Best Free Payroll Software for Small Businesses
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Free payroll software is typically more minimalist when compared to paid payroll software like Gusto and QuickBooks Payroll. However, free payroll software can be a valid alternative to racking up another monthly expense for small-business owners who manage just a handful of employees and don’t mind a bit of manual data entry.
A free payroll software product is exceptional if it’s equipped to calculate federal, state and local taxes; offers payroll tax filing; can handle benefits deductions; includes direct deposit; has an employee portal; and offers some form of customer service. Other features such as time tracking, a cloud-based platform and HR management are nice bonuses. However, free payroll software rarely offers all of these features so it’s important to determine what’s essential to your business when comparing products.
Payroll4Free: All-around best free payroll software
Free basic payroll services for 25 or fewer employees. For an additional monthly fee, Payroll4Free will file and deposit payroll taxes, as well as process year-end tax forms and let you use its bank for direct deposit. You’ll pay a maximum of $30 per month for both these services.
Compared to other free payroll software products, Payroll4Free’s tax calculations, filing options, PTO tracking and employee portal set it apart. These automated features can help prevent costly payroll mistakes and also save the business owner a great deal of time. Although Payroll4Free doesn’t let employees clock in and out or record their hours within the system, the software can import employee hours from outside files. Despite its features, the product isn’t a good fit for business owners who are averse to Windows or have more than 25 employees. Also, there are fees if Payroll4Free handles tax filings or if you want to use its bank for direct deposits to your employees — $30 monthly for both services.
TimeTrex: Best time tracking and scheduling features
TimeTrex’s open-source Community Edition is free. Quote-based plans that include a mobile app, facial recognition capabilities, job costing, applicant tracking and more are also available.
Compared to Payroll4Free, TimeTrex’s community edition payroll software offers more time-tracking and scheduling features, and it's cloud-based. On the downside, it falls short on tax filing. While it will calculate payroll taxes and generate tax reports, business owners should be comfortable filing their own payroll taxes. Likewise, TimeTrex will calculate and prepare your direct deposit, but it's up to the business to remit the file to the bank. The software also works alongside other popular payroll software products in case you’d only like to use it for, say, time-tracking.
HR.my: Best multilingual capabilities
HR.my is free with unlimited data storage and no employee limits. A crowdfunding campaign is available for any users interested in making a financial contribution.
HR.my earns a spot on this list for its multilingual capabilities and HR features. In addition to letting employers track their mobile workforce by collecting geolocation data, the platform lets them assign employees different levels of access to the employer account. This is especially useful for businesses that have an HR staff or administrators. Employers can also set up expense claim approval workflows to ensure documents get sent to the right person the first time around. The product's biggest drawback is its lack of automated tax calculation and filing services. If the business owner doesn’t have prior experience calculating and filing payroll taxes on their own, this is not the right product for them.
eSmart Paycheck: Best payroll calculator
The payroll calculator offered by eSmart is free. Paid plans are also offered that start at $75 annually for up to five employees. Other payroll services such as federal and state e-filing and payroll tax deposits require a yearly fee ranging from $20 to $35 or more.
The free online payroll calculator offered by eSmart Paycheck lets you create paychecks, print them and calculate federal and state payroll taxes. Generating tax forms, like W-2s, is free and users can pay a fee to file them through a service called eSmart Payroll. The site says private information is not saved, which may require more manual data entry from one payroll period to the next. This tool can be used on its own or paired with another free payroll software. It’s especially useful if your current payroll software doesn’t automatically calculate taxes.
Best free payroll software trials
Before paying for a subscription, you can try the following payroll software products for free:
Patriot Payroll: The company, which also sells accounting software, gives clients unrestricted access to its payroll platform for 30 days. For more information, read NerdWallet's review of Patriot Payroll.
OnPay: With one base fee instead of multiple plans, this option offers a simple pricing structure. You can try it free of charge for 30 days. For more information, read NerdWallet's review of OnPay.
Wave Payroll: Known for its free accounting software, Wave also has payroll software for a monthly fee. Clients can try it for free for 30 days. For more information, read NerdWallet's review of Wave Payroll.
QuickBooks Payroll: Business owners interested in this product have to choose between a free 30-day trial or saving 50% for three months. For more information, read NerdWallet's review of QuickBooks Payroll.
How to choose payroll software
Before deciding whether to pay for payroll software, business owners should consider the following:
Complexity of FICA, federal and state payroll tax law.
Whether there’s a plan to scale up their company.
The number of employees and contractors.
How much time they’re willing to dedicate to payroll tasks.
It's best to avoid labeling free payroll software as a temporary solution since switching from one software to another is a pain and often time-consuming. If free payroll software won’t cut it as the business grows, it will likely be better to pick a paid product that can accommodate growth and has automation options.
While business owners can typically make up for a lack of time tracking or expense management features by using an outside app, the same can’t be said for payroll taxes. Here are payroll features that are vital for most business owners along with some that are certainly nice to have.
Most important features
Federal and state tax calculations and preferably tax filing options.
Ability to calculate benefits deductions.
HR management features.
Expense claim features.
Customer support via phone.