Managing payroll manually drains hours you don’t have. Spreadsheets break. Tax calculations go wrong. Employees get paid late. These aren’t minor frustrations—they’re business-threatening problems that cost small companies thousands in penalties, lost productivity, and damaged employee trust.
Free payroll software solves this without adding another line item to your budget. The best solutions automate tax calculations, generate compliant paystubs, handle direct deposits, and eliminate the error-prone manual work that creates payroll nightmares. You get professional-grade features that once required expensive enterprise systems or outsourced payroll services—all at zero cost.
This guide breaks down 15 legitimate small business payroll tools that deliver real value without hidden fees or forced upgrades. You’ll see exactly what each platform offers for free, where limitations kick in, and which solution fits your specific business structure, team size, and growth plans.
Quick Comparison: Best Free Payroll Software for Small Businesses
| Software | Best For | Free Plan Details | Key Free Features | Paid Plans Start |
| Wave | Freelancers & micro businesses | Free accounting + invoicing | Basic payroll, contractor payments, tax calculations | $20/month base + $6/employee |
| Payroll4Free | Teams under 25 | Free for up to 25 employees | Full payroll processing, tax calculations, PTO tracking | Contact for 25+ employees |
| Zoho Payroll | Teams under 10 | Free for up to 10 employees | Automated calculations, direct deposit, self-service portal | $19/month + $3/employee |
| HR.my | Unlimited employees | Completely free forever | Attendance, leave, payroll, expense claims | N/A – fully free |
| OnPay | Growing small businesses | 30-day free trial | Full-service payroll, tax filing, benefits admin | $40/month + $6/employee |
| Homebase | Hourly teams | Free scheduling + time tracking | Time clock, scheduling, team messaging | $20/location + payroll add-on |
| Patriot Payroll | Simple payroll needs | 30-day free trial | 3-step payroll process, unlimited runs | $17/month + $4/employee |
| Gusto | Comprehensive HR + payroll | 30-day free trial | Payroll, benefits, HR tools, onboarding | $40/month + $6/employee |
| CheckMark Payroll | Windows users | 60-day free trial | Unlimited databases, check printing | $509 one-time fee |
| ExcelPayroll | Excel-comfortable users | Free for up to 50 employees | Spreadsheet-based, tax form printing | N/A – fully free |
| Paycor | Multiple payroll options | 90-day free trial | Employee portal, multiple payment methods | $99/month + $5/employee |
| SurePayroll | Cloud-based automation | Up to 6 months free | Automated tax filing, mobile app | $19.99/month + $4/employee |
| Sage Payroll | Time tracking integration | 30-day free trial | Direct deposit, leave management | $10/month + $3/employee |
| Deel | Global teams | Free for under 200 employees | International payroll, compliance tools | $49/month per contractor |
| Ceridian Powerpay | Canadian businesses | 60-day free trial | CRA compliance, multi-province support | $39/month + $6/employee |
Understanding What Free Payroll Software Actually Does
Small business payroll tools handle the complex math and compliance work that manual processing makes painful. At minimum, legitimate payroll software calculates gross pay, withholds appropriate taxes, generates paystubs, and maintains records satisfying federal and state requirements.
Core Payroll Processing Functions
Professional payroll systems automate:
Wage calculations based on hours worked, salary structures, overtime rules, and pay schedules (weekly, biweekly, monthly). This eliminates the spreadsheet errors that cause under or overpayment.
Tax withholding for federal income tax, Social Security, Medicare, state income tax, and local taxes where applicable. Tax rates change frequently—automation ensures current rates apply automatically.
Deduction management for health insurance, retirement contributions, garnishments, and voluntary deductions. The system tracks year-to-date totals ensuring annual limits don’t get exceeded.
Direct deposit processing sends payments directly to employee bank accounts on scheduled dates, eliminating check printing and the risks of lost or stolen checks.
Reporting and compliance features generate required tax forms (W-2, 1099, 940, 941), maintain records satisfying audit requirements, and create management reports tracking labor costs.
Beyond Basic Features
Advanced employee payroll systems add capabilities that smaller businesses traditionally couldn’t afford:
Employee self-service portals let team members access paystubs, tax documents, and personal information without HR intervention, reducing administrative requests.
