Free Payroll Software: What Is Actually Free

Almost every list of free payroll software has the same problem: it counts trials as free, counts free account setup as free, and counts products whose free tier does not include payroll as free. Strip those out and the genuine list is short enough to fit in a sentence.

This guide separates the genuinely free tools from the trials, shows the fee schedules that reviews skip, models what you actually pay at 15 employees, and covers the one risk that free payroll concentrates squarely on you. The question that matters is not whether a tool says free, but what it costs once you account for the parts that are not free.

Payroll4Free is the clearest example. It is widely described as free for up to ten employees with tax filing available for about $15. Its own site puts the free tier at nine or fewer payees paid once a month.

The published Payroll4Free fee schedule adds the rest: the tax service is $35 per month for the first two tax authorities, direct deposit is another $35, bank setup bills at $50 per half hour, and a $10 per-posting charge applies to every batch in any month with ten or more unique payees. That does not make it a bad product.

What free actually means in payroll software

Five different arrangements get marketed with the same word, and telling them apart is most of the decision.

The distinction that matters most is the second one. A tool can be free to use and still leave you with the two functions that carry real consequences: depositing withheld tax on schedule and filing the returns. Free payroll almost always means free calculation, and calculation is the easy part.

How we evaluated these tools

Free payroll is the category where secondary sources go stale fastest, because a free tier can change or disappear without a press release. Every claim here was checked against the vendor's own pricing or fee schedule in September 2026 rather than against another roundup.

Every free and low-cost payroll tool compared

The table orders every tool from genuinely free through to paid and shows the real cost rather than the marketed one.

The genuinely free tools

Two products cost nothing to run payroll indefinitely, with no headcount cap that triggers billing, and both share the same limitation: neither files, so you do. TimeTrex sat in this group until it withdrew its free edition, so it now appears with the paid products further down. The free option with a payee cap gets its own section after these two.

HR.my

HR.my is free for unlimited employees with no tier structure, crowdfunded by its user community rather than by a paid version. It covers payroll calculation, leave management, employee self-service, and basic HR records, and supports many languages, which reflects its global rather than US-first design.

The trade-offs are real. The interface looks its age, and support is a community forum rather than a service commitment. More important for a US employer, there are no built-in federal or state tax tables, so withholding goes in as a salary item you calculate yourself.

For a very small business with simple payroll and patience, HR.my works. For anyone who needs confident US tax calculation, it is the wrong starting point.

ExcelPayroll

ExcelPayroll is a free set of Excel workbooks that calculate payroll, produce pay stubs, and generate the figures needed for tax forms, workable up to roughly 50 employees. The workbooks cost nothing, but they run in Microsoft Excel on a PC, and the Excel license is not free.

The appeal is transparency: every calculation is visible in a cell rather than hidden in an application, which some accountants and owners prefer. The risk is the same thing viewed differently, since a spreadsheet has no guardrails against an overwritten formula and no audit trail of who changed what.

The Payroll4Free case, in detail

Payroll4Free appears at or near the top of nearly every free payroll list, usually described as free for up to ten employees with optional tax filing for around $15 a month. Its published fee schedule, last updated June 2025, tells a more detailed story that changes the calculation for a lot of businesses.

None of this makes Payroll4Free dishonest. The fee schedule is published on its own site and it is more transparent than several paid competitors. But the widely repeated summary of free up to ten employees with $15 tax filing is not what the schedule says, and a business choosing on that basis will be surprised by the first invoice.

Where it genuinely is free: nine or fewer payees, one payroll batch per month, direct deposit through your own bank, and your own tax filing. That describes a real set of businesses, and for them it is the most capable free option available.

Free payroll calculators, and where they stop

A free payroll calculator works out one paycheck and stops there. That is a smaller problem than the one payroll software solves, and for some businesses it is exactly enough.

eSmart Paycheck is the most established of these. Its online calculator is free, needs no registration, and saves no data. It computes withholding from hours or salary and handles overtime, bonus, and commission items, 401(k) and section 125 deductions, and local tax lines. It prints pay stubs or paychecks for each run. The company behind it has been an IRS-authorized payroll e-file provider since 2000.

The honest use case is narrow but real: a business paying one or two people the same amount each period, printing checks, and filing its own returns. At that scale a calculator plus a spreadsheet plus EFTPS (the Electronic Federal Tax Payment System, for federal deposits) is a functioning payroll system.

