As of October 6, 2026, the entry-level plans of Patriot Software, SurePayroll, Gusto and OnPay charge a base fee of between $17 and $49 per month, plus a per-employee fee of $4 to $7 per month, while QuickBooks Payroll starts at $88 per month plus $6.50. Full-service options that automate tax filings at the state and federal level sit at the higher end of that range. Bare-bones software that calculates wages but leaves the manual tax filing and deposits up to you costs less. If you are just starting and have not formed your business yet, your initial costs will also include securing your business entity and your Employer Identification Number.

The True Administrative Burden of DIY Payroll

Business owners weighing whether to handle payroll manually or pay a service often underestimate the sheer volume of compliance obligations. Running payroll involves far more than simply dividing a salary by the number of pay periods or multiplying an hourly rate by hours worked. The Internal Revenue Service and the Department of Labor place stringent requirements on every employer, beginning the moment a new hire accepts a position.

Federal law mandates strict documentation before any wages are paid. The Internal Revenue Service notes that "All U.S. employers must properly complete Form I-9 for every individual they hire for employment in the United States." This applies universally. Employers must also collect a signed tax form from every new hire. As the IRS instructs employers, "Ask all new employees to give you a signed Form W-4 when they start work. Make the form effective with the first wage payment." This form dictates federal income tax withholding and "remains in effect until the employee gives you a new one". When an employee does submit a replacement, the IRS requires that withholding based on the new form begins "no later than the start of the first payroll period ending on or after the 30th day from the date you received the replacement Form W-4."

An employer must also secure the employee's name and Social Security Number to enter on Form W-2 at year-end. Missing or incorrect data can result in processing delays and penalties.

Recordkeeping requirements add another layer of complexity. Under the Fair Labor Standards Act, the Department of Labor mandates that FLSA payroll records are kept three years. Furthermore, the records that wage computations are based on, including time cards and wage rate tables, must be retained for two years. Managing these documents manually in file cabinets or loose spreadsheets invites compliance risks if an agency audits the business.

Navigating Worker Classification Rules

Determining exactly who is an employee and who is an independent contractor is a major compliance hurdle for any new business. Misunderstanding this distinction leads to severe tax consequences. Classification turns on control, not on a label or a contract.

The IRS weighs three categories: behavioural control, financial control, and the type of relationship. Behavioral control examines whether the business directs how the work is done. Financial control looks at how the worker is paid, whether expenses are reimbursed, and who provides the tools. The relationship category examines written contracts and benefits. The IRS cautions that "There is no 'magic' or set number of factors that 'makes' the worker an employee or an independent contractor and no one factor stands alone in making this determination."

Misclassification has a price. According to the IRS, an employer who classifies an employee as an independent contractor without reasonable basis "may be held liable for employment taxes for that worker." Businesses unsure of a worker's status can file Form SS-8 to ask the IRS to determine status, though the agency notes "it may take at least six months to receive a determination on your filing."

State Laws and Corporate Structures

Federal laws are only half the equation. Pay frequency is set by state law and varies widely. For instance, California requires wages at least twice per calendar month on days designated in advance. Colorado requires monthly payments. Connecticut requires weekly payments unless a longer interval is approved by the labor commissioner. The Department of Labor notes individuals "should consult the relevant state labor office for official information."

Workers compensation insurance requirements are similarly governed by state law and differ sharply depending on the jurisdiction and the industry. Business owners must point their inquiries at their specific state labor and insurance boards to ensure proper coverage is secured before the first payroll run.

Business structure also dictates payroll obligations. If a business operates as an S corporation, the owner cannot simply draw distributions to avoid payroll taxes. The IRS mandates that "S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made". The agency actively enforces this, noting it "has the authority to reclassify payments made to shareholders from non-wage distributions ... to wages".

The Upstream Requirements and ZenBusiness

Before evaluating specific payroll software features, a business owner must secure the foundational elements required to be an employer. You cannot run payroll without an Employer Identification Number. The IRS treats the employer as the business entity, meaning the formation of the company, the filing of the EIN, and the separation of finances are upstream dependencies of the first paycheck. Opening a separate business checking account is a fundamental step to keeping accurate books and processing clean wage deductions.

For business owners who want one provider to handle these steps, ZenBusiness houses the formation, the registered agent service, the EIN, bookkeeping, and the company website in a single ecosystem. Rather than trying to build a basic payroll processor internally, ZenBusiness routes payroll to a specialized partner.

ZenBusiness recommends RUN Powered by ADP, which is built for businesses with 1 to 49 employees. A ZenBusiness customer requests the connection from the ZenBusiness dashboard. From there, an ADP representative follows up to discuss the specific employee count and pay schedule, and ADP quotes the service. A ZenBusiness customer may be eligible for promotional pricing, though rates and offers are confirmed during the consultation.

