Payroll is one of those things that feels simple until you’re three months in and your accountant is finding duplicate tax deposits and you can’t explain to your employee why her direct deposit showed up two days late. I’ve been there. Not personally on payroll (I run lean), but I’ve sat across from enough small business owners to know that the wrong payroll service costs you far more than the monthly subscription fee.

So here’s what this is actually about: you want to pay your people correctly, stay out of IRS trouble, and not spend $300 a month for features you’ll never touch. I’ll help you figure out which service fits your situation, what the pricing actually looks like once you get past the homepage, and where the landmines are buried.

The short version: Gusto is excellent for most small businesses with W-2 employees. QuickBooks Payroll makes sense if you’re already living inside QuickBooks. ADP and Paychex are worth the higher price only once you’re above roughly 25 employees or have complicated multi-state needs. OnPay is the underrated one almost nobody talks about, and it might be the best dollar-for-dollar value in the market right now.

Key takeaways
  • Gusto's Simple plan runs $40/month + $6/employee; OnPay runs $40/month + $6/employee with more features included
  • Most small businesses overpay for payroll by choosing contractor-tier plans or full-service HR bundles they don't need
  • Automatic tax filing (federal, state, local) is table stakes, do not choose a service that charges extra for it
  • QuickBooks Payroll Core starts at $45/month + $6/employee, but the accounting integration saves time only if you're already a QB user
  • ADP and Paychex don't list prices publicly, budget for $80-$180/month at 5-10 employees after their "implementation fees"

What You’re Actually Paying For

Before you compare price tags, you need to understand what payroll services are really selling. Every reputable one handles the mechanical part: calculating gross pay, withholding the right taxes, cutting checks or pushing direct deposits. The difference is in three things: how much tax filing they handle automatically, what HR tools get bundled in, and how good the support is when something breaks.

The tax piece matters more than people realize. The IRS charges penalties for late or incorrect payroll tax deposits, and those can add up shockingly fast. A good payroll service files your 941s, handles W-2s at year-end, and manages state unemployment (SUTA) filings automatically. A bad one makes you remember to do it yourself. I have seen a $78/year savings on the “manual tax filing” tier cost a small business owner $1,200 in IRS penalties. Not worth it.

The HR bundling is where pricing gets messy. Gusto, for example, layers three tiers. Their cheapest tier doesn’t include time-tracking or PTO management. ADP’s pricing is almost intentionally opaque, with onboarding fees and per-module billing that I genuinely find irritating to decipher. When I walked through an ADP RUN quote last year for a client with six employees, the “all-in” number was $147/month before they added workers’ comp integration. That’s not a bad product, but the price positioning feels designed to confuse.

Side-by-Side: The Real Numbers

Recommended Rollo USB Thermal Shipping Label Printer 4x6

Commercial-grade direct thermal label printer printing one 4x6 label per second, no ink required.

Check Price →

Helpful resource: Avery Business Card Binder for Networking is a top-rated option for this. (As an Amazon Associate this site earns from qualifying purchases.)

As of July 2026, here’s how the main services compare for a business with 5 W-2 employees, paying monthly:

ServiceBase Fee/MonthPer-Employee Fee5 Employees TotalAuto Tax FilingYear-End W-2sNotes
Gusto Simple$40$6$70Yes+$6/employeeNo time tracking at this tier
Gusto Plus$80$12$140YesIncludedAdds time tracking, PTO
OnPay$40$6$70YesIncludedMulti-state included
QuickBooks Payroll Core$45$6$75YesIncludedBest with QuickBooks accounting
QuickBooks Payroll Premium$85$9$130YesIncludedAdds HR support, same-day DD
Patriot Payroll Full$37$4$57Yes+$20 flatVery basic, no HR tools
ADP RUN Essential~$79+~$4-$8~$100-$120YesIncludedQuote required; fees vary
Paychex Flex~$39+~$5+~$64+YesIncludedQuote required; add-ons stack up
Square Payroll$35$6$65YesIncludedBest for retail/restaurants

A few footnotes that the pricing pages bury: Gusto charges per W-2 for year-end on the Simple plan, which stings if you have seasonal workers. OnPay includes multi-state payroll in the base price, which Gusto charges extra for on Plus and above. Square Payroll is legitimately solid if you’re running a retail or food-service business already using Square POS, but it’s thin on HR features.

Monthly cost at 5 employees (base + per-employee fees)
Patriot Full$57
Square Payroll$65
Gusto Simple$70
OnPay$70
QuickBooks Core$75
ADP RUN Est.$110
Gusto Plus$140
Source: Provider pricing pages, July 2026

The Case for OnPay (Seriously)

Related video

How businesses manage money | Cashflow explained · Practical Wisdom - Interesting Ideas on YouTube

I’ll be honest: I ignored OnPay for years. Their marketing is bland, their name is forgettable, and nobody in a networking group ever brings them up. Then a client with two locations in different states asked me to find her something cheaper than Gusto Plus, which was costing $162/month for 11 employees. I did the actual research.