Beyond that scale, the absence of stored records becomes the problem, because year-end forms require a full year of data that a calculator saving nothing between runs never kept.

Open source payroll software

Open source payroll software is a distinct route into free payroll, and the one to look at if you want a tool you download or host yourself rather than a web application.

The appeal is genuine: source code you can inspect, no per-employee licensing, no vendor able to change pricing under you, and data that stays on infrastructure you control. For a business with technical capability and a preference for owning its stack, those are real advantages that no commercial product offers.

The cost is that you inherit everything the vendor would otherwise do. Tax table updates, security patching, backups, and disaster recovery all become yours. Payroll makes that heavier than most software because the tables change every year in every state, and a stale table does not fail loudly. It produces plausible numbers that are quietly wrong.

Payroll software you download rather than rent

Some owners specifically want payroll software that installs on their own machine instead of running in a browser, usually so payroll data stays local. Only two tools here fit that description: the ExcelPayroll workbooks, and an old copy of TimeTrex that should be ruled out on sight. A third, often mistaken for one, turns out to be a browser extension.

The download question matters less than it used to, and the reason is maintenance. Tax tables change every year in every state, so a local install stays correct only while somebody keeps updating it. A hosted tool does that itself, and it is the one payroll chore you gain nothing from owning.

Free that is not actually free

These products appear on free payroll lists regularly, but none of them is free payroll. Knowing what each one actually offers saves you from evaluating the wrong thing.

Wave Payroll

Wave Payroll is not free, and the confusion is understandable because Wave accounting is. The payroll add-on offers a 30-day trial starting from your first payroll run, then costs $40 per month plus $6 per employee.

Since April 2025 the single Wave Payroll tier includes automatic tax filing in all 50 states, replacing an older structure that split states into tax-service and self-service. For a business already keeping books in Wave, the native sync is a real advantage.

Gusto

Gusto offers free setup, not free payroll. You can create a free account, add your company details, and bring in your team without paying anything, but running payroll takes a paid plan, and the pricing page lists no free trial.

Gusto Simple costs $49 per month plus $6 per employee after a base increase from $40 during 2025. The free setup is useful as an evaluation tool because you can model your real payroll before committing, but it belongs in a different category from free software.

Homebase

Homebase has a real free tier, and it is not payroll. Basic is free for up to 10 employees at a single location and covers scheduling, time clock, and team messaging, which for an hourly business is valuable on its own. Payroll is a paid add-on at $49 per month plus $6 for each employee paid, with unlimited payroll runs.

Homebase payroll puts a 15-person team at $139 a month, level with Gusto Simple and OnPay rather than below them. Because runs are unlimited, paying weekly costs the same as paying twice a month, which matters for hourly teams on short pay cycles.

Square, OnPay, SurePayroll, Patriot, and QuickBooks

None of these has a free tier. Square starts at $35 per month plus $6 per employee, with a contractor-only plan at $6 per person and no base fee. OnPay offers a free first month, then $49 plus $6. SurePayroll charges $29 plus $7 on its single small business plan, currently promoted with six free months spread across the first year.

Patriot offers a free trial, with launch discounts that change and expire, then $37 plus $5. QuickBooks Workforce Payroll, formerly Payroll Core, is $50 plus $7 since the per-employee fee rose on July 1, 2026. These five appear on free lists because of their trials and promotions, which are reasonable things to evaluate but not reasonable things to plan around.

TimeTrex

TimeTrex no longer has a free edition, and most guides still get that wrong. Its own download page offered a free on-site, open-source Community Edition as late as December 2024, and that page was gone by February 2025. An install of that version still runs, but with no free release to update it from, its tax tables and security fixes fall behind, which over time produces incorrect calculations.

The free cloud-hosted Community Edition has gone the same way. Its sign-up page, which TimeTrex described as completely free as recently as May 2026, now redirects to a 30-day trial, and the current site lists only paid Professional, Corporate, and Enterprise editions covering time tracking, scheduling, and payroll. If you read elsewhere that TimeTrex is still free, check the vendor site before planning around it.

Free payroll software with direct deposit

Whether free payroll includes direct deposit is one of the most common questions in the category and one of the least well answered, because the honest answer is narrower than the question assumes.

