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What’s the best payroll software for small businesses in 2021? [Pricing + Features]

Written by Kristen Grau on Sep 10, 2021 | Last updated on Sep 20, 2021
Reviewed by Sheila Malavet

The most popular payroll softwares are Gusto, ADP Run, QuickBooks and Square. Nearly 100 percent of the time, Gusto is your best choice.

Payroll software is a business necessity — even if your business is just you.

The most popular choices include Gusto, ADP Run, QuickBooks and Square. Let’s cut to the chase: We recommend using Gusto for payroll 99 percent of the time, especially for small businesses. It’s automated, affordable and easy to use. But most importantly, it will handle your payroll taxes and save you from penalties.

Although Gusto is arguably the best payroll software, it’s not the only one. Another software might be a better option for you depending on your business’ size, needs and preferences. However, these two payroll software features should be a must for every business owner:

  • Full-service payroll software: A full service payroll software handles your payroll tax calculations, tax filings and direct deposit for you automatically.
  • Accounting software integration: Your payroll software should be compatible with your accounting software to keep your finances organized and make your reporting easier.

There are also features that might not be essential, but set apart the decent softwares from the great ones:

  • Unlimited payroll: Nobody wants to be hit with a charge every time they do payroll. Some payroll softwares will let you run payroll as many times as you want without an extra charge — which is especially convenient if you run payroll weekly.
  • Transparent pricing: Most payroll softwares are upfront with their pricing, but some do require you to get a quote first. Clear pricing right off the bat can help you budget and know what you’re diving into.
  • Tax penalty protection: Nobody’s perfect — not even algorithms. If your software makes a mistake and you end up owing a penalty, some programs will pay it for you.

This review of four of the most popular payroll softwares will show you their features, benefits and drawbacks so you can make the best decision for your business.

At a glance: Gusto vs. ADP Run vs. Square vs. QuickBooks

Before diving into each software, see how each payroll software measures up when it comes to those important features.

 

Full-service?

Accounting software integration?

Unlimited payroll included?

Tax penalty protection?

Upfront pricing?

Gusto

 Yes   Yes   Yes   Yes   Yes 

ADP Run

 Yes   Yes   No   Yes   No 

Square

 Yes   Yes   Yes   Yes   Yes 

QuickBooks

 Yes   No*   Yes   Some plans   Yes 
*Only integrates with Quickbooks Online

Don’t let one limitation from a software turn you off completely. A software like ADP Run might be best for you even though you have to dig for a quote. QuickBooks might also be best for you, despite it only integrating with its own accounting software.

Gustogusto-logo

Editor’s note: We’re a Gusto partner, which means we may receive a commission if you sign up with this link. However, we’re recommending them because the small business owners we work with love using it. And we do, too.

Gusto is, by far, the easiest payroll platform to use. Small business owners tend to catch onto Gusto the fastest compared to other softwares.

Pros

Gusto is a great option for newer, smaller business owners because it’s so easy to figure out. Each plan is full-service, plus it integrates with several major accounting softwares.

Some of the other features we love about Gusto include:

  • Unlimited payrolls. Some payroll softwares will charge you for each payroll you run. Not Gusto. Gusto only charges a monthly fee based on how many contractors or employees you paid that month — so it doesn’t matter if you run one payroll or 50.
  • Easy onboarding and document management. When you make a new hire, Gusto will automatically request all their tax documents so you don’t have to.
  • Time tracking. You can integrate your time tracking software with every plan, but time tracking comes with two of their plans.
  • Affordable pricing. Not many of Gusto’s features are add-ons, so you could save on fees.

Like most payroll softwares, Gusto is compatible with both salaried employees and independent contractors.

Cons

Gusto’s great, but its’ not perfect. These are its two biggest flaws:

  • You can only contact customer service on weekdays. Other support teams, like QuickBooks, are available on weekends for limited hours.
  • Its most basic plan is missing a few key features. The cheapest plan offers two-day direct deposit, while the other two plans include next-day direct deposit. Another feature missing from the most basic plan is the ability to request PTO.

With those cons in mind, even the most affordable plan gets you the two most important features in a payroll software: automatic payroll taxes and accounting software integration.

Pricing

Core: $6/month per person + $39/month base price

Complete: $12/month per person + $39/month base price

Concierge: $12/month per person + $149/month base price

Contractor: $6/month per person + no base price

View each pricing plan’s features.

ADP Runrun-adp-logo

ADP’s small business option is called ADP Run. It’s robust and has nearly every feature you could ask for — but you might have to pay extra for it.

Pros

When it comes to features, ADP Run has an extensive list. It beats out the other softwares on this list especially when it comes to HR and legal options. These are some of its biggest advantages:

  • Robust HR resources. You can post jobs on ZipRecruiter, run background checks, access step-by-step HR trainings and create employee handbooks easily with some plans.
  • 24/7 customer service availability. If something goes wrong on the weekend, you don’t need to wait until Monday to fix it.

ADP Run also includes automatic tax filing and integration to accounting software with all their plans.

Cons

ADP Run has a lot of great features, but also some downfalls.

  • There’s no upfront pricing. If you want to find out how much each plan would cost you, you’ll have to wait for a quote.
  • Many of the features are add-ons that you’ll have to pay extra for. Some include health insurance, time tracking, retirement and workers’ compensation. The price of those add-ons aren’t clear on their website.
  • You’re cut off at 49 employees. You need to upgrade your plan as soon as your business grows to 50 employees.

