Managing payroll can be a complex and intricate process for staffing agencies, especially when payroll software for staffing agencies is not optimised for their unique needs. With a diverse workforce, full-time and part-time employees, contractors, and freelancers, staffing firms must juggle multiple pay rates, tax statuses, and reporting requirements. Recent trends show a growing demand for payroll tools that support contract and contingent workers, a key challenge for modern staffing agencies, as choosing software is more critical than ever.

Fortunately, staffing agencies can significantly simplify payroll processing by adopting purpose-built payroll software. These solutions automate otherwise manual and error-prone payroll tasks, help maintain worker classification compliance, and ensure timely and accurate payments across different types of staffing engagements.

But with a wide array of payroll systems available, each offering different capabilities, pricing models, and integrations, choosing the right one can be overwhelming. To make this decision easier, we’ve curated a list of the 12+ best payroll software options for staffing agencies, highlighting their key features, pricing, and real-user feedback to help you pick the best fit for your business.

What Is Payroll Software?

Payroll software is a digital tool that helps businesses automate and simplify everything involved in processing employee payroll. Instead of manually calculating salaries, deductions, and taxes every pay cycle, the system performs these tasks accurately and in seconds. For staffing agencies that manage multiple employee types, full-time, part-time, contract, and freelance, payroll software becomes even more essential for smooth and error-free payroll management.

A modern staffing agency payroll software solution does far more than basic salary calculations.

It’s built to support end-to-end payroll operations with features like:

• Automated salary and tax calculations

• Built-in tax filing and payroll compliance tools (crucial for a payroll compliance staffing agency)

• Time tracking and scheduling integrations

• Employee attendance and leave management

• Support for benefits, reimbursements, and deductions

• Direct deposit and error-free payment processing

Many advanced systems also offer robust reporting tools that help agencies understand payroll expenses, worker classifications, client-based time logs, billable hours, and more. With these analytics, staffing companies can forecast costs, maintain compliance, and streamline their overall staffing agency payroll management.

When payroll software integrates with ATS platforms, it creates a powerful workflow for staffing teams, reducing manual data entry and ensuring seamless payroll and ATS integration for staffing. In short, payroll software is the backbone of efficient, accurate, and compliant payroll processing for any growing staffing agency.

Why Should Staffing Agencies Use Payroll Software?

Running payroll inside a staffing agency comes with layers of complexity, different employee types, shifting schedules, varying client agreements, multiple tax rules, and constant onboarding. This is exactly why payroll software for staffing agencies is no longer optional; it’s a necessity for accuracy, compliance, and efficiency.

Below are the main reasons every staffing firm should consider using a dedicated payroll solution:

1. Efficient & Error-Free Payroll Processing

Processing payroll manually for full-time employees, contractors, and freelancers can consume hours of your team’s time, and still leave room for mistakes.

With modern staffing agency payroll software, agencies can:

• Automate salary and tax calculations for every type of worker

• Reduce back-office workloads and free recruiters to focus on filling jobs faster

• Detect errors automatically, flagging issues before payroll is submitted

• Ensure every payment is accurate, timely, and compliant

• Improve the overall staffing agency payroll management workflow

Automation eliminates repetitive tasks and helps agencies maintain a smooth payroll cycle, even as their workforce scales across multiple clients.

2. Strong Payroll Compliance for Staffing Agencies

Compliance is one of the biggest challenges in the staffing industry. Agencies often work across different states, industries, and tax jurisdictions, each with its own rules. A single mistake, such as misclassifying a contractor or withholding the wrong tax amount, can lead to penalties or legal issues.

That’s where payroll software makes a measurable difference. A powerful system helps agencies:

• Stay compliant with multi-state and industry tax regulations

• Prevent worker misclassification through consistent rules and automation

• Automate tax filings, deductions, and statutory payments

• Maintain detailed audit trails for reporting and verification

• Reduce compliance risks at every stage of payroll

With built-in payroll compliance features, staffing agencies can operate confidently and avoid costly fines.

