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The Finance Base
business taxes

The Best Free Payroll Software for Small Businesses: Payroll4Free and Its Limits

Payroll4Free is a free basic option for some very small U.S. businesses, but tax deposits and filings are a separate paid service. See how it compares with paid plans.

By TheFinanceBase Team 3 min read
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Payroll4Free is the clearest free basic payroll option identified for a very small U.S. business: its FAQ says the free service covers businesses paying no more than nine people once a month. It can process payroll and calculate taxes, but tax deposits and filings handled by the provider are an optional paid service. If you want a provider to handle those filings, compare paid plans such as Square Payroll, Gusto, and Wave instead.

What “free payroll software” gets you

A free payroll plan can mean free software or payroll calculations—not necessarily free tax administration. With Payroll4Free, the distinction matters: the basic service is free within its stated worker and pay-frequency limit, while having the provider deposit and file payroll taxes costs extra. The company says advertisements displayed inside the software support the free system.

Payroll4Free’s eligibility wording is specific: the business must pay nine or fewer individuals no more than once monthly. Confirm the current limit, eligibility, and any fees with the provider before signing up; terms can change.

Payroll4Free: the free option for a narrow use case

Payroll4Free’s official FAQ lists payroll processing, tax calculations, vacation tracking, reporting, software integrations, HR functions, and customer support among the free service’s features. Its feature page says the software calculates federal, state, and local taxes and provides filled tax forms. These are vendor-described features, not independently tested performance findings.

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How payments and tax work

You can use your own bank for direct deposit or pay by paper check. Payroll4Free calculates payroll taxes, but its provider-operated tax deposits and filings are an optional paid service. That makes the free tier a better fit for employers who are willing and able to manage those tax payments and filings themselves, rather than for someone seeking fully managed payroll at no cost.

If you choose paper checks, Payroll4Free lists that as an available workflow but does not specify check-stock brands or printer compatibility. Check requirements with the provider and your bank before buying supplies.

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Paid alternatives when you want tax filing handled

The following are vendor-published U.S. prices captured on October 4, 2026. They are not normalized quotes, and plan availability, eligibility, and fees may change. Check each provider’s current terms before choosing.

Service Published price Tax service and notable limits
Square Payroll $35 monthly base subscription plus $6 monthly per employee or contractor; contractor-only pricing is $6 per contractor paid. Square describes ongoing quarterly and yearly tax filings and payments as included. Square pricing.
Gusto Simple $49 per month plus $6 per person. Single-state payroll; the pricing page lists tax filings and payments. Gusto Plus is $80 per month plus $12 per person and includes multi-state payroll. The page also shows contractor-only introductory pricing of $0 base for the first six months plus $6 per person, subject to terms; this is not a permanent free plan for W-2 employees. Gusto pricing.
Wave US payroll For new payroll customers who signed up after April 2, 2025: $40 monthly base plus $6 per active employee and $6 per independent contractor paid. Wave describes automatic tax-payment transfers and filings with state agencies and the IRS, excluding 1099 filings. The price qualification applies to the stated group of new customers. Wave payroll.

How to choose for your business

Start with the work you need the service to do, then compare the total price for your actual headcount. A low base fee alone does not tell you what payroll will cost.

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  • Choose Payroll4Free if: you meet its stated limit of nine or fewer people paid no more than monthly, and you are prepared to handle tax deposits and filings yourself—or have confirmed the cost of its optional filing service.
  • Compare paid plans if: you want a provider to handle tax filings and payments, have more workers or more frequent payroll, need multi-state coverage, or prefer another payment or accounting workflow.
  • Calculate the real monthly cost: include the base charge and per-person charges for employees and contractors, using the provider’s definition of a billable person or active employee.

Before enrolling, confirm the states supported by the specific plan, whether tax deposits and filings are included, how you will pay workers, and whether the accounting integration and employee access meet your needs.

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Outsourcing payroll does not remove the employer’s responsibility

The IRS says in its 2026 Publication 15, Employer’s Tax Guide: “An employer who outsources payroll and related tax duties (that is, withholding, reporting, and paying over social security, Medicare, FUTA, and income taxes) to a third-party payer will generally remain responsible for those duties, including liability for the taxes.” A filing service can reduce administrative work, but keep payroll records and monitor tax notices and correspondence.

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