How to choose payroll software for a small business

The short checklist

1. Full service or math only? Patriot Basic ($17 + $4 per person) does the calculations and leaves filing to you; its Full Service plan ($37 + $5) files.
2. Read the tax filing guarantee: penalties, interest, notice deadline and cap.
3. List every state and city where your people live and work, and price the extra-state fee.
4. Price your headcount with the formula base + (per-person fee x people paid).
5. Count contractors and check how they are billed.
6. Check integrations with your accounting, time tracking and POS.
7. Check support hours and channels.
8. Read the cancellation clause and how long you keep access to W-2s and reports.

Tax filing guarantee: what it covers

Tax filing errors are the biggest payroll complaint in our buyer research: reviewers report IRS and state notices and penalties the provider would not pay. The guarantees differ more than the marketing suggests.

Every guarantee excludes errors caused by data you entered. The notice deadlines are the trap: if you miss Gusto's or QuickBooks' window, the promise may not apply. More in the payroll compliance checklist.

State and local coverage

• Extra states cost extra on some plans: $12 a month per state on QuickBooks and Patriot, $9.99 on SurePayroll. Gusto Simple covers one state only. OnPay includes multi-state.
• Registration is usually your job. Gusto is the only provider in our research confirmed to open new state tax accounts for you, through a one-time Middesk registration or Business Compliance at $85 per state per month. QuickBooks and ADP expect you to register and supply the ID numbers.
• Local taxes. Some cities tax wages. Philadelphia's resident wage tax is 3.735% from July 1, 2026, and employers located in Pennsylvania withhold it from Philadelphia residents wherever they work. Check that the software files your locals; see Philadelphia wage tax and the payroll tax hub.

Pricing model, contractors and integrations

Almost every small business plan charges a monthly base fee plus a fee for each person paid that month. The base fee matters most for tiny teams, the per-person fee once you pass about 10 people.

Ask any quote-only provider whether the fee is per month or per pay run. At $4 to $6 per employee per pay run (Fit Small Business's July 2026 Paycom quote), a weekly payroll with 52 runs costs about twice a biweekly one with 26. Every plan is priced in what payroll services cost.

Contractors. They usually count as people paid. Wave charges $6 per contractor paid, Justworks $8 per US contractor, and Square's contractor-only plan is $6 per contractor with no base fee. See paying contractors.

Integrations. QuickBooks Payroll bundles QuickBooks Online accounting, Wave runs alongside free Wave accounting, and Square Payroll pulls hours from Square POS timecards. Ask which accounting, time tracking and POS systems sync before you sign.

Support and getting your records out

Reaching a person who can fix a problem is the most common complaint across all providers in our buyer research. Gusto publishes support hours that include weekends; Wave lists no phone support; an OnPay reviewer on Trustpilot (August 14, 2026) described ticket replies taking three to four months.

Check access after you leave. Patriot keeps reports, 941s, W-2s and 1099s downloadable after you cancel. Wave's access ends at the end of the month you cancel. QuickBooks keeps payroll data for one year, and its help page says W-2s require an active subscription.

Red flags

• Hidden year-end W-2 fees. SurePayroll charges $50 plus $5 per form for year-end forms, Square $3 per mailed paper W-2 or 1099, and QuickBooks $150 for Intuit-prepared year-end forms after you cancel. Gusto charges $100 federal plus $100 per state and $5 per form for final filings it prepares after you leave.
• Setup fees. Paychex reviewers on ConsumerAffairs and Trustpilot describe a $2,340 setup fee and a $2,000 setup fee with a $1,500 cancellation fee. Justworks says it charges no setup fee.
• Auto-renew and notice terms. ADP RUN auto-renews by processing cycle and needs 30 days' written notice to cancel; OnPay also needs 30 days' written notice. Paychex's October 2026 promotion requires a one-year agreement and lets Paychex recover the free months if you leave early.
• Price rises after year one. ADP's RUN terms allow base fee increases after the first six months with 30 days' notice.
• A guarantee with no published terms.

Common mistakes

• Switching mid-year without filing every quarterly wage report. One Hacker News commenter (August 2026) said their unemployment rate went from 0.8% to 12.75% after a switch. The checklist is in common payroll mistakes.
• Comparing base fees only instead of the total for your headcount.
• Ignoring the second state until a remote hire moves.

Our payroll scores rank Patriot 87, OnPay and Gusto 86 and Wave 81 out of 100. Read the Patriot review, OnPay review and Gusto pricing breakdown.