Correct Classification and Organized Documentation

One of the biggest responsibilities for staffing agencies is correctly classifying every worker they employ, whether they’re full-time, part-time, per-diem, or independent contractors. Misclassification can lead to payroll mistakes, compliance issues, or even penalties.

A dedicated payroll software for staffing agencies helps eliminate this risk by:

• Automatically categorizing employees and contractors based on predefined rules

• Maintaining accurate status records for every worker

• Storing employment documents in a secure, cloud-based repository

• Making forms, contracts, and verification documents instantly accessible

• Supporting tools like hourly wage or salary calculators for correct and consistent pay rates

This level of organization ensures your staffing agency always has clean, compliant, and easily retrievable documentation.

Reliable Payroll Compliance

Compliance becomes incredibly manageable when you use a purpose-built staffing agency payroll software. Instead of manually checking tax rules or calculating deductions, the system handles everything behind the scenes.

Agencies benefit from:

• Automated federal, state, and local tax calculations

• Accurate withholding for contractors and W-2 employees

• Built-in rules for garnishments, reimbursements, and benefit deductions

• Real-time compliance updates that reduce legal and financial risks

• A smoother, faster process that allows teams to focus on client service and placing great talent

With automated compliance tools, agencies can maintain flawless payroll compliance without slowing down operations.

Seamless Year-End Forms & Reporting

Year-end processing is often stressful, especially for staffing firms managing large volumes of temporary and contract employees. Payroll software simplifies this by:

• Automatically generating year-end forms (such as W-2s and 1099s)

• Reducing manual data entry errors

• Ensuring employees and contractors receive their documents on time

• Keeping all historical payroll data organized for audits or reporting

This automation ensures a smooth closing cycle every year, even as your workforce grows.

If you’re looking to simplify contract management as well, don’t forget to explore our detailed guide on the Staffing Agency Contract Template, including free downloadable templates to help streamline your onboarding and documentation workflow.

Unique Features Payroll Software for Staffing Agencies Must Have

Staffing agencies operate very differently from traditional businesses. With constant hiring, high turnover, multiple worker types, and shifting client needs, they require payroll tools designed specifically for their environment. This is why choosing the right payroll software for staffing agencies is crucial. The system must support staffing workflows, reduce manual processes, and integrate seamlessly with recruitment tools.

Below are the essential features every staffing agency should look for when selecting payroll software.

1. Seamless Integration With ATS & Other HR Tools

One of the biggest challenges in the staffing world is managing exceptionally high turnover rates, often five to ten times higher than in regular businesses. Agencies continuously hire new candidates while offboarding others, meaning their payroll and HR systems must be built to handle constant movement.

This makes integration absolutely critical.

A modern staffing agency payroll software should:

• Integrate effortlessly with your Applicant Tracking System (ATS)

• Sync candidate information from recruitment to payroll without manual entry

• Support onboarding and offboarding at scale

• Offer an open API to connect with other HR, scheduling, and workforce tools

When payroll software integrates with ATS platforms, it creates a smooth workflow from hiring → onboarding → payroll — reducing errors, saving time, and supporting a fast-paced staffing operation.

2. Acts as the Primary System of Record

Staffing agencies need a single source of truth for all employee data, from the moment a worker is hired until their assignment ends or they leave the agency. A strong staffing agency payroll management system should act as the primary System of Record (SOR), storing:

• Detailed employee profiles and classifications

• Onboarding documentation and client assignment details

• Performance notes, feedback, and issue logs

• Records from first day to termination

Having all information in one centralized place ensures consistency, supports compliance, and simplifies audits or client reporting. This becomes even more powerful when the payroll software integrates with ATS, creating a unified data flow across the organization.

