How to choose the best small business payroll service

10 minutes

You hired a new employee to give you a hand with your business. So why does it feel like so much extra work?

Every time you hire someone, you have a series of new responsibilities: filling out forms, tracking time, paying taxes, and complying with business and industry regulations.

Managing payroll can be tough for anyone, but it places a particular strain on small business owners who are already facing a crunch for time. But that doesn't mean you have to handle your payroll needs alone.

Modern business owners can rely on third-party software to help. These payroll options can provide the tools you need to run payroll yourself — though many providers also offer full-service payroll solutions to handle every part of your payroll needs.

Here we'll show you how to take advantage of these payroll options and help you find a payroll solution that's right for your business.

What to look for in a small business payroll service

For many small business owners, outsourcing payroll services is the smart choice, as it saves the most time. The best way to keep yourself focused on your business is to let a payroll company handle these administrative tasks.

Here are some features to look for when you're considering a switch to a small business payroll service provider:

Payroll features

A full-service payroll provider will offer assistance in every aspect of your payroll process, helping you not only with taxes (see below), but also with workforce management tasks. This includes:

  • Direct deposits
  • Employee benefits
  • Workers' comp
  • State unemployment insurance

The best payroll services can help you with each of these needs, along with providing detailed payroll reports to help you better manage your company and its employees.

Compliance with payroll taxes

This is the big one. Small businesses have to navigate the often-confusing world of changing tax laws in order to remain compliant with all federal and local taxes. The right payroll processing service can help you oversee your taxes, as well as helping you with year-end tax filing and other processing needs.

Data Integration

Outsourcing payroll won't leave you in the dark about your company's cash flow. Today's top payroll services offer integration capabilities, so you can link your payroll data with your point of sale system, general ledger tools, and any retirement or benefit packages you might have. This will give you a comprehensive picture of your company's financial health and help you plan for the future.

Ease of use

Your payroll service shouldn't require an advanced degree to use. Many modern small business payroll services offer a self-service employee portal so that your staff can view their pay stubs and year-end tax forms on their own. You might also look for companies that provide a clear path to customer service if you have trouble getting set up.


Finally, you'll need to consider the cost of outsourcing your company's payroll needs to a third-party provider. In some cases, you may be able to omit certain HR features to reduce the cost, though you'll have to carefully evaluate which core payroll processing tasks you have time to handle on your own. You may find value in outsourcing your needs to a provider simply to save yourself time.

How to choose the best payroll services for small businesses

Payroll services come in two basic forms. Full-service payroll basically allows you to outsource all of your payroll needs to an online payroll company. This can save time, though some small business owners can save money if they process payroll themselves.

It may sound intimidating to process payroll on your own, but the entire process can be streamlined through small business payroll software that can assist you at every step of the way.

Many payroll providers offer a full-service and a self-service option. This lets you decide which processes you choose to outsource (if any) and which processes you'll run yourself or automate through the payroll software.

Below, we'll cover some of the best small business payroll options available in 2021, helping you find the payroll software that's right for you.

Invoice2go + Gusto Payroll

We like Gusto Payroll services so much that we made them our partner! Invoice2go, a company's customers can sign up with Gusto Payroll with just a few easy clicks, integrating accounts to provide a seamless small business management platform.

Gusto Payroll (once known as ZenPayroll) offers a number of features that make it attractive for small businesses. All of their plans include the following:

  • Full-service payroll
  • Employee self-service
  • Health benefits
  • Workers' comp administration
  • Options for making contractor payments

Gusto can also be counted on to automatically complete your required tax forms and file them with the government each time you run payroll. Higher plans contain additional HR services, including time tracking and other automated features.

Gusto Payroll starts at $39 per month, with an additional fee of $6 per employee. However, if you're looking to pay contractors, you can use Gusto Payroll without the base price and simply pay $6 per contractor. These flexible features make Gusto Payroll one of the most popular payroll services for small businesses.

QuickBooks Payroll

This software is something of a household name among small business owners, many of whom are familiar with the company's popular accounting software. QuickBooks Payroll offers three distinct payroll plans that you can choose from, depending on the unique needs of your business.

The obvious advantage of QuickBooks payroll is its ability to integrate seamlessly with other Intuit software – as well as with Invoice2go. But the payroll service also provides full-service payroll and calculates payroll tax automatically.

The company offers a free trial period for each of their plans, after which users pay a monthly fee of $45, $75, or $125, plus an additional $4 per employee. 

While it's hard to deny QuickBooks' strong reputation, this particular service may be best for those already using QuickBooks for other business accounting needs.

QuickBooks Online Payroll

While we'd covered QuickBooks Payroll's full-service features above, small businesses can still take advantage of the payroll software offered by this industry giant. This can be a particularly attractive option for small business owners who are already operating QuickBooks Online or QuickBooks Desktop, as integrating other accounting software will be seamless.

