The 10 Best Payroll Software Tools for Startups
I recently went through the process of evaluating payroll software tools, so I figured I would collect my findings here and share. Some of these options cater more to early-stage startups like mine, while others may be more suited for larger ones.
For founders and HR managers at startups, paying employees, administering benefits, and filing taxes properly can be time-consuming and complex. As a leader, you should be focused on growing the business and developing their product, so the more you can offload to software or third-party services, the more effective you’ll be at your job.
Choosing a Payroll Software Tool for Your Startup
A good payroll tool will help you reduce manual data entry, avoid costly tax mistakes, and allow you to run your business without a lot of overhead. The hard part is deciding which option works best for your needs. I typically recommend two approaches:
- Ask startups that are similar to you about their choice. What do they like? What do they dislike? This is my preferred way of choosing (and how we landed on Gusto at my last startup).
- Try each one out. This is time-consuming and to be honest, many of the options on this list are pretty close in price and features. I don’t recommend spending this much time on the decision.
That said, you should consider your current and future needs.
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The Best Startup Payroll Providers
This list includes an evaluation of the most commonly recommended payroll tools I could find. I looked at each tool’s features, pricing, and target market to get a good sense of which provider might work best for startups like mine. I hope this gives you a better idea of which tool will be the best fit for you, or at least, a starting point for making your own evaluation.
Gusto, which used to be ZenPayroll, was founded in 2011 and is widely known for being an affordable payroll and benefits management software for startups and other small businesses. Its mobile interface integrates seamlessly with accounting and time-tracking software. The autopilot feature ensures your employees are always paid on time, but it also allows you to customize pay schedules whenever you’d like.
In addition to payroll features, Gusto also offers tools for HR managers to manage job offer letters, health insurance, 401(k)s, paid time off (PTO) policies, workers’ compensation insurance, and more. Plus, it can automatically handle federal and state payroll taxes. And with its self-service portals, your employees can download pay stubs and tax forms. However, the platform does lack integrated background checks, an IT systems management feature, and does not register for benefits in all states (see the whole list here).
Gusto is most often used by software startups on the smaller side ($1M-$10M in revenue).
Cost: Gusto’s Basic plan starts at $19 per month, plus $6 per month per person.
Patriot offers an attractive alternative to other payroll providers with its Basic Payroll plan starting at just $10 per month. Even at that low price point, the plan includes payroll setup, direct deposit, an employee portal, workers’ comp integration, unlimited payroll, a mobile-friendly platform, accounting software integration, electronic or printable W-2s, and much more. Patriot makes it simple and easy to set up its services. All you have to do is send your payroll information, and a representative will do the rest.
The only downside to Patriot’s Basic Payroll plan is that it doesn’t include federal or state tax filings, local payroll tax filings, or year-end payroll tax filings. To receive those services, you’ll need to upgrade to its Full-Service Payroll plan, which starts at $30 per month. However, neither plan include more than a few software integrations, so you may want to look at other providers if you need a one-stop-shop for all of your payroll needs.
Patriot Payroll is a great tool for startups looking for wallet-friendly payroll software.
Cost: Patriot Payroll starts at $10 per month, plus $4 per month per person.
If you’re a startup that’s already using QuickBooks accounting software, Quickbooks Online Payroll might be the ideal option for you. All plans, whether you choose Core, Premium, or Elite, include full-service payroll (includes automated taxes and forms), auto payroll, health benefits for your team, 401(k) plans, and 1099 e-file & pay.
One major benefit you get with Quickbooks Payroll is its next-day direct deposit feature, which is great if your need consistently fast payment. You can also get same-day direct deposit, GPS job tracking, employee hours, and workers’ compensation features if you upgrade to the Premium plan. The major downside to its basic plan is the higher price point; however, the plan does start to make sense as you add more employees. If you’re on the fence about choosing Quickbook’s Payroll platform, they offer a 30-day trial to make sure it’s right for your startup.
QuickBooks Payroll is most often used by tech companies like VOSTROM, with 10-50 employees, so again, it’s probably best for smaller startups and local businesses.
Cost: Quickbook Payroll’s basic plan starts at $45 per month, plus $4 per month per person. However, they are offering 50% off for the first 3 months at the moment.
Founded 20 years ago, SurePayroll serves mostly small businesses in the U.S. As a full-service payroll provider for small businesses, the company specializes in managing the needs of startups, restaurants, nonprofits, household services, and healthcare. Those services include same-day payroll, next-day payroll, cancel payroll, and auto payroll for salaried employees. Its standard plan only offers two-day payroll processing, but that’s still faster than the standard plan for most payroll platforms.
SurePayroll offers customer service and data migration if your startup is looking to easily transition from in-house tax-filing. However, it does charge fees for services that other platforms provide for free, such as creating and distributing W-2s. SurePayroll offers two payroll options: full-service and self-service. Both include no set-up fees, no extra fees for unlimited payroll runs, flexible payroll options, and more.
The companies using SurePayroll are most often in the software industry.
Cost: Full-service is $29.99 per month, plus $5 per employee per month. Self-service is $19.99 per month, plus $4 per month per employee.
