What exactly constitutes a “small business?” The US Small Business Administration provides an online tool to check eligibility for SBA loans. If you’re curious about qualifications, visit their website. As a sole proprietorship, LLC, or partnership, you may qualify for small business funding—though you’ll need to provide various documents for approval, including payroll records.
Tax obligations present another compelling case for payroll services, spanning both state and federal requirements. Before launching your business, secure a federal Employer Identification Number and verify with your state revenue department whether workers’ comp insurance is mandatory. Both documents are required to establish payroll services.
Many small business owners mistakenly skip payroll companies initially, opting instead to write business checks or make cash payments “under the table” to reduce costs. This strategy backfires. Your revenue number remains unchanged while those cash payments aren’t recognized as valid expenses—leaving you taxed on the full income. Avoid this costly trap by organizing your payroll system and discovering the best payroll services for small businesses in this comprehensive guide!
Top Payroll Services For Small Businesses
Regardless of whether you’re launching a catering business, a credit repair business, a party planning business, or any other small enterprise, payroll management is essential. Setting up proper payroll systems can be complex and time-intensive—making professional payroll services invaluable. Want to know which payroll services work best for small businesses? Continue reading to discover your options!
Intuit/QuickBooks – Best Payroll Service for Sole Proprietors and LLCs
Sole proprietors commonly face the scenario described above. Why invest in accounting and payroll services when you can write checks for free and maintain paper receipts? Experience one IRS audit and that question becomes irrelevant. While Intuit offers standalone payroll for $29 monthly, the $59 Intuit/QuickBooks combined payroll and accounting package delivers superior value.
Even single-employee businesses need payroll services. Automatically deducting taxes from each paycheck and making quarterly deposits to the IRS prevents hefty tax bills and penalties at year-end. Intuit’s payroll system lets you customize payment frequency and dates, while the accounting software tracks bills and expenses seamlessly.
While Intuit/QuickBooks works well for larger organizations, it particularly excels for small firms with fewer than fifty employees. The user-friendly accounting software earns endorsement from the AICPA. QuickBooks provides tax penalty protection and 1099 E-file capabilities for independent contractors who prefer that structure. They also offer a comprehensive mobile app.
Gusto – Best Payroll Service for Tech Start-Ups
For truly intelligent payroll applications, consider Gusto. Small business owners leverage it to compensate employees, establish necessary insurance coverage, and oversee company benefits including healthcare and retirement plans. All employees receive online access via mobile app, with onboarding completed in under five minutes.
Technology start-ups gravitate toward Gusto because of its sleek, modern interface—evident from your first visit to their home page. Monthly pricing ranges from $39 to $149, depending on which services you utilize. Per-employee costs run $6 to $12 monthly, making it budget-friendly for small businesses.
Beyond payroll and benefits management, Gusto provides HR support, time tracking tools, and team management features including surveys, offer letter templates, and streamlined new hire onboarding. Everything reflects Gusto’s signature approach: sophisticated technology wrapped in intuitive user interfaces. Explore their Talk Shop blog for additional insights.
OnPay – Best Payroll Service for Independent Contractors
At just $36 monthly plus $4 per employee, OnPay serves as the ideal payroll solution for independent contractors. Earning five-star ratings on Capterra and G2 Crowd, plus an “excellent” rating from PC Mag, OnPay comes highly recommended and rapidly emerges as a payroll services leader. Their tagline promises “The New Standard in Payroll.”
For independent contractors, OnPay tracks owner’s draw amounts and automatically handles quarterly and year-end tax deposits. The software integrates seamlessly with major accounting platforms like QuickBooks and FreshBooks, enabling comprehensive cash flow monitoring. 1099 and W-2 filings are included in the service.
While OnPay provides benefits and insurance options like competitors, non-payroll services rely on external integration partners. Their integration page lists accounting, time tracking, 401K, HR & Compliance, small business lending, and business tool applications available for automated data synchronization.
ADP – Best Payroll Service for Expanding Workforces
Every small business receives customized pricing from ADP, making it perfect for companies with expanding or fluctuating workforces. Visit their website for a free quote within minutes. As one of the most established payroll service providers, ADP delivers payroll, benefits, insurance, and HR services, plus an extensive app marketplace for integrations.
Operating since the 1950s, ADP earned placement on Fortune Magazine’s “World’s Most Admired Companies” list for fourteen consecutive years. They dominate the payroll services industry. While this doesn’t guarantee they’re your perfect match, choosing their service virtually eliminates concerns about business continuity.
Patriot – Best Low-Cost Basic Payroll Service
For simple, affordable payroll with no setup costs and a free thirty-day trial, Patriot represents your best option. Sole practitioners, LLCs, or independent contractors pay just $10 monthly for self-managed payroll taxes or $30 monthly for full-service tax handling. You can manage up to ten employees for $50 monthly.
Patriot also provides budget-friendly accounting software for $15 monthly to handle income and expense tracking. These prices might seem suspiciously low, but Patriot has operated for thirty years with affordability as their core business strategy. If you’re launching a business with limited resources, Patriot could be an excellent fit.
