Paying someone the right amount is the easy part. Payroll software exists for everything that comes after: withholding the correct federal, state, and sometimes local taxes, sending your share to the right agencies on the right schedule, and producing the W-2 or 1099 that shows up in someone's mailbox every January.
Get it wrong and it's not just an annoyed employee — it's penalties from the IRS and your state. Get it right, and it's about fifteen minutes every pay period.
This guide compares five options that actually fit a small business, from a solo owner hiring their very first W-2 employee to a growing team that wants benefits handled along with the paycheck.
The short answer
- Choose Gusto when you want the most complete, easiest-to-use option and you're hiring your first employee with zero payroll experience.
- Choose OnPay when you want full-service payroll at one flat, predictable price without extras pushed on you.
- Choose QuickBooks Payroll when your books already live in QuickBooks and you want payroll under the same login.
- Choose Justworks when you want health insurance, retirement, and HR support bundled in — not just a paycheck calculator.
- Choose Square Payroll when you already run Square for payments and pay a mix of hourly staff and 1099 contractors.
Quick comparison
| Software | Best for | Starting price | Main caution |
|---|---|---|---|
| Gusto | First-time employers who want guardrails built in | $49/mo + $6/employee | Full HR support lives on the $180/mo Premium tier |
| OnPay | Straightforward payroll without upsells | $49/mo + $6/employee | Fewer built-in extras — HR and time tracking cost more |
| QuickBooks Payroll | Businesses already using QuickBooks | $44/mo + $6.50/employee (intro rate) | Sold as an accounting bundle, not standalone-simple |
| Justworks | Teams wanting real benefits, not just a paycheck | $50/mo + $8/employee, or $79/employee for PEO | PEO pricing gets expensive fast as headcount grows |
| Square Payroll | Businesses already using Square for payments | $35/mo + $6/person, or $6/contractor with no base fee | Thinner HR tools than dedicated payroll platforms |
Prices are U.S. figures pulled from each provider's official pricing page in September 2026. Intro discounts, add-ons, and state-specific fees can change your actual total — always confirm the current number before you commit.
Gusto
Best first payroll system for a brand-new employer
Gusto built its reputation on making payroll feel less like an IRS form and more like an app. You answer plain-English questions, it calculates withholding and PTO, and payday runs itself once it's set up. It also handles state payroll tax registration in most states during onboarding — a step first-time employers often don't realize they need.
Gusto's Simple plan starts at $49 a month plus $6 per person, covering single-state payroll and basic PTO tracking. Plus ($80/mo + $12/person) adds multi-state payroll and next-day pay. Premium ($180/mo + $22/person) adds a dedicated advisor and real HR support — worth it once you have people questions, not just paycheck questions. A contractor-only plan runs $6 per person with no base fee if you're not running W-2 payroll yet.
OnPay
Best flat-rate payroll without the upsell
OnPay charges one number — $49 a month plus $6 per person — and that covers full-service payroll for W-2 and 1099 workers in all 50 states, unlimited pay runs, and every federal, state, and local tax filing. There's no stripped-down cheap tier missing pieces and no constant nudge toward a pricier plan.
The $49 base plus $6 per employee is the whole price. HR ($15 base + $2/worker) and time tracking ($15 base + $4/worker) are optional add-ons, not required to run payroll. New customers get the first month free.
QuickBooks Payroll
Best for a business already living in QuickBooks
If you're already tracking income and expenses in QuickBooks, adding payroll keeps everything — invoices, expenses, and now paychecks — under one login and one set of reports. Intuit has folded payroll into its Workforce bundles, so you're really choosing a QuickBooks Online tier with payroll built in, not a standalone payroll product.
The entry bundle runs $44 a month plus $6.50 per employee (an introductory rate, regularly $88), and includes full-service payroll, next-day direct deposit, and an employee portal alongside basic accounting. Higher tiers add time tracking, HR tools, and benefits administration, up to $101.50/mo plus $10/employee for the Premium bundle.
Justworks
Best when you want benefits bundled with payroll
Justworks is built around the idea that a small business shouldn't have to shop for health insurance, workers' comp, and a 401(k) separately from payroll. Its PEO (professional employer organization) plans give a small team access to the kind of group benefits usually reserved for much bigger companies, plus a layer of HR and compliance support.
Payroll-only runs $50 a month plus $8 per employee. The full PEO plans price per employee instead — $79/employee for PEO Basic, $124/employee for PEO Plus with medical, dental, vision, and HSA/FSA administration included. That per-head pricing adds up fast as you grow, so weigh it against buying benefits separately before you commit.
Square Payroll
Best if you already run Square for payments
If you're already swiping cards through Square, Square Payroll plugs straight into the timecards, tips, and sales data you're already generating — useful for a shop or service business paying hourly staff. It also has a genuinely simple contractor-only plan if you're not ready for W-2 employees yet.
Full-service payroll is $35 a month plus $6 per person paid. Paying contractors only drops the base fee entirely — it's just $6 per contractor paid, with no monthly minimum.
Getting payroll right before your first pay run
Before you run your first paycheck, a few things matter more than which software you pick:
How we evaluated these payroll and HR platforms
We reviewed each provider's current official pricing and product pages, comparing base fees, per-employee costs, what's included at the entry tier versus locked behind an upgrade, state tax registration support, and how far each one goes into HR and benefits. We didn't run a hands-on payroll test with live employee data.
Frequently asked questions
Do I need payroll software if I only have one employee?
Yes. Even one employee means withholding taxes correctly, depositing them with the right agencies on the right schedule, and issuing a W-2 in January. Software handles the calculations and deadlines automatically; doing it by hand means you're responsible for catching every rule change yourself.
What's the real difference between a 1099 contractor and a W-2 employee?
It comes down to control, not preference. If you set their hours, direct how the work gets done, and it's ongoing rather than project-based, the IRS generally expects W-2 treatment, regardless of what the paperwork says. Misclassifying an employee as a contractor to avoid payroll taxes can trigger back taxes and penalties.
How long does it take to set up payroll for the first time?
Plan on a few days to a couple of weeks, not months. Most of that is waiting on your state tax accounts to be issued, not filling out the software itself. Gusto and OnPay can handle much of that state registration for you, which is the main time-saver worth paying attention to.
Keep the business moving
Browse practical software comparisons organized around the decision in front of you.
Before you pay for another app
Use our free checklist to check the full cost, try one real task, and decide whether the app is worth keeping.
Use the free checklistNo email needed. You can print it or save it as a PDF.