Time tracking integration imports hours from time clocks or scheduling systems, ensuring payroll reflects actual work performed without manual data transfer.
Benefits administration manages health insurance elections, PTO accruals, and retirement plan contributions integrated with payroll processing.
Mobile access enables running payroll, approving time, and accessing reports from phones—critical for business owners managing operations remotely.
The gap between payroll software and manual processing isn’t just convenience—it’s the difference between reactive crisis management and proactive business operations.
15 Best Free Payroll Software Solutions for Small Businesses
1. Wave Payroll – Best for Freelancers and Micro Businesses
Wave combines free accounting and invoicing tools with affordable payroll services, creating an all-in-one financial platform for the smallest businesses.
Why freelancers and contractors love it: Wave’s free accounting features track income and expenses automatically. When you add payroll, all financial data stays in one system without double-entry or reconciliation headaches.
The platform handles both employee and contractor payments with automatic tax calculations in supported states. If you already use Wave for invoicing clients or managing books, payroll integrates seamlessly with existing workflows.
Key features:
- Automated federal, state, and local tax calculations
- Direct deposit to employee bank accounts
- Contractor payments with 1099 generation
- Integration with Wave accounting and invoicing
- Mobile app for on-the-go payroll management
- Employee self-service portal for paystubs and tax forms
What’s actually free: Wave’s accounting, invoicing, and receipt scanning features cost nothing forever. The company makes money through payment processing fees and paid add-ons like payroll.
Payroll pricing: $20/month base fee plus $6 per employee or contractor paid. Tax filing services add $35/month in most states.
Limitations: Tax filing automation only works in states where Wave has partnerships. Other locations require manual filing. The system works best for simple payroll—companies with complex deduction structures or multiple pay rates may find it limiting.
Best use case: Solo entrepreneurs, freelancers paying occasional contractors, and micro businesses under 10 employees wanting accounting and payroll in one free ecosystem.
2. Payroll4Free.com – Best Genuinely Free Option for Up to 25 Employees
Payroll4Free lives up to its name by offering completely free payroll processing for teams with 25 or fewer employees—no trials, no forced upgrades, no hidden limitations.
Why truly free matters: Most “free” payroll tools offer limited trials or restrict features to push paid plans. Payroll4Free provides full payroll functionality at zero cost for qualifying businesses, making it the most budget-friendly option on this list.
The software calculates wages, withholds taxes, generates paystubs, and creates year-end tax forms without charging monthly fees. You can process unlimited payroll runs and pay via direct deposit or printed checks.
Key features:
- Complete payroll processing for employees and contractors
- Accurate tax calculations including federal, state, and local
- Direct deposit or check printing capabilities
- Vacation and PTO tracking
- Employee self-service portal for paystub access
- W-2, W-3, 940, and 941 form generation
What’s actually free: Full payroll processing for up to 25 employees with unlimited pay runs. You’ll see advertisements in the software, but they don’t restrict functionality.
Paid add-ons: Tax filing and payment services cost $15/month if you want Payroll4Free to handle government submissions. Direct deposit setup through their bank partner adds small per-transaction fees.
Limitations: Windows-only software that’s not cloud-based. You’ll need to install it on a Windows computer and can’t access payroll from phones or Macs without workarounds. The 25-employee cap means you’ll outgrow it as you scale.
Best use case: Small businesses committed to staying under 25 employees, Windows users comfortable with desktop software, and budget-conscious owners willing to handle tax filing manually.
3. Zoho Payroll – Best Free Option for Teams Under 10
Zoho Payroll offers genuinely free payroll management services for one location with up to 10 employees—no credit card required, no expiration date, no feature restrictions.
Why small teams choose Zoho: The free tier includes everything small companies need: automated calculations, direct deposit, tax forms, and employee portal access. You’re not testing a crippled version—you get full functionality.
Zoho’s platform calculates federal and state taxes automatically, tracks PTO balances, and generates compliant paystubs. The employee self-service portal lets team members download documents without bothering management.
Key features:
- Automated payroll calculations with tax withholding
- Direct deposit to employee bank accounts
- Employee self-service portal with paystub access
- PTO tracking and leave management
- Detailed payroll reports and analytics
- Digital payslips and tax form generation
- Salary revision tools and employee loan management
What’s actually free: Complete payroll for one location with up to 10 employees. All features included with no time limit.
