Best Payroll Software for 1-5 Employees (2026) — What Reddit Actually Recommends
🔑 Key Takeaways
• Gusto ($40/mo + $6/employee) is the #1 recommendation on Reddit for micro-businesses — best overall balance of features, support, and ease of use
• Patriot ($17-37/mo + $4/employee) is the cheapest full-service option and surprisingly well-liked for basic payroll needs
• Square Payroll ($35/mo + $6/employee) is ideal if you already use Square POS — and offers a $0 base contractor-only plan
• OnPay ($40/mo + $6/employee) is the "quiet favorite" — accountants love it for accuracy and simplicity
• For 1-5 employees, expect to spend $40-70/month total for full-service payroll with tax filing
• Don't do payroll manually — Reddit is near-unanimous that the risk of IRS penalties isn't worth saving $50/month
Updated: March 7, 2026 • 22 min read
Gusto
Best Overall for Micro-Business
The #1 most recommended payroll software on Reddit for 1-5 employee businesses. Intuitive interface, automatic tax filing, and excellent integrations.
Finding the best payroll software for a small business with 1-5 employees shouldn't require reading 47 "enterprise payroll comparison" articles written for companies with 500+ people. If you have a handful of employees and just need to pay them correctly without accidentally committing tax fraud, this guide is for you.
We analyzed hundreds of Reddit threads across r/smallbusiness, r/Entrepreneur, r/accounting, r/bookkeeping, and r/freelance to find out what real micro-business owners actually use and recommend — not what software companies pay review sites to rank first.
The payroll landscape for tiny businesses is different from what most comparison sites cover. You don't need "workforce analytics" or "multi-location compliance automation." You need software that files your taxes correctly, pays your people on time, and doesn't cost more than one of those employees.
Quick Comparison: Payroll Software for Micro-Businesses
Here's what each option costs for a typical micro-business, along with what Reddit actually thinks:
*Prices as of March 2026. All "Full Service" options include automatic federal and state tax filing. EE = employee.
1. Gusto — The Reddit Consensus Pick for Micro-Businesses
Best For: Most micro-businesses that want a set-it-and-forget-it payroll experience
Pricing: $40/month + $6/employee • Cost for 5 employees: $70/month
If you only read one section, make it this one. Gusto is the most frequently recommended payroll software on Reddit for businesses with 1-5 employees, and it's not particularly close. Across r/smallbusiness, r/Entrepreneur, and r/bookkeeping, Gusto comes up in virtually every "what payroll should I use?" thread.
What Reddit actually says:
Pros for micro-businesses:
- Extremely intuitive interface — designed for business owners, not HR professionals
- Full-service tax filing in all 50 states (federal, state, local)
- Automatic W-2 and 1099 preparation and delivery
- Employee self-service portal for pay stubs, tax documents, and benefits
- Integrates with QuickBooks, Xero, FreshBooks, and most accounting software
- Free account setup and migration assistance
- Health insurance, 401(k), and workers' comp available through platform
Cons for micro-businesses:
- Price has increased over the years — Reddit users mention this frequently
- $40 base fee means it's not the cheapest option for solo operators with 1 employee
- Customer support quality has gotten mixed reviews recently (longer wait times)
- Some features locked behind the Plus plan ($80/mo base) that feel like they should be standard
The bottom line on Gusto: For a micro-business owner who wants payroll to just work without thinking about it, Gusto is the safest bet. You're paying a small premium over the cheapest options, but you're getting reliability, an excellent UI, and the confidence that your tax filings are handled correctly. It's the "you can't go wrong" choice.
2. OnPay — The Quiet Favorite That Accountants Love
Best For: Businesses that want accurate, no-nonsense payroll with great support
Pricing: $40/month + $6/employee • Cost for 5 employees: $70/month
OnPay doesn't have Gusto's brand recognition, but it has something arguably more valuable: a devoted following among accountants and bookkeepers who recommend it to their small business clients. On Reddit's accounting-focused subreddits, OnPay comes up almost as often as Gusto.
Pros for micro-businesses:
- One simple plan — no confusing tier structure or upsells
- Phone-based customer support with actual humans who know payroll
- Extremely accurate tax calculations and filings
- Includes HR features, benefits admin, and workers' comp at no extra tier cost
- Multi-state payroll included in base price
- Strong QuickBooks and Xero integrations
Cons for micro-businesses:
- Less polished UI compared to Gusto
- Smaller brand = fewer community resources and tutorials
- Mobile app is functional but not as refined
- Fewer third-party integrations than Gusto
The bottom line on OnPay: If you value accurate payroll processing and being able to call someone when you have a question over flashy UI design, OnPay is excellent. It's particularly good if you work with an accountant or bookkeeper, as they likely already know and trust it.
