How much do payroll services cost for very small businesses? As of October 6, 2026, the two services compared here carry a base monthly fee between $17 and $49, plus an additional per-employee fee of $4 to $6. A business with a single employee can expect to pay around $21 per month for basic software that requires manual tax filing, or $42 to $55 per month for full-service software that files and remits taxes automatically. Prices scale with headcount and the complexity of the service provided.

The Foundation of Small Business Payroll

Getting the software is not the first step in the process. Before a business can process a paycheck, it must be legally structured to act as an employer. The foundation involves establishing the business entity, securing an Employer Identification Number from the federal government, and opening a dedicated business bank account.

The Employer Identification Number is a hard dependency for hiring. An employer cannot run payroll without an Employer Identification Number. Because this setup phase is upstream of choosing software, a reader who is starting out often benefits from using one provider for the entire formation process. A business owner can form the entity, secure the registered agent, and obtain the Employer Identification Number in one place.

Once the business is established, business owners can request access to ZenBusiness's ADP payroll partnership. ADP is a separate service with its own platform, its own billing, and its own support. It is not integrated into the ZenBusiness dashboard. Instead, a customer requests the connection through ZenBusiness, and an ADP representative follows up to discuss the employee count and pay schedule.

Understanding Payroll Tax Administration

The primary difference between standard software tiers usually comes down to tax administration. Basic payroll tools calculate the gross pay, subtract the necessary deductions, and determine the net pay. However, they stop short of interacting with the government. The business owner must manually log into federal and state portals to remit the withheld funds.

Full-service payroll changes this dynamic entirely. A full-service platform automatically withdraws the necessary tax funds during the payroll run. The software provider then holds those funds and remits them to the appropriate government agencies on the required deadlines. This dramatically reduces the compliance burden for the business owner. When comparing OnPay and Patriot Software, this distinction is central to the decision.

The Payroll Provider Comparison for 2026

To evaluate the market, it helps to look at the major providers alphabetically. Please note that this sequence is alphabetical rather than a ranking. Pricing is accurate as of October 6, 2026.

ADP

ADP is one of the largest payroll processors in the market, catering to businesses of all sizes. ADP does not publish payroll pricing and quotes per business. Prospective customers must contact the sales team to discuss their employee headcount, pay schedules, and specific feature needs to receive a custom quote.

Gusto

Gusto structures its service across three main tiers. The Simple plan costs $49 per month plus $6 per person. The Plus plan costs $80 per month plus $12 per person. The Premium plan costs $180 per month plus $22 per person. The higher tiers add features like time tracking, performance reviews, and dedicated support resources.

OnPay

OnPay keeps its pricing structure very straightforward by offering a single tier. The service costs $49 per month plus $6 per worker. The public page quotes a start price of $55 per month, which combines the base fee and the cost for one employee. This single tier includes full-service tax filings, meaning OnPay calculates, deducts, and pays the payroll taxes on behalf of the business.

Patriot Software

Patriot Software divides its offering into two distinct levels based on who handles the taxes. The Basic Payroll plan costs $17 per month plus $4 per employee. This tier requires the employer to handle their own tax filings and deposits. The Full Service plan costs $37 per month plus $5 per employee, taking over the responsibility of remitting federal, state, and local payroll taxes.

QuickBooks Payroll

QuickBooks Payroll integrates tightly with the company's accounting software. Workforce Payroll plus Simple Start costs $88 per month plus $6.50 per employee. The next tier adds Essentials and costs $125 per month plus $6.50 per employee. Workforce Premium plus Plus costs $203 per month plus $10 per employee. The company frequently advertises a promotional rate of 50 percent off the base fee for three months, but that is a promotional rate, not the ongoing price.

Rippling

Rippling focuses on broad workforce management, combining payroll with human resources and information technology tools. Rippling does not publish pricing. Its pricing page is a quote request form, requiring business owners to submit their details to find out what the platform will cost for their specific operational needs.

Square Payroll

Square Payroll appeals to retail and hospitality businesses already using Square point-of-sale hardware. The standard service costs $35 per month plus $6 per person. Square Payroll is hard to beat for contractor-only payment. The contractor-only plan costs $6 per contractor per month with no base monthly fee, making it a highly specialized option for businesses that only rely on independent contractors.

SurePayroll

SurePayroll targets very small businesses and domestic employers. The base service starts from $29 per month plus $7 per worker. Businesses that need to process payroll across multiple jurisdictions must pay a multi-state add-on of $9.99 per month. SurePayroll also offers household payroll services for employing nannies or domestic staff, which starts at $39 per month.

