Healthcare Payroll Software for Practices

I build HR software for small businesses, and my advice to any practice choosing healthcare payroll is to settle which pay rules apply before comparing products. Get one rule wrong in setup and the error repeats every pay period, however good the software is. So this guide starts with the rules, from shift differentials to Payroll-Based Journal (PBJ) reports, then compares the platforms and what they cost.

Take a nurse who earns $35 an hour. This week she works 24 regular hours and 16 night hours carrying a $5 differential, then picks up overtime. If your payroll calculates that overtime at $35 times 1.5, it is wrong, and the Department of Labor names this exact failure as a common error in the health care industry.

Her first 40 hours pay $1,480, which puts her regular rate at about $37 rather than $35, because the differential is compensation for work performed and belongs in the calculation. The difference on one nurse in one week is small. Across a clinical staff running differentials every week, it is the shape of a collective action, a group lawsuit for unpaid overtime.

That is the useful version of what makes healthcare payroll different. Most comparisons in this category answer a different question, ranking a 400-bed hospital system and a five-provider clinic in the same list even though the two have almost nothing in common as payroll problems. This one is written for small practices and says plainly where the healthcare-specialist platforms are the wrong purchase.

First question: are you a practice or a facility?

This single distinction eliminates most of the category, and almost no comparison asks it before ranking products. Your answer decides whether you need general small and mid-size business (SMB) payroll or a healthcare-specialist or enterprise human capital management (HCM) platform.

If you are a practice, the healthcare-specific features that dominate these comparisons are features you will pay for and not use. PBJ file generation is worthless without a PBJ obligation. A credential library sized for hundreds of clinical staff is expensive overhead for a practice tracking eight licenses. Union rule engines and 24-hour scheduling matrices are answering a question you do not have.

What a practice genuinely needs from payroll is narrower: correct differential handling if you run evenings or weekends, accurate overtime including the regular rate calculation, clean handling of a mixed W-2 and contractor roster, and multi-state filing if any staff live across a line. General SMB payroll platforms do all of that, though only some of them apply differentials automatically.

Shift differentials and the regular rate

This is the rule that produces the most back-pay exposure in healthcare, and it applies to any practice paying extra for evenings, nights, or weekends.

Under the Fair Labor Standards Act, overtime is 1.5 times the regular rate, defined as total remuneration for the week divided by total hours worked. It is not the base hourly rate. Shift differentials are compensation for work performed and cannot be excluded from it, and the Department of Labor guidance for the health care industry names failure to include differentials in the regular rate as a common violation.

Two related traps. Paying the differential on all hours and then calculating overtime only on base is a documented industry error rather than a rounding difference. And where an employee works two roles at different rates in the same week, which is common in small practices, the regular rate blends across both.

The 8 and 80 rule, and who may actually use it

Section 7(j) of the Fair Labor Standards Act offers hospitals and residential care establishments an alternative to the 40-hour workweek: a fixed 14-day work period, with overtime paid for hours beyond 8 in a day or 80 in the period. For 8-hour shift patterns that do not fit neatly into weeks, it is genuinely useful.

State law adds another layer. California requires daily overtime after 8 hours and double time after 12, which for a clinic running 12-hour shifts triggers overtime on every shift regardless of weekly totals. The federal 40-hour analysis alone is insufficient there and in several other states.

For California clinics, the exception that matters is a valid alternative workweek schedule. California health care employers may adopt one by a two-thirds secret-ballot vote of the affected employees and then schedule workdays of up to 12 hours within a 40-hour workweek without daily overtime.

Salaried does not mean exempt

The other frequent source of claims in practices is treating a salary as an exemption. Exemption depends on duties and salary together, and the professional exemption generally requires advanced knowledge in a field of science or learning acquired through prolonged specialized instruction. Medical assistants typically do not meet it, and neither do most front desk, billing, and technician roles.

A salaried medical assistant working 45 hours is owed overtime on five of them. For nursing, the learned professional regulation draws the line directly: registered nurses generally meet the duties test, while licensed practical nurses and similar health care employees generally do not.

Per-diem, locum, and contractor staff

Practices routinely run a mixed roster, and the labels used in healthcare do not map cleanly onto tax classifications.

The word per-diem does nothing legally. Classification follows the IRS common-law test on behavioral control, financial control, and the nature of the relationship. A per-diem nurse who works shifts you assign, under your clinical supervision, with your equipment and your protocols, is difficult to defend as an independent contractor.

Healthcare is an area where worker classification is examined, and reclassification brings back payroll taxes, penalties, and usually state wage claims covering several years. The software question that follows is simply whether your platform handles both worker types with year-end filing for each. Most do; a few do not, and discovering the gap in January is expensive.

