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Automation is changing the way nearly every professional does their work in the modern world. One look at the HR payroll software market, and it becomes obvious that payroll is no different as new software solutions are making the task of a payroll run easier than ever before. 

In this article, I'm going to dig into the growth of the HR payroll software market, where it’s headed and take a look at some of the best solutions that are out there. 

HR Payroll Software Market

Differing analysis of any market will leave with you quite a range of valuations and projections for market growth or decline. 

Current size

For example, in 2023, the HR payroll software market was valued somewhere between $7.3 billion and $27 billion depending on which report you read. That number is expected to grow to somewhere between $8.1 billion and $33 billion in 2024.

Rather than get lost in the valuation, perhaps the more important thing to note is the compound annual growth rate (CAGR) for this market, which by all accounts is set for growth with the average estimate being somewhere in the ballpark of 10% annual growth.  

Projected Size

At that growth rate, the HR payroll software market will grow to be worth somewhere between $19 billion and $60 billion by 2030. 

In any case, the estimates are realistic given the implementation of AI into payroll processing and the increased reliability of payroll software platforms to tackle any compliance concern. 

Importance of Payroll Software

Payroll software is of increasing importance for employers as practices around pay transparency and equity have become increasingly important to employees and are examined by state and national governments. 

Other business factors making payroll software a major factor in organizational success include:

  • Improving data security
  • Creating efficiency that replaces manual processes 
  • Improved analytics and reporting
  • Scalability for growing businesses
  • Flexibility that suits technology capabilities
  • Cost savings

Types of Payroll Software

Different types of payroll software cater to different business needs, providing solutions that range from comprehensive, all-in-one systems to specialized, industry-focused applications.

Here, we’ll focus on five of the most common types.

1. On-Premises Payroll Software

  • Description: Installed directly on the company’s local servers and computers.
  • Advantages: Offers full control over data security, customization, and integration with other on-premises systems.
  • Ideal For: Large organizations with dedicated IT staff and specific customization needs.
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2. Cloud-Based Payroll Software

  • Description: Hosted on remote servers and accessed via the internet.
  • Advantages: Provides flexibility, automatic updates, and remote access. Reduces the need for extensive IT infrastructure.
  • Ideal For: Small to medium-sized businesses, remote teams, and companies looking for scalable solutions.

3. Integrated HR and Payroll Software

  • Description: Combines payroll functions with broader human resources management tasks. Often comes in the form of an HRIS that has payroll functionality. 
  • Advantages: Streamlines HR processes, enhances data accuracy, and improves overall employee management.
  • Ideal For: Organizations seeking a unified solution for HR and payroll management.

4. Industry-Specific Payroll Software

  • Description: Tailored to meet the unique needs of specific industries, such as construction, healthcare, or retail.
  • Advantages: Offers specialized features and compliance tools relevant to the industry.
  • Ideal For: Businesses requiring industry-specific payroll functionalities and compliance requirements.

5. Outsourced Payroll Services

  • Description: Outsourced payroll is managed by third-party providers who handle all payroll-related tasks, such as a professional employer organization or employer of record.
  • Advantages: Reduces administrative burden, ensures compliance, and allows businesses to focus on core activities.
  • Ideal For: Small businesses without dedicated payroll staff and companies looking to outsource non-core functions.

Drivers of Payroll Software Market Growth

The payroll software market’s growth is driven by several key factors that are reshaping how businesses manage their payroll and HR functions. Let’s take a look at some of the most important ones. 

Cloud vs. On-Premises Solutions

One of the biggest trends is the shift from traditional on-premises payroll software to cloud-based solutions. Cloud-based payroll software offers flexibility, scalability, and cost-effectiveness. 

Businesses no longer need to maintain extensive IT infrastructure or worry about regular updates and security patches. With cloud solutions, everything is handled remotely, making it easier for businesses to scale their operations and access their payroll data from anywhere, at any time. 

Artificial Intelligence (AI)

AI is revolutionizing the payroll software market by introducing advanced features that enhance accuracy and efficiency. AI-driven tools can automate complex calculations, predict payroll trends, and identify discrepancies before they become issues. 

