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Oct 01, 2023

Best free payroll software of 2023

Business Jessica Elliott Alana Rudder “Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy. BLUEPRINT Published 3:49 a.m. ET Aug. 31, 2023 Editorial

Business

Jessica Elliott

Alana Rudder

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

BLUEPRINT

Published 3:49 a.m. ET Aug. 31, 2023

Editorial Note: Blueprint may earn a commission from affiliate partner links featured here on our site. This commission does not influence our editors' opinions or evaluations. Please view our full advertiser disclosure policy.

The best free payroll software streamlines payroll processing, allowing businesses to accurately and quickly run payroll. They let businesses export payroll data to accounting programs and run reports. In addition, top-rated payroll platforms support direct deposit and paper checks while giving employees access to their personal data, tax forms and pay stubs through mobile apps or online portals.

We reviewed 19 payroll systems and spent over 20 hours speaking with customer service agents, studying user feedback and testing payroll software. Our evaluation considered payroll features, ease of use and tax filing tools. We also assessed add-on fees, paid plan pricing and standout features.

In this guide, we overview the best free payroll software so you can choose the right one for your small business.

: Best for managing hourly workers

: Best for basic payroll services

: Best for solopreneurs and contractors

Why trust our small business experts

Our team of experts evaluates hundreds of business products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.

We extensively research the key competitors within an industry to determine the best products and services for your business. Our experts identify the factors that matter most to business owners, including pricing, features and customer support, to ensure that our recommendations offer well-rounded products that will meet the needs of various small businesses.

We collect extensive data to narrow our best list to reputable, easy-to-use products with stand-out features at a reasonable price point. And we look at user reviews to ensure that business owners like you are satisfied with our top picks’ services. We use the same rubric to assess companies within a particular space so you can confidently follow our blueprint to the best free payroll software of 2023.

The best free payroll software has positive user reviews on customer review sites. Payroll service companies should provide customers with fast and reliable support. Using a combination of phone support, live chat and knowledge bases, customers should be able to quickly resolve issues 24/7.

Free payroll software should provide a combination of basic payroll features, including mobile apps, self-service employee portals, HR libraries, new hire reporting, third-party software integrations, payroll analytics, wage garnishments, vacation/leave tracking, ledger reports and 401k tracking. Expanding on the basic feature set, additional payroll capabilities, such as direct deposit, tax compliance, HR features, time tracking capabilities and benefits administration, set the best free payroll software apart from competitors. However, the most important factor is that the free payroll software allows businesses to run payroll for no cost.

Homebase Payroll

Although Homebase Payroll lacks completely free payroll software, it’s the only payroll software with complimentary time, scheduling and employee management tools. Small businesses with up to 20 workers and one location can give their hourly workers tools to clock in and out through Homebase’s iOS or Android mobile apps or available tablet or web time clocks.

Best of all, the free version integrates with leading point-of-sale (POS) systems, including Square, Lightspeed and Clover. Its built-in messaging tools allow hourly workers to trade or pick up shifts and receive alerts, from shift reminders to overtime notifications.

Homebase’s payroll add-on costs $39 a month plus $6 per employee. Unlike Wave or Payroll4Free, Homebase Payroll has no self-service payroll option. Instead, it has one full-service plan with new hire reporting and tax filing for federal and state agencies.

Homebase payroll features include the following:

We especially like the employee cash-out option for hourly staff, as neither Wave Payroll nor Payroll4Free offers this payment method. It lets employees access part of their wages before payday without hidden fees or interest. It doesn’t impact employers running payroll but can help them attract and retain workers.

Homebase Payroll provides customer support by phone and live chat on weekdays from 8 a.m. to 7 p.m. Central Standard Time and typically replies to emails within 24 hours. Additionally, it offers an extensive knowledge base with detailed guides and screenshots to walk users through each step of using the software. You can also access Homebase’s YouTube channel for helpful videos and product demos.

Our user testing revealed that some Homebase functions were more challenging than others, but we like that Homebase will set up your payroll or transfer data from another service for free. It also receives many positive reviews from other users who praise the software for its ease of use, the ability for employees to easily manage their own time tracking and shift trading tasks using an intuitive employee app and its free features.

However, some users complain of software glitches that cause loss of time-clock data or the inability to log into the system. In addition, Homebase Payroll doesn’t support benefits administration or management, features that several paid payroll systems like Gusto and OnPay offer. Lastly, while Homebase Payroll says it includes paid-time-off policies and tracking, only the Plus plan lets users automatically create PTO policies to track accruals and balances.

