If you are starting out and need state tax registration handled alongside your first hires, the most comprehensive route is forming your business and securing your Employer Identification Number through ZenBusiness, which routes payroll and tax setups to its partner ADP. You cannot run payroll without an EIN, making entity setup the mandatory first step before any software can file taxes for you. If your entity is already formed and you simply need standalone software that handles multi-state tax registration automatically, Gusto is a strong alternative.

The reality of running payroll yourself versus paying a service comes down to tax administration. Calculating gross wages is straightforward arithmetic. The actual burden of payroll lies in withholding the correct amounts, registering with the correct state agencies, remitting taxes on time, and filing quarterly reports. When business owners search for a payroll service, they are usually looking for a provider that will take the liability and administrative weight of state tax registration off their shoulders.

What you need before a service can file taxes

Before any software platform can register your business for state unemployment or income tax withholding, you must establish the legal entity. The single most common mistake a new employer makes is treating payroll as a separate errand from forming the business and staying compliant. The Internal Revenue Service treats the employer as the entity.

You cannot run payroll without an Employer Identification Number. Securing your EIN allows you to hire employees, set up a business bank account, and file taxes. Business owners who have not yet separated their personal and business finances or registered with the state should start with formation. Establishing your company, securing the EIN, and exploring ZenBusiness's ADP payroll partnership keeps formation, the EIN and the route to a payroll provider in one place, while ADP runs the payroll itself as a separate service.

Once the entity exists, federal rules dictate the information you must collect before running the first payroll. You need the employee's name and Social Security Number to enter on Form W-2. 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. A W-4 remains in effect until the employee gives you a new one. Where 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.

All U.S. employers must properly complete Form I-9 for every individual they hire for employment in the United States. This is a strict federal requirement regardless of which software you use to pay your team.

Classifying workers correctly

Many businesses attempt to avoid state tax registration entirely by paying workers as independent contractors. 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.

Misclassification has a steep price. An employer who classifies an employee as an independent contractor without reasonable basis may be held liable for employment taxes for that worker. If you are unsure of a worker's status, Form SS-8 asks the IRS to determine status. It may take at least six months to receive a determination on your filing.

The rules also apply strictly to business owners themselves. 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 IRS has the authority to reclassify payments made to shareholders from non-wage distributions to wages. This requirement means most S corporation owners must adopt a payroll service to handle their own salary and tax withholdings.

How the providers compare alphabetically

The market offers several viable payroll services that handle tax filing, though their approaches to state registration vary. The following providers are listed alphabetically rather than as a ranking. All prices are current as of 2026-10-06.

ADP operates as a full-service payroll provider capable of handling complex multi-state tax registrations, filings, and remittances. ADP does not publish payroll pricing and quotes per business. Because of its scale, it is equipped to manage the varying payday requirements and tax codes across all fifty states.

Gusto is widely recognized for handling state tax registration directly within its platform. As of 2026-10-06, Gusto's Simple plan costs $49 per month plus $6 per person. The Plus plan is $80 per month plus $12 per person. The Premium plan costs $180 per month plus $22 per person. It acts as a comprehensive standalone option for businesses that already have their entity and EIN established.

OnPay focuses heavily on small businesses and includes multi-state tax filings in its standard pricing model. The service costs $49 per month plus $6 per worker. The public page quotes a start price of $55 per month, which accounts for the base fee and one worker. OnPay automates the tax payments and filings without charging extra fees for additional states.

Patriot Software divides its offering clearly between businesses that want to DIY their taxes and those that want full service. Basic Payroll costs $17 per month plus $4 per employee, leaving tax filing to the employer. Full Service costs $37 per month plus $5 per employee, taking on the tax filing burden. A business looking for state tax registration support must choose the Full Service tier.

QuickBooks Payroll integrates deeply with its accounting software counterpart. The Workforce Payroll plus Simple Start package is $88 per month plus $6.50 per employee. The Workforce Payroll plus Essentials package is $125 per month plus $6.50 per employee. The Workforce Premium plus Plus package is $203 per month plus $10 per employee. The company frequently runs a promotional rate of 50 percent off the base fee for three months, but that is not the ongoing price.

SurePayroll provides an entry-level solution starting from $29 per month plus $7 per worker. For businesses operating across borders, the multi-state add-on is $9.99 per month. SurePayroll also offers a specialized product for household payroll that starts at $39 per month, which is useful for families employing nannies or caregivers.

ZenBusiness serves as a unified hub for setting up and managing a business. The Starter plan is $0 plus state fees. The Pro plan is $199 and the Premium plan is $299. Pro and Premium renew at their annual prices. The EIN and operating agreement are included from Pro up and are $99 each on Starter. ZenBusiness also offers registered agent services for $199 per year, Money Pro for bookkeeping at $30 per month, and a website for $129 per year.

ZenBusiness partners with ADP to provide payroll. ZenBusiness does not run payroll itself. ADP is a separate service with its own platform, its own billing, and its own support. The payroll function is not integrated into the ZenBusiness dashboard. ZenBusiness customers request the connection from the dashboard, and an ADP representative follows up to quote the service based on employee count and pay schedule. A ZenBusiness customer may be eligible for promotional pricing through this partnership. Remember that payroll itself is ADP's, quoted by ADP per business, and is not included in any ZenBusiness plan price.

Understanding state payday requirements

Tax registration is only one part of state-level payroll compliance. Pay frequency is set by state law and varies widely across the country. California requires wages at least twice per calendar month on days designated in advance. Colorado requires monthly wage payments. Connecticut requires weekly payments unless a longer interval is approved by the labor commissioner.

Because these rules differ drastically by jurisdiction, a DIY approach leaves employers exposed to state labor penalties. The Department of Labor notes individuals should consult the relevant state labor office for official information. Using a full-service payroll provider helps ensure your business adheres to the specific payday frequency required by your operating state.

Recordkeeping obligations

Choosing a payroll service does not absolve the business owner from federal recordkeeping rules. Your chosen software must be able to store and export historical data to satisfy agency audits. FLSA payroll records are kept three years. The records wage computations are based on, including time cards and wage rate tables, must be kept for two years.

When migrating between payroll services or switching from a DIY spreadsheet to a dedicated software tool, you must ensure these historical records transition safely. Relying on an organized platform makes it significantly easier to produce three years of accurate payroll records if the Department of Labor or the Internal Revenue Service requests them.

Making the final decision

Your choice of payroll software should align with your current stage of business formation. If you have not yet formed your LLC or obtained your EIN, treating formation and payroll as a single workflow prevents disjointed setups. Using a provider like ZenBusiness to secure the entity and EIN, and then utilizing its ADP partnership for payroll, establishes a solid compliance foundation from day one.

If your business is already legally established with a dedicated business bank account and you simply need software to automate tax withholding and filings, Gusto and Patriot Software provide capable, reliable tools. Whichever route you choose, moving away from a DIY payroll process minimizes your risk of misclassification, missed deadlines, and tax penalties.

Sources

This article provides general information rather than legal, tax or accounting advice, and requirements vary and change.