3. Square Payroll — Best for Square Ecosystem Businesses
Best For: Retail, food service, and service businesses already using Square POS
Pricing: $35/month + $6/employee • Contractor-only: $6/contractor (no base fee)
Square Payroll makes the most sense if you're already using Square for payments, POS, or invoicing. The integration is seamless — employee hours tracked in Square automatically flow into payroll. But even if you don't use Square for anything else, the contractor-only plan at $6/person with no base fee is genuinely hard to beat.
Pros for micro-businesses:
- $0 base fee contractor-only plan — genuinely free except per-person cost
- Seamless integration with Square POS, appointments, and invoicing
- Automatic tip importing and tracking
- Lower base fee ($35 vs $40) than Gusto and OnPay
- Simple, clean interface consistent with Square's design language
- Full-service tax filing included
Cons for micro-businesses:
- Limited benefits options compared to Gusto
- No built-in HR tools beyond basics
- Customer support can be slow (common Square complaint on Reddit)
- Best value proposition requires using other Square products
- Fewer accounting software integrations
The bottom line on Square Payroll: If you're a Square shop, this is a no-brainer. If you're not, it's still competitive on price, but Gusto or OnPay offer more features for just $5/month more in base fee. The contractor-only plan is best-in-class.
4. Patriot Payroll — The Budget Pick That Actually Works
Best For: Cost-conscious micro-businesses that want reliable payroll at the lowest price
Pricing: Basic $17/mo + $4/EE (you file taxes) • Full Service $37/mo + $4/EE (they file taxes)
Patriot is the payroll software Reddit recommends when someone says "I need payroll but I'm on a tight budget." It's not glamorous, the UI looks like it was designed in 2015, and you've probably never heard of it. But it works, it's cheap, and the people who use it are surprisingly loyal.
Pros for micro-businesses:
- Cheapest full-service payroll available ($37/mo + $4/employee)
- Basic plan at $17/mo is even cheaper if you're comfortable filing taxes yourself
- US-based customer support with good reviews
- Free setup and migration
- Straightforward, no-upsell experience
- Optional time & attendance and HR add-ons
Cons for micro-businesses:
- Dated user interface
- Fewer integrations (no native Xero integration)
- Limited benefits administration
- No health insurance or 401(k) offerings through the platform
- Basic plan requires you to file your own payroll taxes
The bottom line on Patriot: If you want the absolute lowest cost for reliable full-service payroll, Patriot is it. You sacrifice some UI polish and features, but for a micro-business that just needs to pay employees and file taxes correctly, it does exactly what's needed at about 20-30% less than competitors.
5. SurePayroll — The Established Budget Alternative
Best For: Micro-businesses wanting a recognizable brand at a moderate price
Pricing: ~$30/month + $5/employee • Cost for 5 employees: ~$55/month
SurePayroll (owned by Paychex) targets small businesses specifically and has been around since 2000. Reddit sentiment is mixed — some users are loyal fans, while others have had frustrating customer service experiences that pushed them to Gusto or OnPay.
Pros: Lower price point than Gusto/OnPay, backed by Paychex infrastructure, auto-pay option, mobile app available.
Cons: Inconsistent customer support (major Reddit complaint), interface feels dated, occasional tax filing delays reported, fewer integration options.
The bottom line on SurePayroll: It can work, but with Patriot being cheaper and Gusto being more reliable, SurePayroll sits in an awkward middle ground. Reddit users who've tried multiple services tend to move away from SurePayroll rather than toward it.
6. Homebase Payroll — Best for Hourly Workers and Scheduling
Best For: Businesses with hourly employees that need time tracking + scheduling + payroll in one tool
Pricing: $39/month + $6/employee • Includes time tracking and scheduling
Homebase is primarily a time tracking and scheduling tool that added payroll. If your main headache is tracking hours for hourly workers and then turning those hours into paychecks, Homebase does this exceptionally well in a single platform.
Pros: Excellent time tracking and scheduling integration, free tier for basic scheduling, built-in team communication, hiring tools included.
Cons: Payroll features are less mature than dedicated payroll companies, limited benefits options, not ideal for salaried-only teams, fewer accounting integrations.
The bottom line on Homebase: If you're already using Homebase for scheduling or if time tracking for hourly employees is your biggest pain point, adding Homebase payroll makes great sense. If you don't need the scheduling features, you're better off with Gusto or OnPay.