Payroll4Free

Payroll4Free is free for businesses paying up to 25 employees and contractors. For essential payroll services, this free price tag is quite a bargain. Self-service payroll (where you file your tax forms and remit payments) tend to be less expensive than full-service options. Still, for 25 workers, you would pay $170 monthly through Wave and $117 monthly with Patriot Software for such self-service payroll services. This means that, annually, using Payroll4Free’s self-service payroll can amount to $1,404 to $2,040 in savings over paid tools.

Although Payroll4Free doesn’t have built-in time-tracking like Homebase Payroll, it integrates with any time clock software that allows data export. Connecting Payroll4Free to a time clock system lets you sync worked hours to payroll. In addition, Payroll4Free offers payroll tax services for $25 monthly or $250 annually. This price makes Payroll4Free one of the cheapest solutions for automated tax filing.

Payroll4Free has the following features:

We appreciate that Payroll4Free includes unlimited customer support by phone and email. However, despite its free price tag, we found Payroll4Free lacks some important features that paid software provide. For example:

Overall, Payroll4Free’s automatic calculations may be preferable to a spreadsheet for companies without a budget but less desirable than a full-fledged paid service.

Wave Payroll

While Wave Payroll isn’t free, the software integrates seamlessly with Wave’s free accounting and invoicing tools, making it ideal for solopreneurs and contractors. As your small team expands, you can add payroll for subcontractors or employees without worrying about integrating with Wave Accounting.

The accounting program allows unlimited collaborators for income and expense tracking. The invoicing service enables you to customize your statements and send payment reminders. Once you connect payroll, the software creates automatic payroll journal entries, eliminating the need for manual data entry.

Wave Payroll costs $40 plus $6 per active employee in 14 full-service states or $20 plus $6 per person in 36 self-service states. If you live in a full-service state, you can opt out of the automated tax filing service but still must pay the total monthly amount ($40).

Both versions include direct deposit or you can print paper checks to pay employees. Wave partners with Check Print, providing a Wave check template and stock. For 250 checks without a logo, it costs $92. Wave says you can buy checks from another company but must ensure their format matches their approved Check Print style.

Wave Payroll software includes the following features:

Wave Payroll offers a unique feature that neither Payroll4Free nor Homebase Payroll provides: Workers’ compensation insurance. To do so, it partners with Next Insurance, and you can apply using a portal in your payroll dashboard. This option isn’t available for Ohio, North Dakota, Washington or Wyoming-based employees.

Overall, Wave Payroll users appreciate having an all-in-one accounting, invoicing, payments and payroll system. Many professionals say it’s easy to use and beginner-friendly. Common complaints include difficulty running an off-cycle or emergency payroll and slower-than-expected customer support response times.

Unlike Homebase Payroll and Payroll4Free, Wave Payroll doesn’t offer a customer service phone number. Instead, you must contact Wave via live chat or email during business hours. Wave also doesn’t support benefits administration or wage garnishment services, two features available with top-rated programs like OnPay and Gusto.

The best free payroll software automatically calculates wages, overtime and vacation pay while withholding payroll taxes. In addition, top-rated solutions offer payroll reports and let you export data to accounting programs. But, free versions still charge fees for certain services and may impose limits on workforce sizes or locations.

Our analysis of the best free payroll software revealed that the systems offered various customer service options, free and paid tools and payroll features. Here’s how the platforms differed:

Some payroll providers have a totally free payroll service that may be supported through ads. However, others offer free accounting, invoicing, employee management, time tracking or scheduling tools, yet charge base and per-employee fees for payroll software.

Although all free payroll platforms provide direct deposit or paper check payment options, not all services offer on-demand pay and some require you to pay a fee for key payroll features. Also, differences exist in how or if the payroll software integrates seamlessly with complementary features, such as employee time tracking, wage garnishment capabilities and workers’ compensation insurance and benefits administration services.

Each payroll service provider approaches add-ons differently. Some let you choose automated tax filing and service all 50 states, whereas others require you to pay for automatic tax filing even if you opt out of the service or limit the states in which you can access this feature. Some payroll companies have other HR, benefits administration, compliance and accounting products or fee-based add-on options.

While all free payroll software systems provide email support, not all are available by telephone. And, none offer customer service 24 hours a day, seven days a week. Response times and self-service guides also vary by provider.

Homebase Payroll is our top choice for the best free payroll software. Its free scheduling and time-tracking tools integrate seamlessly with its payroll tools, making Homebase an excellent option for small businesses with 20 or fewer employees and contractors. Although its payroll tools require a monthly payment, the customer support and advanced feature set can save small teams time while reducing payroll errors.

Free alternatives like Payroll4Free don’t include automated tax filings, have any online help center or knowledge base articles and charge extra fees that can add up quickly. While Homebase Payroll isn’t totally free, its value-added tools and free HR software make it stand out from the competition.