The lower-tier pricing plans of QuickBooks online will cost $45 per month, with an additional $4 per employee. However, higher-tier plans can offer advanced features, like next-day direct deposit or even same-day direct deposit for its most advanced plans.

Patriot Payroll

Patriot Payroll offers a simple, affordable payroll solution for small businesses seeking to cover their basic payroll needs. Pricing starts at just $10 per month, with an additional fee of $4 per employee.

Patriot Payroll provides a number of great features, including:

  • Free payroll setup
  • Direct deposit
  • An employee portal
  • Integrations for accounting software and other tools

Again, Patriot Payroll ranks among the most affordable small business payroll providers, though this may also make them less valuable for companies that grow to over 100 employees.

PayChex Flex

Though Paychex offers payroll options for businesses of any size, small business owners might especially want to check out PayChex Flex. This service offers a great set of cloud-based features, including:

  • Full-service payroll
  • Reporting and analytics
  • Employee portal and self-management tools
  • New hire reporting
  • Business insurance
  • 24/7 customer support

This can be a great option for growing businesses, though some users may be turned off by the quote-based pricing.

While other companies charge a monthly fee, PayChex Flex offers to provide a quote based on the features you want and the size of your business, making it challenging to compare their services to other payroll companies.


Retailers who use Square for their POS systems may be pleased to know that Square also provides a payroll solution that syncs with your existing software.

Square offers payroll features that include:

  • Direct deposit
  • Integrations for time-tracking and team management
  • Integrations with benefits providers

Employees will also have access to a portal through which they can access their health insurance, 401(k), and year-end tax forms.

Square charges a flat monthly fee of $35, plus an additional $5 per employee, though you can pay contractors without paying this monthly fee.

However, the other HR support tools that Square can partner with may require an additional charge, so your final price and experience might depend on the integrations that your business requires.


OnPay offers small business owners an affordable, comprehensive solution for their payroll needs. It gives users access to:

  • Direct deposit automation
  • Unlimited payroll runs
  • Filing options for state and federal taxes
  • Integrations for accounting and time-tracking software

OnPay also includes some core HR support features, helping you with new hire paperwork and options to manage benefits.

The service also offers some basic financial protection for particular industries, including minimum wage tip makeup and solutions for nonprofits and religious organizations that are exempt from paying certain payroll taxes, such as federal unemployment.

Users can expect to pay a monthly fee of $36, plus an additional charge of $4 per employee. Small businesses can manage this payroll software through the company's mobile app for maximum flexibility.


While ADP's complete plan offers a full-service option, small business owners can use their basic plans to run payroll through their payroll software. All of their pricing is quote-based, which can make it frustrating to try to compare plans.

Their most basic plans offer core features that can be helpful for small businesses of less than 50 employees. These features include:

  • Direct deposit
  • Time tracking and attendance tracking features
  • Employee self-service portals for benefits administration and taxes

ADP offers a series of plans that can be tailored to your business. Their most advanced plans include HR support like training and educational services.


Powered by PayChex, SurePayroll provides payroll software in a desktop format as well as a mobile app. Small businesses can benefit from SurePayroll's features, which include:

  • Flexible payroll schedules
  • Online payroll reporting options
  • A guarantee on all federal and local taxes

SurePayroll also has options for paying contractors and work-from-home employees, if that applies to your organization.

Like PayChex, SurePayroll offers quote-based pricing, and the final cost will depend on whether you want a full-service provider or if you choose to run payroll yourself.

The right payroll software for your business

How do you know when it's time to invest in payroll software? The answer, most likely, is now. Your time is too valuable to spend on administrative and HR tasks. Get back to running your core business by relying on small business payroll software.

At Invoice2go, we provide a variety of solutions that can help you manage and grow your business. We can streamline your invoicing and other financial processes. Through our partnership with Gusto, we can now streamline your payroll needs.

Why not give us a try by signing up for our 30-day free trial? Experience the advantage of industry-leading automation today!

Frequently Asked Questions About Payroll Service & Software 

Running payroll isn't easy. Here are some common questions we hear about the process:

Do I need payroll software for one employee?

If your business consists of just one or two employees, you can still reap the benefits of payroll software. Even the basic payroll features of the self-service applications above can automate your process to help you pay employees and manage payroll taxes with ease, all while ensuring that you stay in compliance with federal and local tax requirements.

How do I use payroll software for salaried employees?

Full-time employees can be managed easily using payroll software. Most of the programs we've reviewed allow you to make regular direct deposits and manage benefits, payroll taxes, and more for each of your staff members. This makes it easy to handle salaried employees as well as contractors.

How do I choose between outsourcing and running payroll myself?

This is not an easy question. The answer will depend on the size of your business, the number of employees you have, and the time you have to devote to payroll and management. Larger businesses of 50 or more employees can benefit from full-service payroll, but even smaller, growing companies can benefit from this kind of outsourcing to ease the burden on management.

Invoice2go is here to help you with your small business payroll service needs. 


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