7. Wave Payroll — The Budget Option (With a Big Caveat)
Best For: Businesses in supported states that want the lowest possible price with tax filing
Pricing: $20/month + $6/employee (tax-filing states) • $40/month + $6/employee (self-service states)
Wave used to be the go-to free accounting software for small businesses, and their payroll product is attractively priced at $20/month base. The catch: full-service tax filing is only available in 14 states. In other states you get "self-service" which means Wave calculates your taxes but you file them yourself — at a higher $40/month price, which eliminates the cost advantage.
Pros: Lowest base price for full-service payroll ($20/mo), integrates with free Wave accounting, simple interface, good for basic payroll needs.
Cons: Full-service tax filing only in 14 states, limited customer support options, no benefits administration, acquired by H&R Block (future uncertain), fewer features than competitors.
The bottom line on Wave: If you're in one of Wave's supported states and already use Wave for accounting, it's the cheapest full-service option. Otherwise, Patriot offers better value for budget-conscious businesses.
Reddit's "Best For" Recommendations
Based on our analysis of hundreds of Reddit discussions, here's how the micro-business payroll landscape breaks down by use case:
Most recommended, best UI, reliable tax filing, solid integrations
$37/mo base + $4/EE — lowest price with automatic tax filing
Accountants love it, accurate, great reporting, phone support
Seamless Square POS integration, automatic tip tracking
$6/contractor with no base fee, automated 1099s
Time tracking + scheduling + payroll in one platform
$17/mo + $4/EE — but you file your own taxes
Reddit users consistently report 20-30 minute setup time
What Reddit Warns You About (Common Mistakes)
Beyond software choices, Reddit threads are full of warnings from micro-business owners who learned payroll lessons the hard way:
⚠️ Mistakes Reddit Says Will Cost You
1. Doing payroll manually to "save money." IRS penalties for incorrect payroll tax deposits start at 2% and go up to 15%. One Reddit user reported a $3,200 penalty for incorrect quarterly filings on a 3-person business. The $50/month for software would have been $600/year instead.
2. Misclassifying employees as contractors. This is the single most warned-about mistake on r/smallbusiness. The IRS, DOL, and state agencies all take worker misclassification seriously. If you control when, where, and how someone works, they're probably an employee.
3. Missing payroll tax deposit deadlines. Payroll taxes aren't money you owe — they're money you hold in trust for the government. Missing deposit deadlines carries steep penalties and the IRS considers this among the most serious tax violations.
4. Not registering with your state. You need a state employer ID in addition to your federal EIN. Several Reddit users report getting penalty notices months after their first hire because they never completed state registration.
5. Choosing software based on price alone. Multiple Reddit threads describe switching from the cheapest option to Gusto or OnPay after tax filing errors. "I saved $15/month for a year and then spent $800 fixing a state tax filing problem."
How We Analyzed Reddit Sentiment
Unlike most "best payroll software" articles that are thinly-veiled affiliate listicles, our analysis is based on what real users say in unsponsored discussions. Here's our methodology:
- Sources: r/smallbusiness, r/Entrepreneur, r/accounting, r/bookkeeping, r/freelance, r/restaurateur, and various industry-specific subreddits
- Time period: Threads from 2024-2026 to ensure current pricing and feature accuracy
- Filter: We excluded obvious promotional posts and focused on organic recommendations in response to genuine questions
- Weight: Comments with high upvotes and detailed explanations weighted more heavily than one-line mentions
- Verification: Pricing and features verified against official websites as of March 2026
How to Choose: A Simple Decision Framework
If you've read this far and still aren't sure, here's the simplest way to decide. Answer these three questions:
1. Is budget your #1 concern?
→ Yes: Patriot Full Service ($37/mo + $4/EE)
→ No: Continue to question 2
2. Do you already use Square for payments/POS?
→ Yes: Square Payroll ($35/mo + $6/EE)
→ No: Continue to question 3
3. Do you want the easiest setup with the most features?
→ Easiest + most features: Gusto ($40/mo + $6/EE)
→ Best support + accountant-approved: OnPay ($40/mo + $6/EE)
That framework covers about 90% of micro-businesses. If you have a specialized situation — like a restaurant with tipped employees or you're looking for the absolute cheapest option for a brand new startup — we have dedicated guides for those scenarios.
Setting Up Payroll for the First Time
Once you've picked your software, setup is straightforward. If you've never run payroll before, our complete first-time payroll setup guide walks through everything step by step — from getting your EIN to running your first payroll.
And if payroll taxes make your head spin, our simple guide to payroll taxes breaks down FICA, FUTA, SUTA, and all the acronyms into plain English.
