The Best Payroll Setup for Solo Entrepreneurs and Small Teams
As a solo entrepreneur or small business owner, it’s easy to think payroll isn’t something you need to worry about—until you hire your first contractor, part-time worker, or full-time employee. Choosing the best payroll setup early on can save you time, reduce errors, and help you stay compliant with state and federal tax laws.
Whether you’re managing it solo or with a small team, the right payroll for small business operations should be simple, scalable, and affordable.
Why Payroll Setup Matters
Proper payroll setup ensures you pay your workers accurately and on time while handling the required tax withholdings, filings, and compliance tasks. Even a small mistake—like missing a deadline or misclassifying a worker—can result in costly penalties or legal trouble.
Top Payroll Software Options for Small Businesses
Here’s some expert payroll software advice to help you make the right choice:
QuickBooks Payroll
A great choice if you’re already using QuickBooks Online. It integrates seamlessly, handles direct deposit, files payroll taxes, and even offers HR support in premium plans.Gusto
Popular among startups and solo entrepreneurs for its ease of use and friendly interface. Gusto manages employee onboarding, tax filings, benefits, and contractor payments all in one place.Square Payroll
Ideal for service-based small teams or hourly employees. It’s affordable, integrates with Square POS, and supports both W-2 and 1099 workers.ADP Run
A more robust option for growing businesses. Offers scalable features, including time tracking, benefits, and compliance support.
What to Look for in a Payroll Setup
Automatic tax filing to avoid late penalties
Support for both employees and contractors
Ease of use with minimal setup time
Integration with accounting tools
Affordable pricing for small teams
Choosing a payroll system that matches your business stage and goals gives you more time to focus on growth—and less time stressing about compliance.
FAQ: Payroll for Small Business
Q: Do I need payroll software if I only pay contractors?
A: It helps. Many platforms like Gusto and QuickBooks Payroll offer contractor-only plans that handle 1099 filings automatically.
Q: What taxes do I need to withhold for employees?
A: Federal income tax, Social Security, Medicare, and state taxes, depending on your location.
Q: Can I run payroll manually?
A: You can, but it’s risky. Mistakes can lead to penalties, missed filings, or unhappy employees. Software automates the process and keeps you compliant.
Need help choosing or setting up your payroll system? DBR Bookkeeping can guide you through the process—so you can do business right from day one.
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