The Best Contractor Payroll Software: 9 Top Picks for 2025

Paying contractors can be easy or complex, depending on what your overall team looks like. If you just have a handful of contractors on your team, it’s relatively simple. But if you have some independent contractors, some full-time employees, and people working in multiple counties/states/countries, running payroll becomes much more complex.

To reduce the complexity, you need to invest in contractor payroll software. These tools keep track of the status of all of your employees to ensure everyone’s paid properly and has the right deductions withheld from their paychecks, and they do it all automatically with no effort on your part at all.

The nine best contractor payroll software options below will help you automate your payroll processes so running payroll for a mixed team of worker times will be a breeze.

1. Buddy Punch

Buddy Punch works so well as payroll software for contractors because you can use it to track time and run payroll from a single tool. Your contractors can set up direct deposit through a self-service portal, so you’re not responsible for handling everyone’s bank account information.  

Here’s a high-level overview of how Buddy Punch works.

Your contractors use Buddy Punch to track their time

Buddy Punch is a web-based time-tracking system, so your contractors can access Buddy Punch from their smartphones, tablets, and computers. From the Buddy Punch app, your contractors can clock in and out, set up their direct deposit information, and view their pay stubs.

Screenshot of clocking in with Buddy Punch

Plus, Buddy Punch offers advanced clock in and out features, such as IP address locking, geofencing, and facial recognition, which all work to make sure your contractors are tracking their time accurately and honestly.

You import timesheet data into payroll 

Import time into payroll button.

This makes it easy to see a summary of what you’re paying. You can also see and fix any time tracking errors, such as adding hours for someone who forgot to clock in or out. You can also add additional earnings to a contractor’s pay, such as bonuses.

When payroll is ready, you run it from Buddy Punch

Your team has already filled out their direct deposit information through a self-service portal, so you don’t need to worry about getting all that info on file. You can also pay via check if preferred.

And that’s a very high-level overview of how you can use Buddy Punch as payroll software for your contractors. But let’s also dig into some of Buddy Punch’s other unique and useful features.

Advanced time tracking features

Image of Buddy Punch's Photos on Punch feature

As we mentioned above, Buddy Punch has advanced time clock features that help you prevent time theft, buddy punching, or just simple honest mistakes.

  • IP address locking: Employees can only clock in and out when connected to your company WiFi.
  • Geofencing: Prevent employees from clocking in/out unless they’re located at your business or on one of your job sites.
  • GPS tracking: Log employees’ locations when they clock in and out, or use real-time GPS tracking to monitor their movements across the entire workday
  • Photos on punch: ​​Have employees take a picture of themselves when they clock in. Those photos are added to timesheets, and your management team can review the submitted photos, ensuring the right person is clocking in for their shift.
  • Facial recognition: Take photos a step further by using Face ID to automatically verify that the right employee is clocking in or out for their shift.

These features ensure contractor accountability and accurate time tracking. You can also use Buddy Punch to track reimbursements, bonuses, commissions, severance, PTO, and more.

Automatic payroll calculations

Buddy Punch automatically calculates contractor payroll based on time worked to ensure your contractors are paid correctly. And if you have full-time employees in addition to contractors, Buddy Punch also handles multi-state tax registration and all local, state, and federal taxes.

Timely direct deposits

Timely direct deposits in Buddy Punch.

You want your team to get their paychecks on time. With Buddy Punch, you can choose two-day or four-day payroll processing. You can even set up a reminder to submit payroll on time or automate your payroll process by setting up auto pay.

Your contractors get a self-service login which they can use to set up direct deposit or elect to be paid via check (which Buddy Punch also handles).

Tax management for contractors

When paying a contractor $600 or more during the tax year, you must report the payments on a 1099 form and send a copy to the contractor and the IRS. The contractor uses the information on the 1099-misc form to report their income when filing their tax return.

The information reported on the 1099 form includes the contractor’s name, address, taxpayer identification number (TIN), and total payments made to the contractor during the tax year. Contractors should receive a copy of their 1099 form by January 31 of the following year.

Buddy Punch handles the electronic and mail distribution of the 1099 forms for your contractors — and W-2s for your full-time employees. This includes multi-state tax registration in all 50 states and federal and local taxes.

Customer support

Buddy Punch is designed to be intuitive and easy to use. Here some Capterra reviews (a popular software review platform) that highlight this benefit.

“Most folks pick up on it right away. The system is intuitive, and those who do have difficulty only need a quick tutorial and they are good to go.”

“Minimal training for end users (employees or managers). The back end (admin) features are just as simple and intuitive. We wanted a product that was simple to use, cost friendly, and allowed us to customize — all of these areas were met. Very impressed!”

“Their team is knowledgeable about my organization and the way that we use the platform. I have received many helpful suggestions on how we can best leverage the Buddy Punch platform in our sometimes complicated organizational structure. We have had very few issues, but have always received immediate resolutions when anything has come up.”

But when you have questions or need some support help, we won’t leave you hanging. Buddy Punch offers excellent customer support, including email and chat support and a comprehensive help center with video tutorials.

Stay on top of time, attendance, PTO, and overtime in real-time.

2. QuickBooks Payroll

Quickbooks Payroll is one of the best options for contractor payroll. In addition to having a great reputation and many different workforce management services, QuickBooks Payroll has a very generous price for contractors — it stays at a flat rate for up to 20 contractors.

If you’re already using platforms like QuickBooks Online and QuickBooks Time and want a payroll solution that will integrate perfectly with those tools, QuickBooks Payroll is absolutely worth considering.