Paid upgrade triggers: Growing beyond 10 employees or adding multiple locations requires upgrading to paid plans starting at $19/month plus $3 per employee.
Limitations: Currently unavailable in all US states—check availability for your location before committing. The notes field limits entries to 200 characters, which may frustrate detailed record-keepers.
Best use case: Startups and small businesses confident they’ll stay under 10 employees, single-location operations, and companies already using other Zoho products for CRM or project management.
4. HR.my – Best Completely Free Platform for Unlimited Employees
HR.my breaks the mold by offering free small business payroll tools with no employee limits, no paid tiers, and no expiration—genuinely free forever for unlimited users.
Why unlimited free access matters: Most free payroll platforms cap at 5-25 employees. HR.my removes that constraint entirely, making it viable for growing businesses that would otherwise face forced upgrades as they hire.
The platform combines payroll with HR management features including attendance tracking, leave management, expense claims, and employee records. This integration eliminates juggling separate systems for related functions.
Key features:
- Complete payroll processing with automated calculations
- Attendance tracking via geolocation and selfies (great for field workers)
- Leave management with custom approval workflows
- Expense claim submission and approval
- Employee self-service portal
- Document management and digital forms
- Time-off tracking with vacation accruals
- Unlimited data storage
What’s actually free: Everything. No feature restrictions, no employee caps, no time limits. The platform is ad-supported but fully functional.
Revenue model: HR.my displays occasional advertisements in the interface. You can’t pay to remove them, but they don’t interfere with core functionality.
Limitations: No live customer support—you’ll rely on documentation and email help. No tax filing services, so you’ll handle government submissions manually. The in-app ads may annoy users preferring clean interfaces.
Best use case: Growing businesses needing payroll that scales without cost increases, companies with field-based employees requiring mobile check-ins, and budget-conscious owners comfortable with self-service support.
5. OnPay – Best for Growing Small Businesses (30-Day Trial)
OnPay delivers full-service payroll and HR features typically found in enterprise systems, packaged for small businesses at affordable prices following a genuine 30-day free trial.
Why growing businesses choose OnPay: The platform handles complexity and other basic tools can’t—multiple pay rates, varied deduction types, contractor payments, and benefits administration—all without overwhelming users with unnecessary features.
OnPay’s custom reporting lets you track payroll spending by department, project, or any dimension your business needs. The mobile-friendly employee portal reduces HR administration by letting team members update information independently.
Key features:
- Unlimited payroll runs with no processing limits
- Automated tax filing and payments handled completely
- Employee self-service portal with document access
- Direct messaging between managers and employees
- PTO management with accrual tracking
- Benefits administration for health insurance and retirement plans
- Custom payroll reports and analytics
- Automated onboarding workflows
Free trial details: Complete access to all features for 30 days with no credit card required upfront. You’ll experience the full platform before deciding to commit.
Paid pricing: $40/month base fee plus $6 per employee after the trial ends. Tax filing and payments included at no extra cost—some competitors charge separately for these services.
Limitations: Takes approximately 5 business days for employees to receive payments initially while bank connections establish. No built-in time clock—you’ll need to import hours from separate time-tracking tools.
Best use case: Small businesses scaling past basic payroll needs, companies requiring detailed reporting for job costing or project tracking, and teams wanting benefits administration integrated with payroll.
6. Homebase – Best Free Scheduling with Payroll Add-On
Homebase offers forever-free scheduling and time tracking, making it the perfect foundation for hourly teams. Payroll functionality becomes available as an affordable add-on once you need it.
Why hourly teams love Homebase: The free plan handles scheduling, time clocks, team messaging, and basic hiring tools without any employee limits. When you add payroll, hours automatically flow from timesheets into payroll calculations—no manual data entry, no transcription errors.
This tight integration between time tracking and payroll eliminates the biggest headache hourly businesses face: ensuring employees get paid for actual hours worked including overtime calculations.
Key features:
- Free scheduling for unlimited employees at one location
- Time clock with geofencing and photo verification
- Team messaging and shift trading
- Automated overtime calculations
- Instant timesheet sync with payroll
- Employee self-service mobile app
- Direct deposit with optional early wage access
What’s actually free: The Basic plan includes unlimited employees, scheduling, time tracking, timesheets, team messaging, and hiring tools—all at one location, forever free.