Home care agencies: the third category

A home care agency is neither an outpatient practice nor a certified nursing facility, and its payroll problem comes from domestic service wage law rather than from clinical regulation. If your aides work in clients' homes, this is the section that decides your setup, and the PBJ section below almost certainly does not apply to you.

The hard part of home care payroll is counting hours rather than setting rates. Aides work short visits at several addresses, and per the Department of Labor, travel from one client to the next during the workday is compensable hours worked that the third-party employer is responsible for paying. Miss it across twenty aides and the error repeats every week.

The exemption question is the one to settle before the next payroll run. The 2013 domestic service rule bars third-party employers, meaning agencies and registries rather than the family using the service, from claiming the companionship services or live-in exemptions. That rule is still in force, although the Department of Labor proposed rescinding it in July 2025 and paused enforcement against agencies the same month, pending a final rule.

For software, home care runs as two systems rather than one. Medicaid personal care and home health visits require electronic visit verification (EVV) under the 21st Century Cures Act, so visits are recorded and verified in the EVV system and payroll consumes the verified hours.

Ask any payroll vendor how visit-level hours arrive and how several rates in one week become a single regular rate, because a Monday morning spreadsheet import is where the overtime errors get in.

PBJ reporting, and why most readers can skip it

Payroll-Based Journal appears in every healthcare payroll comparison, usually without stating who it applies to. According to the Centers for Medicare & Medicaid Services (CMS), it applies to Medicare and Medicaid certified long-term care and skilled nursing facilities, with swing-bed hospitals excepted. If you run an outpatient practice, dental office, or clinic, it does not apply to you and you should not pay for it.

The penalty structure is what makes PBJ a software requirement rather than an administrative task for facilities that do have the obligation. Under the CMS Five-Star technical guide, a missed submission produces a one-star staffing rating for the quarter even if the facility was fully staffed, and that rating is public.

The file requirements change too: CMS updated its PBJ data specifications during 2026, the sort of change a specialist platform absorbs and a general payroll product does not.

12 healthcare payroll platforms compared

The table sorts the platforms by published price where one exists, with the quote-only platforms at the bottom. Every platform here files payroll taxes; the columns show what each adds beyond that.

Gusto

The strongest general fit for a small outpatient practice. Custom pay rates handle shift differentials, and Gusto computes the blended regular rate. It pays W-2 employees and 1099 contractors with year-end filing for both, and its onboarding and document collection are the best among payroll-first platforms, which matters in a sector that hires continuously. Simple runs $49 per month plus $6 per employee.

Two constraints worth pricing. Time tracking comes included on Plus at $80 plus $12 per employee, or as the Time & Attendance Plus add-on to Simple at $6 per person a month, and a practice running shifts needs one or the other. And Simple covers a single state only.

OnPay

Close to Gusto in capability with one flat plan at $49 per month plus $6 per employee, and every state included at no surcharge. For a practice with staff living across a state line, or a group with sites in two states, that structure is materially cheaper than the alternatives. It also publishes healthcare-specific material and handles the mixed W-2 and contractor rosters practices run.

Patriot Software

The cheapest legitimate full-service payroll at $37 per month plus $5 per employee, with a time and attendance add-on available separately. For a small practice with straightforward daytime hours and a tight budget, it does the core job at the lowest price on this list.

What it does not have is any healthcare specificity at all. Differential pay codes are manual pay items, there is no credential tracking, and additional states cost extra.

Square Payroll

Relevant to clinics already taking patient payments through Square, particularly medspas, dental practices, and cash-pay clinics. At $35 per month plus $6 per person it has the lowest published base fee here, and timecards flow from the same system that takes payment.

QuickBooks Workforce Payroll

Workforce Payroll, the tier formerly called Core, is $50 per month plus $7 per employee since the July 1, 2026 price change. The argument is ledger proximity rather than healthcare capability: if practice accounting already lives in QuickBooks Online, payroll entries reach the general ledger without an export step. There are no healthcare-specific features.

Paychex Flex

Service rather than software, with the option of a dedicated payroll specialist and a large compliance team. Paychex no longer publishes a price for any payroll package: Basic, Foundations, Advanced, and Complete all run on Paychex Flex and all sit behind a pricing request, so every practice now needs a quote.

Paychex also publishes healthcare-specific material and offers a professional employer organization (PEO) route for practices wanting more buying power on benefits.

ADP RUN

Every RUN package calculates, files, deposits, and reconciles payroll taxes, and ADP pays the resulting fines if it makes a filing error. For a multi-site group operating across states with a real administrative function, that is the argument.

