Free payroll software is real, but what it gives you free is the arithmetic: gross-to-net pay, withholding and pay stubs. Tax deposits and filings, the part that carries penalties, are almost never free. In our view, if you have fewer than 10 employees in one state and someone who will file a Form 941 every quarter, Payroll4Free or a do-it-yourself setup with the IRS’s free tools can work. Everyone else should compare the cheapest paid full-service plans below. They start around $50 a month for three employees.
What’s actually free: the options and their catch
Checked on the vendors’ and agencies’ own sites on October 27, 2026.
Payroll4Free.com: free under 10 employees, ad-supported
Payroll4Free says all basic services are free “as long as you pay 9 or less employees monthly.” The free features include pay for employees and contractors, tax calculations, vacation tracking, reports and an employee portal. It’s free because advertisers pay to show ads inside the software when you log in to run payroll.
The catch is in its fee schedule (updated June 1, 2025):
- Tax filing and deposits cost extra: $35 a month ($350 a year) for the first two tax authorities, then $15 a month for each additional federal, state or local authority.
- Direct deposit: the home page lists direct deposit among the free features, but the fee schedule lists a Direct Deposit Service at $35 a month, or $15 if you also pay for the tax service. Ask which applies to you before you count on it.
- Growing past 9 people adds per-run fees: $10 per payroll posting once you pass about 10 paid people in a month. The table and its footnote disagree on whether the line is 10 or 11. At 25 and up, it’s $35 per posting.
- A “tax forms” line: $15 per quarter, which the schedule doesn’t explain further.
- Hands-on help is billed: bank setup and verification costs $50 per half hour, an NSF return $100, and a prior-period or amended filing $350.
In fairness, its tax service terms say Payroll4Free handles notices and pays the charges if a penalty is due to its own error.
HR.my: free for unlimited employees, but not built for US taxes
HR.my is free with no per-head pricing and unlimited employees, funded by its user community. Its payroll module processes payslips from salary items you set up, including withholding tax, which you configure yourself as a “statutory contribution” item. We found no US federal or state tax tables, no tax filing and no direct deposit in its documentation. Forbes Advisor’s review also notes that direct deposit isn’t available.
It’s a free payslip and HR records tool, not US payroll. Use it only if a bookkeeper calculates withholding for you.
The government’s free payroll tools
If you do payroll yourself, these cost nothing:
- EFTPS for federal tax deposits, provided free by the Treasury. You enroll first and receive a PIN by mail in 5 to 7 business days. Payments must be scheduled by 8 p.m. ET the day before the due date.
- IRS Publication 15-T has the 2026 federal income tax withholding tables.
- SSA W-2 Online, through Business Services Online, files W-2s free.
- IRS IRIS e-files 1099s free. It needs a Transmitter Control Code, which the IRS says can take up to 45 days, so apply well before January.
The IRS requires e-filing if you have 10 or more information returns in total, W-2s included. None of these tools prepares your quarterly Form 941 or your state returns.
Free trials and contractor-only plans
- QuickBooks Payroll offers a 30-day free trial that covers only the base price, per Intuit. Full prices are in our QuickBooks Payroll pricing breakdown.
- Patriot was showing a promotion of 30 days free plus 50% off for 3 months on October 27, 2026. Treat it as a promo, not the price.
- Square Payroll’s contractor-only plan has no base fee and costs $6 per contractor paid each month (Square). You’re billed only for contractors actually paid that month. Its full-service plan is $35 a month plus $6 per person.
- Wave payroll is not free. It costs $40 a month plus $6 per active employee and $6 per contractor paid (Wave).
When free payroll costs more: IRS penalties
The real price of free payroll is the deposit you miss. The IRS failure-to-deposit penalty is a percentage of the late deposit:
| Days late | Penalty |
|---|---|
| 1 to 5 calendar days | 2% |
| 6 to 15 calendar days | 5% |
| More than 15 calendar days | 10% |
| More than 10 days after the first IRS notice | 15% |
The rates don’t stack, and the IRS charges interest on top.
