Free Payroll Tools for Your Small Business

Payroll is the biggest operating expense for most employers, often representing nearly 70% of a company’s total costs. Because these costs are largely tied to compensation, it’s easy to view payroll cost-cutting measures through the narrow lens of reducing employee salaries, wages, benefits, and perks.

But as a small employer, it’s important to think expansively when it comes to payroll savings, as every source counts — especially during times of economic instability.

There are many ways to save on payroll costs — and they don’t all involve chipping away at employees’ pay and benefits. You can, for example, utilize free payroll tools/resources for small businesses, such as:

• Payroll promotions
• Payroll software
• Online payroll calculators
• Online timekeeping tools
• Payroll report templates
• Payroll compliance tools

Let’s explore these freebies.

Payroll promotion: Free payroll for one year

To help small businesses cope with the financial fallout of the COVID-19 crisis, Zenefits is offering free payroll software for one year. You can get the free payroll software for 12 months if you subscribe to a select Zenefits HR package, regardless of whether you’re a new or existing customer.

With Zenefits free payroll for one year, you can expect:

• Full-service payroll, including paycheck calculations, direct deposit, pay stubs, payroll reports, and integration capabilities
• Unlimited payroll runs
• Multiple pay schedules, such as weekly, biweekly, and semimonthly
• Federal and state tax filings
• Rapid deployment. Gets your payroll up and running within 14 days

Though you must purchase a Zenefits HR Tier package to receive the free payroll software, you’re ultimately getting 2 core business services (payroll and HR) for the price of 1 (HR).

Free and open source payroll software

When a program is open source, it’s available to users at no cost. Users can also modify the source code to fit their industry-specific or organizational needs.

If you’re looking for payroll software that won’t cost you anything at all, you can try free or open source payroll software. When a program is open source, it’s available to users at no cost. Users can also modify the source code to fit their industry-specific or organizational needs.

Free payroll software comes with restrictions. For example, you won’t get an unlimited full-service platform, there may be technological drawbacks, and support may be lacking. Still, it’s usually better than having to do payroll manually. (Manual payroll is not only time-consuming but also error-prone.)

If your payroll needs are very basic or you can’t afford full-service payroll, you may try: 

• TimeTrex. Developed by a network of volunteer developers from around the world, TimeTrex is a popular open source solution that offers basic payroll processing, leave management, and time-tracking capabilities for free.
• Payroll4Free. This company offers free basic payroll services to small businesses with 25 or fewer employees.

For access to advanced technology, a broad range of services, and personalized support, it’s best to go with a traditional small-business payroll vendor such as Zenefits.

Free online payroll calculators

During the course of business, employees will have questions about their net/take-home pay. They may also want to know what their paycheck will look like if they make certain payroll changes, such as to their tax withholdings.

Free online payroll calculators can give your small business employees the tools they need to comprehend and estimate their net pay. By routing them to the calculators, you increase employee autonomy and reduce dependence on your payroll team.

Online payroll calculators are also handy tools for small employers that perform payroll in-house, as they can be used to quickly compute salaries, wages, and deductions.

Free online payroll calculators can give your small business employees the tools they need to comprehend and estimate their net pay. By routing them to the calculators, you increase employee autonomy and reduce dependence on your payroll team.

For example, here are the free calculators PaycheckCity offers:

• Salary calculator to determine net pay for salaried employees
• Hourly calculator to determine net pay for hourly employees
• W-4 calculator to help employees fill out their Form W-4
• Gross-up calculator to compute gross wages based on a specific net pay amount
• Bonus tax calculators to compute tax withholding for bonuses and other special wage payments
• 401(k) calculator to figure the impact of increased 401(k) contributions on net pay
• Dual scenario calculator to compare salary or hourly net pay in 2 side-by-side scenarios

There’s also the Zenefits overtime calculator, a free tool that lets you calculate regular and overtime pay for salaried and hourly employees, as required by the Fair Labor Standards Act (FLSA).

Free online timekeeping tools

Failure to conduct appropriate payroll recordkeeping can lead to audits by the federal and state labor departments plus fines and penalties.

Failure to pay nonexempt employees according to hours worked can open you up to employee complaints, lawsuits, and reputational damage. Moreover, failure to conduct appropriate payroll recordkeeping can lead to audits by the federal and state labor departments plus fines and penalties. Accurate time tracking is essential to preventing all of these outcomes.

Per the United States Department of Labor (DOL), any timekeeping system is acceptable — provided it is accurate and complete. If your business is very small, paper timesheets may get the job done. However, with workers increasingly requiring more mobility, online timekeeping systems are becoming a must-have for small businesses.

Free online timekeeping tools:

• The DOL’s Mobile Timesheet App. Helps employers and employees track regular hours, breaks, and overtime.
• Homebase Online Timesheet App. Includes time tracking and employee scheduling for users with one location.
• TimeTrex Time and Attendance software. Lets employers and employees track work hours from anywhere.
• OpenTimeClock. Enables time-tracking for businesses of all sizes.

Similar to free payroll software, free online time-tracking tools have limitations. For example, the DOL’s Mobile Timesheet is available only through the App store for iPhone and iPad. Plus, it’s not equipped to manage complex payroll items such as holiday pay, wages for hours worked on weekends, and tips.

You can avoid many time-tracking constraints by taking advantage of “Zenefits free payroll for one year” promotion, which automatically comes with a comprehensive Employee Time & Scheduling module.

Free payroll report templates

Payroll report templates allow you to record your small business payroll transactions in a structured way. Once a template is generated, just fill in the spaces to create the report. Save the generated report separately from the blank template. When it’s time to make a new report, use the blank template.

Free payroll report templates spare you from having to make the templates yourself. The free templates are pre-designed; simply tweak them as needed.

For example, you can use Zenefits free (Excel) payroll report templates to record:

• Regular and overtime hours
• Regular and overtime earnings
• Other hours and earnings
• Payroll deductions
• Employee reimbursements
• Employer contributions
• Employer and employee taxes
• Employee net pay for the pay period

Free payroll compliance tools

Small employers must comply with applicable federal, state, and/or local payroll laws relating to:

• Hours worked
• Minimum wage
• Overtime
• Wage garnishment
• Employment taxes
• Employee benefits
• Paid and unpaid leave
• Unemployment insurance
• Supplemental wages
• Final pay
• Youth employment
• Payroll recordkeeping
• Payroll reporting

Keeping up with these laws and other regulatory developments can be an uphill battle.

To help businesses navigate the employment landscape and achieve compliance, the DOL offers the following free online tools:

• Payroll Audit Independent Determination (PAID) program. Covered employers that missed payroll or inadvertently violated the FLSA (including during the COVID-19 pandemic) may use the PAID program to correct the violations, without incurring penalties.
• Employer.gov. This website provides answers to questions you might have regarding your role as an employer. It also includes separate sections for small businesses and pay and benefits.

In addition, you can direct your small business employees to Worker.gov, a free tool that helps employees understand their workplace rights.