ADP's healthcare page lists multiple pay rates and shift differentials, license and certification records with expiration dates, and Affordable Care Act (ACA) compliance tools. For midsized and larger employers, ADP positions Workforce Now rather than RUN. ADP does not publish RUN pricing.

Netchex

Positioned explicitly as a healthcare specialist, combining payroll with credential and certification tracking, PBJ file generation, shift differential rules, and a learning module for compliance training. For a certified nursing facility this is the shape of product that removes real quarterly work rather than adding a feature.

Pricing is quote-based, and the fit narrows sharply below facility scale.

Paycor

Aimed at growing multi-location healthcare groups, with differential pay, agency and contract staff records, PBJ reporting help for long-term care, certification-based scheduling, and earned wage access. It sits between SMB payroll and enterprise HCM, which is the right band for a group that has outgrown Gusto but is not a hospital system.

Paycor is now part of Paychex, which completed the acquisition in April 2025, and it is still sold under the Paycor name alongside Paychex Flex.

Paylocity

A full human capital management platform with a published healthcare offering. Its time system adds premiums to time cards, the mechanism behind shift differentials and on-call pay, and its healthcare page lists credential-based scheduling, PBJ reporting support, certification tracking with recurring training, and a learning management system for compliance training.

Paylocity sells to small businesses as well as midsize and enterprise ones, but its healthcare depth pays off in larger groups, which places it above most practices reading this page.

UKG Ready

UKG Ready is UKG's all-in-one HR, payroll, time, and scheduling suite, and UKG markets it to growing businesses rather than to hospitals, which its Pro products serve. UKG says Ready's pay rules handle shift differentials and multiple positions, its scheduling builds shifts around demand, skills, and compliance rules, and its reporting flags fatigue risk.

UKG also describes PBJ reporting for its post-acute and senior living customers. For a growing clinical group that wants healthcare payroll, scheduling, and HR in one system, that is the case for it. For a single small practice, it is more suite than the problem requires.

HR for Health

A niche option built specifically for small clinical practices, from dental and medical to optometry and veterinary, combining HR compliance documentation, continuing education and certification records with expiration alerts, and payroll built into the platform. For a practice that wants credential tracking without facility-grade pricing, it is the closest fit in this comparison.

Unlike the other specialists here, HR for Health publishes its prices. Payroll comes on two plans: Plus, from $348 a month with a $1,600 one-time setup fee, and Premium, from $374, with a $2,000 setup fee. Each adds a payroll charge per employee. The $179 Basic and $249 Essentials plans leave payroll out.

What a small practice actually pays

At 15 staff the published options cluster between roughly $112 and $155 a month. The table models 5, 15, and 30 staff, which covers most outpatient practices, and leaves out quote-only platforms because there is no published figure to model honestly.

Two observations. The spread is about $43, which is small enough that choosing on price alone leaves most of the decision unmade. What separates the options at that size is multi-state handling, contractor support, and whether time tracking is included.

And the Gusto Plus row is the one to read carefully. Time tracking comes included on that tier, while Simple needs the Time & Attendance Plus add-on. For a practice running evening or weekend shifts, time tracking is not optional: it is the input that makes differential handling and the regular rate calculation work.

At 15 staff, adding time tracking takes Gusto from $139 a month to $229 with the add-on on Simple, or to $260 on Plus, which also brings multi-state payroll.

Credential tracking: a real problem in the wrong system

Every practice has this problem. Clinical licenses, board certifications, DEA registrations, Basic Life Support (BLS) and Advanced Cardiac Life Support (ACLS) cards, and immunization records all expire on independent schedules. An expired license means a clinician cannot lawfully work the shift they are scheduled for.

The question is not whether you need to track it but where the tracking belongs. Payroll runs on a pay cycle. Credentials expire on their own calendar, and nothing about a payroll run surfaces the fact that a nurse practitioner's certification lapses in three weeks.

Facility-grade payroll platforms solve this by including a credential module, which is a legitimate answer if you are buying that platform anyway. Buying a facility-grade payroll platform just to get credential tracking is an expensive route to a document management requirement.

Verdict by practice type

Choose by what you actually are rather than by feature count. Most of these point away from the healthcare-specialist platforms.

Before you choose

FirstHR covers the people side of a practice: onboarding, employee records, documents, and training. It is an onboarding and HR platform, not a payroll provider, so paying clinical staff, filing payroll taxes, calculating differentials, and generating PBJ files all come from the platforms above. If paying clinical staff correctly is the problem in front of you, pick from the comparison.

