The Best Payroll Software for Small Businesses (US Guide)
Gusto, QuickBooks Payroll and other options compared for small US businesses: what payroll software does, what it costs per employee and how to choose.
Getting payroll wrong is expensive: late tax filings mean penalties, and mistakes in someone's pay damage trust fast. Payroll software handles the calculations, tax withholding and filings automatically, which is why most small businesses use it from their first hire.
This guide focuses on the United States, where payroll tax rules are particularly complex.
What payroll software does
- Calculates pay, overtime and deductions
- Withholds and pays federal, state and local taxes
- Files payroll tax forms, and W-2s and 1099s at year-end
- Pays employees by direct deposit
- Often handles benefits, PTO tracking and onboarding paperwork
Gusto: the small business favourite
Gusto is popular because it's easy to use, for owners and employees alike. Payroll runs are unlimited, tax filings are automatic and new hires can onboard themselves.
Price (as of 2026): the Simple plan is about $49 a month plus $6 per person, after a price increase in early 2026. For a 10-person team, that's about $109 a month. Multi-state payroll requires the Plus plan, at about $80 a month plus $12 per person.
Best for: most small businesses with employees in one state.
QuickBooks Payroll
If you already use QuickBooks Online for accounting, its payroll add-on keeps everything in one place, with paychecks and taxes flowing straight into your books.
Best for: businesses already on QuickBooks. See the best accounting software for small businesses.
Other options worth a look
- ADP and Paychex: large, established providers with lots of HR features, often a good fit as you grow. Pricing is usually by quote.
- Contractor-only payroll: if you only pay freelancers, several providers (including Gusto) offer cheaper contractor-only plans.
How to choose
- Using QuickBooks already? Start with QuickBooks Payroll.
- Want the simplest experience for a small team? Gusto.
- Employees in several states? Check multi-state pricing carefully; it changes the cost a lot.
- Need HR features like benefits administration and compliance help? Compare Gusto's higher plans with ADP or Paychex quotes.
Questions to ask before you sign up
- What's the total monthly cost for my current team, and for double the team?
- Are year-end W-2 and 1099 filings included?
- Is there a tax filing accuracy guarantee, and what does it cover?
- How easy is it to switch mid-year?
Payroll and employment law vary by state. For anything complex, like contractors versus employees or multi-state rules, talk to an accountant.