Square Payroll is ideal for companies that already use Square for payment processing and is among the most affordable full-service payroll options available. As a plug-and-play payroll solution, it’s easy to set up, and the app automatically syncs with your Square point-of-sale system (POS). This makes it simple for Square users to create one streamlined financial system.
Your monthly subscription includes automatic quarterly and annual tax filings, timecard integration and Square Team app access, and flat pricing for payroll services and live support. You can also sync hours, review sales, and manage permissions with the Square Team Management integration. However, some reviewers, such as PCMag, complain about the platform’s user experience, which isn’t as sleek, professional, and state-of-the-art as competitors like SurePayroll. But the company does provide helpful guides to help navigate the payroll system.
Startups that typically go with Square Payroll already use Square for payment processing.
Cost: Square Payroll starts at $29 per month, plus $5 per month per person. The Pay Contractors Only option is $5 per month per person.
Rippling was founded in 2016 and offers payroll, payroll tax, HR, and benefits management services through its cloud-based software. With its employee management platform, you can manage all your employee data and operations—onboarding, offboarding, and everything in between. Rippling automatically creates and sends documents to employees for online signature and storage. That includes offer letters, handbooks, I-9s, W-4s, severance, and more. With its platform, you can also create custom reports and graphs using employee data across your company. HR can visualize employee turnover, IT can track app usage, and finance can see comp trends.
However, Rippling is a young company still investing in support, which means its software still has some bugs, and its customer support less quick than competitors such as Gusto. The company also isn’t a Professional Employer Organization (like Gusto), meaning you’ll have to register in all the relevant states. However, it does integrate with over 50 businesses and productivity apps.
Cost: Rippling’s core platform has a base cost of $35 plus $5 per month per employee (paid annually) or $7 per month (monthly).
TriNet is a PEO that specializes in payroll software for small businesses. It offers 24/7 support, access to a full range of HR services, benefit options, payroll services, risk mitigation, and a technology platform. Run payroll anywhere with its mobile app designed for iOS and Android, and keep your operations paperless with electronic pay stubs and tax forms. TriNet’s self-service platform lets employees enroll in direct deposit, update their personal information, and request paid time off. With TriNet Mobile, you have apps for expenses, time tracking, pay statements, and benefits. Whether you have full-time or part-time employees in one state or many states, the app gives you accurate, compliant payroll complete with secure processing, tax withholding, and reporting.
While the platform is robust and offers excellent HR features, TriNet is more expensive than the other options on this list. For this reason, more established startups typically go with TriNet.
Cost: TriNet does not publicly disclose its pricing plans. You must visit its website to get a customized quote.
At this point, you’re probably wondering if there is free payroll software. As far as your options go, Payroll4Free is the best one out there. Its completely free plan gives you access to several handy features if you have fewer than 25 employees on your payroll. Those features include payroll processing (for both W-2 employees and 1099 contractors), direct deposits (to your bank only), tax calculations and forms, vacation tracking, outside software integrations, HR functions, reporting, and live customer support.
Beyond those functions, you will have to pay extra. To deposit and file your taxes directly from your payroll software, you’ll have to pay $15 per month. Additionally, if you want to transfer direct deposit funds to your employees’ bank accounts—rather than your own—then you’ll have to pay another $15 a month. Payroll4Free’s platform is free because they do place small ads inside their software.
If your startup is in its infancy, Payroll4Free could be a good option for you. However, you’ll want to move to a paid platform with more features once you start growing.
Cost: Payroll4Free is free with the payroll add-on starting at $15 and the direct deposit add-on another $15.
Zenefits is technically a cloud-based HR platform with a payroll software add-on, but it’s an incredibly comprehensive payroll option. Zenefits has all the HR tools that make managing your people easy, from streamlined onboarding and easy PTO tracking to org charts, performance reviews, and more. It also simplifies the process of curating and providing benefits to your employees, from comprehensive healthcare plans to perks like commuter benefits.
From startups to enterprises, the Zenefits payroll platform is designed to address every situation. Each plan includes advanced payroll features such as unlimited pay runs, garnishment support, direct deposits, contractor payments, general ledger reporting, dynamic mobile paystubs, and more. The platform integrates with a variety of business tools such as G Suite, Slack, Salesforce, and Xero.
However, with so many features, Zenefits could be overwhelming for small startups. And for larger startups, the app doesn’t support all admin tasks, which could be a deterrent.
Cost: The least expensive plan, the Essentials plan, is $10 per month per employee.
10. Wave Payroll
If you are in the market for accounting and invoicing software, as well as payroll software, Wave Payroll might be the perfect fit. The company does charge for its payroll software, but the accounting and invoicing software are free, and they sync seamlessly. However, the cost of Wave Payroll will vary depending on where you are. In states where they can offer tax services, the cost is $35 per month, plus $6 per active employee or independent contractor. In states where taxes are considered “self-service,” the base price will be $20.
No matter which state you’re in, the features include unlimited free direct deposits, self-service check printing, payroll reminders, customer support, employee holds, tax filings where applicable, and paystubs and tax forms for employees. Wave Payroll also offers a free 30-day trial if you’re unsure if it’s the right fit for your startup. However, if you’re interested in payroll tax services, make sure to check with them. As of now, they provide those services for only 6 states.
Cost: Wave Payroll pricing starts at $20.00 per month.