Best Free and Lowest-Cost Payroll Software
There is no genuinely free full-service payroll software for W-2 employees in the United States. The closest thing to free is a contractor-only plan with a $0 monthly base — Square Payroll offers one, and Gusto often advertises a promotional $0 base for the first six months — where you pay only a fee per contractor you actually pay. Gusto's regular contractor price is $35/month plus $6 per contractor.
Everything else marketed as cheap payroll falls into one of two buckets. Either it's a low-cost paid plan that still files your taxes, which is what most businesses should buy, or it's a self-service plan like Patriot's Basic Payroll that's cheaper precisely because you keep the obligation to file and deposit your own payroll taxes.
That second bucket is where people get hurt. A late or incorrect federal deposit can cost more in penalties and interest than several years of the difference between a cheap plan and a full-service one. This page is ordered by honesty about that trade-off, not by headline price.
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Our ranked picks
We earn a commission from some providers here and nothing from Square, Wave, or QuickBooks. Our top pick for the closest thing to free payroll is a provider we are not paid by.
- 1Closest thing to free payroll
Square Payroll
Businesses that pay only 1099 contractors
Square Payroll's contractor-only plan has a $0 monthly base and charges a fee per contractor paid, with 1099-NEC filings included. If you have no W-2 employees, that's as close to free as payroll gets: in a month where you pay nobody, you pay nothing.
We earn nothing from Square and it still ranks first here, because for the specific question "what's actually free," a $0 base is the honest answer. Square's employee plan is a separate paid product with a published monthly base plus a per-employee fee, and it imports tips and timecards from Square POS.
Where it falls short- The $0 base applies to contractors only — adding a W-2 employee moves you to the paid employee plan.
- You still pay a fee for each contractor you pay, so it isn't free in an active month.
- Much less HR and benefits functionality than a full platform.
- Full-service payroll is $35/month plus $6 per person paid; contractor-only is $6 per person paid with no base fee (pricing verified August 2026).
- 2Lowest-cost full-service payroll
Patriot Payroll
Price-sensitive employers who still want their taxes filed
If you have W-2 employees, this is where most price-sensitive owners should land. Patriot's base price is among the lowest available for full-service payroll, and the Full Service plan files your federal, state, and local payroll taxes, issues W-2s and 1099s, and carries a tax filing accuracy guarantee.
Patriot also sells Basic Payroll at a lower price, which runs payroll and produces pay stubs but leaves the filings and deposits to you. That plan is appropriate if a bookkeeper or CPA is already filing on your behalf, and a bad idea otherwise.
Where it falls short- Basic Payroll is not full-service: you file and deposit your own payroll taxes.
- Benefits, HR tooling, and employee experience are thin compared with Gusto or OnPay.
- We may earn a commission if you sign up through our Patriot link.
- Basic Payroll is $17/month plus $4 per worker paid, but you handle the tax filings and deposits yourself; Full Service Payroll is $37/month plus $5 per worker paid (pricing verified August 2026).
PayrollSignal may earn a commission if you sign up through this link. It does not affect our ranking.
- 3Cheapest option for Wave accounting users
Wave Payroll
Microbusinesses already keeping books in Wave
Wave Payroll is $40/month plus $6 per active employee and $6 per independent contractor paid, with automated payroll tax filing in all 50 US states — Wave enabled nationwide filing for customers who signed up after April 2, 2025, so the old split between tax-service and self-service states no longer applies to new accounts.
The value case is really about the ledger. If your books are already in Wave, payroll posting straight into them saves real time each month. If they aren't, there's no particular reason to choose Wave over Gusto, OnPay, or Patriot.
Where it falls short- Accounts opened before April 2, 2025 may still be on legacy self-service tax terms — confirm your own account's filing status.
- The value case depends heavily on already using Wave for accounting.
- Very limited HR, benefits, and multi-state capability.
- Wave Payroll is $40/month plus $6 per active employee and $6 per independent contractor paid (pricing verified August 2026).
- 4Best low-cost contractor plan with room to grow
Gusto
Contractor-only businesses that expect to hire employees later
Gusto's dedicated contractor plan is $35/month plus $6 per contractor, with promotional $0-base pricing often available for the first six months — confirm the current terms on Gusto's site. It's the strongest 1099 workflow of the low-cost options on this page.
