Free Payroll Software for Small Business in 2026: What Is Actually Free

You will see lists that call Gusto, Paychex, QuickBooks or ADP “free.” They are not. Below you can see what is truly free, what is only a free trial, and what each one costs after that. Prices and offers are as listed on each company’s own website on 12 October 2026. This guide covers small business payroll software that is free, free payroll apps and do-it-yourself payroll software, and it is for businesses in the US.

Which payroll software is free, and which is only a trial?

“Free” can mean three different things. Free forever means you never pay. A free trial is free for a short time, then you pay. A free offer gives you a few free months on a paid plan. The table shows which is which, and what you pay afterwards.

Two things to know. Wave Payroll says it handles taxes in all 50 states, but an older page on its own site lists only 14, so check your state before you sign up. Patriot’s prices here come from its official help center.

Is Payroll4Free really free?

Yes, as long as you stay inside its limits. Payroll4Free says its basic services are free if you pay 9 people or fewer, and no more than once a month. It makes money from small ads inside the program and from extra services you can choose to buy.

What you get for free: it works out each paycheck and the payroll taxes, pays your people by paper check or by direct deposit from your own bank, tracks time off, makes reports and year-end tax forms, and has live phone support. It works for employees and for contractors.

What costs extra:

• Having Payroll4Free pay your payroll taxes and file the forms for you (a separate tax service; the price is not published).
• Direct deposit that goes through Payroll4Free’s bank instead of yours (also extra; price not published).
• More than 9 people, or paying more than once a month.
• Extra states or locations.

Who it fits: you pay 1 to 9 people, you are fine filing your own payroll taxes, and you want to pay nothing. If you want someone else to handle the taxes, look at the paid tools below.

What will payroll software cost me after the free period?

Most tools charge a flat monthly fee plus an amount for each person you pay. For example, Gusto Simple is $49 plus $6 per person, so paying 5 people costs $49 + $30 = $79 a month. The table shows the monthly cost for 5 people and for 10 people. It does not include extras, state fees or discounts.

QuickBooks is not in this table because it sells payroll together with its accounting software, so there is no payroll-only price to compare.

Can I run payroll myself for free?

Yes. This is the do-it-yourself route, and it needs no payroll software. You can work out the pay and taxes by hand using free IRS tables. You pay nothing for software, but it takes time, and mistakes can cost you penalties. These are the basic steps:

1. Get an EIN (your business tax number). Ask each new employee to fill in a Form W-4 (how much tax to hold back) and a Form I-9 (proof they can work in the US).
2. Tell your state about each new hire, usually within 20 days.
3. Every payday, hold back federal income tax from each paycheck. Use the tables in IRS Publication 15-T. Also hold back Social Security tax (6.2%) and Medicare tax (1.45%). You pay the same amounts again as the employer. In 2026, Social Security tax applies to the first $184,500 an employee earns.
4. Pay those taxes to the IRS by bank transfer. The IRS requires electronic payment. The free way is a service called EFTPS, and signing up can take up to 5 business days. How often you pay depends on how much payroll tax you reported in the past: $50,000 or less means once a month, and more than that means twice a week. If you owe $100,000 or more in one day, you pay the next business day.
5. Send the IRS a quarterly payroll report (Form 941) and a yearly unemployment tax report (Form 940). The federal unemployment tax is 6.0% on the first $7,000 you pay each employee, but it drops to about 0.6% if you pay your state unemployment tax on time.
6. Give each employee a Form W-2 by February 1, 2027 for pay in 2026. If you paid contractors, send them a Form 1099-NEC.

If you pay a deposit late, the IRS adds a penalty of 2% to 15%, depending on how late you are. With one or two employees, doing it yourself is realistic. As you add people or states, software usually costs less than your time. The IRS guides to read are Publication 15 and Publication 15-T for 2026.

A spreadsheet such as an Excel payroll template can add up hours and pay, but it does not work out or file your payroll taxes, so you still need the IRS tables above or a payroll service.

Which payroll tool is right for my business?

• If you pay 9 people or fewer and can file your own taxes, Payroll4Free is the only free one.
• If you want taxes handled for you at the lowest price, compare Zoho Payroll (paid yearly), Patriot Full Service and Square Payroll in the table above.
• If your team works hourly shifts, Homebase has a time clock and shift scheduling built in. Its basic time clock is free for up to 10 employees.
• If you pay people in more than one state, OnPay says you can pay in as many states as you need at no extra cost. Patriot Full Service charges $12 a month for each extra state. Gusto’s Simple plan covers one state, and you need Plus for more. Zoho needs its Professional plan.
• If you mostly pay contractors, Wave and OnPay charge $6 for each contractor. Square has a contractor-only plan at $6 per person, but it works out the taxes without filing them.
• If you also want help with HR or health insurance, look at Gusto Plus or Premium, QuickBooks Workforce Premium, or ADP’s bigger packages.
• If you are the only one on the payroll and you own an S corporation, Gusto offers a Solo plan for that. Ask an accountant what salary you should pay yourself.

Which payroll taxes and forms do I need to know about in 2026?

These are the federal basics from the IRS. Your state adds its own taxes, and some cities do too, so also check your state’s tax website.

• Social Security and Medicare taxes: you and the employee each pay 6.2% and 1.45%. You also hold back an extra 0.9% Medicare tax from the part of an employee’s pay above $200,000.
• Federal unemployment tax: 6.0% of the first $7,000 you pay each employee, usually cut to about 0.6% by a credit for paying your state unemployment tax.
• Forms: W-4 and I-9 when you hire. Form 941 every 3 months, due by the last day of the month after each quarter ends. Form 940 once a year. W-2 forms to your employees by the end of January, or the next business day if January 31 is a weekend.
• Employee or contractor? The IRS looks at how much control you have over the work, who controls the money side, and the type of relationship. Calling someone a contractor does not make them one.

What changed for payroll in 2026?

A 2025 tax law changed what goes on your employees’ W-2 forms for 2026. The IRS added two new codes in Box 12: code TT for overtime pay (only the extra half of time-and-a-half) and code TP for cash tips. The limit for reporting small payments to workers who are not employees rises from $600 to $2,000 for payments made after 2025. Tips and overtime are still taxed for federal income tax withholding and for Social Security and Medicare. Most payroll tools update this for you, so ask yours whether it has.

Can ChatGPT or another AI do my payroll?

Not on its own. An AI assistant can explain payroll, write you a checklist or help you compare tools. It cannot pay your taxes, send your forms to the government, or take the blame if a number is wrong. Get your tax amounts from payroll software or the IRS tables, not from a chatbot. Some payroll tools now use AI to help you get ready: QuickBooks says its Payroll AI collects hours, spots mistakes and drafts a payroll for you to check before you run it.

Bottom line

If you pay 9 people or fewer and you will file your own payroll taxes, Payroll4Free is the one free choice. If you want the taxes handled for you, expect to pay about $54 to $79 a month for 5 people. Zoho Payroll, Wave and OnPay let you try them free first.

Prices and offers change, so confirm on the company’s website before you sign up. This page is general information, not tax or legal advice.

Frequently asked questions