Among the services compared here, the cheapest payroll software for a tiny business is Patriot Software Basic. At $17 per month plus $4 per employee as of October 6, 2026, it has the lowest published base fee. However, Patriot Basic leaves you responsible for filing and paying your own payroll taxes. If you want a service to handle the tax filings for you, Patriot Full Service costs $37 per month plus $5 per employee, below the entry prices of Gusto, OnPay and QuickBooks Payroll.

Understanding the DIY Versus Full Service Divide

Running payroll is not just about writing a check. It requires calculating gross wages, deducting taxes, and producing a net pay amount. Once paid, the employer must deposit withheld taxes on a strict schedule. The employer must also pay their own portion and file returns.

A DIY approach to payroll puts the burden of remittance entirely on the business owner. Software like Patriot Basic handles the heavy mathematical lifting. It computes the taxes owed based on the wages entered, but it stops there. You must log into the tax portals to submit the forms yourself.

Full-service payroll automates the back half of the equation. Programs like Patriot Full Service draft the tax funds directly from your checking account. The provider holds those funds and remits them to the tax agencies on your behalf. Choosing the cheapest software means accepting the DIY workload, while paying for full service buys back time.

The Prerequisites: Entity Formation and the EIN

A common mistake for a new business is shopping for payroll software before the legal foundation is built. You need a legal business entity and an Employer Identification Number before you can hire anyone. You cannot run payroll without an EIN. The government tracks payroll tax liabilities at the entity level, meaning the EIN is a hard dependency.

If you are comparing systems but have not separated your personal money, you are stepping out of order. Forming an LLC or a corporation and securing the EIN are the mandatory first steps. A platform like ZenBusiness is designed for exactly this stage. It houses your entity formation, acts as your registered agent, and secures your EIN in one place.

The EIN is available as a standalone purchase for $99 or is included if you choose a higher-tier formation plan. ZenBusiness also provides bookkeeping tools like Money Pro for $30 per month. When you are ready to pay employees, ZenBusiness hands the payroll function off to a dedicated partner. This all-in-one approach ensures your business is legally compliant before the first paycheck is cut.

Compliance: Forms, Classifications, and Requirements

Payroll is highly regulated, and the obligations fall entirely on the employer. You must properly onboard every worker and maintain strict records to satisfy federal and state agencies. The paperwork begins the moment a hire is made. All U.S. employers must properly complete Form I-9 for every individual they hire for employment in the United States.

You also need a signed Form W-4 from all new employees when they start work. You must make the form effective with the first wage payment. A W-4 remains in effect until the employee gives you a new one. When a replacement is given, withholding 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.

Properly classifying workers is one of the most critical legal challenges for a tiny business. To enter information on a Form W-2 at year-end, you need the employee's name and Social Security Number. Beyond the paperwork, the distinction between an independent contractor and an employee dictates your tax obligations. The IRS weighs three categories to determine worker status: behavioral control, financial control, and the type of relationship.

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. Calling someone a contractor does not override the actual working conditions. An employer who classifies an employee as an independent contractor without reasonable basis may be held liable for employment taxes for that worker. If the status is unclear, you can submit Form SS-8, but it may take at least six months to receive a determination on your filing.

Business structure also introduces specific payroll mandates. 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. You cannot bypass this rule to avoid payroll taxes. The IRS has the authority to reclassify payments made to shareholders from non-wage distributions to wages.

The mechanics of issuing pay and storing records are also strictly governed. Pay frequency is set by state law and varies widely. California requires wages at least twice per calendar month on days designated in advance. Colorado requires monthly payments, while Connecticut requires weekly payments unless a longer interval is approved by the labor commissioner.

Because these rules differ sharply across borders, individuals should consult the relevant state labor office for official information. Once the payroll is processed, the documentation must be preserved. You must retain FLSA payroll records for three years. The records wage computations are based on, including time cards and wage rate tables, must be maintained for two years.

Competitor Comparison: Alphabetical Breakdown

Finding the right fit means weighing the monthly cost against the feature set. The providers below are listed alphabetically rather than as a ranking. The market offers a mix of specialized payroll engines, broad platforms, and business compliance ecosystems. All prices noted are as of October 6, 2026.

ADP

ADP is the most established presence in the payroll industry. ADP does not publish payroll pricing and quotes per business. If you manage your business entity through ZenBusiness, ZenBusiness recommends RUN Powered by ADP for businesses with 1 to 49 employees. ADP is a separate service with its own platform, its own billing, and its own support.

It is not integrated into the ZenBusiness dashboard. A ZenBusiness customer requests the connection from the ZenBusiness dashboard. An ADP representative follows up to discuss the employee count and pay schedule, and ADP provides a quote. A ZenBusiness customer may be eligible for promotional pricing, which is confirmed during the consultation.

Gusto

Gusto operates entirely as a full-service platform with no DIY tax tier. The Gusto 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 different approach by offering a single, all-inclusive tier. It costs $49 per month plus $6 per worker. The public page quotes a start price of $55 per month, which factors in the base fee and exactly one worker.

Patriot Software

Patriot Software directly answers the demand for low-cost payroll. The Basic Payroll plan is $17 per month plus $4 per employee. The Full Service plan is $37 per month plus $5 per employee. Patriot is cheaper at the very bottom end of the market than almost any competitor.

If a business owner is comfortable handling their own tax deposits, the Basic tier provides an unbeatable price. Even the Full Service tier undercuts the base fees of most major rivals. This makes Patriot a strong option for a small operation focused strictly on budget.

QuickBooks Payroll

QuickBooks Payroll is built to sit alongside Intuit's dominant accounting software. The entry tier, Workforce Payroll plus Simple Start, costs $88 per month plus $6.50 per employee. The middle tier, Workforce Payroll plus Essentials, is $125 per month plus $6.50 per employee. The highest tier, Workforce Premium plus Plus, is $203 per month plus $10 per employee.

Intuit frequently advertises a promotional rate of 50 percent off the base fee for three months. However, the figures listed above are the ongoing, standard prices.

SurePayroll

SurePayroll is another system designed specifically for small and micro-businesses. Pricing starts at $29 per month plus $7 per worker. Unlike some competitors that include nationwide capabilities in the base fee, the multi-state add-on is $9.99 per month. SurePayroll also handles specialized niches; its household payroll service starts at $39 per month.

ZenBusiness

ZenBusiness provides the foundation for setting up a business legally and keeping it compliant. The Starter plan is $0 plus state fees. The Pro plan costs $199 per year, and the Premium plan costs $299 per year. The Pro and Premium plans renew at their annual prices, and the EIN and operating agreement are included from Pro up.

If you use the Starter plan, the EIN and operating agreement are $99 each. ZenBusiness also provides a registered agent service for $199 per year, the Money Pro bookkeeping tool for $30 per month, and a website builder for $129 per year. ZenBusiness does not build or operate a proprietary payroll engine. Payroll itself is ADP's, quoted by ADP per business, and is not included in any ZenBusiness plan price.

Sources

This article provides general information and does not constitute legal, tax, or accounting advice; requirements vary by jurisdiction and are subject to change.