Best Payroll Services for Small Businesses in 2025

Running payroll as a small business owner can be daunting. Tracking hours, calculating taxes, ensuring compliance, and correcting errors can be overwhelming and costly. This administrative burden can divert focus from growing your business.

At Lift HCM, we have guided small businesses through payroll and HR complexities for over five decades. Our payroll software simplifies processes, reduces errors, and saves time. This article highlights the best payroll services for small businesses in 2025, comparing features, pricing, support, and scalability.

By the end, you'll know which solution suits your needs and why Lift HCM offers reliable, expert support. We've crafted this guide based on our extensive experience with small businesses, providing insights into budget-friendly and comprehensive payroll solutions.

Table of Contents

• Why Small Businesses Are Choosing Payroll Services
• How to Choose the Best Payroll Service for Your Small Business
• Top Payroll Software for Small Businesses in 2025
• Simplify Payroll and Focus on Growing Your Business with Lift HCM

Why Small Businesses Are Choosing Payroll Services

Payroll isn't just about paying people; it's a critical function that demands accuracy, strict compliance, and significant time investment. For small businesses, managing payroll manually or with outdated systems can lead to a multitude of pain points.

The Hidden Costs of Manual Payroll:

• Time Drain: Manually calculating wages, deductions, and taxes, then preparing and filing forms, consumes valuable hours that could be spent on core business activities or strategic growth.
• Compliance Risks & Penalties: Constantly changing federal, state, and local tax laws (like FICA, FUTA, SUTA, and local withholding) make compliance a minefield. Mistakes can lead to hefty fines, legal issues, and even audits.
• Error Prone: Human error in calculations or data entry can lead to overpayments, underpayments, or incorrect tax filings, causing employee dissatisfaction and requiring time-consuming corrections.
• Confusing Onboarding & Changes: Managing new hires, terminations, raises, or benefits adjustments manually is complex and prone to administrative oversight.
• Lack of Data Security: Storing sensitive employee and financial data manually or in unsecured spreadsheets poses significant security risks.

The Unmatched Benefits of Automated Payroll Solutions:

Modern payroll services are designed to eliminate these stresses. By automating crucial tasks, they provide:

• Guaranteed Accuracy: Automated calculations for wages, taxes, and deductions drastically reduce errors.
• Effortless Compliance: Services automatically update to reflect current tax laws and regulations, handling tax filings (941, 940, W-2s, 1099s) on your behalf.
• Time Savings: Free up hours of administrative work each pay period, allowing you to focus on strategic initiatives.
• Employee Self-Service: Empower employees to access pay stubs, W-2s, and update personal information, reducing inquiries to HR.
• Scalability: Grow your business without outgrowing your payroll system, as services adapt to increasing employee numbers and evolving needs.
• Enhanced Security: Robust security protocols protect sensitive payroll data.
• Integrated HR Features: Many services offer integrated HR tools, from onboarding to benefits administration, streamlining workforce management.

How to Choose the Best Payroll Service for Your Small Business

Selecting the ideal payroll service requires a strategic approach. Here’s what to prioritize when making your decision:

Key Features to Prioritize:

• Full-Service Payroll & Tax Filing: Does the service handle all federal, state, and local tax calculations, withholdings, and filings automatically? This is paramount for compliance and peace of mind.
• Direct Deposit: A non-negotiable for modern businesses, offering convenience for employees.
• Employee Self-Service Portal: Allows employees to view pay stubs, tax documents, and manage personal information, reducing administrative burden.
• Time Tracking Integration: Seamlessly connect with time and attendance systems to simplify hourly wage calculations.
• HR Features: Consider if you need integrated HR tools like onboarding, benefits administration, PTO tracking, or performance management.
• Reporting Capabilities: Robust reporting helps you analyze payroll costs, track trends, and ensure compliance.
• 1099 Contractor Payments: If you work with independent contractors, ensure the service supports 1099 payments and year-end filing.