3. Provides Customizable, On-Demand Reporting

Reporting is one of the most important and most overlooked features for staffing agencies. With contract-to-hire and long-term contract models, clients often need precise information about the hours worked by each employee at their site.

A generic payroll system rarely supports this level of detail. But staffing-focused payroll software should allow you to:

• Generate customized client-specific reports

• Track hours worked per assignment or per contract

• Automatically calculate hours tied to pre-agreed billing rates

• Support contract models where rates decrease as total hours increase

• Deliver clear reporting without pulling data from multiple pay stubs

Without these tools, staffing teams end up manually reviewing individual paychecks to calculate total hours, a process that is slow, inaccurate, and unsustainable as the agency grows.

A good payroll system should generate these reports instantly, reducing errors and giving clients confidence in the agency’s transparency and accuracy.

Types of Payroll Software in the Market

1. VARS – The Best Payroll Software for Staffing Agencies

G2 Rating: 4.6/5 

Capterra Rating: 4.5/5

While there are many great payroll software options for staffing agencies, VARS stands out as a next-generation, all-in-one platform specifically designed to meet the unique needs of staffing agencies. Unlike generic payroll tools, VARS combines payroll automation, compliance management, and workforce insights with advanced staffing-specific features, making it the ideal choice for agencies looking to streamline operations and scale efficiently.

Key features that make VARS the best choice for staffing agencies include:

• Automated Payroll Management: Calculate salaries, taxes, benefits, and reimbursements accurately for full-time, part-time, and contract staff.

• ATS Integration: Seamlessly connects with applicant tracking systems, allowing agencies to link payroll directly to recruitment and onboarding workflows.

• Compliance Assurance: Ensure full compliance with federal, state, and local payroll regulations, reducing the risk of penalties or errors.

• Custom Reporting & Analytics: Generate client-specific or employee-specific payroll reports instantly, saving time on manual calculations.

• Employee Self-Service Portal: Staff can view pay stubs, update personal information, and track benefits without administrative intervention.

• Mobile-Ready Platform: Managers and employees can access payroll and staffing information on the go, ensuring flexibility and efficiency.

With VARS, staffing agencies not only simplify payroll but also gain a robust workforce management system that supports growth, improves accuracy, and enhances overall operational efficiency. By investing in VARS, agencies can focus more on placing top talent and less on time-consuming payroll administration.

2. QuickBooks Payroll

G2 Rating: 3.8/5 

Capterra Rating: 4.5/5

QuickBooks Payroll is a popular cloud-based payroll solution from Intuit, a trusted name in accounting and financial management software for small to mid-sized businesses. It’s built to simplify everyday payroll tasks, making it easier for teams to run payroll accurately and on time. With features such as automatic tax calculations, direct deposit, and scheduled payroll runs, businesses can streamline their payroll operations and eliminate manual tasks.

One of the biggest advantages of QuickBooks Payroll is its ease of use. The interface is clean, intuitive, and beginner-friendly, making it a great option for small business owners or staffing agency teams that don’t have deep payroll management experience. Users can navigate the platform quickly, access important tools easily, and process payroll without unnecessary complications.

Pricing Plans

QuickBooks Payroll offers multiple pricing tiers to fit different business needs:

• Free Trial: 30-day free trial available

• Core: $45/month + $4 per employee

• Premium: $75/month + $8 per employee

• Elite: $125/month + $10 per employee

These plans scale depending on features such as same-day direct deposit, tax penalty protection, advanced reporting, and support.

3. Gusto

G2 Rating: 4.2/5 

Capterra Rating: 4.6/5

Gusto is one of the most user-friendly payroll software solutions for staffing agencies, especially for small and fast-growing recruitment businesses. It combines affordable pricing with a strong set of payroll tools, making it a great fit for agencies that want simple, reliable payroll automation without a steep learning curve.

Beyond payroll processing, Gusto also supports several essential HR workflows. Staffing firms can manage hiring, onboarding, employee benefits, and even offboarding from a single dashboard. This makes it a well-rounded platform for agencies looking to streamline both payroll and basic employee management.