For example, AI can flag unusual patterns in payroll data that might indicate fraud or errors, helping businesses maintain payroll compliance and avoid costly mistakes. 

Additionally, AI-powered chatbots can provide instant support to employees, answering common payroll queries and reducing the burden on HR teams.

Increased Automation of HR Processes

Modern payroll software integrates seamlessly with other HR systems, automating a wide range of processes from time tracking to benefits administration. 

This automation reduces manual work, minimizes errors, and ensures that payroll processing is faster and more reliable. 

For instance, automated time tracking systems can directly feed into payroll calculations, ensuring employees are paid accurately for the hours they've worked without manual data entry.

Regulatory Compliance and Reporting

Staying compliant with ever-changing labor laws and tax regulations is a major challenge for businesses. Payroll software simplifies compliance by automatically updating to reflect new laws and generating accurate tax reports. 

This not only saves time but also helps businesses avoid penalties and legal issues. The ability to generate detailed reports and analytics also supports better decision-making and strategic planning.

Employee Self-Service

Modern payroll software often includes employee self-service portals, where employees can access their pay stubs, tax forms, and personal information. This feature improves transparency and empowers employees to manage their own payroll-related tasks, reducing the workload for HR departments.

Cost Efficiency

For many businesses, especially small and medium-sized enterprises, the cost is a significant factor when looking at payroll services or software. 

Payroll technology can reduce the need for a large in-house HR team by automating many routine tasks. The shift to subscription-based models also means businesses can spread the cost over time, rather than making a large upfront investment.

Employee expectations around pay are changing and with it, payroll systems will have to evolve to meet those expectations. Here are some areas where your payroll service or software providers will be looking to up their game in the coming years. 

Flexible pay

Payroll is now predominantly a digital function, with only about 3% of U.S. employees still receiving paper checks. Offering diverse payment options will become essential as employees increase their financial literacy and begin to manage their money in new ways. 

According to research from ADP, 76% of all employees say that it’s important to them that their employer offer flexible pay, sometimes called Earned Wage Access (EWA), or the ability to pull from accrued wages whenever they want rather than only receiving funds on a specific day within the pay period.

This also sometimes referred to as "on demand pay".

There are now systems that let employees manage their own payment schedules, with vendors and apps allowing them to choose when they get paid without disrupting their employer’s payroll processes.

Growth of cryptocurrency

And how those payments are received will likely change as well.

Cryptocurrency payments are becoming more popular, for example. A report from Statista shows that over 39% of American adults would consider using Bitcoin for transactions and purchases they make. It’s not unlikely then that more people will warm to the idea of receiving their paycheck via crypto in the future. 

However, many employers are still unfamiliar with cryptocurrency and the associated risks and regulations. Issues like taxes, international laws, and the definition of “legal tender” need careful consideration. 

For instance, Bitcoin isn't recognized as legal tender in countries like Belgium, Finland, and Sweden, but it isn't banned either. Payroll software can help manage these complexities with automated compliance, enabling employers to adopt Bitcoin payments smoothly.

More AI

There are some remarkable capabilities around AI for payroll. Whether that’s detecting anomalies, predicting employee requests or streamlining compliance, and avoiding errors through the automation of time-consuming tasks that are prone to error. But it also will drive improvement in some other key areas. 

Real time analysis 

AI-powered payroll systems can instantly analyze vast amounts of data, providing real-time insights and identifying patterns that human analysts might miss. 

For example, AI can monitor payroll data for discrepancies, such as overtime inconsistencies or unusual payment patterns, and flag these issues immediately. 

This level of instant analysis could help businesses address problems before they escalate, ensuring payroll accuracy and compliance with labor laws.

Predictive Analytics

AI can also use historical payroll data to predict future trends. By analyzing past payroll records, AI algorithms can forecast labor costs, budget needs, and potential financial risks. 

This predictive capability allows businesses to plan more effectively and make informed decisions about hiring, budgeting, and resource allocation.

