What "full-service payroll" has to include
Providers use the phrase differently. Confirm that a full-service plan includes each of these tasks:
- Calculating federal, state and local withholding
- Remitting those taxes to each agency on the correct schedule
- Filing 941s quarterly, 940 annually, and the state equivalents
- Producing and filing W-2s and 1099-NECs at year end
- Handling new-hire reporting to the state
- Managing wage garnishments and child support orders
The distinction has direct liability consequences. Failure-to-deposit penalties escalate to 15%, and the IRS Trust Fund Recovery Penalty can be assessed personally against individual officers for unremitted employee withholding. A low price does not compensate for unclear filing responsibility.
The providers
Pricing is indicative US list pricing as of August 2026. Promotional discounts are common, so verify both the introductory and renewal price before deciding.
Gusto
Best overall for small businesses
An approachable full-service option for companies without dedicated HR or finance staff, with unlimited payroll runs and published pricing.
Gusto is designed for a non-specialist to run payroll without extensive training. Onboarding, benefits administration, contractor payments and filings share one interface, and unlimited off-cycle runs let a team correct a mistake without another run fee.
It supports multi-state payroll, although lower tiers charge monthly for additional states. The product is less suited to hundreds of employees, union rules or intricate job costing, and phone support is not included on every plan.
Strengths
- Easy to operate without dedicated payroll staff
- Unlimited payroll runs, including corrections
- Contractor payments and 1099s included
- Strong employee self-service and onboarding
Trade-offs
- Per-state fees add up for distributed teams
- Support depth varies by tier
- Limited for complex scheduling, unions or job costing
ADP RUN
Best for compliance-heavy or growing businesses
A large provider with broad compliance coverage and an upgrade path for businesses growing into the hundreds of employees.
ADP’s scale supports a wider range of payroll cases and jurisdictional compliance than the smaller providers. There is also a defined path from RUN to Workforce Now. Businesses dealing with multi-state, multi-entity, certified payroll or union agreements may justify the additional cost for that depth.
The main trade-off is commercial. Pricing is quote-based and generally higher, contracts are annual, and reported add-on fees can push the effective cost above the initial quote. Get every line item in writing, including year-end and off-cycle charges.
Strengths
- Broad compliance coverage across jurisdictions
- Scales from a handful of staff to enterprise
- Extensive integrations and HR services
- Long track record with every edge case
Trade-offs
- Opaque, quote-based pricing
- Add-on fees frequently exceed expectations
- Interface feels dated next to newer competitors
- Annual contracts with limited flexibility
Rippling
Best if payroll is part of a wider IT and HR problem
Payroll built on an employee system that can also provision devices, application accounts and benefits from the same onboarding record.
Rippling treats hiring, device provisioning, application access and payroll as one workflow. A single onboarding form can set up payroll, order a laptop, create Google and Slack accounts and enrol benefits; offboarding can reverse those actions, which also reduces lingering access.
The platform also handles global employment and contractors in many countries. Modular pricing rises as components are added, making it more platform than a payroll-only buyer needs.
Strengths
- Unified HR, IT and payroll workflows
- Offboarding can revoke application access automatically
- Strong international contractor and EOR support
- Highly configurable approval and policy workflows
Trade-offs
- Modular pricing adds up quickly
- More platform than a payroll-only buyer needs
- Implementation is a project, not a signup
QuickBooks Payroll
Best if your books are already in QuickBooks
Native integration with QuickBooks Online eliminates the reconciliation work that other combinations create.
Payroll journal entries flow into QuickBooks Online without separate mapping, syncing or monthly reconciliation. For a business whose accountant already works in QuickBooks, that removes a recurring administrative task.
As a standalone payroll product, it offers less differentiation. Some tax-penalty protections are limited to higher tiers, so confirm the exact coverage before choosing a plan.
Strengths
- Seamless QuickBooks Online integration
- Familiar to most bookkeepers and accountants
- Same-day direct deposit on higher tiers
- Often bundled at a discount with accounting
Trade-offs
- Weaker HR features than dedicated platforms
- Tax penalty protection varies by tier
- Less compelling if you do not use QuickBooks
Patriot Payroll
Best value for very small businesses
Straightforward full-service payroll at a materially lower price, aimed at businesses with a handful of employees in one state.
