Payroll services for small business
Maria Arnedo
By: marnedo
Read in 11 minutes

Best Payroll Services for Your Small Business

Unless you are the only employee of your small business, then you are presumably having to contend with issues of payroll, taxes, compliance, insurance, unemployment, paid time off (PTO) and the like. As a small business, chances are you do not yet have a human resources department to guide and assist you with the payroll services and related tasks.

While you may want to believe you can handle things like small business payroll completely on your own, looking into payroll services would definitely be to your advantage. Think that one in three small businesses ends up being fined by the IRS and forced to pay stiff penalties, due to the correct fees not being paid and forms not being filed properly. You don’t want to be that business!

How Do Small Business Start Payroll?

Make sure you follow these steps to properly set up and use payroll services for small business:

  1. Obtain an employer identification number (EIN)
  2. Check whether you need state or local IDs
  3. Choose if the member of your team and independent contractors or employees
  4. Take care of any required employee paperwork
  5. Decide on a pay period
  6. Document your employee compensation terms
  7. Choose a small business payroll system
  8. Run the payroll
  9. Keep your records straight
  10. Report your payroll taxes

How Much Does It Cost to Have Payroll Services for Small Business?

When choosing a small business payroll service the first concern is usually the price. How much does it cost to use a payroll company? On average, a basic small business payroll service has a per-employee or per-check fee, in addition to the base account fee. While base account fees vary widely from one provider to the next, you can expect to pay anywhere from $20 to $100 per month, plus an additional $1.50-$5.00 per payroll run for each employee

Have in mind that, naturally, the cost of the payroll service will increase as your business and team grow. Some plans may offer various plans or tiers based on the number of employees you have. This is something to keep in mind when shopping around for payroll services, especially if you are looking to dramatically grow your business in a short period of time.

Lastly, try to choose a small business payroll that offers free quotes or free trial periods.

How Much Does a Small Business Pay in Payroll Taxes?

One of the benefits of utilizing payroll services for small business is not having to pay the payroll tax fees. Some payroll services even come with a guarantee: the promise that you won’t have to pay any fines, and if you do end up getting hit with any, the service will handle them.

This is, obviously, a big selling point for a lot of small businesses. If a payroll service doesn’t provide that guarantee, it doesn’t have to necessarily be a deal-breaker, depending upon what other services they offer. Besides, your taxes won’t be guaranteed if all of the payroll work is falling on your shoulders, anyway!

What Should You Look for When Shopping for Payroll Services for Small Business?

1. Excellent customer service – Just as you are devoted to providing high-quality customer service to your customers, does your small business payroll service provide the same for you? Are their customer support teams easily reachable via phone, email or live chatbox? Are their hours of availability convenient to the hours your business keeps? Do they respond quickly to email? When you speak with a support specialist, are they knowledgeable and helpful, getting your issue resolved quickly?

While shopping around for payroll services for small business, calling a few times to get a feel for their operations can give you a good idea as to whether or not you’ll be satisfied. Additionally, asking your fellow small business owners as to which payroll services they use and their experiences can also help guide you in the right direction.

2. Features that fit your small business – Some industries have specific needs regarding payroll. For example, do you own a restaurant, in which employees earn a lower base salary and tips? Do you have a sales team that earns their salaries on a commission-based structure? If so, then you will have different needs than those businesses who are paying their employees set hourly rates or yearly salaries, and you will want to ensure that your payroll service is able to work with you, accordingly.

3. Additional benefits – While some payroll services for small business may offer all kinds of added or bonus features, you will want to ask yourself if you actually need them. For example, if you only have a few paid employees, then you may not need anything more complex than the basics of paying your employees in full and on time, paying your payroll taxes appropriately and filing your tax forms on time and correctly.

However, if your small business is rapidly growing, then you may have additional needs or wants. There are various Human Resources-focused add-ons that may be worth the extra money, such as tracking vacation time, health insurance deductions, and the like.

4. Simplicity – Let’s face it, with everything else that goes into being a small business owner, the last thing you want to do is spend a lot of time on the phone with your payroll service’s customer service line or getting flummoxed by software glitches. Take the time to ask around to other small business owners, read reviews and take advantage of any free trial periods that may be offered so you can see if a particular service’s functionality works for you and if you (or, your staff) find it easy and user-friendly.

Best Payroll Software for Small Business

Now that we have gone through a quick synopsis of what to look for in a payroll service for your small business, let’s dive into which companies are out there and how they each add up.


Regardless of whether you are looking for a barebones payroll service, or you are need of something more comprehensive, Intuit will have a package for you.

  • Intuit Basic, which starts at $20 per month, plus $2 per employee/month, is a great price point for any small business. This package will calculate your payroll and taxes (although, it will not file your taxes).
  • Additionally, there is Intuit Enhanced, which is priced at a still reasonable $31.20 per month. The Enhanced program offers additional features beyond that of the Basic package, including tax form completion, filing and payment.
  • Lastly, Intuit offers a Full-Service package, which will run you $79 per month, but that is still quite reasonable, considering it will run the entire payroll, transfer data from other services and guarantee its accuracy.

2. Namely

Namely has become one of the biggest human resources services around. While their prices are not cited on their website, and you will need to call and speak with a representative to find out more about their pricing structures, Namely offers a full suite of payroll services and human resources tools.

Regarding payroll services, Namely will carry-out benefits deductions, pay and file all of your taxes, handle year-end reporting, provide access to payroll histories for your employees and ensure your compliance with regulations, among other services.

Additional helpful services include: assisting with employee benefits, such as health insurance, life insurance, and disability insurance while providing services for onboarding new employees and tracking performance reviews.

3. Paylocity

Paylocity is what you are looking for if you are looking for straightforward and efficient. In addition to offering apps to your employees that allow for clocking in and out, and checking their paychecks, their website allows employees to track vacation time, request time off, and print out year-end tax forms.

For the employer, Paylocity offers the same payroll services as many other payroll services, along with tracking retirement plans, wellness plans and compliance checking with the Affordable Care Act. Much like Namely, Paylocity also offers templates for onboarding new employees.

4. Gusto

At only $39 per month plus another $6 per employee, Gusto is still quite affordable for the small business owner, while providing many of the much-needed services, including check services, direct deposit, and benefits planning, among others. Much like Paylocity, Gusto provides employees with access to their information such as pay stubs and tax information, even after they have moved on.

In addition to filing all of your federal, state and local taxes, Gusto will easily integrate with your in-house accounting software. In fact, PC Magazine previously named Gusto the top small business payroll service.

Regardless of which payroll service you decide to go with for your small business, it’s always a good idea to keep your own records in the event of something unforeseen occurring. Additionally, don’t be afraid to change payroll services if you find that the one you initially chose doesn’t turn out to be the one that best meets your needs.

Keep Reading: Are You Hiring for the First Time? Here’s How to be Compliant


Check if you
qualify for a loan