Best Payroll for Handyman & Home Services: Gusto vs ADP vs Paychex
As a handyman, general contractor, or any home services pro, you're good with tools, not tax forms. But payroll for your crew or subs can sink you fast if done wrong. Late taxes, messed-up W-2s, or classifying a helper as a 1099 when they should be W-2 — these mistakes cost big money and headaches for years. Picking the right payroll system early on isn't just about saving an hour here or there. It's about protecting your new business from serious financial and legal trouble.
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The Quick Answer
Gusto is best for most new handyman, HVAC, or painting businesses with 1-10 W-2 employees (or a mix with 1099 subcontractors). It’s for pros who want a simple online tool to handle paychecks, taxes, and new hires without needing a bookkeeper on speed dial. Handles W-2s for your apprentice and 1099s for that roofing sub. ADP is better if you're quickly scaling a remodeling company, running jobs in multiple counties, or have complex situations like union painters or many different pay rates. It's for established contractors expecting rapid growth or with 20+ crew members. Paychex is for tradespeople who prefer to call a person, not click buttons. If you want a dedicated account manager to handle payroll, especially if you have a team of 5-15, and you prefer phone support over a software dashboard. Good for owners who want to focus on their tools, not payroll software.
Side-by-Side Breakdown
Gusto: $40/month base + $6/employee. Easy online setup. Strong HR for offer letters for new apprentices, onboarding checklists for safety gear, and tracking PTO for your lead plumber. Best for home service businesses up to 50 employees who like managing things online. ADP Run: Custom quote, typically $60-$200/month. Assisted setup. Modular HR like tracking hours for multiple job sites or managing different pay rates for a skilled electrician vs. an entry-level helper. Dedicated reps on most tiers. Good for growing general contractors or businesses with multiple crews. Paychex Flex: Custom quote, typically $60-$160/month. Assisted setup with a rep. Solid HR, including retirement savings plans for your long-term crew members. Dedicated account manager you can call. Best for businesses wanting a full-service option, so you can stay focused on the tools.
When to Choose Gusto
Gusto is perfect for first-time business owners like independent electricians, painters, or handyman services. If you're hiring your first helper as a W-2 employee or regularly bringing on 1099 subcontractors, Gusto makes it genuinely easy. You can set up payroll for your apprentice and send out 1099-NEC forms to your drywall subs automatically. Their HR tools, like offer letters and onboarding checklists, help you bring on new crew members properly. For the typical 1-15 person home services team, Gusto covers 90% of your needs at a price that leaves more money for tools.
When to Choose ADP
ADP becomes a smart choice once your home services business grows beyond basic payroll. If you're a general contractor with crews working in different states, managing union painters, or dealing with various pay rates for different licenses (e.g., journeyman vs. master electrician), ADP has the depth. It can handle complex PTO accruals for long-term employees and integrate with larger job costing software. Expect a more hands-on sales process and custom pricing, but you get enterprise-level reliability for your scaling operation.
When to Choose Paychex
Paychex is ideal for home service owners who want a person, not an app, to manage their payroll. If you'd rather spend your time on job sites or bidding new projects than wrestling with payroll software, Paychex's account manager model is a good fit. You get a dedicated person to call when you have questions about paying an unexpected bonus to your best HVAC tech or need to adjust hours for a storm-damaged roof crew. They also have strong ties with accountants who specialize in the trades, making year-end taxes smoother.
The Verdict
For most new handyman, HVAC, or painting businesses, start with Gusto. It handles W-2 employees and 1099 contractors cleanly, costs less, and frees up your time to focus on billable work, not payroll. It's the best bang for your buck, leaving more money for tools and materials. Only upgrade to ADP or Paychex when your business complexity (multi-state work, union rules, 20+ employees) truly demands it, or if you simply prefer a dedicated human handling everything.
How to Get Started
For Gusto: Sign up online. You can typically run your first payroll for your crew in a day. You'll need basic info for your W-2 employees (Social Security numbers, bank details), your EIN, state tax IDs (like your sales tax ID for contractors), and your business bank account info. For ADP or Paychex: Request a quote. Expect a sales call to discuss your specific needs (number of employees, 1099s, multi-state work) — pricing varies significantly based on what your home services business requires.
RECOMMENDED TOOLS
Gusto
Best payroll software for small business — automated taxes, HR tools included
ADP
Enterprise-grade payroll for growing and complex businesses
Paychex
Full-service payroll with dedicated account manager support
Rippling
Payroll, HR, and IT management in one platform for scaling teams
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FREQUENTLY ASKED QUESTIONS
Do I need payroll software if I am the only employee?
If you elect S-Corp treatment and pay yourself a salary, yes. If you are a single-member LLC taxed as a sole proprietor, you take owner draws and do not run payroll. Gusto handles both scenarios.
Can I switch payroll providers mid-year?
Yes, but it requires careful coordination to ensure year-to-date records transfer correctly. January 1 transitions are cleanest. Gusto makes switching relatively easy with a payroll history import tool.
What happens if I miss a payroll tax deposit?
The IRS charges penalties starting at 2% for deposits 1-5 days late, escalating to 10% or more for deposits over 15 days late. This is why software that handles deposits automatically matters.
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