Best Payroll Software for Small Startups (2026 Prices)

Short answer: For a US solo founder running owner payroll or a startup with its first one to five hires, start with Square Payroll ($35/mo + $6 per person, multistate included) or OnPay ($49/mo + $6 per worker, every state included, first month free). In the UK, a director-only company can run payroll for free with HMRC Basic PAYE Tools, or use the payroll that comes with FreeAgent or Xero if you already keep your books there.

Every price below comes from the vendor's own pricing page or gov.uk/IRS, checked on 12 Nov 2026. The recommendations and arithmetic are ours and are marked as such.

TL;DR#

• Cheapest full-service US payroll we could verify: Square at $35/mo + $6 per person paid (Square Payroll pricing).
• Best for multiple states on a budget: OnPay at $49 + $6/worker, with no additional cost to pay in as many states as you need (OnPay pricing).
• Lowest per-worker fee: Patriot Full Service at $37/mo + $5 per worker, but $12/mo per extra state (Patriot pricing).
• UK, free: HMRC Basic PAYE Tools, for "businesses with fewer than 10 employees" (gov.uk).
• UK, bundled: FreeAgent (payroll in the £33/mo limited company plan) or Xero Grow (£39/mo incl. payroll for 1 person), both ex VAT.

Disclosure: ZeroRaised has no affiliate or commercial relationship with any payroll provider named here and earns nothing if you sign up. This is not tax or legal advice.

Who this guide is for#

A solo owner who now needs payroll for themselves (US S corp or C corp salary, UK director PAYE), or a founder hiring their first one to five people. Our guide on how to pay yourself as a solo founder covers why and how much, and how to hire your first employee covers the hiring side. This post covers which tool.

Our read: you need correct tax filings, direct deposit, year-end forms and a bill that stays small when headcount is one, not a platform built for 200 people.

Comparison table: payroll software for small startups#

Gusto and Justworks blocked our automated checker, so we read their pricing pages by hand on 12 Nov 2026. Gusto lists Simple at $49/mo + $6/mo per person ("Run basic payroll in one state"), Plus at $80/mo + $12/mo per person (multi-state payroll), and says US contractors are billed at the per-person rate only in months you pay them. Its Gusto Solo plan for one-person S corps is "$49/mo base + $6/mo per payroll recipient", with a guided S corp election (Form 2553) and a reasonable salary calculator. Justworks lists Payroll at $8/month per employee + $50/month base fee, with US contractors at $8/month per paid contractor and PEO Basic at $79 per employee. Our read: Gusto Solo is worth the extra $14 a month over Square only if you want the S corp election paperwork and salary guidance in the same tool.

The best US payroll software, one by one#

Square Payroll: cheapest full-service we verified#

Square's full-service plan is "$35/mo" plus a "$6 monthly fee per person paid", and its pricing page lists multistate payroll and automated state tax payments and filings as included (Square). There is also a contractor-only plan at $6/mo per person paid, which does not include state tax filings.

Our read: for a one-person S corp, this is the simplest low bill. If your only payroll is you, $41 a month is hard to beat with taxes filed for you.

OnPay: best when you hire in other states#

OnPay's standard plan, Payroll Essentials, is "$49 base + $6/worker per month". It includes "All federal, state, and local tax filings and payments" and says there is no additional cost to pay in as many states as you need (OnPay). The first month is free. Contractors are paid on the same plan at the same rate.

Our read: remote startups often make their second hire in a different state from the founder. OnPay's flat rate means that hire does not change your software bill.

Patriot Software: lowest per-worker fee, one state#

Patriot has Basic Payroll ($17/mo + $4 per worker, you file taxes yourself) and Full Service Payroll ($37/mo + $5 per worker, Patriot files federal, state and local taxes). The current offer is 30 days free then 50% off for 3 months, which shows as $18.50 + $2.50. The catch: "Each additional state filing is $12 per month, per state", and the base fee is charged even in months you do not run payroll (Patriot).

Wave Payroll: if Wave already does your books#

Wave Payroll in the US is a "$40 USD base fee" plus "$6 per active employee" and "$6 per independent contractor paid", with a 30-day free trial. Wave says it offers its tax service in all 50 states at the same price, though it files with your state and the IRS "excluding 1099 filings" (Wave).