The reason to start here rather than somewhere cheaper is what happens next. When you hire your first W-2 employee, you move up to Simple at $49/month plus $6 per person inside the same account, with full-service filings, benefits in supported states, and 401(k) integrations, instead of migrating providers.
Where it falls short- Nothing here is free once you have W-2 employees — Simple starts at $49/month plus $6 per person.
- Simple is single-state only; multi-state requires Plus at $80/month plus $12 per person.
- Promotional contractor pricing changes, so verify the current base fee before signing up.
- We may earn a commission if you sign up through our Gusto link.
PayrollSignal may earn a commission if you sign up through this link. It does not affect our ranking.
Compare the picks side by side
| Provider | Starting price | Per person | Best for |
|---|---|---|---|
| Square Payroll | $0 base (contractors only) | $6 / person paid / mo | Businesses that pay only 1099 contractors |
| Patriot Payroll | Full Service: $37/mo base | $5 / worker paid / mo | Price-sensitive employers who still want their taxes filed |
| Wave Payroll | $40/mo base | $6 / active employee / mo | Microbusinesses already keeping books in Wave |
| Gusto | Contractor Only: $35/mo base | $6 / person / mo | Contractor-only businesses that expect to hire employees later |
Prices shown come from each provider's review page on this site. Confirm current pricing with the provider before signing up — payroll pricing changes often.
Pricing verified August 2026
How we picked
For this roundup we ignore marketing language and ask one question first: does the plan file and deposit your payroll taxes, or not? Plans that don't are ranked and labeled as calculators, no matter how low the price is.
Then we weight the true monthly cost at a realistic worker count, whether the $0 or low base survives adding a W-2 employee, and how much penalty risk the cheap option transfers to you. A plan that saves you a few dollars a month and creates a filing obligation you'll forget is not a saving.
We also excluded anything advertised as free that turns out to be a free tier of a different product. Homebase, for example, has a genuinely free tier — but it's free scheduling and time tracking, not free payroll; its payroll is a paid add-on.
Every provider is scored against the same criteria. Read our payroll software review methodology.
Frequently asked questions
Is there any truly free payroll software?
Not for W-2 employees in the United States. The closest thing is a contractor-only plan with a $0 monthly base, which Square Payroll offers. Gusto often advertises a promotional $0 base for the first six months; its regular contractor price is $35/month plus $6 per contractor. In each case you pay a fee only for each contractor you actually pay.
Why is self-service payroll cheaper?
Because it doesn't include the work that carries the risk. Self-service plans calculate paychecks and produce pay stubs, but you file and deposit your own federal, state, and local payroll taxes. Patriot's Basic Payroll at $17/month plus $4 per worker paid works this way — Full Service is $37/month plus $5 per worker paid and files for you.
What is the cheapest full-service payroll?
Among the providers we review, Patriot's base price is among the lowest for full-service payroll, and its Full Service plan includes federal, state, and local tax filings with a tax filing accuracy guarantee. Confirm the current base and per-employee pricing before signing up.
Is free payroll software safe to use for taxes?
A plan that doesn't file your payroll taxes isn't unsafe by itself, but it moves a strict deadline-driven obligation onto you. Unless a bookkeeper or CPA is already filing on your behalf, the few dollars a month you save are a poor trade against a single late-deposit penalty.
Isn't Homebase free payroll?
Homebase has a genuinely free tier, but it covers scheduling, time tracking, and team messaging for a single location. Homebase Payroll is a paid add-on with a published price plus a per-employee fee.
Should I use free payroll software to save money?
If you pay only contractors, a low-cost contractor plan is a reasonable way to spend little in quiet months. If you have W-2 employees, buy the cheapest genuinely full-service plan you can find instead, because the filings are the part you don't want to own.
The bottom line
The honest summary: pay nothing only if you pay nobody but contractors. Once you have a W-2 employee, the question stops being "what's free" and becomes "what's the cheapest plan that still files my taxes."
Before you buy any low-cost plan, confirm one thing in writing: whether federal, state, and local filings are included. That's the line between a payroll service and a payroll calculator, and it's the difference between Patriot's Basic and Full Service plans.
Read how we research and score payroll providers in our payroll software review methodology.