Conversational experience

The days of manual payroll reporting are coming to an end. Earlier this year, UKG announced it was deploying generative AI in its "Pro" platform to create a question-and-answer experience to streamline the payroll reporting process. 

In other words, no more combing through datasets or manually reviewing employee profiles. A user of the platform can simply ask a text-based question such as “Show me all employees who have a wage garnishment” or “Create a list of all employees paying into multiple retirement accounts.”

“Payroll reporting often feels like seeking a needle in a haystack, and by the time the frantic search for information is over, it’s often too late to take action on,” said Hugo Sarrazin, chief product and technology officer at UKG in a press release. “With generative AI, we’re making critical payroll data easily searchable and accessible through conversational experiences, while also putting that information into actionable context for payroll teams.”

Enhanced security protocols

Advanced algorithms can identify unusual patterns and potential breaches instantly, allowing for swift action to protect sensitive data. AI also ensures continuous monitoring and updates, keeping payroll systems secure against evolving cyber threats.

This proactive approach minimizes risks and maintains the integrity of payroll information.

The Gig Economy Impact

More than one-third of the U.S. workforce is made of gig workers and that number is expected to grow to more than half of the workforce by 2027. 

This trend presents an interesting question for our society about how these workers receive benefits with more insurance companies now offering policies and services specifically tailored to independent contractors.

In the future, it’s likely that payroll software will have to account for this and streamline payment of premiums to the contractors desired healthcare provider. 

Best Solutions on the Market

At this point, you might be wondering about the best solutions on the market. We’re here to help. 

1

Deel

Best global payroll software with flexible payment options

Deel is a global payroll platform that's available in over 150 countries. With Deel, you can hire and pay anyone as a contractor or employee without worrying about local laws, complicated tax systems, or international payroll.

Why I picked Deel: I chose this software because it provides end-to-end global workforce management, including contract adjustments, expense reimbursements, and off-cycle payroll adjustments. You can schedule payments in advance and run off-cycle payroll whenever needed. It's also worth noting that the company has local country experts working in-house to run global payroll and ensure all regional contributions are accounted for. Their team provides 24/7 online support, and dedicated account managers are available for specific requests.

Deel Standout Features and Integrations:

Standout features I noticed were the software's 10+ payment options, ranging from bank transfers to cryptocurrency pay-ins. What makes this stand out from other options is that employees and contractors can self-manage their pay and personal data, and use providers like Wise, PayPal, Payoneer, and Revolut for easy international withdrawals.

Integrations include Ashby, BambooHR, Expensify, Greenhouse, Hibob, NetSuite, Okta, OneLogin, QuickBooks, Xero, Workday, and Workable. The software’s open API can support additional custom software integrations.

Pros and cons

Pros

  • Knowledgeable support staff
  • Detailed dashboards
  • Add-ons available to localized benefits and global payroll

Cons

  • Limited invoice customization
  • Contract templates could be simplified
This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
4.8 3340

Free demo available

Flat rate user pricing, with a free version for businesses with up to 200 people

2

Papaya Global

Best end-to-end workforce management in 160+ countries

Papaya Global is an online payroll solution that helps companies remove barriers to global hiring. Their software provides end-to-end global workforce management with everything from onboarding to cross-border payments in over 160 countries.

Why I picked Papaya Global: This software covers all employee options (payroll, EoR, contractors) and can be used to send payments securely to remote and global personnel. I chose it because of its various payroll packages, which make it a flexible option for various business sizes and needs. The reporting and analytics tools offer detailed payroll and business intelligence, and give you a real-time view of your funds. Payment delivery is also guaranteed within 72 hours by the company.

Papaya Global Standout Features and Integrations:

Standout features include that its bank rails were built in partnership with JP Morgan and Citibank, which makes me confident in their reliability and compliance standards. Payroll anomalies and issues can be detected with the software’s artificial intelligence capabilities, which automatically notifies admins so they can address the problem swiftly.

Integrations include most financial tools, and HR software like BambooHR, Expensify, NetSuite, SAP SuccessFactors, and Workday. An API is also available to support additional custom integrations.