The practical answer: genuinely free direct deposit exists in exactly one place, which is Payroll4Free using your own bank account to originate the transfer. Everything else either does not move money at all or charges for it.

The reason is cost. Moving money requires banking relationships, ACH origination (sending transfers through the Automated Clearing House network banks use), and fraud controls, all of which cost the provider real money on every transaction. A product with no revenue cannot absorb that, which is why free tools calculate net pay and stop.

Payroll for one employee

Payroll for one employee is where free tools work better than anywhere else, so it is worth treating as its own case. The classic scenario is an S-corporation owner paying themselves a reasonable salary: one person, a fixed amount, twice a month, one state, no variable hours.

At this scale the argument for paying is weaker than at fifteen employees, because a single unchanging salary produces the same numbers every quarter and filing four 941s a year is a manageable task. The argument for paying anyway is that a single-employee business usually means the owner is doing everything, and the failure mode is forgetting rather than miscalculating.

What you actually pay at 15 employees

Free tiers are designed around very small headcounts, so the useful comparison is what happens at a size a growing business actually reaches. The model below uses fifteen employees, one state, and twice-monthly payroll.

Two things stand out. First, Payroll4Free with its tax and deposit services active costs roughly $900 a year at this headcount, which is cheaper than every full-service alternative but is not free and is much closer to the paid tier than the marketing suggests.

Second, the genuinely free tools show $0 because the software costs nothing, which is accurate and also incomplete: the cost has moved to your time and to the risk of a missed filing.

What you actually file yourself

Every genuinely free tool leaves tax deposits and filings with you. That is the whole trade, and it is worth seeing in full rather than as a footnote, because the work is more procedural than difficult and the deadlines are unforgiving.

Setup before the first payroll

EFTPS enrollment is the step that catches new employers. According to IRS Publication 966, the PIN arrives by mail five to seven business days after you enroll online. Registering right after you get your EIN (employer identification number), rather than when the first deposit is due, is the difference between a smooth first quarter and a late deposit.

Your deposit schedule is assigned, not chosen

The IRS puts you on a schedule based on the total tax liability reported during a lookback period covering the previous four quarters. You do not select it and it can change between years.

Two details matter for anyone self-filing. First, deposit rules follow when wages are paid, not when they are earned, so June work paid in July belongs to the July deposit.

The second detail is the cutoff. Under IRS Publication 15, EFTPS accepts same-day payments of $1 million or less only if they go in before 3:00 p.m. Eastern on a business day, so remembering late in the afternoon of the due date is already too late.

Returns you file through the year

Form 944 exists as an annual substitute for the quarterly 941 for very small employers, but only when the IRS has notified you in writing to file it. Filing it without that notice creates a problem rather than saving work.

FUTA (federal unemployment tax) liability of $500 or less in a quarter carries forward rather than requiring a deposit, which is a small mercy for a business paying one or two people.

The risk free payroll concentrates on you

The risk is a late tax deposit or filing. With a free tool, nobody else is watching those deadlines, and the IRS penalty on a late deposit grows the later the money arrives.

Per the Internal Revenue Service, these tiers do not stack: a deposit twenty days late incurs 10 percent, not the sum of the earlier tiers. Late filing of a return such as Form 941 is separate, at 5 percent of the unpaid tax per month up to 25 percent. Late W-2 and 1099 filing runs $60 per form if corrected within 30 days, rising to $340 after August 1.

There is a second, quieter risk with free tools specifically: whether tax tables stay current. An old copy of the withdrawn TimeTrex on-site Community Edition still runs, but with no free release to update it, its calculations drift further from correct every year. A free tool that is no longer maintained is worse than no tool, because it produces confident wrong answers.

Common mistakes with free payroll software

Six mistakes come up again and again with free payroll, and each one is easier to prevent than to fix after the fact.

Where free payroll genuinely works, and where it does not

Free is a legitimate answer for a real set of businesses and a bad one for another. The dividing line is predictability rather than size.

Where free works

Where free breaks down

The pattern is that free tools handle a fixed, repeating calculation well and handle exceptions badly. A business whose payroll looks the same every period gets most of what paid software offers; a business whose payroll differs every period is paying in time and error risk for what it saves in subscription.