If you’re willing to pay for quality features and do some digging to find the price, ADP Run might be a good option for you.

Pricing

Essential: Varies

Enhanced: Varies

Complete: Varies

HR Pro: Varies

You need to request a quote to find out what each plan would cost you. View each pricing plan’s features or ask for a quote.

QuickBooksquickbooks-logo

QuickBooks is primarily known for their accounting software, but they offer payroll software as well. It’s generally intuitive and easy to navigate — which would make it a good choice for newer business owners.

If you’re a fan of other QuickBooks softwares, it might be a good fit for you.

Pros

QuickBooks Payroll is decently priced, and each plan will cover the basics. Each plan is full-service, so you don’t have to worry about handling taxes on your own at all. These are some other perks:

  • Next-day direct deposit for employers with the most affordable plan. The most affordable plan on Gusto, for example, gives employees two-day direct deposit. You can get employees paid even sooner on QuickBooks’ Core plan for roughly the same price.
  • 30-day free trial. Not sure QuickBooks is for you? You can use it free for 30 days.
  • Works well with other QuickBooks software. We recommend using QuickBooks payroll if you’re using it already for accounting. It doesn’t integrate with other accounting softwares, but it works great with its own.

The free trial is one of the biggest advantages of QuickBooks, since most payroll softwares don’t offer one. Some platforms like Gusto provide demos, but won’t let you use it for free.

Cons

Although QuickBooks is easy to use, it’s not best for everyone — especially if you’re not using it for accounting. These are some other drawbacks to be aware of:

  • Only integrates with QuickBooks Online accounting software. You can’t integrate with Xero or other major accounting softwares, which can slow your reporting down and put more work on your plate.
  • Tax penalty protection is only available to some users. Mistakes happen, and payroll tax mistakes will sometimes leave you with a tax penalty. If you’re a Core or Premium user, you’re on the hook for paying it. Elite users aren’t.

Tax penalty protection isn’t necessary to have, but you should start saving in case you need to pay any fees.

Pricing

Core: $4/month per person + $45/month base price

Premium: $8/month per person + $75/month base price

Elite: $10/month per person + $125/month base price

View each pricing plan’s features.

Squaresquare-logo

Like QuickBooks, Square isn’t famous for their payroll. They’re known for their point of sale (POS) materials, like chip readers and registers.

Square is usually used by product-based businesses like in-person and online retailers and restaurants, and less by businesses that provide professional services. The same applies for its payroll service.

Pros

Square is the most affordable payroll software on this list. If you use Square products and you’re looking for something that just gives you the essentials, then Square might be a good option for you. These are some of its benefits:

  • Integrates with Square products. If you use Square’s POS products, you won’t have to worry about any integration or compatibility issues.
  • Affordable pricing. With a low, flat rate and a tax penalty protection, you know exactly how much you’re spending every month.
  • Keep track of tips. If you’re in an industry with frequent tips, Square makes it easy to record them for tax purposes.

Square really only takes care of the basics: your taxes, your payroll and your tax documents. That could be a good thing — or a bad thing if you’re looking for more resources.

Cons

Square is one of the simplest payroll softwares to use — but for some, it’s too simple. It lacks many of the features beyond tax filing and automatic payroll that other softwares have. These are the two biggest flaws with Square:

  • Only two plans to choose from. There are plans available for employees and contractors, and contractors only. Most other softwares give you at least three other options to choose from.
  • Limited functionality. Because Square is designed for a subset of businesses, it’s not robust. There are little to no HR or onboarding features that can help make payroll easier.

You can save a lot of money with Square. It might also cost you some convenient features.

Pricing

Employees and contractors: $5/person + $29/month base price

Contractors only: $5/person

View each pricing plan’s features.

Why Gusto is the best payroll software for small businesses

Gusto is the best because it's incredibly easy to use. Seriously, try it yourself.

It integrates with more than 100 different softwares and automates all your most important processes. Most importantly, it calculates and pays all your payroll taxes for you. Other payroll softwares do that too, but some of the other ones have limitations that Gusto doesn’t.

Gusto won’t make you upgrade if you reach 50 employees like ADP Run will. Gusto will integrate with nearly any of your other softwares, unlike QuickBooks. And Gusto comes with a much longer list of features than Square does.

Remember that every business has different goals and needs. You might need a software that’s different from Gusto — so talk to your accounting specialist to evaluate those needs and decide on the best fit.

The bottom line

Choosing a payroll software that’s right for your small business is an important decision — and one you need to make before you start paying your employees or yourself. You should opt for a software that handles those complicated payroll taxes for you and integrates with your accounting software.

There are dozens of payroll softwares out there that are designed with small businesses in mind. The most commonly used ones include Gusto, ADP Run, QuickBooks and Square. We think Gusto is the right choice for businesses most of the time, but that might change depending on your size and preferences.

Want an expert to set up your payroll software for you and guide you through the process? Talk to a DiMercurio Advisors team member today to take the stress away from payroll.

Talk with an advisor

Sheila Malavet

Sheila Malavet

Sheila loves to empower our clients and team members by building our infrastructure and mentoring new team members on the importance of our core values. When not having fun at DiMercurio Advisors she is spending time with her adorable daughter, Aleigh’ana.