Introduction

Paying your team on time — without headaches, compliance errors, or surprise fees — is an essential part of growing a small business.

But if you’re price-conscious or just starting out, full-featured enterprise payroll tools might feel too costly. The good news? There are affordable payroll services in 2026 that still deliver:

automated tax filing
direct deposit
support for contractors
compliance tools
easy onboarding

In this guide, we look at the best affordable payroll services for small businesses in 2026 — comparing pricing, features, strengths, limitations, and real use cases.

Why Affordability Matters (But So Does Value)

Low cost shouldn’t mean low quality.

The right affordable payroll service should still provide:

correct tax calculations
timely payments
compliance with federal & state requirements
clear reporting
support when you need it

Let’s evaluate the best cost-effective payroll solutions you can use right now.

Quick Comparison: Best Affordable Payroll Services (2026)

Payroll Service	Starting Cost	Per Employee Fee	Tax Filing	Best For	Ease of Use
OnPay	~$49/mo	~$6/employee	Included	Small teams & contractors	⭐⭐⭐⭐
Patriot Payroll	~$10/mo	~$4/employee	Optional	Microbusiness & startup	⭐⭐⭐
Gusto (Simple)	~$40/mo	~$6/employee	Included	Full small business payroll	⭐⭐⭐⭐
Wave (via integrations)	Free	Depends on add-ons	Manual	Budget payroll entry point	⭐⭐⭐
Square Payroll	~$35/mo	~$5/employee	Included	Retail + small teams	⭐⭐⭐⭐

(Pricing is approximate and varies by region, features, and add-ons. Always check current pricing before subscribing.)

1) OnPay — Best Overall Affordable Payroll Service

Best for: Small businesses that want full payroll features at a predictable price.

Pricing

~$40 base per month
~$6 per employee monthly

What You Get

✔ Full tax filing (federal & state)
✔ Contractor & employee payroll
✔ Multi-state payroll support
✔ Simple reporting

Why It’s Affordable

OnPay combines payroll, tax filing, and contractor support at a very accessible price — without forcing you into costly add-on tiers.

Pros

Transparent pricing
Full tax filing included
Easy setup
Clean user interface

Cons

Not as many advanced HR features as enterprise platforms

Best choice if you want a strong core payroll service with predictable pricing.

2) Patriot Payroll — Cheapest Core Payroll Option

Best for: Solopreneurs and microbusinesses with tight budgets.

Pricing

~$10 base per month (core)
~$4 per employee (core)
~$30 base per month (full service) + ~$6 per employee

What You Get

✔ Basic payroll processing
✔ Direct deposit
✔ Add-on tax filing

Why It’s Affordable

Patriot charges extremely low base fees, making it one of the cheapest real payroll services available.

Pros

Very low entry cost
Simple setup
Quick onboarding

Cons

Full tax filing is an add-on
Fewer advanced features
Manual steps may be needed for compliance

Best if keeping payroll costs ultra-low matters most.

3) Gusto (Simple Plan) — Affordable With Full Tax Filing

Best for: Small teams who want payroll simplicity + compliance automation.

Pricing

~$49 base per month
~$6 per employee

What You Get

✔ Federal & state tax filing
✔ Next-day pay options (higher tiers)
✔ Contractor support
✔ Employee self-service

Why It’s Affordable

While priced similarly to OnPay, Gusto offers excellent UI and team tools that make payroll easier for beginners.

Pros

Strong automation
Intuitive interface
Excellent customer support

Cons

Add-ons for benefits can increase cost

Best if you want full payroll features without enterprise pricing.

4) Wave (with Integrations) — Budget Entry Pathway

Best for: Very early-stage businesses and freelancers.

Pricing

Free core platform
Payroll via third-party integrations (paid add-ons)

What You Get

✔ Free accounting dashboards
✔ Basic invoicing
✔ Add-on payroll services

Why It’s Affordable

Wave itself is free, so you can use basic financial tools, then plug in a low-cost payroll add-on.

Pros

Free bookkeeping tools
Good entry point
Works well with freelancers

Cons

Payroll isn’t included — requires integrations
Limited reporting

Best if you want the lowest entry cost and already use Wave for accounting.

5) Square Payroll — Best Affordable for Retail & Service SMBs

Best for: Small retail and service businesses with pop-up teams.

Pricing

~$35 base per month
~$6 per employee
Tax filing included

What You Get

✔ Automated payroll tax filing
✔ Seamless integration with Square POS
✔ Contractor payroll
✔ Timecard syncing

Why It’s Affordable

Square combines payroll with POS tools, making it easy for businesses already in the Square ecosystem to manage paychecks seamlessly.

Pros

Strong for retail/service businesses
Integrates with Square products
Easy time tracking

Cons

Less powerful for larger teams
Not ideal if you don’t use Square POS

Best for businesses already in the Square world.

How Affordable Payroll Services Charge (What to Expect in 2026)

Most services use a simple hybrid pricing model. This may include the following:

i) Base Monthly Fee

Paid every month — usually $10 to ~$50+, depending on service.

ii) Per Employee / Contractor Fee

A recurring fee for each person you pay.

iii) Add-Ons

Optional extras like:

Enhanced compliance alerts
Contractor-specific features
Benefits administration
Time tracking modules

How to Choose the Right Affordable Payroll Service

Ask yourself:

a) How many employees do I have?

Small teams = cheaper options like Patriot or OnPay
Larger small teams = Gusto or Square

b) Do I need full tax filing included?

If yes → OnPay, Gusto, Square
If no → Patriot (tax add-on)

c) Am I already using accounting software?

Integration matters:

QuickBooks Payroll, if you use QuickBooks
Wave integrations, if you use Wave

What Small Business Owners Should Consider in 2026

Payroll decisions should factor in:

>> Tax Compliance
Late or incorrect payroll taxes = penalties.

>> Ease of Use
The simpler the UI, the fewer mistakes.

>> Add-Ons vs Core Features
Compare total monthly cost, not just base price.

>> Growth Path
Don’t outgrow your payroll system in 6–12 months.

Frequent Pricing Mistakes to Avoid

Choosing solely based on base price
Ignoring per-employee fees
Forgetting about multi-state tax costs
Paying for add-ons you don’t use

A true pricing comparison should consider total annual cost, not just the monthly starting price.

Final Verdict: Best Affordable Payroll Services (2026)

Best For	Recommended Payroll
Lowest Cost Payroll	Patriot Payroll
Best All-Around Value	OnPay
Best with Tax Filing Included	Gusto
Best Retail/Service	Square Payroll
Budget Entry Pathway	Wave + Integrations

The right choice depends on your:

Team size
Budget
Compliance needs
Accounting software ecosystem

Related Resources You May Find Helpful

➡️ Best Payroll Software for Small Businesses (2026)
➡️ Payroll Software Pricing Comparison (2026)
➡️ Best Accounting Software with Payroll Included (2026)

These pages work together to help you pick the best tools for your business stage.

Want a different software? Start your free trial with Xero today!