Payroll add-on pricing: $39/month base fee plus $6 per employee, with the first three months free for new payroll customers. This pricing includes automated tax calculations and filings.
Limitations: Purpose-built for US businesses—not suitable for international operations. Payroll functions require upgrading from the free plan. Multiple locations need paid plans starting at $20/month.
Best use case: Restaurants, retail stores, healthcare facilities, and other businesses with primarily hourly workers needing scheduling and time tracking integrated with payroll.
7. Patriot Payroll – Best for Simplified Three-Step Process
Patriot Payroll strips payroll down to essentials with a straightforward three-step process: enter hours, review calculations, and submit. This simplicity makes it perfect for business owners who hate complexity.
Why simplicity wins: Many payroll platforms overwhelm users with options, settings, and configurations. Patriot focuses on core functionality that small businesses actually use, eliminating unnecessary features that create confusion.
The system handles federal, state, and local taxes automatically, tracks PTO balances, and generates all required tax forms. You can include contractors alongside employees in the same payroll run—no separate processes.
Key features:
- Three-step payroll process with minimal complexity
- Unlimited payroll runs with no processing fees
- Automatic tax calculations and deductions
- Direct deposit for employees and contractors
- Employee self-service portal for paystubs and tax documents
- 1099 e-filing for contractors
- Time and attendance tracking integration
- Multi-state and multi-location support
Free trial details: 30 days of full access with no credit card required. Test the complete system before committing.
Paid pricing: Basic Payroll starts at $17/month plus $4 per employee for do-it-yourself payroll. Full Service adds tax filing for $37/month plus $4 per employee.
Limitations: Tax filing costs extra on the Basic plan—you’ll handle government submissions yourself. Automated bank transfers processing on weekends or holidays incur additional fees.
Best use case: Business owners wanting the simplest possible payroll experience, companies with straightforward pay structures, and teams mixing employees with contractors.
8. Gusto – Best Comprehensive HR Platform (30-Day Trial)
Gusto combines employee payroll systems with complete HR functionality—onboarding, benefits, time tracking, and compliance tools—creating an all-in-one platform for modern small businesses.
Why comprehensive platforms save time: Instead of juggling separate systems for payroll, benefits enrollment, time tracking, and HR documents, Gusto centralizes everything. Employee data entered once flows automatically to all connected functions.
The platform’s onboarding tools streamline new hire paperwork with electronic signatures and automated document collection. Employees access health insurance options, enroll in retirement plans, and request time off through the same portal where they view paystubs.
Key features:
- Automated payroll with unlimited runs
- Full-service tax filing and payments
- Benefits administration with health insurance and 401(k)
- Time tracking with PTO management
- Employee onboarding with e-signatures
- HR compliance assistance and employee handbook templates
- Workers’ compensation administration
- Integration with accounting and time-tracking software
Free trial details: 30 days of complete access to evaluate the platform. No credit card required to start.
Paid pricing: Core plan starts at $40/month plus $6 per employee. Complete plan ($40/month plus $12 per employee) adds benefits administration. Concierge plan ($149/month plus $12 per employee) includes dedicated support.
Limitations: Some advanced features only available on higher-priced plans. Limited customization options for payroll reports and processes compared to enterprise systems.
Best use case: Growing businesses needing HR infrastructure, companies offering employee benefits, and teams wanting automated onboarding that makes scaling easier.
9. CheckMark Payroll – Best One-Time Purchase Option
CheckMark Payroll breaks from subscription models with a one-time software purchase—pay once, own forever, no monthly fees. This appeals to businesses hating recurring charges.
Why one-time payment matters: SaaS subscriptions accumulate quickly. CheckMark’s single payment eliminates perpetual costs, making it cost-effective for businesses planning long-term payroll management.
The Windows software supports unlimited employees, unlimited databases, and unlimited companies. Accountants managing payroll for multiple clients particularly appreciate this structure.
