FreshLedger Pro includes a complete payroll module in the base $799 license - not a separate $40-$150/month add-on. You can set up employees with the post-2020 Form W-4 fields (multiple jobs, dependents credit, other income, deductions, extra withholding), calculate federal income tax, Social Security, Medicare, FUTA, and state SUTA, cut paychecks, and produce a quarterly Form 941 worksheet and year-end W-2 and W-3 forms directly from the same general ledger that runs your books. Because payroll posts straight into the double-entry system, wages, employer taxes, and liability accruals hit the right accounts the moment you run a pay period. For a small business owner or bookkeeper who is tired of paying a monthly payroll fee per employee on top of accounting software, this is the practical reason to switch: one purchase, one file, one set of reports.
Setup starts in the Payroll Items list. You define earnings types (regular, overtime, bonus, commission, holiday, PTO), pre-tax deductions (Section 125 health, 401(k) traditional), post-tax deductions (Roth 401(k), garnishments), and employer contributions. Each item is mapped to a GL account so the journal entries are correct from day one. For each employee you enter the W-4 (2020+) data: filing status, Step 2 checkbox for multiple jobs, Step 3 dependents amount in dollars, Step 4(a) other income, Step 4(b) deductions, and Step 4(c) extra withholding. State withholding certificates are entered the same way. Federal income tax is computed using the IRS Publication 15-T percentage method tables that ship with the current-year update. When you run a pay period, FreshLedger Pro calculates gross pay, applies pre-tax deductions, computes Social Security (6.2% to the annual wage base), Medicare (1.45% plus the 0.9% Additional Medicare Tax above $200,000), federal and state withholding, and any local taxes you've configured. Employer-side FICA, FUTA (0.6% net after state credit on the first $7,000), and SUTA at your state rate are accrued in the same entry. The posting debits wage expense and employer tax expense and credits cash and the various tax liability accounts. Each quarter you open the 941 Worksheet. It pulls wages, tips, federal income tax withheld, taxable Social Security and Medicare wages, and any sick/family leave items, and lays them out line-by-line in the order of the current Form 941. You transcribe the numbers onto the IRS form (or print the worksheet as a working paper). Form 940 is produced annually the same way. At year-end, the W-2 generator produces Copy A, B, C, D, 1, and 2, plus the W-3 transmittal, on plain paper or pre-printed forms. 1099-NEC printing for contractors is included in the same module.
Payroll is where small businesses get hurt by the IRS. Form 941 is due quarterly (April 30, July 31, October 31, January 31), and the failure-to-deposit and failure-to-file penalties stack quickly - 2% to 15% of the unpaid deposit depending on lateness, plus interest. The Trust Fund Recovery Penalty under IRC §6672 can hold an owner personally liable for 100% of unremitted withholding. Getting the numbers right and on time is not optional. W-2s have their own deadline: copies to employees and to the SSA by January 31, with penalties under IRC §6721 and §6722 that can exceed $300 per form for late or incorrect filings. Misclassifying an employee as a 1099 contractor is a separate, larger exposure. The post-2020 W-4 redesign removed allowances and introduced dollar-amount inputs in Steps 3 and 4. Older payroll tools and homegrown spreadsheets often still calculate withholding from an allowance count, which produces wrong federal withholding for any employee hired since 2020 - and an unpleasant surprise on the employee's 1040. Built-in payroll also matters for your books. When payroll runs in a separate service, you either re-key a summary journal entry each pay period or rely on a sync that frequently breaks at quarter-end reconciliation. With payroll inside the same double-entry ledger, wage expense, employer FICA expense, FUTA and SUTA expense, accrued payroll liabilities, and tax payable accounts all reconcile to the pay register without manual intervention. Your accountant will thank you at year-end when the 941s tie to the W-3 tie to the general ledger wage account.
QuickBooks Online sells payroll as a separate subscription: Core, Premium, and Elite tiers currently run roughly $50 to $130 per month plus $6-$11 per employee per month. Over five years for a five-employee shop, that is well north of $5,000 - on top of the QBO subscription itself. QuickBooks Desktop Payroll (Enhanced or Assisted) is similarly priced as an annual add-on and is being phased toward subscription-only. Xero does not have its own US payroll product anymore; it partners with Gusto, which starts around $40/month plus $6 per employee and is billed separately. Wave moved payroll to a paid add-on at roughly $20-$40/month base plus per-employee fees, depending on whether your state is self-service or tax-service. All three competitors will file 941s and produce W-2s, often electronically, and some include tax-payment services that FreshLedger Pro does not - that is a real difference. What they do not do is include payroll in the base price. FreshLedger Pro's tradeoff is explicit: you get the calculation engine, the 941 worksheet, the W-2/W-3 printing, and the 1099-NEC printing for the one-time $799, but you are responsible for making the actual federal and state tax deposits through EFTPS and your state portal, and for e-filing or mailing the forms yourself.
FreshLedger Pro's payroll module calculates and reports; it does not electronically file 941s, 940s, or W-2s, and it does not move money to the IRS or to state revenue departments. You make EFTPS deposits and state SUTA payments yourself. It does not provide an employee self-service portal or mobile pay stubs - stubs print or export to PDF. Direct deposit is supported only by generating a NACHA ACH file that you upload to your bank; there is no built-in ACH origination service. Tax tables ship current for the year of purchase; keeping rates, wage bases, and withholding tables current in future years requires the optional $99/year update. Local taxes beyond common jurisdictions may need manual rate entry. Multi-state employees are supported but require careful setup. The app is Windows-only and single-user at a time.
One-time-purchase accounting software with built-in payroll, full depreciation handling, and a free Accountant Edition for your CPA.
Buy FreshLedger Pro — $799One-time purchase. No subscription. Free Accountant Edition included.