Most self-employed professionals do not need payroll software — until they do. The moment you employ others — even a single part-time assistant — you inherit federal and state compliance obligations. Manual processes handle these poorly, and mistakes are expensive.
This guide is relevant specifically to self-employed professionals who are making or planning their first W-2 hire. If everyone you pay is a 1099 contractor, payroll software is not what you need — an invoicing tool and 1099 tracking handle that situation. But if you have an employee on payroll — or are about to — the five platforms here cover the full range. They go from a solo operator adding one part-time hire up to a self-employed professional building a small team that includes international contractors.
What Self-Employed Professionals Need from Payroll Software
The payroll requirements for a self-employed professional making their first hires differ from an established business in several important ways.
- Simplicity over features. You are not running a 50-person HR department. The software should handle payroll tax calculation and filing automatically, require minimal setup time, and not demand a finance background to operate.
- Low base cost. Self-employed professionals hiring one or two employees do not need enterprise-scale payroll infrastructure. Platforms with low or no base fees and per-employee pricing are the right model at this stage.
- Multi-state tax compliance. Remote work means your employee may be in a different state than your business address. Each state has its own income tax withholding rates, unemployment insurance requirements, and paid leave mandates. Automatic multi-state registration and filing saves the research burden of figuring this out per state.
- Contractor and employee in the same platform. Many self-employed professionals pay a mix of W-2 employees and 1099 contractors. A platform that handles both — payroll for the employee, ACH payments and 1099s for contractors — avoids managing two separate payment systems.
- Accounting integration. Payroll costs need to flow into your accounting platform automatically. A QuickBooks Online or Wave integration that posts payroll journal entries without manual reconciliation saves meaningful time at month-end.
- International contractor support. Self-employed professionals who hire help internationally need a platform that can pay contractors in local currencies and handle the compliance documentation for non-US workers.
Best Payroll Solutions for Self-Employed Professionals
All 5 platforms below handle federal and state payroll tax filing automatically, support direct deposit, and issue W-2s at year-end.
| Tool | Best for | Starting price | Free tier |
|---|---|---|---|
| Gusto | First W-2 hires, US teams, all-in-one payroll | $40/mo + $6/person | No |
| Deel | International contractors, global EOR needs | $49/contractor/mo | No |
| Wave Payroll | Budget-conscious, US-only, minimal payroll | $20/mo + $6/person | No |
| Square Payroll | Existing Square users, hourly workers, low cost | $6/person/mo | No |
| Rippling | Growing teams, HR + IT + payroll combined | $8/user/mo + base | No |
Gusto
Gusto is the most complete payroll platform for self-employed professionals making their first US employee hires. It handles payroll tax withholding and filing in all 50 states automatically, generates W-2s and 1099s at year-end, runs direct deposit, and includes employee onboarding, benefits enrollment, and time tracking in a single interface. The Starter plan at $40/month base plus $6 per person is priced appropriately for a solo operator with one or two employees. Gusto’s bookkeeping integrations with QuickBooks Online, Xero, and Wave sync payroll transactions automatically. For a self-employed professional who wants to get payroll right without becoming a payroll expert, Gusto’s guided setup and automatic tax filing are the most forgiving entry point into employer compliance.
Deel
Deel is the right platform for self-employed professionals with international workers or those who need to formalize international contractor relationships. It handles contractor agreements and payments in 150+ countries. It also manages compliance documentation for non-US workers (local contracts, right-to-work verification, currency conversion) and provides an Employer of Record service for countries where you want a local hire without incorporating.
For a self-employed professional with contractors in Eastern Europe, Southeast Asia, or Latin America, Deel replaces ad-hoc wire transfers with a compliant, documented workflow. It formalizes the relationship and professionalizes the payments. It also handles US contractor payments and 1099s, working as a combined domestic-and-international payment platform. The contractor plan starts at $49 per contractor per month.
Wave Payroll
Wave Payroll is the lowest-cost full-service payroll option in this list, making it the natural choice for self-employed professionals with a tight budget and US-only payroll. It costs $20/month base plus $6 per employee in states where Wave handles tax filing automatically (around 14 states). For other states, the base fee rises to $40/month and you file state taxes manually.
Wave Accounting (free) and Wave Payroll ($20–$46/month for one employee) is the most affordable compliant payroll setup available. Payroll transactions sync automatically to your books with no separate accounting subscription required. The limitation is coverage: Wave’s automatic tax filing state list is smaller than Gusto’s, and for states not covered, you handle state filing yourself.
Square Payroll
Square Payroll stands out for its pricing model: no monthly base fee, just $6 per employee paid per month. For a self-employed professional running payroll for one person, that is $6/month — the lowest effective cost of any full-service payroll platform. Square handles W-2 employees and 1099 contractors, files payroll taxes in all 50 states, runs direct deposit, and integrates with Square’s POS and scheduling tools.
For existing Square users — a tradesperson, a fitness trainer, or a photographer who uses Square for client payments — Square Payroll is the most frictionless addition. It lives within the same platform. The trade-off is that Square Payroll’s HR and benefits features are minimal compared to Gusto; it handles payroll mechanics cleanly but does not replace a full HR platform as your team grows.
Rippling
Rippling is the most sophisticated option in this list — combining payroll, HRIS, benefits administration, and IT management (device provisioning, software access, SSO) in a modular stack. For a self-employed professional who is actively growing a team and anticipates scaling from one or two employees to ten or twenty within a few years, starting with Rippling avoids a platform migration later. Its per-user pricing of $8/user/month plus a base fee makes it more expensive than Gusto or Wave Payroll for very small teams, but the consolidation value increases as headcount grows. Rippling handles multi-state tax registration automatically, integrates with equity management tools (Carta) and accounting platforms (QuickBooks, Xero), and eliminates the separate IT onboarding workflow for new employees. For a self-employed professional who is treating their first hire as the beginning of a company rather than a one-off arrangement, Rippling’s architecture supports that trajectory without requiring a rebuild.
How to Choose
The right platform depends on 3 factors: where your employees are located, how many people you pay, and whether you also use contractors.
If you are making your first US hire and want the most guided, foolproof setup: Gusto’s step-by-step onboarding, automatic 50-state tax filing, and comprehensive support documentation make compliance accessible without a payroll background. It is the default starting point for most solo-operator first hires.
If your budget is the primary constraint and you have a single US employee: Square Payroll at $6/person/month for full-service payroll tax filing is the lowest-cost option that handles compliance correctly. If you already use Square for payments, the integration is seamless.
If you use Wave Accounting and want combined accounting + payroll at minimal cost: Wave Payroll integrates natively with Wave Accounting. The combination is the most cost-effective setup for US-only payroll with simple accounting needs.
If you have or anticipate having international contractors or employees: Deel covers the international compliance complexity that US-only payroll platforms do not address. Start with Deel if any of your workers are outside the US.
If you are growing and want to avoid a platform migration later: Rippling’s modular architecture scales from first hire to 100+ employees without requiring a switch. Accept the higher per-seat cost as an investment in not rebuilding your HR infrastructure twice.
See also: Payroll Software — HR Software for Self-Employed — Accounting Software for Self-Employed