Key features:
- Unlimited employees with no per-user fees
- Unlimited payroll runs throughout the year
- Direct deposit or check printing
- Multiple database and company support
- W-2, W-3, 940, and 941 form generation
- E-filing capabilities for tax forms
- Integration with accounting software
- US-based customer support
Free trial details: 60-day trial with complete functionality. Test everything before purchasing.
One-time pricing: Starting at $509 for a perpetual license—no monthly fees, no annual renewals. Updates may require additional fees for major version upgrades.
Limitations: Windows-only with no Mac or mobile options. Limited report customization compared to cloud-based competitors. Making changes on checks can be difficult once printed.
Best use case: Businesses preferring one-time purchases over subscriptions, accountants managing payroll for multiple clients, and companies wanting local software control without cloud dependency.
10. ExcelPayroll – Best for Excel Power Users
ExcelPayroll transforms Microsoft Excel into a payroll system through downloadable templates. For businesses already living in spreadsheets, this feels more familiar than dedicated software.
Why Excel-based works: Many small business owners already track everything in Excel. ExcelPayroll leverages existing Excel skills rather than forcing adoption of completely new interfaces and workflows.
The templates automate wage calculations, tax withholdings, and form generation while maintaining spreadsheet flexibility. You can customize formulas, add columns, and integrate with other Excel-based business systems.
Key features:
- Spreadsheet-based payroll calculations
- Automated tax withholding formulas
- Support for up to 50 employees
- W-2, W-3, 940, and 941 form generation
- Vacation accrual tracking
- Expense and deduction management
- Workers’ compensation calculations
- Check printing capabilities
What’s actually free: Complete software download with no cost, no trials, no subscriptions. Compatible with Microsoft Excel on Windows and Mac.
Requirements: Active Microsoft Excel license required. The software doesn’t work in Google Sheets or other spreadsheet alternatives.
Limitations: No cloud access or mobile apps—you’re working in desktop Excel. No automated tax filing—you’ll generate forms but submit them manually. No customer support beyond documentation.
Best use case: Business owners highly comfortable with Excel, companies wanting complete data control on local computers, and organizations with fewer than 50 employees requiring customization flexibility.
11. Paycor – Best for Multiple Payment Options
Paycor offers comprehensive small business payroll tools with flexibility in how employees receive pay—direct deposit, on-demand payments, or payments directly to credit cards.
Why payment flexibility matters: Different employees have different financial situations. On-demand pay helps team members handle emergencies without payday loans. Credit card deposits benefit employees without bank accounts.
The mobile-friendly employee portal gives team members control over personal information, benefits selections, and document access without constantly bothering HR.
Key features:
- Multiple payroll payment methods
- Unlimited payroll runs
- Mobile-friendly employee self-service portal
- Time and attendance tracking (add-on)
- Benefits administration
- Tax filing and compliance assistance
- Recruitment and onboarding tools
- Performance management features
- Analytics and custom reporting
Free trial details: 90 days of full access—the longest trial period on this list. Evaluate completely before committing.
Paid pricing: Starting at $99/month base fee plus $5 per employee. Pricing varies based on features selected and company size.
Limitations: Time tracking only available as paid add-on despite being essential for many businesses. Some users report bugs in the self-service portal. Onboarding process could be smoother.
Best use case: Companies wanting to offer employees payment flexibility, businesses needing integrated recruiting and performance management, and teams requiring detailed analytics.
12. SurePayroll – Best for Automated Tax Compliance
SurePayroll emphasizes automated tax filing and compliance, taking the stress out of the most error-prone payroll aspect. The cloud-based system handles federal, state, and local tax submissions automatically.
Why tax automation is critical: Tax filing mistakes create expensive penalties and legal headaches. SurePayroll’s full-service tax handling eliminates this risk by automatically calculating, filing, and paying all payroll taxes.
The mobile app lets you run payroll from anywhere—valuable for business owners managing operations remotely or traveling frequently. Employees access paystubs and tax documents through their own mobile app.
Key features:
- Automated payroll with tax calculations
- Full-service tax filing and payments
- Direct deposit processing
- Mobile apps for managers and employees
- Time-off tracking
- New hire reporting
- Year-end tax forms (W-2, 1099)
- Integration with QuickBooks and other accounting software
Free trial details: Up to 6 months free for qualifying new customers. Extended trial helps ensure the system works perfectly before you start paying.
