Guide on the best payroll system for your small business [2025]

Even for experienced business owners, pay day can become a battlefield of baffling spreadsheet formulas, confusing compliance requirements, and muttered expletives.

But paying employees doesn’t have to feel like pulling teeth. The best payroll systems for small businesses simplify the procedure and slash human error, all while keeping you in the IRD’s good books.

In this post, we’ll cover what to consider when comparing payroll systems and present a few leading options for Kiwi SMBs.

Table of contents
Payroll system considerations for small businesses Payroll systems for small businesses in New Zealand Xero Pay Sauce Pay Hero Employment Hero Payroll iPayroll Wise Business - For NZ companies operating across borders

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Payroll system considerations for small businesses

Not all payroll systems are a good fit for every business. Using the wrong platform means wasting money on subscription fees, messy integrations, and having to relearn a new interface when you switch. Weigh up the top payroll considerations to find the right match that best suits your small business needs.

Price

Cost is a crucial consideration for every small business. While payroll subscriptions are a tax-deductible expense, high fees will still batter your bottom line.

Pay attention to the pricing structure. Some systems charge by the number of employees, while others offer tiered plans that unlock sophisticated features at higher levels. Determine what you truly need before selecting a plan.

Don’t give short-term discounts too much sway, as these crafty marketing tactics might often exist to encourage sign-ups. Once the low-cost term ends, you could end up paying the full price and might realise the service is too expensive for your needs.

Features

Comb through the inclusions to ensure your preferred payroll platform meets all your business needs. As a small business, it is easy to get swayed into payroll solutions that offer a variety of features that might not even be required for day-to-day operations. A successful payroll solution addresses your company's specific needs. Therefore, begin by defining your business' operational pain points and goals.

At a minimum, a payroll system should offer automated pay runs (weekly, fortnightly, or monthly) and integrated Inland Revenue Department (IRD) reporting for compliance.

You may also require additional features depending on your specific business needs:

• Holiday pay calculations: Generate reports on holiday balances and leave payments
• Attendance tracking: Generate attendance reports, monitor employee locations in real-time, and receive alerts for missed shifts
• Employee self-portal: Staff enter their timesheet details into a self-portal for approval
• Custom pay conditions: Calculates bulk pay rates and date-triggered wage adjustments
• Roster management: Automatically allocates shifts based on skillsets or demand during peak periods and allows staff to swap shifts
• Employee self-portal or app: Enables staff to submit leave requests and perform other functions, alleviating the administrative burden on HR
• Expense claims: Streamlines expense claiming procedures and automates reimbursements with each pay cycle
• HR integration: Payroll software combined with HR software for hiring and onboarding new employees

IRD tax filings and compliance

As small business owners know, filing taxes and maintaining IRD compliance is the hardest part of paying staff. For small businesses operating locally, it is best practice to consider payroll systems designed explicitly for Kiwis or that have a Software as a Service (SaaS) portal dedicated to New Zealand.

Localised payroll systems generally have the capability to automate tax calculations and deductions in accordance with the IRD's strict requirements. Many will even handle payroll tax processes for a complete turn-key solution.

Accounting software integration

If you’re already using business accounting software, ensure your payroll platform integrates with this program. Payroll-accounting software integrations automate a wide range of processes, reducing number-crunching-related headaches and the potential for human error.

Big players like Xero offer accounting software and payroll capability together under one package.

Easy implementation

Most small New Zealand businesses don’t have a dedicated payroll or HR professional on-site. This lack of expertise makes it crucial to find a system with a simple, easy-to-learn interface. Large, well-established platforms invest substantial sums in developing intuitive UIs that don’t require high-level financial or computer skills.

But even the simplest platforms have a learning curve. Look for a system with sufficient onboarding support. The best New Zealand payroll systems offer comprehensive learning resources, including tutorial videos, how-to guides, and training modules.

Customer support

Despite picking the perfect payroll platform and mastering its UI, you’ll inevitably run into problems. When you do, it’s a huge boon to have access to helpful customer support. FAQs and chatbots can provide basic solutions, but often prove inadequate for complex matters.

Look for a program that offers support through multiple channels, including telephone, email, and live chat. Send an enquiry to your preferred platform, then evaluate the speed and quality of their response. Some platforms require upgrading to a higher tier to unlock over-the-phone customer support.

Some of the best payroll systems for small businesses in New Zealand

Let us deep dive into each payroll solution to better understand the features they offer. Here’s how the top payroll programs stack up in terms of price.

	Pricing (NZD/month)
Xero Payroll	Ignite $35 Grow $75 Comprehensive $99 Ultimate NZ $1131
PaySauce	Standard from $42 base + $5.25/employee Premium from $63 base + $6.25/employee2
PayHero	Origin: $19 base + $4/emp Super: $39 + $5/emp; Universe: $59 + $6/emp3
Employment Hero Payroll	Contact for a quote
iPayroll	Starting at $9.70 per weekly pay run4

Xero

As a leading accounting program in Australia and New Zealand, Xero⁵ is a trusted, well-known brand with a solid payroll product. Payroll is included for a limited number of staff members, depending on the plan you choose. Should you exceed the limit, you can pay a small fee instead of upgrading to the next tier.