Pricing Plans

• Simple - $40/month base fee + $6 per person

• Plus - $80/month base fee + $12 per person

• Premium - Custom pricing (quote-based)

• Contractor Plan - $35/month base fee + $6 per contractor

4. OnPay

G2 Rating: 4.8/5 

Capterra Rating: 4.8/5

OnPay is a simple yet powerful payroll software designed for staffing agencies, supporting small and mid-sized firms that need scalable payroll automation without complexity. Known for its high ratings across review platforms, OnPay delivers far more than standard payroll processing.

As a fully cloud-based platform, OnPay automates payroll runs, tax calculations, and tax filings, ensuring every payment is accurate and compliant. Staffing agencies can easily enter work hours, bonuses, tips, and reimbursements, making it especially useful for teams managing diverse worker classifications.

OnPay also integrates employee benefits into payroll, including health insurance, 401(k) retirement plans, and workers’ compensation, with support for pay-as-you-go options. This makes it a strong all-in-one solution for agencies that want to simplify both payroll and benefits management.

Pricing Plan

• First month free

• Base Price: $40/month

• Plus: $6/month per employee

5. Justworks

G2 Rating: 4.6/5 

Capterra Rating: 4.7/5

Justworks is one of the fastest-growing payroll software solutions for staffing agencies, offering a streamlined, all-in-one platform designed to make running payroll simple and efficient. Built from the ground up with ease of use in mind, Justworks helps staffing agencies automate payroll, manage benefits, and access HR tools typically reserved for larger companies. With dedicated 24/7 support, it ensures that even small and mid-sized agencies can operate smoothly without worrying about payroll errors or compliance issues.

This platform is ideal for staffing firms looking for a staffing agency payroll software that integrates payroll, benefits, and HR management in a single, easy-to-navigate system.

Pricing Plans

• No trial period available

• Basic Plan (2-4 members): $99 per employee/month

• Basic Plan (5-24 members): $59 per employee/month

• Basic Plan (25-99 members): $49 per employee/month

• Basic Plan (100+ members): Contact vendor for pricing

6. factoHR

G2 Rating: 4.9/5 

Capterra Rating: 5.0/5

FactoHR is a cloud-based Human Capital Management (HCM) platform that simplifies HR and payroll operations for staffing agencies. Its payroll software for staffing agencies is designed to streamline every step of payroll processing, from onboarding and salary calculation to deductions, reimbursements, and retirement. By automating these complex tasks, factoHR helps agencies save time, reduce errors, and focus on delivering high-quality staffing services.

With factoHR, agencies can:

• Process payroll accurately and on time for full-time, part-time, and contract employees

• Manage employee data, taxes, and compliance in a single, secure platform

• Automate deductions, reimbursements, and benefits for a smooth payroll workflow

• Generate reports and analytics to track payroll expenses and employee costs

• Safeguard confidential payroll information while maintaining full regulatory compliance

factoHR empowers staffing agencies to elevate payroll management efficiency while ensuring precision, compliance, and a better employee experience.

Pricing Plans

• Free Trial

• Essential Plan

• Advance Velocity Plan

• Bolster Plan

• Performer Plan (Visit the official site for detailed pricing)

7. UKG Pro

G2 Rating: 4.2/5 

Capterra Rating: 4.2/5

UKG Pro is a comprehensive, all-in-one payroll software for staffing agencies and other business organizations, designed to streamline HR and payroll operations. Its user-friendly interface allows staffing agencies to efficiently manage employee payroll, benefits, and HR workflows from a single platform.

One of the standout features of UKG Pro is its employee self-service capabilities, which empower staff to:

• Track and access their pay stubs instantly

• Request time off without HR intervention

• Update personal and contact information easily

The software also includes a robust reporting system that provides insights into employee productivity, compensation, and payroll costs. By centralizing payroll and HR functions, UKG Pro helps staffing agencies save time, reduce errors, and improve compliance while keeping employees engaged and informed.