Paid pricing: Starting at $19.99/month base fee plus $4 per employee. Tax filing and payments included at no extra charge.
Limitations: Self-service portal may lag occasionally. Managing year-end tax forms (W-2s and 1099s) costs extra. Some users report occasional system glitches.
Best use case: Business owners wanting hands-off tax compliance, companies intimidated by tax filing complexity, and mobile-first businesses needing payroll access anywhere.
13. Sage Payroll – Best for Time Tracking Integration
Sage Payroll combines payroll processing with built-in time tracking and leave management, creating a comprehensive solution for businesses needing both functions tightly integrated.
Why integrated time tracking matters: Importing hours from separate time-tracking systems creates opportunities for errors and requires additional software subscriptions. Sage’s built-in tracking eliminates these issues.
The platform syncs with other Sage products—particularly Sage Accounting—creating a unified financial management system where payroll data automatically updates your books.
Key features:
- Integrated time and attendance tracking
- Leave management with approval workflows
- Direct deposit, e-payment, or check printing
- Historical pay run access
- Multi-level access permissions
- Detailed employee records
- Automated tax calculations
- Multiple customizable reports
Free trial details: 30 days of full access with no credit card required upfront.
Paid pricing: Starting at $10/month base fee plus $3 per employee—among the most affordable options once you upgrade from the trial.
Limitations: Employee portal could be improved. Some users find the interface confusing initially. No dedicated mobile app—web interface only.
Best use case: Companies already using Sage Accounting, businesses wanting time tracking included without additional software, and budget-conscious teams needing affordable paid plans.
14. Deel – Best for Global and Remote Teams
Deel specializes in international employee payroll systems, making it the best choice for companies hiring globally or managing distributed teams across multiple countries.
Why global payroll is different: Paying international team members involves currency conversions, international tax compliance, and navigating employment laws in multiple countries. Deel handles these complexities automatically.
The platform supports payments to employees and contractors in over 150 countries, handles tax compliance in each jurisdiction, and offers employer of record (EOR) services for hiring in countries where you don’t have legal entities.
Key features:
- International payroll in 150+ countries
- Multi-currency payment support (including cryptocurrency)
- Automated tax compliance across jurisdictions
- Contractor and employee payment processing
- Employer of record services
- Benefits administration globally
- Contract templates compliant with local laws
- Misclassification protection up to $25,000
What’s actually free: Completely free for businesses with fewer than 200 employees. This generous free tier makes Deel accessible to startups and small businesses hiring internationally.
Paid pricing: Beyond 200 employees, pricing starts around $49/month per contractor or varies for EOR services based on country and employee count.
Limitations: No mobile app available. No free trial for testing paid features before the 200-employee threshold.
Best use case: Companies hiring international contractors, remote-first businesses with distributed teams, and startups expanding globally without establishing foreign entities.
15. Ceridian Powerpay – Best for Canadian Businesses
Ceridian Powerpay focuses exclusively on Canadian payroll, ensuring perfect compliance with CRA (Canada Revenue Agency) and Revenu Québec requirements that US-focused systems miss.
Why Canada-specific matters: Canadian payroll differs significantly from US systems—CPP, EI, provincial taxes, and Revenu Québec have unique rules. Powerpay handles these complexities that generic systems struggle with.
The mobile-friendly interface lets you set up and run payroll from any device. The platform manages all required paperwork for CRA compliance automatically.
Key features:
- Complete Canadian payroll processing
- CRA and Revenu Québec compliance
- Multi-province tax handling
- Employment records management
- Automated tax filing
- Direct deposit processing
- Advanced custom reporting
- Mobile access for on-the-go payroll
- Employee self-service portal
- 24/7 customer support
Free trial details: 60 days of full access—generous trial period for thorough evaluation.
Paid pricing: Starting at $39/month base fee plus $6 per employee. Includes all compliance and tax filing services.
Limitations: Canada-only—not suitable for businesses outside Canada or with cross-border operations. Few native integrations beyond Ceridian’s other products. Onboarding could be smoother.
Best use case: Canadian small businesses exclusively, companies needing CRA and Revenu Québec expertise built-in, and businesses wanting local support familiar with Canadian employment law.
