Best Payroll Services For Small Business of 2023

Congraulations, your small business is expanding. Getting to a place where you can begin hiring and growing your team is a sign of financial success. On the other, managing payroll, especially if it’s your first time, can feel daunting.

Fortunately, there are a number of payroll services on the market that help streamline the process while handling a comprehensive array of employee benefits — like 401(k) plans and workers’ compensation — and onboarding logistics.

Below, CNBC Select highlights four of the best payroll services for small businesses. We evaluated each payroll service based on a range of features, including pricing, features, benefits administration and HR tools. (Read more about our methodology below.)

OnPay packs all of the payroll features your business could need into a simple platform at an affordable price. At a flat rate of $40 per month plus $6 per employee per month, OnPay offers some of the lowest pricing on the market.

It offers a number of HR and benefits tools and features including W-2 and 1099 processing, PTO, health insurance, 401(k) plans, life and disability insurance, liability insurance, commuter benefits, HSA and FSA. When people think of working for small businesses or startups, one of the biggest concerns is often that they don’t want to lose health insurance or retirement planning account contributions. So having access to “corporate” benefits makes the platform appealing to business owners who want to offer competitive perks.

Gusto offers simple, automated processes for business owners, including automatic W-2 and 1099 forms, unlimited payroll runs, state tax registration, international contractor payments, time off requests and approvals, PTO reporting, cost reports, tax credits and more.

The platform also offers a number of employee benefits administration and HR tools, including applicant tracking, custom onboarding checklists, offer letter templates, benefits advisors, 401(k) plans, 529 plans, HSA, FSA accounts and more. However, you may need to pay more to access all features. Gusto offers a limited “Simple” plan for $40 per month plus $6 per employee per month and a more comprehensive “Plus” plan for $80 per month plus $12 per employee.

Reviews suggest Gusto is easier to navigate than other platforms because of its simplicity and well-designed user interface. Both employers and employees describe the platform as user-friendly but even instances where users had to reach out to customer service for assistance received positive feedback on the experience.

Wave Payroll offers more limited features compared to bigger-name competitors, but can be a more affordable options for some businesses. That’s because Wave charges lower rates to businesses based in “self-service” states, where Wave doesn’t file payroll taxes automatically. However, Wave still allows you to export the appropriate forms, making it easy to go through the filing process manually.

States where businesses have the option to automatically file taxes include Arizona, California, Florida, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, Virginia, Washington and Wisconsin. All other states are considered self-service states.

Businesses in self-service states pay just $20 per month (plus $6 per month per employee and independent contractor). Businesses in states eligible for automatic tax services pay $40 per month plus $6 per month per employee and contractor. Best of all, you’ll only be charged that $6 fee for contractors you actually pay each month, so you won’t be charged for contractors or seasonal employees that are not actively working for you.

Intuit Quickbooks is a household name in the business bookkeeping space. So if your business has already been using this service for bookkeeping, the good news is you can also use the same platform for payroll.

At the same time, if you haven’t previously signed up for the bookkeeping service and want that in addition to payroll, there are plans for new customers as well. The packages are pricier compared to most other options, though. Without the 50% off three-month discount, plans start at $75 per month plus $5 per month per employee and can be as expensive as $170 per month. The more expensive the plan, the more features you get, such as same-day direct deposits, access to an HR Support Center and mobile time tracking.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every payroll service review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of small business products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best payroll services for small businesses.

To determine which payroll services are best for small businesses, CNBC Select analyzed over a dozen software companies and looked at their pricing, features, user reviews and ratings.

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