuickBooks
Pricing increases with features

Best if you’re already using QuickBooks for accounting.

4) ADP RUN — Best for Growing & Scaling Businesses

Best for: Businesses expecting growth beyond 10–20 employees

ADP is one of the largest payroll providers in the U.S.

Key Features

Full-service payroll
Advanced HR tools
Compliance management
Scalable infrastructure

Pros

Enterprise-grade reliability
Excellent compliance
Scales well

Cons

Higher pricing
Sales-driven onboarding process

Ideal for small businesses planning rapid growth.

5) Patriot Payroll — Best Budget Payroll Software

Best for: Very small teams

Patriot offers one of the lowest-cost payroll solutions for small businesses.

Key Features

Basic payroll processing
Direct deposit
Tax filing (higher tier)
Contractor payments

Pros

Very affordable
Simple setup

Cons

Fewer advanced features
Less automation compared to premium tools

Good entry-level payroll for very small teams.

Payroll Software Pricing Comparison (2026 Overview)

Most payroll software pricing follows this model:

Base monthly fee
+
Per employee fee

Typical structure:

Tier	Monthly Base	Per Employee
Budget	Low	Low
Mid-tier	Moderate	Moderate
Premium	Higher	Moderate

Also consider:

Multi-state payroll fees
Benefits add-ons
Time tracking modules
HR integrations

For deeper cost breakdowns, see our Payroll Software Pricing Comparison (2026) guide.

Payroll vs Manual Payroll: Why Software Wins

Manual payroll risks:

Incorrect tax calculations
Missed deadlines
Penalties

Payroll software automates:

Withholding
Filing
Compliance tracking
Year-end reporting

For most small businesses, software pays for itself in time savings alone.

Best Payroll Software by Business Type

Freelancer Hiring First Employee

Gusto
OnPay

Small Business (Under 10 Employees)

OnPay
Patriot

Growing SMB (10–50 Employees)

Gusto
QuickBooks Payroll
ADP

Businesses Using QuickBooks

QuickBooks Payroll

When Should a Small Business Start Using Payroll Software?

You should consider payroll software when:

You hire your first employee
You begin paying contractors regularly
You want automatic tax filing
Compliance deadlines feel overwhelming

Even one employee justifies using payroll software.

Final Verdict: Best Payroll Software for Small Businesses (2026)

✔ Best overall: Gusto
✔ Best affordable full-service: OnPay
✔ Best for QuickBooks users: QuickBooks Payroll
✔ Best for scaling: ADP RUN
✔ Best budget option: Patriot Payroll

The right choice depends on:

Team size
Budget
Growth plans
Existing accounting software

Compare Payroll + Accounting Together

If you’re evaluating payroll alongside accounting software, see our guide:

Best Accounting Software for Small Businesses (2026)

Many businesses choose integrated solutions for smoother workflows.