Pros and cons

Pros

  • Payments can be made in virtually any currency
  • Extensive knowledge base
  • Strong automation features

Cons

  • No mobile app is currently available
  • Employee profiles could be more detailed
This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
4.5 31

Free demo available

From $15/employee/month

3

Remote

Best payroll and benefits for international teams

Remote empowers companies of all sizes to pay and manage full-time and contract workers around the world. Remote makes it possible for users to take care of international payroll, benefits, taxes, stock options, and compliance in over 50 countries.

Remote makes it easy to onboard and pay your contractors and employees in one modern, secure, cloud-based platform, freeing you and your team up to focus on more strategic work. Through Remote’s platform, you’ll have access to your most important employment documents, data, and HR processes, while Remote takes care of your localized payroll, benefits, compliance, IP protection, and taxes wherever your team works. Remote’s network of HR and legal experts stay on top of the nuances, changes, and complexities of local regulations to ensure full compliance with all relevant legislation at all times.

Remote also partners with powerful HR systems to connect people, payroll and HR data. Through Remote’s global employee API and native partner integrations, Remote empowers partners to leverage its global infrastructure in their offerings and help more customers scale their global teams faster.

This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
4.6 1439

Free trial available

From $50/user/month

4

Rippling

Best for USA and Canada-based payroll with tons of integrations

Rippling’s modern payroll system provides the robust functionality of legacy systems with the ease of newer systems to deliver the best of both worlds.

Why I picked Rippling: Rippling allows users to onboard new hires quickly and automatically, run payroll with a click, and pay employees or contractors, anywhere. Their system is built on centralized employee data, so businesses can automate all of the admin work that’s normally required to run payroll and update employee information.

Rippling Features and Integrations:

Features include domestic and international payrolls, an organization chart, expense management, talent management, local tax filing, country-specific compliance, and international benefits programs. Companies can also manage their employees’ offer letters, I-9s, health insurance, and time off.

Integrations are available with Google Workspace, Typeform, Databricks, BrightHire, Atlassian, Google Workspace, Slack, Checkr, Zoom, GitHub, Asana, 1Password, Zendesk, Dropbox, Sage Intacct, Netsuite, Microsoft 365, QuickBooks, DocuSign, Upwork, LinkedIn, and dozens more.

This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
4.8 1134

Free demo available

From $8/user/month (billed annually)

5

Remofirst

Best international payroll software for global teams in 170+ countries

Remofirst is a payroll software that provides users with a secure, efficient, and easy-to-use platform for managing payroll processes in 170+ countries. Users can input employee information, calculate taxes, and generate pay stubs. The software offers many features, including employee self-service, direct deposit, tax compliance, and reporting.

The software provides tools for managing employee shares and dilution, as well as for issuing specialized reports on equity and bonus activity. Its reporting feature allows users to generate detailed reports on their payroll data which can be generated for a specific period. The cost calculation feature helps businesses budget costs effectively by considering various factors, including the number of employees, the type of benefits provided, and the frequency of payments. Employees can also view their equity and bonus information in real time, and the system automatically calculates vesting schedules and payout dates.

Remofirst lets businesses manage employee benefits programs with ease. Users can track employee eligibility, enroll employees in benefits plans, and even change existing plans. It also allows businesses to generate employee enrollment and participation reports. Dashboards summarize team distribution and spending with visual graphs and charts.

Remofirst can also manage payroll and invoicing for businesses with employees abroad. The software automatically generates accurate paychecks and invoices in the local currency and tracks employee vacation days, sick leave, and expense reimbursements. Remofirst sends invoices every month, ensuring your employees are paid on time. Users can access a dedicated account manager and Remofirst's knowledge base to troubleshoot any issues.

This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
4.4 72

From $25/user/month (billed annually)

6

Paycor

Best payroll software for automating manual payroll tasks

Paycor is a human capital management solution with payroll, workforce management, and employee experience features. The payroll product can handle payroll, expense management, time and attendance, and more.