How to Choose the Right Free Payroll Software for Your Business
Selecting free payroll software requires matching features to your specific business structure, growth plans, and operational complexity rather than choosing based solely on “free” designation.
Start With Team Size and Structure
Current employee count determines which platforms you qualify for:
Under 10 employees: Zoho Payroll, HR.my, and most trial-based options work well. Consider whether you’ll grow beyond 10 soon—if yes, start with scalable options.
10-25 employees: Payroll4Free, Wave, and platforms with generous free tiers accommodate this range. Evaluate upgrade costs for when you exceed thresholds.
25+ employees: Free tiers essentially disappear at this scale. Focus on trial periods from Gusto, OnPay, or Paycor to test before committing to paid plans.
Team composition matters equally:
All W-2 employees: Any full-featured payroll system works. Focus on features like benefits administration and PTO tracking.
Mix of employees and contractors: Ensure your chosen platform handles both in the same payroll run. Wave, Patriot, and Deel excel at mixed workforce management.
International team members: Deel becomes essentially required unless you’re prepared for the complexity of managing international payroll manually.
Hourly versus salaried: Hourly teams need time-tracking integration—Homebase or Sage Payroll provide this built-in. Salaried teams care more about benefits administration and automated deductions.
Evaluate Your Payroll Complexity
Simple payroll characteristics:
- Single pay rate per employee
- No overtime or shift differentials
- Minimal deductions (taxes only)
- One payment method (all direct deposit or all checks)
- Single state or province operation
Simple setups work great with: Wave, Patriot, CheckMark, or ExcelPayroll.
Complex payroll characteristics:
- Multiple pay rates (base, overtime, shift differential, bonuses)
- Variable deductions (health insurance, 401(k), garnishments)
- Multiple payment methods or on-demand pay
- Multi-state operations with different tax rules
- Union employees with special requirements
Complex needs require: Gusto, OnPay, Paycor, or SurePayroll—platforms built for handling numerous variables.
Consider Growth Plans and Scalability
Planning to scale rapidly? Free tiers with low employee caps will force migrations mid-growth. Start with platforms offering reasonable upgrade paths:
Good scaling options:
- HR.my (no employee limits even on free tier)
- Wave (affordable scaling per employee)
- Gusto (grows from micro businesses to 100+ employees)
Problematic scaling:
- Payroll4Free (hard cap at 25)
- Zoho Payroll (only 10 employees free)
- ExcelPayroll (50 employee limit, no cloud option)
Stable team size? Maximize free features without worrying about future costs. Payroll4Free or HR.my provide excellent functionality if you won’t exceed limits.
Integration Requirements Matter
Accounting software integration eliminates double-entry:
QuickBooks users: Wave, SurePayroll, and Patriot integrate seamlessly.
Xero users: Wave and Gusto provide solid integration.
Sage Accounting users: Sage Payroll native integration is unbeatable.
Time tracking systems:
Using separate time tracking? Ensure payroll software imports hours. Homebase’s built-in time clock eliminates this entirely.
No time tracking yet? Choose payroll software with built-in tracking (Homebase, Sage) or that doesn’t require it (salaried teams).
Tax Filing Preferences
Do-it-yourself tax filing saves money but requires:
- Understanding tax deadlines (federal, state, local)
- Completing correct forms (940, 941, state withholding)
- Making timely payments to avoid penalties
DIY-friendly platforms: Wave (basic), Patriot (Basic tier), ExcelPayroll.
Automated tax filing costs more but:
- Eliminates missed deadlines
- Reduces penalty risk dramatically
- Saves hours of administrative work
Automated tax included: Gusto, OnPay, SurePayroll, Paycor.
Support and Learning Resources
Self-service comfortable? Platforms with extensive documentation work fine:
- HR.my (documentation only, no live support)
- ExcelPayroll (self-service)
- Wave (email support, comprehensive help center)
Need hand-holding? Premium platforms provide better support:
- OnPay (phone and email support included)
- Gusto (live chat, phone, extensive resources)
- SurePayroll (US-based support team)
Common Limitations of Free Payroll Software
Understanding where payroll management free options fall short helps set realistic expectations and plan for eventual upgrades.