The Bottom Line
For most micro-businesses with 1-5 employees, Gusto is the best payroll software in 2026. It's not the cheapest, but it's the most reliable, easiest to use, and most recommended by real business owners on Reddit. If budget is tight, Patriot Full Service gives you reliable payroll at the lowest price. If you use Square already, Square Payroll is the obvious choice. You genuinely can't go wrong with any of these three.
The most important thing is to stop doing payroll manually and pick something. Every month you spend calculating taxes in a spreadsheet is a month you risk penalties and waste hours that should go toward growing your business. The difference between these options is $10-20/month — the difference between using payroll software and not using it is hundreds of hours and potentially thousands in penalties.
Ready to Choose Your Payroll Software?
Here are our top 3 picks based on Reddit sentiment analysis:
Frequently Asked Questions
What is the best payroll software for a small business with only 1-2 employees?
For just 1-2 employees, Gusto and OnPay are the most recommended on Reddit. Both charge around $40/month base + $6/employee, handle all tax filings automatically, and are simple enough to set up in under 30 minutes. If budget is your top concern, Patriot Basic at $17/month is the cheapest option that still handles federal and state tax filings.
Is Gusto worth it for a very small business?
Yes — Gusto is the most recommended payroll software on Reddit for micro-businesses. At $40/month + $6/employee, a 3-person business pays $58/month for full-service payroll including automatic tax filing, W-2s, direct deposit, and an intuitive interface. Reddit users consistently praise the UI and customer support. The main complaint is price increases over the years.
Can I do payroll myself to save money?
Technically yes, but Reddit overwhelmingly advises against it. Manual payroll means calculating federal income tax withholding, Social Security (6.2%), Medicare (1.45%), FUTA, SUTA, and state taxes yourself — then filing quarterly 941s, annual 940s, and W-2s. One mistake can trigger IRS penalties starting at 2% and going up to 15%. Most Reddit users say the $40-60/month for software is worth the peace of mind.
What's the cheapest payroll service that still files taxes?
Patriot Payroll Full Service at $37/month + $4/employee is the cheapest full-service option. Wave Payroll (available in 14 states) starts at $20/month + $6/employee. Square Payroll at $35/month + $6/employee is another affordable choice. All three handle federal and state tax filings automatically.
Is Square Payroll good for small businesses?
Square Payroll is solid for businesses already in the Square ecosystem (POS, invoicing). At $35/month + $6/employee, it's competitively priced. Reddit users praise the contractor-only plan ($6/contractor, no base fee) and integration with Square POS. The main downside: limited HR features and benefits options compared to Gusto or OnPay.
Do I need payroll software if I only have contractors?
If you only pay 1099 contractors (not W-2 employees), you technically don't need payroll software — you just need to issue 1099-NEC forms at year end. However, Square Payroll offers a contractor-only plan at $6/person/month with no base fee, which automates 1099 filing and payments. Many Reddit users recommend this for simplicity.
What payroll software do accountants recommend for small businesses?
According to Reddit threads in r/accounting and r/bookkeeping, accountants most frequently recommend Gusto for micro-businesses. It integrates well with QuickBooks and Xero, has clean reporting, and reduces the number of client questions accountants receive. OnPay is the second most recommended by accountants for its simplicity and accuracy.
How much should I expect to pay for payroll software with 5 employees?
With 5 employees, expect to pay: Patriot Full Service ~$57/month, Square Payroll ~$65/month, Wave ~$50/month, Gusto ~$70/month, OnPay ~$70/month. These prices include automatic tax filing, direct deposit, and W-2 preparation. Annual cost ranges from $600-$840 depending on provider.
Can I switch payroll providers mid-year?
Yes, but timing matters. Reddit users recommend switching at the start of a quarter (January, April, July, October) to simplify tax filing. Your new provider will need year-to-date payroll data from your old provider. Most services like Gusto and OnPay offer free migration assistance. Avoid switching in November or December when year-end tax forms are being prepared.
What's the difference between Gusto Simple and Gusto Plus?
Gusto Simple ($40/month + $6/employee) covers full-service payroll, tax filing, direct deposit, and basic HR. Gusto Plus ($80/month + $12/employee) adds next-day direct deposit, time tracking, PTO management, and workforce costing reports. For most micro-businesses with 1-5 employees, Reddit consensus is that Simple is sufficient — Plus features are nice-to-have, not need-to-have.
Related Guides
How to Set Up Payroll for the First Time →
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Cheapest Payroll for Startups →
Detailed cost comparison for budget-conscious startups
Best Payroll for Restaurants →
Tip reporting, compliance, and real reviews
Payroll Taxes Explained →
Simple guide to FICA, FUTA, and all the acronyms