Why I picked Paycor: Once I set up payment options for employees, I was able to use the automation features to run my payroll automatically, as scheduled for a specific day and time. Multiple payment options are available through the software, including direct deposit, paycards, or on-demand pay. It also provides in-depth compliance feedback to help you respect the employment laws in your state. Because of its robust functionality, I think it's best suited to large and enterprise businesses.

Paycor Standout Features and Integrations:

Standout features include its pay-on-demand feature, which allows employees to access their earned wages before their next official payday. I thought this was a modern functionality. It's also convenient that expense management, scheduling and time tracking, and employee experience monitoring are all also available in the platform.

Integrations include several other tools for wage and salary verification, expense management, employee wellness, certified payroll, and FMLA. Key software systems to note include Certify, ESR, Payfactors, and WageWorks.

Pros and cons

Pros

  • All-in-one solution well suited to enterprise businesses
  • Live and on-demand product training and industry webinars
  • Mobile app allows for payroll management on the go

Cons

  • Time cards are a bit simplistic
  • UX can be a little clunky at times
This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
4.1 563

90-day free trial + free demo available

From $5/employee/month + $99/month base fee

7

OnPay

Best payroll software for niche industries

OnPay’s payroll platform helps organizations with payroll processing, managing HR functions, and integrating employee benefits, all in one place. Their software includes a full suite of payroll services and compliance settings for the US, covering all 50 states.

Why I picked OnPay: I picked this company because special payroll services are offered at no additional cost for niche industries like restaurants, farms and agriculture, churches and clergy, and nonprofits. They provide great customer service in addition to the payroll platform, which is helpful when you have specific business needs. Platform specialists are available to help you set up your payroll process and automate your taxes, even if you don’t have any previous experience with this kind of software.

OnPay Standout Features and Integrations:

Standout features include their team of licensed in-house insurance brokers. I like that they can help you set up health, dental and vision plans with top providers such as Humana, Cigna, Blue Cross / Blue Shield, and UnitedHealthcare. You can also set up a 401k integration that supports employer matching and profit sharing arrangements.

Integrations include Deputy, Magnify, Mineral, PosterElite, QuickBooks, When I Work, Xero, Guideline, and Vestwell.

Pros and cons

Pros

  • QSEHRA payments can be made
  • Clean, intuitive user interface
  • A team of specialists come with the cost

Cons

  • Employee files can be a bit complex
  • Integrations can be a bit tricky to set up
This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
5 1

30-day free trial

From $6/user/month

8

Paychex Flex

Best for streamlining payroll processing with accuracy, compliance, and ease

Paychex Flex is a cloud-based payroll and human resources management software designed to help businesses of all sizes manage their payroll processes, employee benefits, and other HR-related tasks. It's a comprehensive solution that aims to simplify and streamline the entire payroll process, making it easier for businesses to stay compliant with tax regulations and ensure their employees are paid accurately and on time.

Why I picked Paychex Flex: Paychex Flex enables you to track your team’s daily hours, manage time sheets, approve PTO, and oversee benefits in one place. The solution offers a self-service portal where employees can access digital copies of their pay stubs, see their contributions, and manage their retirement accounts, making it easy for them to access their data. 

With Paychex Flex, you can schedule your payrolls and approve them before payday with ease. You can schedule multiple runs in the same pay period, and you can oversee your work on the mobile app. The solution also gives you access to extra HR features as add-ons for additional fees. 

Paychex Flex Standout Features and Integrations

Features include payroll processing, payroll tax filing, a garnishment payment service, paycheck preview and approval, new-hire reporting, and a mobile app. 

Integrations include Ashby, BambooHR, Clover, Deputy, HIREtech, iCIMS, Indeed, Oracle Netsuite, QuickBooks Payroll, and others.

Pros and cons

Pros

  • 24/7 specialized service for US clients
  • Knowledgeable representatives
  • Helps you save time with payroll filters and saved views

Cons

  • Adding pay categories could be easier
  • Automatically creates multiple subfolders, making it difficult to find the right files at times
This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
4.2 1339

Free demo available

Pricing upon request

9

Bambee

Best software and services for ease of use and expert guidance

Bambee's cloud-based HR software is specifically tailored for small and medium-sized businesses. Their software covers a wide range of functions, including onboarding, compliance, and employee termination. They also offer a guided payroll service, which is available as an add-on.

