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How to run payroll for a small business

To run payroll, you register as an employer, collect each employee's tax and bank details, calculate gross pay, withhold taxes and deductions, pay your people, then pay the withheld amounts and send filings to the tax authorities on time. Payroll software handles the calculations, payments and records, and depending on the plan, the tax filings. The rules differ by country and state, so check what applies where you operate or ask your accountant.

Bill Belcamino
Bottom line up frontby Bill Belcamino, founder of HelpCompare
Editorial assessment

Bottom line up front: What should a small business check before choosing payroll software?

Start with who files the taxes: some plans calculate payroll taxes but leave the filing to you, and that decides how much work lands on your desk every pay run.

Then price on headcount, since Gusto is from $49/mo + $6/person, which the page puts at $109/mo for a team of 10, while Rippling is quote only. Two timing points prevent most first-run trouble. Payroll money has to move before payday, so learn the processing cutoff and have the funds in the account by then, not on the day staff expect to be paid. If you're switching providers, start at the beginning of a quarter if you can (ask your accountant how reporting periods work where you are), because a mid-quarter switch splits wage and tax history across two systems and someone has to reconcile it at year end. On the first run, check every net pay against the last pay stubs before you approve, and confirm in writing who files the year-end forms.

My read of the verified data on this page, checked against vendor sources on September 23, 2026. Disagree or spot an error? Tell Bill

How to run payroll, step by step

The software this job takes

What to look for

Common mistakes to avoid

What to settle before you buy

Frequently asked questions

How do I do payroll for one employee?

The steps are the same as for a larger team: register as an employer, collect the employee's tax and bank details, pay on a set schedule, and pay and file the withheld taxes. Software can still take the calculations and record-keeping off your hands. Check the per-person pricing for a single employee in the table above.

How do I do payroll myself?

You can calculate pay and withholding by hand or in a spreadsheet using your tax authority's guidance, then pay and file yourself. The risk is calculation errors and missed deadlines, which can bring penalties. Ask your accountant what applies where you operate before you start.

What is the cheapest way to do payroll for a small business?

Compare the total for your headcount, not the headline fee: the base fee plus per-person fees, plus any charge for tax filing, extra states or contractor payments. The table above shows each tool's verified entry price and billing unit.

What is the easiest payroll software for a small business?

Easy in practice means it files taxes for you, lets employees serve themselves and syncs to your books. Do a test run in a trial with your real employee data and see how setup and approval feel.

How we built this page

We start from the job, not the product. The phrasings people search for this job (for example “how to do payroll for small business”) come from our research into how small and mid-size teams describe it. Which software categories the job takes is our editorial judgment. Every tool, entry price, billing unit and date comes from HelpCompare’s open dataset, recorded from each vendor’s own pricing page; nothing is estimated, and where a vendor publishes no price we say so. We take no affiliate commissions and publish no scores of our own. See our methodology or download the data from Open Data.

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Cite this page: HelpCompare, “How to run payroll for a small business”, helpcompare.com/start/run-payroll/ (updated ).

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Bill Belcamino, founder of HelpCompare
About the author

Bill Belcamino

Founder and author, HelpCompare

Engineer by training, operator by experience, marketer by choice. Bill spent eight and a half years as an engineer at HP, was COO of Auctiva (the number one third-party selling platform on eBay, past 200,000 users) and ran Google’s $70M/year search syndication partnership at Alot.com. Then he spent 13 years building his own web properties with his own money at stake. He has bought, trialled, integrated and cancelled more SaaS tools than he can count, and started HelpCompare because the real cost of switching tools is the part nobody covers.

“I’ve sat on both sides of the table: the agency recommending the tool and the client paying for it.”

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