Understanding Pricing Models:

• Base Fee + Per Employee: Many services charge a monthly base fee plus an additional fee per employee or contractor.
• Tiered Plans: Different plans offer varying levels of features at different price points. Understand what’s included in each tier.
• Hidden Fees: Always inquire about potential extra costs for year-end tax forms, off-cycle payrolls, or customer support.

Evaluating Customer Support:

• Availability: Is support available via phone, email, or live chat? Are the hours convenient for your business?
• Expertise: Do support representatives truly understand payroll intricacies and tax laws, or are they simply general tech support?
• Dedicated Account Manager: For larger small businesses, a dedicated account manager can provide personalized assistance.

Scalability for Future Growth:

• Will the service accommodate a growing workforce?
• Can it handle multi-state payrolls if your business expands geographically?
• Does it offer more advanced features (e.g., HRIS, talent management) that you might need in the future?

Top Payroll Software for Small Businesses in 2025: In-Depth Reviews

Let’s dive into the best payroll services of 2025, analyzing them based on features, pricing transparency, customer support responsiveness, and overall ease of use for small business owners.

Gusto: Comprehensive Solution for Payroll & Benefits Management

Gusto offers a robust payroll solution tailored for small to mid-sized entities, encompassing benefits administration and HR tools. 

• Best for: Small to mid-sized businesses seeking an all-in-one platform for seamless payroll, benefits administration, and integrated HR tools. Ideal for businesses prioritizing employee experience and comprehensive features.
• Key Features:
  • Full-service automated payroll, including federal, state, and local tax filing (941, 940, W-2, 1099).
  • Robust benefits administration: Health insurance, 401(k)s, workers' comp, and more.
  • Integrated time tracking and PTO management to streamline hourly payroll.
  • Employee self-service portal for pay stubs, W-2s, and personal info updates.
  • Automated new hire reporting.
  • Employee financial wellness tools.
• Technology & Software: User-friendly, intuitive cloud-based platform, accessible on any device. Designed specifically for ease of use for small business owners.
• Integrations: Extensive integrations with popular accounting software (QuickBooks, Xero, FreshBooks), time tracking (TSheets, Homebase), and productivity tools (Asana, Slack).
• Pricing:
  • Simple Plan: $40/month + $6/employee (Core payroll, tax filing, employee self-service).
  • Plus Plan: $60/month + $9/employee (Adds full HR features, time tracking, project tracking).
  • Premium Plan: Custom quote (Advanced HR, dedicated support, R&D tax credit advisory).
  • Contractor Plan: $6/contractor per month (For 1099 contractors only).
• Customer Support: Available via phone, email, and live chat. Higher-tier plans receive priority support.

OnPay: Affordable Payroll with Built-in Compliance

OnPay simplifies payroll processes for small businesses with essential payroll features and HR compliance tools. 

• Best for: Budget-conscious small businesses that require strong compliance features and a straightforward, easy-to-use payroll system without excessive bells and whistles.
• Key Features:
  • Automated payroll and tax filing for all 50 states.
  • Built-in HR compliance tools and resources.
  • Employee self-service capabilities.
  • Workers' compensation tracking and pay-as-you-go options.
  • Garnishment payment services.
  • Unlimited pay runs.
• Technology & Software: Mobile-friendly, cloud-based platform known for its simplicity and ease of navigation.
• Integrations: Seamlessly connects with QuickBooks, Xero, TSheets, and Deputy.
• Pricing: Simple, transparent pricing at $40/month + $6/employee.
• Customer Support: Accessible via email, phone, live chat, and a comprehensive online help center. Known for responsive and knowledgeable support.

Paychex: Personalized Payroll with Added HR Tools

Paychex is a software service for W-2 employees and 1099 contractors. In addition to payroll, it provides a variety of HR tools, customizable user roles for tailored access, and integrations with time tracking, attendance management, and other business management systems.

• Best for: Small to mid-sized businesses seeking a highly customizable payroll solution with a strong emphasis on personalized service and robust HR management capabilities. Excellent for those who value dedicated support.
• Key Features:
  • Full-service payroll for W-2 employees and 1099 contractors, with automated compliance.
  • Extensive HR tools: Time tracking, benefits administration (health, retirement), recruiting, and onboarding.
  • Financial wellness programs for employees.
  • Customizable user roles for tailored access.
  • Access to HR advisors and compliance experts.