Why I picked Bambee: I included Bambee's combined payroll software and expert services because of its ease of use and affordability. Their services cover a comprehensive set of payroll functions, including 2-day direct deposit, tax filings, and year-end reporting. In addition, Bambee also offers personalized support from HR experts, as well as a dedicated HR manager for every client, making it easier for businesses to navigate complex payroll regulations.

Bambee Standout Features & Integrations:

Features include 2-day direct deposit, integrated compliance monitoring, and automatic federal, state, and local taxes. They also provide businesses with guidance on payroll-related compliance issues, such as minimum wage requirements and overtime rules too. Their employee self-service portal also allows employees to view their pay stubs, manage their personal information, and request time off, all without having to contact HR, saving businesses time and resources.

Integration details are currently not available.

This is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.
3.6 33

Free demo available

From $99/month

10

Trinet

Best payroll software with compensation benchmarking

Trinet is a global payroll and HR software and service provider. It can help your organization manage various HR operations including payroll and employee benefits administration, performance and learning management, and risk mitigation.

Why I picked Trinet: I picked this platform because its payroll capabilities can handle complex regulations in several countries, making it suitable for global organizations or businesses operating in multiple locations. It can also manage worker's compensation claims, retirement plans, and employee benefits packages. Time tracking is included, which connects exact employee hours with their pay.

Trinet Standout Features and Integrations:

Standout features are definitely the software's compensation benchmarking capabilities, which stood out to me in my testing. The data is verified by Salary.com and covers 15,000 different job titles and 225 industries, helping you craft a better, more competitive compensation structure.

Integrations include QuickBooks, Oracle NetSuite, Sage Intacct, BambooHR, Lattice, Greenhouse Software, Carta, and Xero.

Pros and cons

Pros

  • Global payroll management for multinational businesses
  • Centralizes all of your HR processes in one platform
  • Company provides HR consulting as well as software

Cons

  • Robust system, comes with a learning curve
  • Full functionality may not be needed

Free demo available

Pricing upon request

Competitive Landscape

The competition for payroll software is fierce, including some of the biggest names in HR related software solutions. You’ll recognize some of these names and will have likely interacted with several of them if you’ve been in HR for a long period of time. They include the likes of:

  • ADP
  • Papaya Global
  • Paychex
  • Paycor
  • BambooHR
  • Deel
  • Quickbooks

All of these companies have cloud-based solutions and most are in some stage of implementing AI into their payroll solutions. Additionally, they all typically integrate with the most popular HRIS systems

Some, like Deel, have fully embraced the flexible pay trend and are offering cryptocurrency pay-ins. Others, like ADP, have set themselves apart on the self-service front. Finding the right payroll solution for your business just depends on your needs, size and goals.

Familiarize yourself with the key features of payroll software that your business needs in a solution and establish a step-by-step process for selection. 

FAQs

How do I select the right payroll software?

Essentially, the answer to this question will be much clearer once you follow a four step process.

  1. Define what requirements you have of the software
  2. Set a budget
  3. Evaluate features and functionality
  4. Make a pros and cons list to help you decide.

How much does payroll software cost?

Base plans for payroll software can start as low as $17 per month, while more established payroll service providers provide enterprise plans starting at $140 per month. You’ll want to check out our guide to payroll software costs to learn more.

Are some payroll software or service providers better for small businesses?

Yes. Different sized businesses have different needs and capabilities. Those with customizable features that can evolve as your company scales, a high level of affordability and a user friendly interface that someone in either HR or accounting can use with similar ease are best. Check out our favorites for best payroll services for small businesses.

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David Rice
By David Rice

David Rice is a long time journalist and editor who specializes in covering human resources and leadership topics. His career has seen him focus on a variety of industries for both print and digital publications in the United States and UK.