QuickBooks Payroll: if QuickBooks already does your books#

On the add-payroll page for existing QuickBooks users, Workforce Payroll is $50 + $7 per employee, Premium $88 + $13, and Elite $134 + $17, with a "save 50% for 3 months" offer and "No annual contract". All tiers say "We'll calculate, file, and pay your payroll taxes for you" (QuickBooks).

Warp, Deel and Rippling: the startup-flavoured platforms#

• Warp charges a platform fee plus a per-person fee: Starter "$35 per person/mo" + "$89 platform fee/mo" covering up to 3 states, Pro $50 per person + $129 covering all 50 (Warp). Our read: the per-person fee makes it the priciest option here at small headcount.
• Deel shows contractor pricing "Starting at $49 per contractor per month" and US PEO "Starting at $125 per US PEO employee per month" (Deel). It makes most sense when your contractors are abroad.
• Rippling says "Rippling plans start at $8 per employee per month, with a monthly base fee" and asks you to request a quote (Rippling). Its free startup access is for eligible VC-backed US startups, which most readers here are not.

One-person payroll for a US S corp owner#

The IRS is direct about this: "S corporations must pay reasonable compensation to a shareholder-employee in return for services before non-wage distributions may be made to the shareholder-employee" (IRS). So if you work in your S corp, you are an employee of it and need payroll. How to pick a reasonable figure is covered in our pay yourself guide.

Before the first run, the SBA's hiring guide lists the order: "Get an Employer Identification Number (EIN)", then "Find out whether you need state or local tax IDs". For unemployment insurance you "may need to register with your state workforce agency", and workers' compensation is "Required through a commercial carrier, self-insured basis, or state Workers' Compensation Program" (SBA). Rules vary by state, and whether an owner-only company needs workers' comp depends on your state, so check its own pages.

Our read: full-service payroll earns its fee here. Quarterly federal returns, state withholding and unemployment filings, and a W-2 for yourself are the boring tasks that get forgotten when you are the only person on payroll.

UK: running payroll for a director and first staff#

Once your limited company pays anyone, including you, you run PAYE. Gov.uk says that "On or before your employees' payday" you use your payroll software to "Report their pay and deductions to HMRC in a Full Payment Submission (FPS)" (Running payroll). That is Real Time Information (RTI).

Three facts that matter for a founder:

• Directors' NI is worked out annually. Gov.uk says director contributions "are worked out from their annual earnings rather than from what they earn in each pay period" (Employee directors). Make sure your software is set to treat you as a director.
• 2026 to 2027 thresholds. The employer secondary threshold is £5,000 a year, the lower earnings limit is £6,708 a year, and the employer Class 1 rate is 15% (Rates and thresholds 2026 to 2027).
• Employment Allowance does not cover a lone director. The allowance is £10,500 for 2026 to 2027, but "If your company has only one director, they must not be the only employee liable for secondary Class 1 National Insurance" (Employment Allowance eligibility).

Which tool:

• HMRC Basic PAYE Tools is "free payroll software from HM Revenue and Customs (HMRC) for businesses with fewer than 10 employees". It works out tax and NI and sends it to HMRC, but has "some limitations" (gov.uk). You must already be registered as an employer.
• FreeAgent includes payroll in its limited company plan at £33/mo ex VAT (£16.50 for the first six months), and says you can "Add as many employees as you need as your business grows, at no extra cost" (FreeAgent pricing, FreeAgent payroll). It is free with some NatWest, RBS, Ulster Bank and Mettle accounts.
• Xero Grow is £39/mo ex VAT with "Payroll for 1 person", Comprehensive £55 with 5 people, and £1.50 per additional person (Xero UK pricing).
• BrightPay is now cloud-only: "BrightPay for Windows will be discontinued after 5th April 2026" (BrightPay). Its pricing page did not show prices when we checked.
• QuickBooks UK sells payroll as an add-on, but its page loaded no live prices for us, so we have not quoted one.