Pricing Plan

• Pricing details are not publicly available and require direct contact with the vendor

8. Paylocity

G2 Rating: 4.4/5 

Capterra Rating: 4.3/5

Paylocity is a web-based payroll software for staffing agencies designed to support small to mid-sized businesses with comprehensive payroll and HR tools. Its intuitive platform allows agencies to streamline payroll processing, automate tax filings, and manage employee data efficiently.

Key features of Paylocity include:

• QuickPay, enabling batch payroll processing for multiple employees

• Paycheck calculators and third-party direct deposit/check creation

• Automated compliance with regulations like the Affordable Care Act

• Access to tax experts for guidance on filings and generating quarterly and year-end reports

• Time and labor management, including attendance tracking and automated benefits administration

With these tools, staffing agencies can reduce manual payroll tasks, ensure accuracy, and improve staffing agency payroll management while keeping employees and clients satisfied.

Pricing Plan

• Pricing information is not publicly available; agencies must contact the vendor for details

9. Workful

G2 Rating: Not available 

Capterra Rating: 5.0/5

Workful is an all-in-one payroll software for staffing agencies and small businesses that simplifies payroll, HR, and compliance tasks. Its cloud-based platform automates payroll calculations, tax filing, and employee management, making it easier for staffing agencies to manage a mix of full-time, part-time, and contract workers.

Key features of Workful include:

• Payroll processing and tax automation, including annual W-2 and 1099 filing

• Integration with employee timesheets, PTO requests, and expense reports

• Time tracking and mobile clock-in/out through a self-service employee portal

• Document management and internal communication tools

• Support for multiple pay rates and custom policies

• Centralized report library with employee contact info, paychecks, mileage reimbursements, and timesheets

• Integration with Intuit QuickBooks for streamlined accounting

Workful ensures staffing agencies can maintain accurate payroll, stay compliant, and save time on repetitive tasks, all while providing a transparent and user-friendly experience for employees.

Pricing Plan

• 30-day Free Trial

• Paid Plan: $35/month + $6 per team member/month

10. Spine Payroll

G2 Rating: 4.0/5 

Capterra Rating: 3.8/5

Spine Payroll is a simple yet powerful payroll software for staffing agencies, designed to make payroll and HR management straightforward and error-free. Its intuitive interface allows staffing agencies to manage employees efficiently, automate payroll tasks, and simplify complex HR processes.

Key highlights of Spine Payroll include:

• User-friendly interface for quick navigation and minimal training

• Flexible and customizable features tailored to different staffing agency needs

• Automated payroll processing with accurate calculations

• Tools to manage employee data, deductions, and compliance efficiently

With Spine Payroll, staffing agencies can reduce manual work, improve accuracy, and focus more on placing talent and growing their business.

Pricing Plan

• Pricing information is not publicly available; interested agencies need to contact the vendor directly

11. Papaya Global

G2 Rating: 4.3/5 

Capterra Rating: 4.6/5

Papaya Global is a cloud-based payroll software for staffing agencies designed to handle global payroll and cross-border payments efficiently. It’s ideal for staffing agencies managing international employees or contractors, providing a unified platform for payroll, compliance, and HR operations.

Key features of Papaya Global include:

• Global payroll and multi-currency processing for employees and contractors worldwide

• Cost breakdown analysis and centralized workforce spending dashboards

• Benefits administration and secure employee record management

• Hiring, onboarding, and managing employees across multiple countries using a third-party Global Employer of Record (EoR)

• Automated alerts for employee document collection and compliance verification

• Streamlined classification and payments for domestic and foreign workers

Papaya Global helps staffing agencies ensure accurate payroll, maintain compliance across jurisdictions, and reduce the administrative burden of managing an international workforce.