Cheap paid alternatives when free stops working

If the trade-offs above are unacceptable, the paid floor is lower than most people expect.

Patriot Basic deserves a note because it sits between the two categories. At $17 plus $4 per employee, it calculates payroll and tells you what to remit, but leaves the filing with you: the same trade the free tools make, with a maintained product, current tax tables, and actual support behind it.

For a business that wants to keep filing in house but is uncomfortable relying on an unmaintained free tool, Patriot Basic is often the right answer.

When to stop using free payroll

Stop using free payroll when your payroll stops being simple. These five questions show whether you have reached that point.

Moving from free payroll to paid

Every free payroll tool is temporary for a growing business, so the exit is worth planning before it is urgent. The constraint is year-to-date data.

A Form W-2 must reflect a full calendar year of wages and withholding. Switching mid-year means either importing complete year-to-date figures into the new system or ending the year with two partial records and a reconciliation problem in January. Every paid provider supports the import; the work is producing accurate figures from the tool you are leaving.

What to export before you leave

Per employee, for the year to date: gross wages, taxable wages by tax type, federal income tax withheld, Social Security and Medicare withheld, state income tax withheld, employer-side tax amounts, pre-tax and post-tax deductions, and employer contributions. Plus the company-level record of deposits already made and returns already filed.

How to choose free payroll software

Choose by answering six questions, in the order that eliminates options fastest.

The last question is the one people skip. Before committing, check when the tool last shipped an update, how it funds itself, and what happens to your data if it stops operating. A free product with no revenue model has no obligation to be there next year, and payroll records need to outlive the software that produced them.

Which of these is easiest to run

None of the free ones, and that is the trade rather than a flaw. HR.my has a dated interface and no US tax tables, ExcelPayroll asks for spreadsheet discipline, and Payroll4Free needs Windows plus a browser extension and stays free only at one payroll a month. All three then leave the filing with you.

If easy payroll software is the real requirement, look at where the effort actually sits. It is the deposits and the returns, not the screens. Full-service products take that work away from about $112 a month at fifteen employees, and Gusto lets you set up a free account with your real employee data, so you can measure what your own setup involves before you pay for a plan.

Before you choose

FirstHR is not payroll software, free or paid. We do not calculate pay, file taxes, or move money. If running payroll is the problem in front of you, pick from the tools above; the honest recommendation for most small businesses that have outgrown free is Patriot at $37 plus $5 per employee.

The reason this section exists is that payroll is downstream of something else. Before anyone appears on a payroll run, an offer letter has to be signed, Section 1 of Form I-9 completed by day one, a Form W-4 and any state withholding certificate collected, and the employee record created accurately. Payroll software inherits whatever that process produces, including its errors. A wrong withholding certificate produces wrong withholding every period until someone notices, and free tools notice least.

That is the layer we handle: onboarding workflows, e-signature on offer letters and I-9s, employee records, document management, and training with completion tracking, for US small businesses at a flat $98 to $198 per month rather than a per-employee rate. It runs alongside whichever payroll tool you choose, free or otherwise. If getting the paperwork right before the first paycheck is the part that keeps slipping, that is the gap we built for.

Frequently Asked Questions

Is there genuinely free payroll software?

Yes, but the list is short: HR.my for unlimited employees, ExcelPayroll if you own an Excel license, and Payroll4Free for nine or fewer payees paid once a month. All three leave tax filing to you, and TimeTrex's free Community Edition is no longer offered. Anything else sold as free turns out to be a trial, a free setup, or a free tier without payroll in it.

What is the catch with free payroll software?

Three: tax filing is usually excluded, employee caps trigger fees that can reach backwards across a whole month, and published fee schedules contain charges that reviews omit. A free tool is only free until a deposit is late, at which point the IRS penalty runs 2 to 15 percent of the unpaid amount.

Is Payroll4Free actually free?

Core calculation is free for nine or fewer payees. Its published fee schedule shows tax filing at $35 per month for the first two tax authorities, $15 for each additional state or locality, direct deposit at $35, setup tasks at $50 per half hour, and $10 per posting once a month reaches ten unique payees. Genuinely free if you have nine or fewer people, run one batch monthly, and file yourself.

Does free payroll software include tax filing?

