Free payroll software: it calculates your taxes but does not file them

The distinction that defines the category#

Free payroll software will tell you that you owe $2,140 in federal withholding this month.

It will not send that money to the IRS. It will not file form 941 quarterly, 940 annually, or issue W-2s in January.

Those remain your job, on your deadlines, with your penalties if they slip.

That is not a hidden catch. It is the entire reason paid payroll costs money, and it is why a comparison of features misses the point.

1. Payroll4Free, the only genuine option#

Free up to nine employees. No expiry, no card required.

You get payslip creation, withholding calculations, and printable reports. That is a real product rather than a trial, and for a small employer who already handles their own filing it removes the arithmetic.

The limits:

• Nine employees, then it stops being free
• Windows desktop only, with no mobile access
• Calculation, not filing

2. eSmart Paycheck, which is a calculator#

Free, and useful for working out a single paycheck.

It is not a payroll system. If you need to run payroll every fortnight for four people and keep records, this is not that. Included because it appears on every list of free payroll software and should be understood correctly.

3. TimeTrex, which you should not use#

The Community Edition was the genuinely capable free option for years.

Existing installations still run. That is exactly the problem.

What free is really competing against#

Not other free tools. Paid payroll at the small end.

Gusto Simple is $49 a month base plus $6 an employee:

So the honest question is not free versus paid. It is is filing payroll taxes yourself worth $67 a month to avoid.

For some people it genuinely is not, particularly if an accountant already does it. For others, one late 941 filing costs more than a year of subscription.

When to stop using free#

You cross nine employees. Payroll4Free stops being free.

You hire in a second state. Multi-state payroll tax is where self-filing goes wrong, and it is also where Gusto forces you from Simple to Plus.

Filing takes more than an hour a month. At that point you are paying yourself less than minimum wage to avoid a $67 bill.

You have ever missed a deadline. That is the answer on its own.

The honest verdict#

Free payroll software exists and works, for a narrow case: under nine employees, single state, and somebody else already owns the filing.

Outside that case, what you are choosing is not free software versus paid software. It is whether you want payroll tax liability to be your problem or somebody else's, and that is worth more than the subscription costs.