Employee Number Restrictions
Most free tiers cap supported employees:
5 employees or less: Extremely limited options
10 employees: Zoho Payroll threshold
25 employees: Payroll4Free maximum
Unlimited: Only HR.my truly offers unlimited free
Planning ahead: When you approach these limits, start evaluating upgrade costs or alternative platforms. Migrating payroll mid-year creates complications—timing transitions for year-end makes cleaner breaks.
Feature Limitations
Tax filing often costs extra on free tiers. You’ll calculate taxes correctly but handle government submissions manually—a time sink that defeats automation purposes.
Direct deposit sometimes requires paid upgrades or per-transaction fees. Check whether your chosen platform includes electronic payments or charges separately.
Advanced reporting gets locked behind paywalls. Basic payroll reports come free, but analyzing costs by department, tracking labor percentages, or custom reporting requires upgrading.
Benefits administration rarely appears in free tiers. If you offer health insurance, retirement plans, or other benefits, you’ll likely pay for this integration.
Support Restrictions
Free users typically receive:
- Email support only (no phone)
- Slower response times (24-48 hours vs. same-day)
- Limited documentation and training resources
- No dedicated account managers
Paid users get:
- Phone support with faster response
- Live chat for immediate help
- Comprehensive training and onboarding
- Dedicated support for complex issues
Geographic and Compliance Limitations
State coverage varies—some platforms don’t support all 50 states. Verify your state is covered before committing.
Local tax support may be incomplete. If your city or county has local income taxes, confirm the platform handles these correctly.
International payroll doesn’t exist in most free tools except Deel. US-focused platforms can’t handle Canadian, European, or other international employees.
Integration Limitations
Accounting software connections often require paid plans. Free tiers may not sync with QuickBooks, Xero, or other accounting systems, forcing manual data entry.
Time tracking systems may not integrate, requiring manual hour entry that eliminates efficiency gains.
HR systems rarely connect to free payroll tools, creating disconnected employee data across platforms.
Data Export and Portability
Leaving free platforms sometimes creates challenges extracting historical data. Verify you can export complete payroll history before committing long-term.
Reporting flexibility suffers on free tiers with limited export options or report customization.
Security and Compliance in Free Payroll Software
Employee payroll systems handle extraordinarily sensitive data—Social Security numbers, bank account details, salary information, and tax documents. Security cannot be compromised regardless of free versus paid status.
Data Protection Standards
Encryption in transit: Payroll data moving between your browser and the provider’s servers must use TLS 1.2 or higher encryption. This prevents interception during transmission.
Encryption at rest: Data stored on provider servers should be encrypted using AES-256 or equivalent standards. If hackers breach servers, encrypted data remains useless without decryption keys.
Physical security: Reputable providers host data in facilities with access controls, surveillance, and redundant systems preventing both theft and loss.
Access controls: Role-based permissions ensure only authorized users view sensitive data. Your bookkeeper shouldn’t access Social Security numbers; HR shouldn’t see bank account details unless necessary.
Compliance Requirements
SOC 2 certification indicates providers meet security standards for handling sensitive data. Look for Type II certification requiring independent audits of ongoing practices.
GDPR compliance (if applicable) matters for companies with European employees. The software must handle personal data according to European regulations.
IRS e-file authorization proves the provider can file tax forms electronically on your behalf. This authorization requires background checks and bonding.
State tax authority approvals vary by location. Providers must register with each state where they file taxes on customers’ behalf.
Security Best Practices
Strong passwords: Require complex passwords for all payroll system users. Consider implementing two-factor authentication where available.
Regular access audits: Review who has payroll access quarterly. Remove former employees immediately and adjust permissions when roles change.
Separate duties: Don’t give one person complete control over payroll setup, processing, and bank account access. Segregation reduces fraud risk.
Activity monitoring: Review system logs showing who accessed payroll, what changed, and when. Unusual patterns may indicate compromised accounts.
What to Ask Providers
Before trusting any free payroll software with employee data:
How is my data encrypted? (Require specific answers, not vague “we take security seriously” statements)
Where are servers physically located? (Jurisdiction matters for legal recourse if problems occur)
How often are security audits performed? (Annual minimum, ideally quarterly)
What happens if you’re breached? (Notification timeline, liability coverage, remediation process)
How do I export my data if I leave? (Verify complete historical data export, not just recent periods)