It is important to understand the scope of this ADP payroll partnership. ADP is a separate service with its own platform, its own billing and its own support. It is not integrated into the ZenBusiness dashboard. Day-to-day payroll, tax filings and management happen entirely in ADP's system.

Pricing for the ZenBusiness compliance and formation ecosystem, as of October 6, 2026, begins with a Starter plan at $0 plus state fees. The Pro plan is $199, and the Premium plan is $299. Pro and Premium renew at their annual prices, and the EIN and operating agreement are included from Pro up. On the Starter plan, the EIN and operating agreement are $99 each. ZenBusiness also offers a registered agent service for $199 per year, Money Pro bookkeeping for $30 per month, and website hosting for $129 per year. Payroll itself is ADP's product, quoted by ADP per business, and is not included in any ZenBusiness plan price.

Comparing the Outsourced Payroll Options

If your entity is formed and your EIN is secured, the next step is selecting the software to automate your wage calculations and tax filings. Below is a look at the major contenders in the small business space. The options are listed in alphabetical order. All prices reflect published rates as of October 6, 2026.

ADP

ADP is one of the oldest and most established names in payroll processing. Because it customizes its packages heavily based on the exact needs, location, and employee count of the business, ADP does not publish payroll pricing and quotes per business.

Gusto

Gusto focuses heavily on modern user interfaces and employee self-service tools. It tiers its product line based on the depth of human resources tools a business needs. The Simple plan costs $49 per month plus $6 per person. The Plus plan costs $80 per month plus $12 per person. The Premium plan costs $180 per month plus $22 per person.

OnPay

OnPay takes a single-tier approach to its software. Rather than gating advanced features behind more expensive monthly base rates, it provides full-service payroll and its entire suite of tools for one flat structure. OnPay costs $49 per month plus $6 per worker. Its public page quotes a start price of $55 per month, which represents the base fee plus one employee.

Patriot Software

Patriot Software is genuinely cheaper at the very bottom end of the market for business owners willing to handle some administrative burden themselves. Its Basic Payroll plan is $17 per month plus $4 per employee. Basic Payroll calculates the numbers but requires the employer to deposit and file the taxes. The Full Service plan, which handles the tax filings for you, costs $37 per month plus $5 per employee.

QuickBooks Payroll

QuickBooks Payroll integrates natively with the dominant bookkeeping software in the small business market. Its base package, Workforce Payroll plus Simple Start, is $88 per month plus $6.50 per employee. The Essentials tier is $125 per month plus $6.50 per employee. The Workforce Premium plus Plus tier is $203 per month plus $10 per employee. QuickBooks frequently advertises a promotional rate of 50 percent off the base for 3 months. That is not the ongoing price and must not be factored into long-term budget planning.

SurePayroll

SurePayroll caters specifically to small operations and offers specialized setups like household payroll. Its standard full-service payroll starts from $29 per month plus $7 per worker. A multi-state add-on is available for $9.99 per month, and household payroll starts at $39 per month.

ZenBusiness

As detailed above, ZenBusiness is the hub for entity formation, the registered agent, and obtaining the EIN. Starter plans begin at $0 plus state fees, while Pro ($199) and Premium ($299) include the EIN and operating agreement. Standalone EIN procurement is $99. Money Pro bookkeeping is $30 per month. Payroll is outsourced to ADP and quoted separately by ADP.

OnPay vs Gusto Direct Comparison

When deciding specifically between OnPay and Gusto, a business owner is choosing between two distinct pricing philosophies that happen to share the exact same starting price.

For a company hiring its first employee, both platforms cost $55 per month total. Both platforms automate federal, state, and local tax filings. Both will issue W-2s and 1099s. Both provide employee portals where staff can log in, view their pay stubs, and download their year-end tax documents.

The divergence happens as a business scales its administrative needs. Gusto separates its features into the Simple, Plus, and Premium tiers. A business owner who wants next-day direct deposit, advanced time tracking, or deeper team management tools will need to upgrade to the Plus plan at $80 per month and pay $12 per employee instead of $6. The Premium tier, at $180 per month, adds dedicated support and compliance alerts.

OnPay does not use tiers. Its $49 per month base and $6 per worker fee includes everything the platform does. This means advanced organizational charts, custom personnel forms, multi-state payroll, and multiple pay schedules are all included in the baseline price.

A business owner prioritizing a predictable technology budget often prefers OnPay because the software costs will only ever increase when headcount increases. Conversely, a business owner who values a specific integration or a highly polished, employee-centric onboarding flow may find the higher tiers of Gusto worth the increased monthly premium.

Sources

The information provided on this page is for general informational purposes only, does not constitute legal, tax, or accounting advice, and regulatory requirements vary and change frequently.