• Technology & Software: Paychex Flex, a comprehensive cloud-based solution. Offers powerful reporting and analytics.
• Integrations: Broad integration ecosystem including QuickBooks, Sage, BambooHR, JazzHR, TSheets, NetSuite, and custom APIs.
• Pricing:
  • Flex Essentials: Starts at $39/month + $5/employee (Basic payroll and tax filing).
  • Flex Select & Pro: Custom pricing based on required features and number of employees. Offers more advanced HR and dedicated support.
• Customer Support: 24/7 phone support, dedicated account manager options, and extensive online resources.

Rippling: Unified IT and Payroll for Tech-Savvy Companies

Rippling merges payroll, HR, and IT into a single platform, which is ideal for varying business sizes with customization and automation. 

• Best for: Rapidly growing or tech-savvy businesses that need a single, unified platform to manage not only payroll and HR but also IT and device management. Ideal for streamlining administrative tasks through extensive automation.
  
  
• Key Features:
  • Unified platform for payroll, HR, and IT management.
  • Extensive automation for administrative tasks (e.g., onboarding, offboarding, device setup).
  • Global payroll capabilities (for international teams).
  • Device and app management for seamless onboarding and security.
  • Benefits administration, time tracking, and expense management.
• Technology & Software: Highly customizable, cloud-based platform with powerful automation workflows.
• Integrations: Integrates with thousands of apps, including QuickBooks, Xero, BambooHR, Greenhouse, Slack, Google Workspace, Okta, and Microsoft Azure. Offers robust developer APIs.
• Pricing: Starts at $8/user per month for core platform (custom quotes for specific modules and advanced features).
• Customer Support: Available via phone, email, live chat, and an extensive knowledge base.

ADP Run:  Scalable Solution for Growing Small Businesses

ADP Run is designed for small businesses with under 50 employees. It offers a range of features, including payroll processing and HR tools, that can be customized to meet your business's needs. The platform also provides customer support to assist with any questions or issues that may arise.

Best for: Small businesses (typically under 50 employees) that anticipate significant growth and require a highly scalable payroll and HR solution backed by an industry leader.

• Key Features:
  • Flexible payroll scheduling (weekly, bi-weekly, semi-monthly, monthly, off-cycle).
  • Mobile app for convenient payroll management on the go.
  • Comprehensive compliance support including new hire reporting, tax filing, and wage garnishments.
  • Access to HR tools, forms, and best practices.
  • Background checks and screening services.
• Technology & Software: Secure, cloud-based platform with advanced security features. Known for its robust infrastructure.
• Integrations: Integrates with QuickBooks, Xero, and ZipRecruiter. Connects with over 700 insurance carriers and financial institutions for benefits.
• Pricing: Varies significantly based on features and employee count, but a common starting point is around $79/month + $4/employee. Custom quotes are standard.
• Customer Support: 24/7 expert support, including HR advisory services, providing comprehensive guidance.

SurePayroll: Reliable and Affordable Payroll Option

SurePayroll, a subsidiary of Paychex, is designed for small businesses and offers a suite of services to manage payroll processes. These include tax filings and payroll processing, along with optional features such as retirement plans and health insurance support, which may incur additional fees.

• Best for: Small businesses seeking a straightforward, reliable, and cost-effective payroll solution, especially those new to automated payroll. As a subsidiary of Paychex, it offers stability.
• Key Features:
  • Automated tax filing and compliance management.
  • Workers' compensation integration (pay-as-you-go).
  • Flexible payroll options (direct deposit, paper checks).
  • Employee self-service portal.
  • Support for both W-2 employees and 1099 contractors.
• Technology & Software: Cloud-based platform with a mobile-friendly interface designed for simplicity.
• Integrations: Integrates with popular accounting software like QuickBooks, Xero, Sage, FreshBooks, ZohoBooks, and time tracking solutions like Homebase, BuddyPunch.
• Pricing: Generally starts at $29.99/month + $5/employee. Additional features like retirement plans or health insurance support may incur extra fees.
• Customer Support: Available via phone, email, and live chat, with a helpful online knowledge base.

