Best Payroll Software for Small Business in 2026: Gusto vs Paychex vs Others

Running payroll in Virginia is not like running payroll in Texas or Florida. Between State Disability Insurance (SUI), Paid Family Leave (PFL), daily overtime rules, constantly changing local minimum wages, and strict VA UI reporting requirements, Virginia payroll is among the most complex in the nation. Choosing the right payroll software is not just a convenience — it is a compliance necessity.

We spent weeks evaluating the leading payroll platforms specifically through the lens of a Virginia small business owner. This guide covers pricing, features, Virginia-specific compliance, ease of use, and our honest recommendation for 2026.

Why Virginia Businesses Need Specialized Payroll Software

If you operate in any other state, you might get away with bare-bones payroll processing. Virginia is different. Here is what makes Virginia payroll uniquely demanding:

• SUI and PFL withholding: Virginia's State Disability Insurance rate for 2026 is 1.2% on employee wages up to $153,164. Your payroll software must calculate and withhold this correctly every pay period, and it changes annually.
• Daily overtime: Federal law only requires overtime after 40 hours per week. Virginia requires 1.5x pay after 8 hours per day and 2x pay after 12 hours per day. Your software must track daily hours, not just weekly totals.
• Local minimum wages: Over 40 Virginia cities and counties have minimum wages higher than the state minimum of $16.50/hour. San Francisco is at $18.67/hour, West Hollywood at $19.08/hour, and many others fall between $16.50 and $19.00+. Your software needs to know which rate applies to each employee based on work location.
• VA UI quarterly reporting: Every quarter, Virginia employers must file the DE 9 (Quarterly Contribution Return) and DE 9C (Quarterly Contribution Return and Report of Wages) with the Employment Development Department.
• Wage statement requirements: Virginia Labor Code Section 226 requires detailed pay stubs showing gross wages, total hours, deductions, net pay, pay period dates, and more. Non-compliant pay stubs can result in penalties of $250 per employee per violation.

Bottom line: you need payroll software built with Virginia in mind, not a generic national platform with Virginia bolted on as an afterthought.

1. Gusto — Best Overall for Virginia Small Businesses

Pricing: Gusto's Simple plan starts at $40/month base + $6/month per employee. For a business with 5 employees, that is $70/month. The Plus plan runs $80/month base + $12/employee and adds advanced features like time tracking, PTO management, and next-day direct deposit.

What Makes Gusto Stand Out for Virginia

• Automatic Virginia tax calculations: Gusto automatically calculates SUI withholding, SUI (State Unemployment Insurance) contributions, PIT (Personal Income Tax), and ETT (Employment Training Tax) — no manual configuration required.
• VA UI filing handled for you: Gusto files your DE 9 and DE 9C quarterly returns directly with the EDD. It also files your federal 941 and annual W-2s and W-3s.
• Local minimum wage compliance: Gusto's system tracks local minimum wage ordinances across Virginia and alerts you if an employee's pay rate falls below the applicable local minimum.
• Daily overtime tracking: Unlike many competitors, Gusto correctly calculates Virginia's daily overtime rules — 1.5x after 8 hours and 2x after 12 hours — in addition to weekly overtime.
• New hire reporting: Gusto automatically submits new hire reports to the Virginia VA UI within the required 20-day window.
• Built-in benefits: Health insurance, 401(k), workers' comp, and commuter benefits are available directly through Gusto — no need for separate brokers.
• Employee self-service: Employees can access pay stubs, W-2s, and update their information through a clean, modern portal.

Gusto Pros and Cons

Pros: Transparent pricing, excellent VA tax automation, beautiful user interface, strong customer support, integrated HR tools, free contractor payments on Simple plan.

Cons: Phone support limited to Plus plan and above, no dedicated payroll representative (unlike Paychex), limited international payroll capabilities.

2. Paychex — Best for Growing Teams (10+ Employees)

Pricing: Paychex uses custom pricing based on your business size and needs. Expect to pay roughly $60–$150+/month depending on the plan and number of employees. You will need to request a quote.

Paychex is a well-established payroll provider that has been in business since 1971. It is a strong option for Virginia businesses that are outgrowing basic payroll software and need more hands-on support.

Paychex Strengths

• Dedicated payroll specialist: Unlike Gusto's general support team, Paychex assigns you a dedicated representative who knows your account. This is valuable for businesses with complex payroll situations.
• Full-service HR: Paychex offers a complete HR suite including recruiting, onboarding, time and attendance, benefits administration, and compliance management — all in one platform.
• Virginia compliance: Paychex handles Virginia payroll taxes, VA UI filings, and wage statement compliance. They have deep experience with Virginia's regulatory environment.
• Scalability: Paychex scales well from 10 employees to hundreds. If you are planning to grow quickly, Paychex will not hold you back.
• Workers' comp integration: Paychex offers pay-as-you-go workers' compensation insurance, eliminating large upfront deposits.

Paychex Pros and Cons

Pros: Dedicated support rep, comprehensive HR tools, excellent scalability, strong compliance track record, pay-as-you-go workers' comp.

Cons: Opaque pricing (must call for a quote), interface less modern than Gusto, can be expensive for very small businesses, long-term contracts may apply.