Sample features:

• Automatic payroll calculations for pay, tax, and Kiwisaver contributions
• Flexible pay schedules
• Fast direct deposits
• Xero Me mobile app
• Employee self-portal, and more

Best for:

A simple, user-friendly interface and easy IRD integration make Xero a hit among small businesses with limited payroll expertise.

Pay Sauce

A flexible option for Kiwi SMBs, Pay Sauce⁶ runs on a pay-as-you-go model, meaning you’ll only pay for the months you use the service. Customers can sign up risk-free and cancel at any time without charge. The cloud-based platform is New Zealand-owned and specifically targets small local businesses.

Sample features:

• Mobile App for employees and employers
• Includes free training and onboarding
• Standard payroll reports and payslips
• Variable pricing per number of employees
• No bank fees, and more

Best for:

The pay-as-you-go model and flexible, risk-free contracts work well for businesses with intermittent payroll needs.

Pay Hero

Based out of Wellington, Pay Hero⁷ is another Kiwi-operated payroll platform targeting the SMB market. The software provides streamlined payroll calculations to ensure IRD compliance and integrates with the best accounting software. The user interface is easy to master, and a self-service portal is available for tasks such as leave requests, making life easier for HR.

Sample features:

• Time tracking tools
• Employee app with self-portal
• Automatic PAYE filing
• Accounting software and IR integrations
• HR and onboarding tools

**Best for:**The low base and per-employee price make this an affordable option for small businesses seeking an effective, user-friendly payroll solution.

Employment Hero Payroll

A major regional player, Employment Hero⁸ began in Sydney in 2014 but has since established a presence in Malaysia, Singapore, the UK, and New Zealand. The brand has enjoyed rapid expansion thanks to its comprehensive HR and employment solutions, including a user-friendly payroll service. The well-established platform has served 300,000+ businesses worldwide.

Sample features:

• Onboarding software
• Time and attendance tools
• Mobile app
• Automated payday filing
• Leave management software, and more

Best for: As a combined HR and payroll platform, Employment Hero is an attractive option for Kiwi SMBs seeking to cover all their employment needs in one app. A low base rate on the basic plan makes it appealing for cost-conscious SMBs with minimal needs.

iPayroll

As a pioneer of cloud-based payroll solutions in New Zealand, iPayroll⁹ has been serving Kiwi businesses since the early 2000s. The well-known, locally run company processes an average of $400 million in gross payrolls each month and currently has over 10,000 customers. Automated payday filings, a wide range of integrations, and a user-friendly employer/employee app helped the brand become a local institution.

Sample features:

• Top-up tools
• Online time logs
• Reporting suites
• Leave management tools
• Banking and IRD payments, and more

Best for: Small New Zealand businesses across various industries looking for a trustworthy, locally-owned payroll service with a solid employee app.

Wise Business - Alternative solutions for Kiwi companies operating across borders

While isn’t a payroll platform, the solution lets you perform up to 1,000 transactions simultaneously. Users can also add recipients, make recurring transfers, schedule payments, and more. Users can leverage Wise Business’ capability to send money in multiple currencies at low and transparent fees, where conversions also occur with no hidden markups on the mid-market exchange rate.

For Kiwi companies managing international teams, Wise Business serves as a powerful and cost-effective alternative to traditional payroll solutions. Its features are ideally suited for the complexities of cross-border salary payments. With the bulk payments tool, you can efficiently pay up to 1,000 overseas employees or contractors in a single transaction.

The platform simplifies payroll administration by allowing you to manage recipients, schedule recurring transfers for consistent pay cycles, and ensure timely payments. It also helps businesses save on hidden FX fees through low-fee transfers that happen at the mid-market exchange rate with no hidden markups.

Wise Business helps streamline overseas business payments without foreign transaction fees, saving up to 6x compared to other providers.

• Free to register — Send money to 140+ currencies with no hidden exchange rate markups
• Make up to 1,000 transfers at once with the Wise batch payments feature
• Fast, low-cost payouts to customers, freelancers, employees, investors, and suppliers globally
• Automate invoice payments, recurring transfers, and international payroll
• Fast and fully secure payments through Wise, even for large amounts

Tired of hidden fees and complex processes when making overseas payments?

Start sending with a Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

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Sources:

1. Xero: New Zealand Pricing
2. Pay Sauce: New Zealand Pricing
3. Pay Hero: Pricing
4. iPayroll: Pricing
5. Xero: Payroll
6. Pay Sauce: Payroll
7. Pay Hero: Payroll
8. Employment Hero: Payroll
9. iPayroll: Payroll