A free payroll software is an application that automatically calculates wages, deductions and taxes to determine each employee’s net pay. From there, employers can print paper checks or pay using direct deposit.

Some free payroll platforms offer additional capabilities to make payroll processing easier or more efficient. For example, they may integrate with time and attendance tools or have built-in time-tracking systems. This capability reduces manual data entry by auto-populating the hours worked for each employee.

In addition, most free services allow you to export your payroll ledger to accounting software, like QuickBooks Online. Several free and paid payroll systems offer accounting and payroll tools for seamless workflows. These include QuickBooks Payroll, Patriot Software and Wave Payroll.

However, free payroll apps typically only work for small companies with fewer than 20 or 25 employees and contract workers. Some only allow a single business location to use the software. Most free services do not automate payroll tax filing, although they may provide tax forms or offer paid add-on services.

To understand the software, here are free payroll software terms to know:

Free payroll software works much like their paid counterparts. Our testing showed slight differences in that free services were less user-friendly and had fewer features. Yet, payroll processing methods are similar, whether using free or paid tools.

Some free payroll software services have a dashboard where you can click to start payroll. The portal may also show important dates, upcoming tax filing deadlines and other alerts.

To complete a payroll run using free payroll software, you must follow these steps:

The system automatically calculates wages, taxes and deductions. Once complete, you can review and finalize payroll runs, then print paper checks or send your payroll data to your bank for direct deposit. Most free payroll services summarize your pay cycle and let you view, print or export reports. However, not all free apps allow you to cancel a payroll run unless you pay a fee.

Most free payroll systems are self-service, meaning you must file quarterly and annual tax forms and remit payments. However, some may offer tax filing services for an additional fee. For example, to file taxes for you, Payroll4Free charges $25 monthly or $250 annually, while Wave Payroll charges $40 plus $6 per employee monthly (available in 14 states) and Homebase Payroll charges $39 plus $6 per person monthly.

Businesses that file payroll taxes must complete the following steps:

Gregory Saarinen, owner of The Collab at 113, suggests taking extra caution when looking at free payroll systems. “Even if the price (free) is right, a poorly configured tool can frustrate your payroll team and end up taking even longer than a simple spreadsheet.”

Follow these steps to choose the best free payroll software for your small business.

Many small businesses switch to a payroll system after experiencing problems with their processes. Suppose it’s taking too long to manually enter payroll data, driving up costs but you’re comfortable filing quarterly taxes through the government’s online system. In this case, a self-service payroll platform may work better than paying for a full-service subscription. However, if you’ve been fined for delinquent payments or tax errors, you may prefer a solution that includes automated tax filings.

As you consider your payroll challenges, ask yourself the following questions:

Free payroll software has limitations, and fees may apply to companies with multiple locations or those that pay over 25 employees and contractors each payroll run. Furthermore, included features and tools vary. For example, not all services assist with wage garnishments or benefits administration.

Consider these questions when evaluating your software requirements:

Now that you know what you’re looking for, you can evaluate payroll products to match your needs. Make a prioritized list of the features you need and of your monthly budget. Use project management software or a spreadsheet to track software variables and company contact information.

Check out professional reviews and software round-ups like our best payroll software guide to see which providers offer the most needed features within your budget. Tally up the monthly costs and any add-on fees for each considered provider. Compare these figures to your budget and features list to see which services offer the best overall value.

Also, look at user testimonials on sites like TrustPilot, G2 and Capterra. For payroll software that offer mobile apps, see user ratings on the Apple Store and Google App Store. While user reviews are subjective, if you notice a pattern of complaints or praises, take note.

Once you’ve narrowed down your options, request free demos and trials from payroll service providers. If possible, access the software from the employer and employee portals. Practice performing basic payroll tasks, like adding and removing workers, running payroll and exporting reports or ledger information.

As you test the products, note any questions or issues so you can speak with a company representative. As you do, remember to contact customer support through email, chat and phone to determine if staff is responsive, friendly and knowledgeable.

After consulting with your team, determine which payroll system suits your budget and business needs. Do a soft rollout with your team’s management to determine if your top considered software meets your team’s needs and to smooth out any glitches before rolling it out to your entire company.

Few things in the business world are genuinely free, and payroll software systems are no different. Free payroll services may be ad-supported and typically offer less support and features than paid versions.

However, a few platforms didn’t make our final cut. This is because some free payroll software don’t offer integrations with key software or tools, such as accounting tools. Others don’t offer employee self-serve portals or detailed reporting. Most businesses will find these features essential for employee retention and ongoing payroll processing success and so cannot do without them even for a free price tag.