Employee or contractor? Check before you add them#

Payroll tools will happily pay anyone, so classification is on you. The IRS says a worker is an employee "if you can control what will be done and how it will be done", and looks at behavioral, financial and relationship evidence (IRS). In the UK, status determines "their rights" and "their employer's responsibilities", and gov.uk warns "A person may have a different employment status in tax law" (gov.uk). Our guide to hiring your first contractor covers contracts and payment.

Worked example: 12-month cost (ours)#

Illustrative arithmetic using list prices above, one state, monthly payroll, before promos and before any state or local fees. Your bill will differ.

US, 1 owner on payroll:

US, 3 people (owner + 2 hires):

If one hire lives in a second state, Patriot adds $12 a month ($144 a year, so $768), while Square, OnPay and Wave stay the same. That flips Patriot from cheapest to mid-table.

UK, ex VAT, regular prices: a director alone costs £0 on Basic PAYE Tools, £396 a year on FreeAgent (accounts included), or £468 on Xero Grow. With two staff added, FreeAgent stays at £396, and Xero Grow becomes £39 + £3 = £42 a month, £504 a year.

Decision table (our picks)#

Frequently asked questions#

What is the cheapest payroll software for a one-person S corp?#

On prices we verified on 12 Nov 2026, Square Payroll full-service is $35/mo plus $6 per person, so $41 a month or $492 a year for one owner. Patriot Full Service lists at $37 + $5 = $42 a month, is cheaper only during its promo, and charges $12 a month for each additional state. Wave is $40 + $6, and OnPay is $49 + $6 with the first month free.

Do I need payroll software if I am the only employee?#

If you are an S corp owner who works in the business, yes in practice: the IRS says S corporations must pay reasonable compensation to a shareholder-employee before non-wage distributions. In the UK, a limited company paying a director salary through PAYE must report pay to HMRC on or before payday, and HMRC's free Basic PAYE Tools can do that for fewer than 10 employees.

Is HMRC Basic PAYE Tools good enough for a small UK startup?#

For a director-only company or a couple of staff, often yes. HMRC describes it as free payroll software for businesses with fewer than 10 employees that can work out tax and National Insurance and send it to HMRC. It notes it has some limitations and is not designed for agents or bookkeepers. If you already pay for FreeAgent or Xero, their bundled payroll saves keying data twice.

Can I use payroll software to pay contractors?#

Yes. Square has a contractor-only plan at $6/mo per person paid, Wave charges $6 per independent contractor paid, OnPay and Patriot pay contractors at their normal per-worker rate, and Deel's contractor plan starts at $49 per contractor per month. Check worker classification first: the IRS and gov.uk both have tests for employee versus contractor.

What about Gusto, Justworks and Rippling?#

Gusto Simple is $49/mo plus $6 per person for payroll in one state, and Gusto Solo for one-person S corps is $49 base plus $6 per payroll recipient, which Gusto puts at $55 a month for just you (Gusto Solo). Justworks Payroll is $50/mo base plus $8 per employee (Justworks). Both are solid but cost more than Square for a single owner. Rippling says plans start at $8 per employee per month with a monthly base fee and gives custom quotes.

Launch the thing payroll is paying for#

Payroll is overhead. Revenue is what covers it. When your product is ready, work through our product launch checklist for bootstrapped makers, then submit it to ZeroRaised for free. For more no-VC guides on money, hiring and growth, join the ZeroRaised newsletter.

Sources#

All last checked 12 Nov 2026.

• Square Payroll pricing
• OnPay payroll costs and pricing
• Patriot Software payroll pricing
• Wave Payroll
• QuickBooks add payroll pricing
• Warp pricing
• Deel pricing
• Rippling pricing
• Gusto pricing (read via WebFetch)
• Gusto Solo
• Justworks pricing (read via WebFetch)
• IRS: S corporation compensation and medical insurance issues
• IRS: Independent contractor or employee
• SBA: Hire and manage employees
• gov.uk: Basic PAYE Tools
• gov.uk: Running payroll
• gov.uk: Employee directors
• gov.uk: Rates and thresholds for employers 2026 to 2027
• gov.uk: Employment Allowance eligibility
• gov.uk: Employment status
• FreeAgent pricing
• FreeAgent payroll
• Xero UK pricing
• BrightPay pricing