Pricing Plan

• Global Payroll and Payments: $20/month per employee

12. Rippling

G2 Rating: 4.8/5 

Capterra Rating: 4.9/5

Rippling is a comprehensive payroll software for staffing agencies that centralizes HR, IT, and finance functions into a single, easy-to-use platform. By consolidating payroll, benefits, expenses, and even IT provisioning, Rippling allows staffing agencies to manage the entire employee lifecycle in one place, reducing errors, saving time, and improving operational efficiency.

Key benefits of Rippling include:

• Centralized payroll management for all employees and contractors

• Integration with corporate tools like Slack, Microsoft 365, and expense systems

• Automated onboarding, set up new hires globally with payroll, benefits, and IT access in just 90 seconds

• Streamlined management of employee data, devices, and third-party applications

• Scalable solution for staffing agencies of all sizes

Rippling is ideal for staffing agencies looking to combine payroll automation with broader workforce management, giving recruiters and HR teams more time to focus on placing talent.

Pricing Plan

• $8/month per employee

13. Zimyo

G2 Rating: 4.4/5 

Capterra Rating: 4.5/5

Zimyo is a versatile payroll software for staffing agencies and a full-featured Human Resource Management System (HRMS) designed to simplify HR and payroll processes for businesses of all sizes. Its cloud-based platform offers a comprehensive Human Capital Management (HCM) suite, allowing staffing agencies to automate repetitive HR tasks and manage payroll efficiently.

Key features of Zimyo include:

• Streamlined payroll processing in just three clicks

• Expense and reimbursement management

• Attendance tracking and timesheet management

• Employee engagement and performance monitoring

• Recruitment, onboarding, and offboarding automation

• Innovative and cost-effective financial solutions for employees

Zimyo is ideal for staffing agencies looking for a holistic HR and payroll solution that integrates staffing agency payroll management with broader workforce management tools.

Pricing Plans

• 14-day Free Trial

• Basic: $60 per user/month

• Standard: $120 per user/month

• Enterprise: $250 per user/month

14. Homebase

G2 Rating: 4.5/5 

Capterra Rating: 4.6/5

Homebase is a cloud-based payroll software for staffing agencies and small-to-mid-sized businesses, particularly those managing hourly workers across multiple locations or client sites. While it is widely recognized for employee scheduling and time tracking, Homebase also delivers a fully integrated payroll solution that automates wage calculations, tax filings, and direct deposits.

Key features of Homebase include:

• Seamless payroll integration with scheduling tools, automatically syncing hours worked

• Accurate tax calculations for federal, state, and local jurisdictions, with filings handled on your behalf

• Employee self-service portal to view pay stubs, update personal info, and access W-2/1099 forms

• Support for multiple pay rates, job codes, and seasonal workers

• Integration with popular accounting platforms for consistent back-office data

Homebase helps staffing agencies reduce manual payroll errors, save administrative time, and manage a flexible workforce with ease, making it a strong choice for agencies handling hourly employees and multiple client sites.

Pricing Plans

• Free Plan: Scheduling, POS integration, and time tracking only

• Essentials: From $24/month per location

• Plus: From $56/month per location

• All-in-One (includes payroll): From $96/month per location

Conclusion

Implementing the right payroll software for staffing agencies can transform how your agency manages payroll, from saving valuable time to improving accuracy and ensuring compliance. By automating repetitive payroll tasks, staffing agencies can focus more on core activities like placing top talent, managing client relationships, and scaling their business efficiently.

When selecting the best staffing agency payroll software, consider features like ATS integration, employee self-service portals, compliance tools, and customizable reporting. Evaluating these options carefully will help you choose a solution that aligns with your agency’s workflow, growth objectives, and budget, ultimately making payroll management simpler, faster, and error-free.

Investing in robust payroll software is not just about handling salaries; it’s about empowering your staffing agency to operate smarter, serve clients better, and create a seamless experience for both employees and managers.