The reason this section exists is the credential section above it. Practices consistently arrive at healthcare payroll software looking for two things at once: a payroll engine and a way to stop losing track of licenses, certifications, and training records. Those are different problems, and buying a facility-grade payroll platform to solve the second one is how a small practice ends up with a quote built for a nursing home.

That is the layer we handle: onboarding workflows a new clinician completes before their first shift, e-signature on offer letters and policy acknowledgments, document management with an expiry date on each document, and employee records that stay retrievable after someone leaves.

Form I-9 and W-4 go on the first-day task list, and the completed forms are kept in the employee file; the forms themselves are completed outside the platform.

Training runs on courses you build from your own HIPAA, OSHA, and practice materials, with completion recorded by signature. Pricing is flat: $98 a month for up to 10 people or $198 for 11 to 50. It sits alongside whichever payroll platform you choose rather than replacing it.

Frequently Asked Questions

What makes healthcare payroll different from regular payroll?

Four things: shift differentials that must enter the regular rate before overtime, clinical credentials that expire, mixed W-2 and per-diem rosters, and for certified nursing facilities a quarterly CMS staffing submission. An outpatient practice needs the first two and generally not the last.

How do shift differentials affect overtime pay?

They raise the overtime rate. Overtime is 1.5 times the regular rate, which is total compensation divided by total hours, not the base rate. A nurse at $35 with 16 night hours at a $5 differential across 40 hours has a regular rate of $37, so overtime is $55.50 rather than $52.50.

What is the 8 and 80 overtime rule and can my practice use it?

Section 7(j) lets hospitals and residential care establishments use a fixed 14-day period, paying overtime beyond 8 hours daily or 80 in the period, with a prior agreement in place. It is not available to physician-owned outpatient practices or dental offices, and applying it there underpays overtime every cycle.

What is PBJ reporting and does my practice have to do it?

Payroll-Based Journal is a quarterly CMS staffing submission required of Medicare and Medicaid certified long-term care and skilled nursing facilities. It is due 45 days after each fiscal quarter, and missing it triggers an automatic one-star staffing rating. Outpatient practices and clinics have no PBJ obligation.

Do I need credential tracking in my payroll system?

You need it somewhere, but payroll is an awkward home for it because credentials expire on their own calendar rather than on a pay cycle. Facility platforms include it, which is fine if you are buying one anyway. For a small practice it is more naturally a document management requirement than a payroll one.

How much does healthcare payroll software cost for a 15-person practice?

At published October 2026 rates, about $112 a month for Patriot, $125 for Square, $139 for OnPay or Gusto Simple, and $155 for QuickBooks Workforce Payroll. Adding time tracking takes Gusto to $229 with the Simple add-on, or $260 on Plus. Paychex and the PBJ-capable specialists quote privately, and HR for Health plans that include payroll start at $348 a month before per-employee fees.

How do I pay per-diem and locum staff correctly?

Classification first. A per-diem nurse working shifts you assign under your supervision with your equipment is usually a W-2 employee regardless of the label. A locum through an agency is usually the agency's worker. Genuine contractors are paid gross, and Form 1099-NEC is due once payments to a contractor reach $2,000, the IRS threshold for payments made from January 1, 2026.

What is the best payroll software for a small medical practice?

Gusto or OnPay for most small outpatient practices, with OnPay ahead for multi-state and Gusto ahead for onboarding. Patriot if budget is tight. Square for clinics already on Square. Healthcare-specialist platforms are better healthcare products and worse small-practice fits.

Are medical assistants exempt from overtime?

Almost never. Exemption depends on duties and salary together, and the professional exemption generally requires advanced knowledge acquired through prolonged specialized instruction, which medical assistants typically do not meet. A salary does not change that: one who works 45 hours is still owed five hours of overtime.

Does payroll software need to be HIPAA compliant?

Payroll data is generally employment information rather than protected health information. The HIPAA definition of protected health information excludes employment records a covered entity holds as an employer, so a payroll platform is not usually a business associate. Health data entering the employment record, such as occupational health results or leave documentation, should be kept separate from the personnel file for independent reasons.

Should a small practice use a healthcare-specific payroll platform?

Usually not. Specialist platforms earn their price through PBJ generation, credential libraries, union rules, and 24-hour scheduling, none of which an outpatient practice needs. What a practice needs is correct differentials, accurate overtime, and mixed worker support, which general SMB payroll platforms provide at a fraction of the cost.

How does high clinical turnover affect payroll setup?

It shifts the burden from processing to onboarding. Each clinical hire needs the usual tax forms plus license verification, certifications, immunization records, screening, and HIPAA and OSHA training acknowledgments. Payroll is unaffected by turnover; document completeness is what degrades, and the gaps surface at credentialing or survey.