For a five-person company in one state with no benefits administration, the difference between $37 and $100 a month is material. Patriot still covers tax filing, direct deposit, W-2s and employee self-service.
The lower price comes with fewer integrations and less HR and benefits depth. Hiring across state lines or adding benefits may be the point at which the business outgrows it.
Strengths
- Among the cheapest full-service options
- Simple and quick to set up
- US-based support well regarded by small users
Trade-offs
- Few integrations
- Minimal HR and benefits functionality
- Less suited to multi-state or complex payroll
How multi-state payroll changes the cost
A distributed hire can create both registration work and recurring charges. Price those obligations before issuing the offer letter.
An employee generally creates tax obligations in the state where they physically work, not where your company is registered. One remote hire in a new state typically means registering with that state’s revenue department and unemployment insurance agency, new withholding and unemployment filings, and compliance with that state’s rules on pay frequency, final pay and paid leave.
- Most providers charge a monthly fee per additional state, commonly $6–$20.
- State registration is often a separate one-off service fee, or your responsibility entirely.
- Some states have reciprocity agreements; others, notably New York, apply "convenience of the employer" rules that can create obligations that surprise everyone.
- Local taxes add another layer. Ohio, Pennsylvania and several cities have their own filings.
Fees to confirm before signing
| Charge | Typical | Ask |
|---|---|---|
| Additional state | $6–$20 / month | Included, or extra per state? |
| State registration | $50–$200 one-off | Do you register for us, or only file? |
| Off-cycle payroll run | $0–$50 | Are corrections and bonuses free? |
| Year-end W-2 / 1099 | $0–$8 per form | Included, or billed in January? |
| Amended returns | $100+ | Who pays if the error was yours? |
| Direct deposit speed | Varies by tier | Is next-day available, and at what tier? |
| Setup / implementation | $0–$500 | Waived on annual terms? |
Switching providers without breaking anything
- Switch at a quarter boundary if possible, ideally 1 January. Mid-year moves require migrating year-to-date totals, which is where W-2 errors originate.
- Export everything before cancelling. Keep pay history, tax filings and employee records. Access often ends at cancellation, and those records are needed for audits.
- Run parallel for one cycle. Compare gross-to-net for every employee against the old system before committing.
- Confirm who files the final quarter. Both providers filing, or neither, are equally bad. Get it agreed in writing.
- Verify tax agency accounts transferred. New provider, new third-party authorization with each state.
Frequently asked questions
How much does payroll software cost for a small business?
Typically $35–$80 per month as a base fee plus $5–$12 per employee. A ten-person company generally lands between $100 and $180 a month. Additional states, year-end forms and off-cycle runs can add meaningfully to that, so compare on total annual cost rather than the headline.
What is the difference between full-service and self-service payroll?
Full-service means the provider calculates, remits and files your payroll taxes. Self-service calculates the numbers and leaves filing and payment to you. Given that payroll tax penalties can be assessed against company officers personally, self-service is rarely worth the saving.
Do I need payroll software for one employee?
Even one employee triggers withholding, quarterly 941s, annual 940, state filings and a W-2. Manual processing is possible but error-prone. The cheapest full-service providers start around $40 a month, which is less than a single late-filing penalty.
What happens if my payroll provider files my taxes late?
Most reputable providers cover penalties resulting from their own error, but read the terms: some cover the penalty and not the interest, and all exclude errors caused by information you supplied late or incorrectly. Ultimately the IRS holds the employer responsible, so the guarantee is a reimbursement promise rather than a transfer of liability.
Can I pay contractors through payroll software?
Yes. Most platforms handle contractor payments and file 1099-NECs. Some charge per contractor; others include it. Classification remains your responsibility. Misclassifying an employee as a contractor carries substantial back-tax and penalty exposure, and the software will not catch it.
When is the best time to switch payroll providers?
1 January, so the new provider handles a full tax year and produces clean W-2s. A quarter boundary is the next best option. Mid-quarter switches require migrating year-to-date figures accurately, which is the main source of year-end errors.