Best Payroll Software for a Company With 1 to 5 Employees

When your team is small, payroll is easy, right? You only have a handful of people to pay, so how complicated could it be?

Then you realize you're also responsible for federal tax deposits, state filings, W-2s at year end, direct deposit timing, and staying current on whatever the IRS decided to update this quarter. Add to that pile that if you make a mistake, you're on the hook for it and it could cost you some pretty high penalties.

Suddenly things don't look so “easy” anymore.

The good news is that payroll software at the small-team level is genuinely affordable, and the right choice can save you hours every month while keeping you out of penalty territory. Here's an breakdown of the best options for businesses with one to five employees.

What to Look for When Your Team Is Small

At the one-to-five employee level, your priorities are different from a 50-person company. You don't need an enterprise HR suite. You just need something that's easy to set up, handles tax filings automatically, processes direct deposit reliably, and won't charge you for features you'll never use.

Pricing transparency matters too. Some platforms look affordable until you start adding the features that should have been included in the first place.

And since companies are built to grow, scalability is worth thinking about early. The least painful time to pick payroll software is before you need it, and the second least painful time is before you outgrow your current solution.

The Best Payroll Software for Small Teams in 2025

Gusto

Best Overall for 1 to 5 Employees

Gusto is a full-service payroll platform used by more than 400,000 companies, and it's consistently rated as one of the best options for small businesses thanks to its intuitive interface and comprehensive feature set. For a team of one to five, the Simple plan covers everything most small businesses actually need: automated payroll, federal and state tax filings, direct deposit, and employee self-service.

Gusto's Simple plan starts at $49 per month plus $6 per employee. For a team of five, that works out to $79 per month, well within reach for most small businesses, and a reasonable trade-off for the time and compliance headaches it eliminates.

The AutoPilot feature lets you run payroll automatically on schedule, and the platform supports multiple payment methods including direct deposit and pay cards. It also integrates with QuickBooks, Xero, and a wide range of accounting tools, which matters more than people realize at tax time.

The main limitation at the Simple plan level is that multi-state payroll requires upgrading to the Plus plan. If all your employees are in one state, you won't feel that constraint at all.

Best for: Small businesses that want an intuitive, all-in-one platform with room to grow. Pricing: $49/month base + $6 per employee

OnPay

Best for Transparent, No-Surprises Pricing

OnPay's base service fee is $49 monthly plus $6 per employee, and unlike some competitors, that price includes multi-state payroll processing, HR tools, and benefits administration with no additional charges. For a five-person team, it's the same monthly spend as Gusto's Simple plan but with more included out of the box.

OnPay averages 4.8 out of five stars across more than 700 reviews on Capterra, G2, and Trustpilot, which is genuinely hard to sustain. Customer support quality is consistently cited as a differentiator. [Link opportunity: “OnPay vs Gusto comparison”]

The trade-off is a less polished interface compared to Gusto, and the employer-side mobile app isn't as strong. But if your priority is value and reliability, OnPay earns its reputation.

Best for: Budget-conscious small businesses that want full-service payroll without tier-based restrictions. Pricing: $49/month + $6 per employee

Patriot Payroll

Best Budget Option

Patriot's basic payroll plan costs $17 a month plus $4 per worker. If you upgrade to the full-service payroll plan, Patriot will file and deposit federal, state, and local payroll taxes on your behalf for $37 a month plus $5 per worker.

For a team of five on the full-service plan, that's $62 per month, making it one of the most affordable legitimate payroll options on the market. Patriot consistently ranks first for value for money and customer support across review platforms including Capterra and Software Advice.

The trade-offs are real though. The interface is functional rather than polished, time tracking requires a workaround, and multi-state payroll support is limited. For a straightforward single-state small team on a tight budget, those limitations rarely matter.

Best for: Cost-focused small businesses with simple, single-state payroll needs. Pricing: $17/month + $4/employee (basic) or $37/month + $5/employee (full-service)

Square Payroll

Best for Hourly and Contractor-Heavy Teams

If you're only paying contractors, Square Payroll charges just $6 per month per worker with no base monthly fee. For traditional W-2 employees, the cost goes up to $35 a month plus $6 per employee.

Square Payroll makes the most obvious sense if you're already using Square for point-of-sale. The integration is seamless, and for retail, food service, or service businesses with hourly staff, the built-in time tracking and tip reporting features solve real problems.

For businesses that don't use Square's ecosystem, it loses some of its appeal. The platform is capable, but it's most valuable when it's part of a broader Square setup.

Best for: Retail, restaurant, or service businesses already using Square POS, and contractor-heavy teams. Pricing: $6/contractor/month (contractors only) or $35/month + $6/employee

QuickBooks Payroll

Best for QuickBooks Users

If your accounting already lives in QuickBooks, adding QuickBooks Payroll is an easy decision. The sync between payroll and your books is seamless, and for anyone already navigating the QuickBooks interface daily, the learning curve is minimal. [Link opportunity: “QuickBooks Payroll vs Gusto”]

The core plan starts at $45 per month plus $6 per employee, which is competitive. The caution is that QuickBooks Payroll becomes significantly more expensive at higher tiers, and if you ever move away from QuickBooks for accounting, the main advantage disappears.

Best for: Small businesses that are already invested in the QuickBooks ecosystem. Pricing: Starting at $45/month + $6/employee

How to Choose the Right One for Your Team

At one to five employees, the decision usually comes down to three things: how much you want to spend, whether you operate in multiple states, and whether you're already using any platforms the payroll software integrates with.

If budget is the primary factor and your payroll is straightforward, Patriot gets you there affordably. If you want the best balance of features, price, and usability in one package, Gusto and OnPay are genuinely close, with Gusto edging ahead on interface and OnPay ahead on included features per dollar. If you're a Square shop, Square Payroll is the obvious fit. And if your world revolves around QuickBooks, you already know what to do.

The Bottom Line

I've been using Gusto for years and it has genuinely kept me sane. For a small team, it's the right combination of easy to set up, reliable on compliance, and intuitive enough that you don't need to read a manual to run payroll. Whether you're an S-Corp owner processing your own salary or managing a growing team with more complex needs, it scales without forcing you to migrate to a new platform every time your headcount changes. For most small businesses, it's the place to start.

Pricing information is current as of 2025. Always confirm current rates directly with each provider before making a decision.