Key features

Customer reviews

QuickBooks Payroll has an overall rating of 4.4 out of 5 stars on Capterra across 885 reviews. Here’s what customers like about the platform:

“It has the advantage of being customizable to suit your business needs. It is also very user-friendly, making it easy to use. The automatic payroll feature saves time, and reporting and paying taxes are handled efficiently. It also simplifies employee setup and onboarding.”

3. Square Payroll

Square Payroll is a great general option for your business needs. It has multiple different major features like payroll, HR, and scheduling, which is great since you can keep everything in one place. 

Square Payroll has parts of its software targeted towards payroll for contractors, as well as a paid plan for contractor businesses only, making it only one of two options on this list with this discount. 

Key features

Customer reviews

Square Payroll has an overall rating of 4.7 out of 5 stars on Capterra across 611 reviews. Here’s what customers like about the platform:

“The direct deposit feature of Square Payroll makes paying employees a very streamlined and simple procedure. The W-2 preparation features make tax season a breeze. Vacation/leave tracking has truly increased the productivity of payroll and bookkeeping. This is the ultimate feature of this application.”

4. Roll by ADP

Roll by ADP is a great option because not only does it have great and accessible payroll features made to work easily and efficiently, a main feature of the platform is their contractor payroll service to make every part of taxes and payroll for contractors so much easier. 

Not only that, but Roll also has features for making sure your employees are being rewarded for their efforts with instant bonuses and rapid raises.

Key features

5. Payroll4Construction

Payroll4Construction is a great option because, as it says in the name, it’s the only option on this list that is made specifically for the construction industry, so all of its features are tailored specifically for these needs. Because of this specific purpose, it has a lot of unique features like fringe calculations, tax filing, and child support deductions.

Key features

6. OnPay

OnPay is a great option if you want more tools to increase communication between you and your employees, as well as multiple different tools for keeping up with payroll and compliance. 

OnPay has a few unique features, but having employee benefits and Workers’ Comp included in the service at no extra charge makes it so you can make sure your employees are safe and that you can afford to keep them healthy — especially in a business where injuries can be common.

Key features

Customer reviews

OnPay has an overall rating of 4.8 out of 5 stars on Capterra across 440 reviews. Here’s what customers like about the platform:

“Running payroll biweekly is quite easy with OnPay. It takes me very little time to do it, and it gets deposited in my employee’s accounts quickly. I also really like how easy it was to get Workers’ Comp set up, and I’m getting ready to add in the retirement integration.”

7. Gusto

Gusto is a great option for a lot of reasons, such as its great reputation, impressive payroll features, and the many HR tools you get access to (Gusto’s tax credits feature is something to pay attention to). 

A big benefit is that Gusto has a specific plan for contractor-only businesses that is incredibly affordable. So Gusto isn’t just a good service, it’s a great cheaper option on this list. 

Key features

Customer reviews

Gusto has an overall rating of 4.6 out of 5 stars on Capterra across 4,001 reviews. Here’s what customers like about the platform:

“As a startup business executive, Gusto has been excellent in simplifying the payroll and HR processes. It has made payroll effortless, handling taxes, benefits, and employee payments in a way that’s easy to manage. New hires can enter their information and sign documents digitally, which saves time and keeps everything organized from day one.”

8. Rippling

Rippling is a great option if you need a powerful all-in-one tool for HR management as well as payroll. Rippling offers many, many features for every part of running a business. 

Rippling does offer an option to just use its payroll features if you just want them, but their other services like IT and Spend also have incredibly useful and unique features as well. 

Rippling is just a great option you should consider, especially considering their incredibly high rating on Capterra. 

Key features

Customer reviews

Rippling has an overall rating of 4.9 out of 5 stars on Capterra across 3,116 reviews. Here’s what customers like about the platform:

“What I like most about Rippling is how much it consolidates into one platform. Payroll, benefits, onboarding, device management – it’s all there, which is a lifesaver for anyone managing HR and IT tasks. The interface is straightforward and pretty user-friendly, especially compared to some of the older HR platforms out there..”

9. Remote

Remote may seem like a fairly simple option at first glance, and although it may lack the long list of features, it is an amazing option if you are a global business or are looking to expand outside of your home country. 

All of Remote’s main features (like payroll, compliance, and talent management) include options that make complying with local laws faster and easier, and they can even help you hire in different countries.

Key features

Customer reviews

Remote has an overall rating of 4.4 out of 5 stars on Capterra across 89 reviews. Here’s what customers like about the platform:

“Remote has enabled our team to grow globally, hiring amazing people without the worry and cost associated with creating a legal entity. I have reached out many times with questions and have found the support available to be very extensive and knowledgeable, even on some very specific inquiries.”

Features to look for in contractor payroll software

When searching for the best payroll software for contractors working with your business, here are some of the things to keep in mind:

  • Payment flexibility: You want to be able to pay contractors through various payment methods, such as direct deposit or check.
  • Accurate time tracking: You want a way to keep an accurate track of contractor hours, ensuring that you only pay for the time worked. Plus, you want a way to customize how much each contractor is paid, adding rates for overtime or prevailing wage hours.
  • Tax compliance: The software should be able to calculate and deduct payroll taxes accurately, including federal, state, and local taxes, to ensure compliance. You don’t want any concerns or potential errors when it comes to tax compliance.
  • Contractor management: You want an easy way to manage contractor information, including contact details, payment history, and tax information.
  • Contractor self-servicing: You want payroll software that makes it easy for your contractors to log into their profile, check out paystubs, change withholdings, request any time off, etc.

Finally, look for payroll software that has a good track record of customer support. Payroll — paying your team accurately and on time — is critical to any business, and you want to make sure any questions you have get addressed in a timely manner.

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