Likewise, some free payroll software didn’t support 1099 contractors or offer direct deposit. Since more than 93% of respondents to a Getting Paid in America survey get paid by direct deposit, we consider this an important feature to meet the expectations of the top talent businesses want to attract and retain. Additionally, with McKinsey & Company reporting that the gig economy is booming, many small businesses want the flexibility to pay contractors from the same software that they pay hourly and salaried workers.

Finally, just because it claims to be free doesn’t mean it is. Saarinen recommends that, when considering a free software, business owners read the terms of service carefully and check the fee list. “Often free payroll software charges fees for things that paid tools include with your subscription. I got dinged once because I had to revise my payroll after submitting it for processing. With a paid service, you can usually make adjustments without extra charges. But this oversight ended up costing me a pretty penny.”

Most small businesses can benefit from payroll software because its tools help small businesses comply with complex, ever-changing payroll tax and employment laws. For example, it enables:

Incorrect payroll management can lead to tax penalties, litigation, reputational damage and lost talent. For example, SHRM reported on a $13.2 million award to Alabama steelworkers who weren’t paid the correct overtime amounts, a policy that violated the fair labor standards act (FLSA).

Payroll software could have helped the company avoid this costly penalty by using calculation and compliance engines to compute the correct overtime pay and tax withholding amounts. These tools update automatically to the latest state and federal regulations to ensure accurate payroll and legal compliance.

Payroll software protects your company by:

You can run payroll using a spreadsheet and the IRS tax withholding calculator. Here is a general breakdown of how to do so:

Remember that the IRS requires certain payroll records as well. Therefore, you must ensure that your spreadsheet and related documentation meet IRS standards.

You must also pay taxes on an approved state and federal schedule, usually quarterly. Check with state and federal guidelines to learn when you must submit your payments. You can use the electronic federal tax payment system (EFTPS) to submit your payments. State taxes are usually paid to your state’s department of revenue, department of taxation or a similar agency.

Due to the multiple manual calculations, do-it-yourself payroll is time-consuming and prone to errors. You can over or underpay workers or the IRS with one missed decimal point or an incorrect number. Neither is a situation that you want to be in as resulting penalties and interest add up quickly and substantially.

Payroll software improves payroll processes, making the cost well worth it for companies with more than a few employees. Many free and paid payroll software platforms let users export payroll ledger data to accounting software. Several payroll apps sync with time tracking or point-of-sale (POS) systems. These two capabilities alone can save small businesses many hours of manual data entry and prevent errors.

On the flip side, a simple mistake when going it alone can underpay an employee or miscalculate withholdings, leading to upset staff, litigation and tax penalties. According to an Ernst & Young study, the average cost per payroll error is $291. Moreover, about “one in six companies surveyed” had litigation issues,” resulting in 44% having to terminate or furlough employees and 35% experiencing an increase in employee turnover.

Free payroll tools typically do not include key features you’re likely to need, including automated tax filing and deposits. Many also lack advanced features that come with paid subscriptions, such as new hire reporting and benefits administration.

Free payroll software gets the basic payroll processing job done for a company with a handful of employees. But as your business expands, having an all-in-one platform that assists with new hire onboarding, tax filings and document storage can streamline workflows and allow HR staff to complete tasks in less time and with less risk of internal or external error penalties.

With a free price tag, Payroll4Free is the cheapest self-service payroll solution for companies with 25 or fewer employees and contractors. However, if you want automated tax filing and payments, Roll by ADP offers the lowest monthly price ($29 plus $5 per employee) and provides a three-month free trial for new users.

Self-payroll software ranges from free to $20 monthly plus $0 to $6 per employee per month. Payroll4Free, Patriot Software and Wave Payroll all offer do-it-yourself tax filing payroll software. Full-service payroll systems range from $29 to $45 monthly plus $4 to $6 per employee for base plans.

However, several full-service payroll providers have pricier tiers with advanced HR tools, benefits administration services, financial management tools, compliance tools and other features. These cost $80 or more monthly plus $10 or higher per-person monthly fees. Compare pricing and features in our best payroll software guide.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Jessica Elliott

BLUEPRINT

Jessica Elliott is a business writer specializing in technology, marketing, and operations. She dissects complex topics and empowers leaders to make informed decisions. Her work appears in Business News Daily, U.S News & World Report's 360 Reviews, and Investopedia.

Alana Rudder

BLUEPRINT

Alana is the deputy editor for USA Today Blueprint's small business team. She has served as a technology and marketing SME for countless businesses, from startups to leading tech firms — including Adobe and Workfusion. She has zealously shared her expertise with small businesses — including via Forbes Advisor and Fit Small Business — to help them compete for market share. She covers technologies pertaining to payroll and payment processing, online security, customer relationship management, accounting, human resources, marketing, project management, resource planning, customer data management and how small businesses can use process automation, AI and ML to more easily meet their goals. Alana has an MBA from Excelsior University.

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