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An important aspect of running your small business efficiently is finding the right tool to manage your payroll. You may be considering Paychex, but before making your final decision, it’s worth looking at a few alternatives.
This handy guide explores the top Paychex competitors, so you'll be able to see what they have in common with Paychex, as well as what makes each one unique.
What is Paychex Payroll?
As a quick refresher, Paychex is a payroll software that enables you to perform the tasks you need to manage your company’s payroll. They’re one of the largest and oldest payroll software providers and have made lots of updates to their core services along the way. There are also many tiers of Paychex services, such as Paychex Flex, so you can pick a level that best meets your needs.
Paychex Payroll is a relatively comprehensive payroll software system that’s built to be scalable for growing businesses as it has tiers that support businesses that are growing out of the “small” stage. It’s meant to be software that helps you with payroll, but also offers extremely comprehensive HR functions too.
Paychex pros and cons
When considering the benefits and drawbacks of Paychex Payroll, which are important for comparison to the Paychex competitors, this guide will primarily focus on Paychex Flex Select. It’s a good level to compare as it serves small businesses with 10 to 49 employees.
Paychex Flex pros
Other HR functions beyond payroll
Cloud-hosted, so you can access it via your phone or any computer
Notifications when it’s time to do your next payroll
Several options to pay employees, including a prepaid MasterCard
Automatically calculates, pays and files payroll taxes
Employee portal for onboarding
Robust reporting suite
Several add-ons available
Paychex Flex Payroll cons
Fee to use
Can be a difficult user experience for some
Lack of immediate setup, as you have to wait up to 48 hours for access
Mixed reviews across software review sites
No way to track pay increases.
Top Paychex Payroll competitors
If Paychex Payroll isn’t quite right for you, or you’re looking into other options to compare features, there are numerous Paychex Payroll competitors — and you've got more options than would be practical to cover in this brief guide. Below are some of our top picks.
As a small-business owner, you’ve likely come across ADP already since it’s incredibly popular — you might have even received a paycheck through the system if you ever worked for someone else. ADP serves more than half a million small-business owners and offers a mix of both payroll and HR services.
One of the biggest pros of ADP is that this payroll software offers four different tiers of plans for small businesses, whereas Paychex Payroll only offers one until you have to upgrade your service. (For reference, ADP defines small-business as one to 49 employees, whereas Paychex Payroll starts at 10.) Some of the features are similar to those of Paychex Payroll, including a robust reporting suite, tax administration and more.
Similar to Paychex Payroll, there are several options for ways to pay your employees. But ADP offers more background checks at the Complete level, whereas Paychex Payroll only gives a limited number. Many users also find ADP easier to use than Paychex Payroll.
Like Paychex, ADP is priced on a quote-based system, so you will have to contact their team directly for more pricing info.
One of our favorite options for payroll software, QuickBooks Payroll is by the same team behind the beloved QuickBooks accounting platform. QuickBooks Payroll has three tiers of payroll plans, some of which include combinations with QuickBooks Online. You also have the option to select integration with QuickBooks Desktop for small-business.
They also have transparent pricing: $45, $75 and $125 for each tier respectively. The software is easy to scale with as you grow your business. As a cloud-based platform, you can administer your payroll from any internet-enabled device, anywhere.
As a downside, some QuickBooks Payroll reviews say that tax management isn’t the easiest process. If this is especially important to your business, you’ll want to check this out thoroughly before committing.
Another one of our top Paychex competitor picks is Patriot's payroll software. This Paychex alternative has two tiers that are specifically designed for small-business owners. While time and attendance tracking and HR tools are not standard with either plan, you have the option to add this functionality.
For cost-conscious small-business owners, you’ll definitely want to consider Patriot Payroll, since it begins at just $17 per month for the first tier, and $37 per month for the top tier. On top of these monthly base fees, you’ll also pay $4 per employee per month with either plan.
Between the two tiers, most business owners will likely prefer the higher one, known as Full Service, which has more features. The base level includes a couple of options for paycheck deposit as well as flexible payment schedules. However, the Full Service also gives you tax filing integration, including W2s and W3s, as well as federal, state and local taxes filed and deposited for you.
You’ll likely know Square from their ubiquitous card readers that enable small businesses to take credit cards directly from their phones. The popular payment processor also offers payroll software, known as Square Payroll. This software is available in all states and is especially appealing for business owners who already use the Square POS software.
It’s also a strong option if you work with contract or hourly employees. Taxes are taken care of for these employees, and they can even clock in and clock out directly from the Square app. For all users, payroll and tax automation is very strong. One drawback, however, is the app doesn’t let users schedule their payroll on the same day each month.
With Square Payroll, you’ll pay $5 per employee or contractor a month. If you only employ contractors, this will be the only fee you’ll have to worry about. However, if you have W2 employees, you’ll also pay a $35 monthly base fee. For this relatively low price, though, you’ll also have access to benefits management (health insurance, retirement and more).
Next on our list is Gusto, previously known as ZenPayroll, a very popular emerging payroll platform, especially for businesses with a modern tech stack. Gusto also offers transparent, upfront pricing, with plans beginning at $40 per month, plus $6 per employee.
There are three Gusto payroll plans, each with an increasing number of services for small-business owners. The lowest tier gives you full-service payroll software, benefits administration, workers comp administration (only available at a higher tier with Paychex Payroll) and more. Gusto doesn’t offer new employees onboarding at their lower level, though.
Gusto also integrates with several accounting software platforms, which helps with the smooth process of having all of your finances together.
If the reason you’re looking for Paychex alternatives is that the price might not be in your budget, then it’s worth considering this top free payroll software option: Payroll4Free.
This software serves businesses with fewer than 25 employees and you can access features including payroll processing for both employees and contractors, vacation tracking, tax calculation and forms and a few HR processes, too.
Of course, you will have to sacrifice a few features in order to get free software. These include no automatic tax filing and direct deposit to your own bank as the only payment option. If the tax filing is a dealbreaker for you, then know that for $12.50 you can upgrade to get those services. The same is true if you want more options to pay your employees. Still, it’s a relatively inexpensive option, especially for business owners that don’t run a huge operation and don’t need bells and whistles in their payroll software.
Gusto Payroll Plans start at $40 per month (base) and $6 per person per month. Read review.
RUN Powered by ADP Plans start at $79 per month (base) and $4 per person per month. Read review.
OnPay Payroll Plans start at $40 per month (base) and $6 per person per month. Read review.
Square Payroll Plans start at $35 per month (base) and $5 per person per month. Read review.
QuickBooks Payroll Plans start at $45 per month (base) and $4 per person per month. Read review.
Wave Payroll Plans start at $20 per month (base) and $6 per person per month.
Providers may offer lower promotional pricing.
A version of this article was first published on Fundera, a subsidiary of NerdWallet