ZenBusiness

ZenBusiness is a comprehensive platform for forming and maintaining a business. The Starter plan costs $0 plus state fees. The Pro plan costs $199. The Premium plan costs $299. The Pro and Premium plans renew at their annual prices, and the Employer Identification Number and operating agreement are included from Pro up and are $99 each on Starter. The registered agent service is $199 per year, the Money Pro tool costs $30 per month, and the website builder costs $129 per year. Payroll itself is ADP's, quoted by ADP per business, and not included in any ZenBusiness plan price, though customers may be eligible for promotional pricing.

Calculating Monthly Costs for a Five-Person Team

Understanding the base fee and the per-employee rate is necessary to forecast the actual monthly cost as a team grows. Consider a small business that employs five people. Using Patriot Software's Basic Payroll, the calculation involves the $17 base fee plus $20 for the five employees, bringing the total to $37 per month.

If that same business uses Patriot Software's Full Service tier to handle tax filings, the total becomes $62 per month. With OnPay, the monthly cost for five employees involves the $49 base fee plus $30 for the staff, resulting in a total of $79 per month. Square Payroll would cost $65 per month for this team.

These calculations demonstrate why a low base fee is attractive, but they also show how quickly per-employee costs multiply. Business owners must evaluate the total combined cost rather than just looking at the advertised starting price to understand the true impact on their cash flow.

Choosing Between OnPay and Patriot Software

Choosing between OnPay and Patriot Software often comes down to the employer's comfort with tax administration. Patriot Software is cheaper at the very bottom end. An employer who understands tax deadlines and feels completely confident remitting their own federal and state deposits can use Patriot Basic Payroll to keep monthly costs to an absolute minimum.

Taking on this responsibility introduces the risk of missed deadlines and filing errors. Moving up to Patriot Software's Full Service tier removes that burden but brings the price closer to the market average. OnPay does not offer a self-service tax tier. By defaulting to full-service tax filings in its single standard plan, OnPay ensures that tax remittance is handled by the software automatically.

This is usually the safer choice for business owners who want to minimize compliance anxiety. While Patriot Software is less expensive for those who want manual control, OnPay provides a streamlined package for a predictable monthly fee. If a business owner has not yet separated their business and personal money, neither tool will solve the root problem. Establishing the entity and the banking infrastructure must precede software selection.

Federal Forms and the Onboarding Process

Once the business is formed and the software is chosen, the employer must collect the proper documentation from every hire. The federal government sets strict rules for employee onboarding. All U.S. employers must properly complete Form I-9 for every individual they hire for employment in the United States.

Tax withholding requires proper documentation from the very beginning. Employers must ask all new employees to give them a signed Form W-4 when they start work. The employer must make the form effective with the first wage payment. A W-4 remains in effect until the employee gives you a new one.

In situations where an employee submits updated documentation, the employer must implement the change promptly. The revised withholding begins no later than the start of the first payroll period ending on or after the 30th day from the date you received the replacement Form W-4. At the end of the calendar year, the employer needs the employee's name and SSN to enter on Form W-2.

Classifying Workers and Misclassification Risks

One of the most significant risks a small business faces is treating an employee as an independent contractor to save on payroll costs. Classification turns on control, not on a label or a contract. The IRS weighs three categories: behavioural control, financial control, and the type of relationship.

There is no single deciding factor when determining a worker's status. The IRS notes that there is no 'magic' or set number of factors that 'makes' the worker an employee or an independent contractor and no one factor stands alone in making this determination. Getting this classification wrong is an expensive mistake for a growing business.

Misclassification has a price. An employer who classifies an employee as an independent contractor without reasonable basis may be held liable for employment taxes for that worker. Form SS-8 asks the IRS to determine status. Employers should plan accordingly if they file it, as it may take at least six months to receive a determination on your filing.

S Corporation Compensation Rules

For business owners operating under an S corporation election, payroll carries an additional legal obligation. The tax advantages of an S corporation require the owner to be treated as an employee. S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made.

Attempting to bypass the payroll system to take all income as a distribution invites regulatory scrutiny. The IRS has the authority to reclassify payments made to shareholders from non-wage distributions to wages. This reclassification can trigger back taxes and severe financial penalties, making a reliable payroll system a critical investment for S corporation owners.

State Payday Requirements and Record Retention

Federal rules govern taxation, but state laws heavily influence how often employees must be paid. Pay frequency is set by state law and varies widely across the country. California requires wages at least twice per calendar month on days designated in advance.

Colorado requires monthly wage payments. Connecticut requires weekly payroll runs unless a longer interval is approved by the labor commissioner. Because these statutes differ drastically from border to border, individuals should consult the relevant state labor office for official information regarding their specific location.

Finally, the federal government mandates strict recordkeeping to protect workers' rights. FLSA payroll records are kept three years. Furthermore, the records wage computations are based on, including time cards and wage rate tables, must be retained for two years. A reliable payroll software platform helps automate this archiving process and keeps historical data accessible.

Sources

This article provides general information rather than legal, tax or accounting advice, and requirements vary and change.