Patriot Payroll: Simple, Budget-Friendly Solution for Core Needs

Patriot Payroll is designed for small businesses looking for a simple, cost-effective payroll solution that integrates payroll, tax filing, HR, and accounting services. However, it lacks mobile support and international payroll capabilities.

• Best for: Very small businesses or startups looking for an incredibly simple and budget-friendly payroll system, ideal for core payroll and tax filing needs.
• Key Features:
  • Two main options: Self-service payroll (you handle tax filings) or full-service payroll (Patriot handles tax filings).
  • Automated tax filing in the full-service plan.
• User-friendly setup and interface.

• • Free direct deposit.
  • Support for W-2s and 1099s.
  • Basic HR and accounting integrations.
• Technology & Software: Cloud-based platform known for its minimalist design and ease of use. Lacks mobile support and international payroll capabilities.
• Integrations: Integrates with QuickBooks Online, QuickBooks Time, GoCo, Plaid, and Vestwell for Retirement Plans, WorkforceHub.
• Pricing:
  • Basic Plan (Self-Service): $17/month + $4/employee.
  • Full-Service Plan: $37/month + $4/employee (Highly competitive for full service).
• Customer Support: Available via phone, email, and a helpful online help center.

Simplify Payroll and Focus on Growing Your Business with Lift HCM

Choosing the right payroll provider for your small business requires careful consideration of your business size, budget, and unique operational needs. When evaluating your options, remember to prioritize:

• Ease of Use: Opt for intuitive, user-friendly software that minimizes your learning curve and daily effort.
• Scalability: Ensure the service can seamlessly grow with your business, accommodating more employees or expanding operations without disruption.
• Compliance Support: Verify the provider’s expertise and commitment to staying current with all federal, state, and local tax laws and regulations.
• Customer Support: Look for responsive, knowledgeable assistance that can quickly resolve issues and provide expert guidance.

At Lift HCM, we don't just offer payroll software; we provide a partnership built on transparency, personalized service, and decades of expertise. With over fifty years of experience serving small businesses, we understand the intricacies of payroll, HR, and compliance like no other. Our robust Human Capital Management (HCM) solutions are designed to simplify your operations from start to finish, ensuring accuracy and peace of mind.

Don't let payroll challenges hold your business back. Reach out to Lift HCM today for a personalized consultation. Discover how our tailored payroll and HR solutions can support your unique needs, streamline your operations, and help your small business thrive.

Frequently Asked Questions (FAQs) About Small Business Payroll

Q1: What is full-service payroll, and why is it important for small businesses?

A1: Full-service payroll means the provider handles all aspects of payroll, including calculating wages, deductions, and taxes, as well as submitting all federal, state, and local tax filings on your behalf. This is crucial for small businesses to ensure compliance, avoid penalties, and save significant time.

Q2: How much do payroll services for small businesses typically cost?

A2: Payroll service costs vary. Most providers charge a base monthly fee (ranging from $20-$100+) plus a per-employee fee (typically $4-$12 per employee per month). Some offer tiered plans with more features at higher price points. Always get a clear quote that outlines all potential fees.

Q3: Can payroll services handle both W-2 employees and 1099 contractors?

A3: Yes, most leading payroll services can handle both W-2 employees and 1099 contractors, including calculating and filing relevant tax forms (W-2s and 1099s) at year-end. Always confirm this feature if you work with contractors.

Q4: What is the benefit of employee self-service portals?

A4: Employee self-service portals empower your team to access their pay stubs, W-2s, and update personal information directly. This reduces administrative tasks for HR/payroll staff, improves employee satisfaction, and ensures data accuracy.

Q5: How does a payroll service help with tax compliance?

A5: Payroll services automate tax calculations and deductions (federal, state, local), keep up-to-date with changing tax laws, and file all necessary tax forms (e.g., Form 941, Form 940, state unemployment taxes) on time. This significantly reduces the risk of non-compliance and associated penalties for small businesses.