3. QuickBooks Payroll — Best for Existing QuickBooks Users

Pricing: QuickBooks Payroll starts at $50/month base + $6/month per employee for the Core plan. The Premium plan (with same-day direct deposit and HR tools) runs $80/month + $8/employee. Elite is $130/month + $11/employee.

If your business already runs on QuickBooks for accounting, QuickBooks Payroll is a natural extension. The integration between the two products is seamless — payroll expenses automatically flow into your books with zero manual entry.

QuickBooks Payroll Strengths

• Seamless QuickBooks integration: Payroll transactions automatically sync to your general ledger. No importing, no reconciling, no double entry.
• Virginia tax support: QuickBooks Payroll calculates and files Virginia state taxes, SUI, SUI, and PIT. It also handles VA UI quarterly filings on the Premium and Elite plans.
• Auto Payroll feature: For salaried employees, QuickBooks can run payroll automatically on schedule with no manual intervention needed.
• Tax penalty protection: The Elite plan includes a tax penalty protection guarantee — if QuickBooks makes a tax filing error, they cover the penalties and interest.

QuickBooks Payroll Pros and Cons

Pros: Best-in-class accounting integration, familiar interface for QuickBooks users, auto payroll feature, tax penalty protection on Elite plan.

Cons: More expensive than Gusto at the base level ($50 vs $40), VA daily overtime tracking requires manual setup on Core plan, customer support can be inconsistent, limited HR tools compared to Gusto or Paychex.

4. ADP — Best for Large Enterprises (Not Recommended for Most Small Businesses)

Pricing: ADP uses custom pricing only. ADP Run (their small business product) starts around $79/month + $4–$10/employee, but final pricing depends on your quote. Enterprise plans (Workforce Now) can run into thousands per month.

ADP is the largest payroll company in the world, processing payroll for roughly 1 in 6 U.S. workers. However, being the biggest does not mean being the best fit for every business.

ADP Strengths

• Enterprise-grade capabilities: Multi-state payroll, international payroll, advanced analytics, and deep compliance tools.
• Massive infrastructure: ADP's tax filing engine is battle-tested across millions of businesses. Virginia compliance is well-supported.
• Professional Employer Organization (PEO): ADP TotalSource offers a PEO option where ADP becomes the co-employer, taking on payroll, benefits, and HR administration entirely.

ADP Pros and Cons

Pros: Unmatched scalability, deep compliance expertise, PEO option, extensive integration marketplace.

Cons: Overkill for businesses with fewer than 25 employees, opaque and often expensive pricing, long-term contracts, clunky user interface compared to modern competitors, customer service quality varies widely by region and rep.

Side-by-Side Comparison Table

What to Look for in Virginia Payroll Software

When evaluating any payroll platform for your Virginia business, make sure it checks these boxes:

Must-Have Features

1. Automatic Virginia tax calculations: SUI, PFL (funded through SUI), SUI, ETT, and PIT must be calculated automatically with current rates. For 2026, the SUI rate is 1.2% on wages up to $153,164, the SUI rate for new employers is 3.4%, and the ETT rate is 0.1% on the first $7,000 per employee.
2. VA UI filing: The software should file your DE 9, DE 9C, and DE 88 forms electronically with the EDD.
3. Daily overtime tracking: This is non-negotiable for Virginia. Any software that only tracks weekly overtime will miscalculate pay for your hourly employees.
4. Compliant pay stubs: Virginia Labor Code Section 226 has nine required elements on every pay stub. Your software should generate compliant stubs automatically.
5. New hire reporting: Virginia requires new hire reporting within 20 days to the EDD.

Nice-to-Have Features

• Local minimum wage tracking: Especially important if you have employees in cities like Los Angeles ($17.28/hr), San Francisco ($18.67/hr), or Mountain View ($18.75/hr).
• Integrated time tracking: Reduces errors in overtime calculations.
• Benefits administration: Health insurance, 401(k), and workers' comp in one platform.
• Employee self-service portal: Reduces your administrative burden.
• Year-end tax forms: Automated W-2 generation and delivery.

Our Recommendation for 2026

Here is how we break down our recommendation by business size and situation:

• 1–50 employees, want simplicity and value: . Start with the Simple plan at $40/month + $6/employee. It covers all Virginia tax requirements out of the box. Upgrade to Plus when you need time tracking and PTO management.
• 10–200 employees, want a dedicated rep: . The dedicated payroll specialist and comprehensive HR suite justify the higher price for growing teams that need more hands-on support.
• Already on QuickBooks, simple payroll needs: QuickBooks Payroll. The accounting integration is unbeatable if QuickBooks is already your financial backbone. But get the Premium plan or higher for full VA tax filing.
• 50+ employees or multi-state/international: ADP. At this scale, ADP's enterprise features start to make sense. Get quotes from both ADP and Paychex and compare.

For most readers of this guide — Virginia small business owners trying to stay compliant without drowning in paperwork — Gusto is the clear winner. It was built from the ground up for modern small businesses, and its Virginia compliance features are best-in-class.

Trusted by 300,000+ small businesses. Handles all Virginia payroll taxes automatically.