Almost never. HR.my and ExcelPayroll both leave the filing to you: Form 941 every quarter, Form 940 once a year, W-2 and W-3 by January 31, and your state returns. HR.my does not even calculate US withholding. Payroll4Free sells filing as a separate monthly service. Full-service filing is the line between free and paid.

Is there free payroll software with direct deposit?

Effectively one: Payroll4Free, free when you originate the transfer through your own bank, or $35 per month through theirs. The other free tools do not move money at all. Moving money requires banking relationships and fraud controls that a product with no revenue cannot fund.

What is the best free payroll software for a small business?

Payroll4Free for nine or fewer employees paid monthly, on Windows, by an owner willing to file their own taxes. HR.my for unlimited employees at zero cost with a dated interface. ExcelPayroll for spreadsheet users. TimeTrex no longer has a free edition for teams wanting time tracking too. If none of those trade-offs works, Patriot at $37 plus $5 is the cheapest legitimate full-service option from five employees up.

Can I run payroll for one employee for free?

Yes, and it is the scenario free tools handle best, typically an S-corporation owner paying themselves a fixed salary. Payroll4Free costs nothing at that scale if you file yourself and run one payroll a month. Paid alternatives for one employee start at $21 per month for Patriot Basic, which leaves filing to you, while filing is included from $36 with SurePayroll, $41 with Square Payroll, and $42 with Patriot Full Service.

Is Wave payroll free?

No. Wave accounting is free; Wave Payroll is a 30-day trial then $40 per month plus $6 per employee, covering all 50 states since April 2025. The native sync with Wave accounting is a genuine advantage for existing Wave users, but it is a paid payroll product.

Is Gusto free?

No. Gusto offers free setup, meaning you can open an account and add your team without paying, but payroll itself needs a paid plan. Simple is $49 per month plus $6 per employee after a base increase from $40 during 2025. Useful for evaluation, not a free tier.

Is Homebase payroll free?

The scheduling and time clock are free for up to 10 employees at one location. Payroll is a paid add-on at $49 per month plus $6 per employee paid, with unlimited runs, so a 15-person team pays $139 a month on any pay schedule.

When should I stop using free payroll software?

When an employee starts working in a second state, when headcount approaches the free tier cap, when you first miss or nearly miss a deposit deadline, or when the time spent exceeds what outsourcing costs. Any one of those is sufficient on its own.

What do I have to file myself with free payroll software?

Everything on the tax side: a federal EIN, EFTPS enrollment with a PIN that takes five to seven business days to arrive, state withholding and unemployment accounts per state, then Form 941 quarterly, Form 940 annually, W-2 and W-3 by January 31, 1099-NEC, state returns, and new hire reports. Deposits follow an IRS-assigned schedule: monthly if lookback liability was $50,000 or less, semiweekly above that.

Is there a free payroll calculator?

Yes. eSmart Paycheck offers one free with no registration, computing withholding from hours or salary and printing stubs or paychecks. It does not store records, deposit tax, file returns, or move money. Workable for one or two employees paid consistently; the lack of stored records becomes the constraint at year end.

Is there open source payroll software?

Yes, though thinner than before. TimeTrex still calls its on-site deployment open source but sells it as a paid edition, and its free Community Edition download was gone by early 2025. You gain inspectable calculations and no licensing cost, and you inherit tax table updates, patching, and backups. Check the date of the most recent release, since a discontinued project keeps running while growing more wrong.

What are the most common mistakes with free payroll?

Assuming free covers tax filing, not reading the vendor fee schedule, running a discontinued tool because it still opens, choosing without testing the data export, and forgetting that state withholding, unemployment, and new hire reporting carry separate deadlines and penalties from the federal obligations.

How do I switch from free payroll to a paid provider?

Switch on January 1 if possible, or at the start of a quarter. Before leaving, export per-employee year-to-date gross wages, taxable wages by tax type, all withholding, employer-side amounts, and deductions. Test that export early, since free tools often export poorly and reconstructing figures by hand is far worse in November.

Is free payroll software safe to use?

Established free tools have operated for years, but free products generally carry less security investment and slower patching. The clearest illustration is an old copy of TimeTrex's withdrawn free on-site edition, which still runs with no free release to patch it or update its tax tables. Check whether a tool is actively maintained and how it funds itself before trusting it with Social Security numbers and bank details.