A worked example (hypothetical numbers): a 10-person business deposits $6,000 a month in withheld income tax plus Social Security and Medicare. One deposit made 8 days late costs 5%, or $300. That’s more than three months of Patriot Full Service for 10 workers ($87 a month).
There’s a bigger risk too. The IRS can assess the Trust Fund Recovery Penalty personally against anyone responsible for paying withheld taxes who willfully doesn’t pay them. That includes nonprofit officers and board members (IRS).
Free payroll software for nonprofit organizations
Nonprofits don’t get a separate free tier from any vendor we checked. Their tax position differs in one useful way, though. Organizations exempt under section 501(c)(3) are also exempt from FUTA, and the IRS says this exemption can’t be waived. So they don’t file Form 940 (IRS). They still withhold income tax and pay Social Security and Medicare, and they file Form 941 like any employer.
Our view: a small nonprofit with a volunteer treasurer is the case where free software is most tempting and least safe, because of personal liability and volunteer turnover. If the person running payroll changes every year or two, pay for a full-service plan so filings don’t depend on one person’s calendar. If you change providers later, read our guide to switching payroll providers before you cancel.
The cheapest paid full-service payroll, worked out
List prices, before taxes and add-ons, single state, monthly:
| Option | Price | 3 employees | 10 employees | Files your taxes? |
|---|---|---|---|---|
| Patriot Basic | $17 + $4/worker | $17 + $12 = $29 | $17 + $40 = $57 | No, you deposit and file |
| Payroll4Free + tax service + direct deposit | $0 + $35 + $15 | $50 | $50 + per-run fees | Yes (2 authorities) |
| SurePayroll | $29 + $7/worker | $29 + $21 = $50 | $29 + $70 = $99 | Yes |
| Patriot Full Service | $37 + $5/worker | $37 + $15 = $52 | $37 + $50 = $87 | Yes |
| OnPay | $49 + $6/worker | $49 + $18 = $67 | $49 + $60 = $109 | Yes |
Year-end matters. SurePayroll bills W-2s and 1099-NECs annually at $50 plus $5 per form (SurePayroll). Over a year with three employees, that makes SurePayroll $665 ($600 + $65) against Patriot Full Service at $624. At 10 employees the gap widens: $1,288 for SurePayroll ($1,188 + $100) against $1,044 for Patriot. OnPay is $1,308, but it includes multi-state payroll at no extra cost. Patriot charges $12 per extra state and SurePayroll $9.99 a month.
What breaks in each of the cheap options
- Patriot: standard direct deposit takes 4 days (2-day for qualifying customers). Patriot says it doesn’t handle garnishment or child-support payments. Its base fee is charged even in months you don’t run payroll.
- SurePayroll: year-end form fees, the multi-state fee and an unpublished local-tax fee add up. Support hold times are the most common complaint on Capterra.
- OnPay: direct deposit runs on a 2- or 4-day schedule with no faster option published. Some Trustpilot reviewers report late or incorrect tax filings and slow fixes.
- Payroll4Free: the ads, the extra charges once you pass 9 employees, and hourly fees whenever you need staff to do something for you.
Bottom line
- “Free payroll software” means free calculations. Tax deposits and filings are where the cost and the risk are.
- Fewer than 10 employees, one state, and someone disciplined about deadlines: Payroll4Free or Patriot Basic ($29 a month for 3 workers), plus EFTPS, can work.
- Anyone else: Patriot Full Service is the cheapest full-service list price we track, at $52 a month for 3 workers and $87 for 10. One late-deposit penalty can wipe out months of what you save by filing yourself.
- Employees in several states: look at OnPay first.
For how we verify these prices, see our methodology. For a wider comparison of full-service plans, see Gusto vs QuickBooks Payroll.