OnPay’s pricing is genuinely flat: $40/month base plus $6/employee, and that covers multi-state payroll, all tax filings, year-end W-2s, garnishment handling, and even basic HR onboarding documents. The U.S. Small Business Administration has noted that multi-location small businesses often underestimate multi-state payroll compliance costs, which is exactly where OnPay’s flat structure pays off.

The client switched. Her payroll bill went from $162 to $106 for the same number of employees, and she stopped getting charged extra when she hired a worker in a third state.

The one knock: OnPay’s mobile app is mediocre. If your managers are doing everything on their phones, Gusto has a better experience there. That’s a real tradeoff, not a fatal flaw.

Where Most People Get Tripped Up

Contractor-only vs. employee payroll. If you have a mix of W-2 employees and 1099 contractors, check how the service handles both. Gusto charges $6/month per active contractor on top of your employee fees. Square Payroll charges $6/month base (no per-employee fee) for contractor-only businesses, which is actually a good deal if you’re purely 1099. Know what you have before you sign up.

“Same-day” and “next-day” direct deposit. Gusto’s Simple tier offers next-day direct deposit if you submit by noon. Getting same-day requires Gusto Premium ($180/month base). QuickBooks Payroll Premium has same-day. OnPay is two-day by default. This matters if you’re running payroll on a tight cash flow cycle or if you have hourly workers who really notice a late Friday deposit.

The year-end crunch. Every January, I hear the same complaint: “My payroll service charged me $X to file my W-2s and I didn’t expect it.” Gusto Simple charges $6 per W-2. Patriot charges a flat $20. Most other services include it. Read the fine print on this before December, not after.

Multi-state payroll is where the pricing gets weird fast. If you have even one remote employee in another state, some services charge you for that state’s registration and filings separately. OnPay absorbs this. Gusto charges extra on lower tiers. Paychex can charge per state, per quarter, which I find genuinely excessive.

Scenario: Restaurant owner with 9 employees in Texas, already using Square POS. Considered Gusto Simple but didn’t need HR tools. Action: Switched to Square Payroll at $35 base + $6 per employee. Result: Monthly payroll cost dropped from $110 to $89, and POS/payroll data synced automatically, eliminating a manual tip-reporting step that was taking a manager 40 minutes every pay period.

Scenario: Marketing agency, 3 employees, 7 active contractors, two states. Action: Chose OnPay over Gusto Plus. Result: $40 base + $60 employee fees + no extra multi-state charge = $100/month vs. a projected $136/month on Gusto Plus with contractor fees layered on.

Making the Decision Without Overthinking It

Here’s the framework I actually use with clients. Answer these four questions:

  1. Do you have W-2 employees, 1099 contractors, or both?
  2. Are you in more than one state?
  3. Are you already using QuickBooks for accounting?
  4. Do you need time-tracking or PTO management inside your payroll platform?

If you’re QuickBooks-native, start with QuickBooks Payroll Core. The integration alone is worth the slight price premium over Patriot. If you have multi-state needs and want a flat, predictable bill, OnPay is your answer. If you want a polished product with decent HR tools and don’t mind paying a little more, Gusto Plus is probably the right call. If you’re retail or food service using Square POS already, Square Payroll is a no-brainer.

SCORE offers free one-on-one mentorship for small business owners, including help thinking through operational costs like payroll systems. If you’re genuinely unsure, it’s worth a free call.

One more thing: always, always get a CPA to review your payroll setup at least once before you automate it and forget about it. The classification questions (employee vs. contractor, benefits implications, retirement plan integration) are outside what any payroll software can answer for you. This is the one place where I’d push you hard toward professional advice rather than just trusting the platform.

If you want to get deeper on the accounting side of payroll, Profit First by Mike Michalowicz (available on Amazon, and yes, the site may earn a small commission) is worth reading before you finalize any of your payroll cost assumptions. It changed how I think about pay cycles and cash reserves entirely.

Sources

Photo: RDNE Stock project via Pexels

This article is for general informational purposes only and does not constitute financial, tax, or legal advice. Business finance and tax rules vary by entity type, state, and individual circumstances. Consult a qualified CPA, enrolled agent, or business attorney for advice specific to your situation.

Disclosure: As an Amazon Associate, we earn a small commission from qualifying purchases at no extra cost to you. We only recommend products that genuinely support the topics covered in this article.