Cheapest payroll for daycare and childcare in 2026
Daycare and childcare centres are hourly-staff businesses with state-licensing requirements that touch payroll: maintained staff records, background check verification, and ratio compliance documentation. Cheapest payroll is the one that bundles time tracking and produces the records state licensing inspectors want.
Cheap payroll for daycare with time tracking included
| Provider | 5 EE / mo | 10 EE / mo | Time tracking |
|---|---|---|---|
| Square Payroll | $65 | $95 | Square Team free |
| Homebase Payroll | $70 | $100 | Homebase free (best for shift teams) |
| OnPay | $70 | $100 | When I Work integration ($4/user) |
| Patriot Full Service + time | $87 | $137 | $6/EE add-on. Loses to Square |
| Gusto Simple + 3rd party time | $90 | $140 | Bolted-on, fragile sync |
| Gusto Plus | $140 | $200 | Built in. Double the price |
| QuickBooks Payroll Core + Time | $95 | $145 | QB Time $20 + $10/user |
| Procare Solutions | $199 | $299 | Childcare-specialist all-in-one |
Why daycare cannot run payroll without integrated time tracking
Daycare staff schedules are shift-based with high variability. Two morning teachers until noon, two afternoon teachers from noon, weekend caregivers, substitute teachers covering call-outs. Tracking actual hours worked manually in a spreadsheet is error-prone and exposes the centre to FLSA wage-and-hour claims.
State licensing inspections also commonly request staff time-and-attendance records as part of ratio compliance verification. The inspector wants to know that during a given hour on a given day, the staff-to-child ratio was met. A time clock log gives the inspector exactly that.
Square Team and Homebase both provide app-based clock-in and clock-out from a tablet at the door. Staff clock in when they arrive, clock out when they leave. The data flows into payroll without manual entry, and into a time log the inspector can see. This is the structural reason Square Payroll and Homebase Payroll are the right cheap answers for daycare, not the lowest-sticker Patriot Basic.
Where payroll meets state childcare licensing
Most state childcare licensing requirements (administered by the state Department of Children and Families or equivalent) require centres to maintain staff records that include: hire date, background check date, fingerprint clearance date, professional development hours per year, CPR and first aid certification expiry, and TB test currency.
None of these fit into standard payroll provider employee profiles. Cheap payroll providers store name, address, SSN, tax-withholding inputs, and pay rate. They do not have purpose-built fields for background check status or CPR cert expiry.
The practical workaround is to maintain the licensing records in a separate document (a shared spreadsheet, a folder of PDFs, or a childcare-specific tool like Procare Solutions) and use the cheap payroll provider for payroll only. The childcare tool costs $99 to $299 per month depending on centre size. For small daycares, a spreadsheet is usually enough.
Choosing between the two cheapest daycare payroll options
Square Payroll wins on price by $5 a month at every headcount. Homebase wins on scheduling depth. The choice depends on how much your daycare manager spends doing schedules.
Square Team's scheduling is functional: drag-and-drop weekly schedule, time-off requests, shift swaps with manager approval. Adequate for a centre with stable recurring schedules and infrequent shift changes.
Homebase's scheduling is purpose-built for shift management: auto-scheduling against staffing forecasts, instant call-out coverage finding, integrated team messaging, built-in labor cost tracking against budget. For a daycare manager who spends an hour a week building schedules, Homebase saves that hour and is worth the $5 a month premium.
Both providers do the core payroll correctly. Both include time tracking. Both file taxes correctly for hourly non-exempt staff. The differentiator is scheduling, not payroll quality.
The single biggest payroll-cost mistake daycares make
Daycare staffing is forecast against expected enrollment. When enrollment goes up mid-month or a staff member calls out, the cheapest immediate response is to ask existing staff to work more hours. The hidden cost is overtime: every hour over 40 per week is paid at 1.5x.
A $20/hour assistant working a 10-hour overtime week costs $300 in straight wages plus $50 in overtime premium plus $27 in employer FICA = $377 for those 10 hours. Hiring a substitute at the same $20/hour rate for the same 10 hours costs $200 + $15 employer FICA = $215. The overtime decision is $162 more expensive.
Cheap payroll providers calculate overtime correctly but do not flag the schedule decision in advance. The daycare-specific value of Homebase Payroll is that the scheduling tool surfaces overtime risk before you schedule the shift, not after the fact when you see the payroll bill.
Other cohort and vendor pages
Cheapest payroll for restaurants
Square + Homebase + tip handling
Cheapest payroll for nonprofits
501(c)(3) nonprofit discounts
Cheapest payroll for churches
Clergy housing allowance
Cheapest Square Payroll plan
$35 + $6, time tracking included
Cheapest OnPay plan
Flat $40 + $6, multi-state
Cheapest payroll for 6-10 employees
Sub-$100/mo path
Common questions
What is the cheapest payroll service for a small daycare?
Square Payroll at $35 + $6 per employee with free Square Team time tracking is the cheapest legitimate payroll for hourly daycare staff. At 5 employees that is $65 per month. Homebase Payroll at $40 + $6 is the closest competitor with stronger scheduling features for shift-based teams.
Does Square Payroll work for daycare staff records?
Square Team tracks hours and stores basic employee data but does not have purpose-built childcare-licensing record fields (background check status, professional development hours, CPR certification expiry). You can store those manually in employee notes. For state inspectors who want a specific format, a dedicated childcare HR tool like Procare layered on top may be needed.
How much does payroll cost for a 10-employee daycare?
Square Payroll at $95. Homebase Payroll at $100. OnPay at $100. Patriot Full Service at $77 sticker but $137 after a $6 per employee time-tracking add-on for hourly staff. Square wins on the hourly-bundled comparison.
What about overtime for daycare staff?
Daycare staff are non-exempt employees under the FLSA, so overtime is 1.5x regular rate over 40 hours per week. Most cheap payroll providers calculate this correctly if the time-tracking integration is feeding accurate hours. The bigger overtime risk is scheduling: scheduling overtime is more expensive than hiring an additional part-timer.
Do daycare providers qualify for any payroll-cost relief?
501(c)(3) nonprofit daycares qualify for the Gusto and OnPay nonprofit discount (10 percent off base) and the FUTA exemption. For-profit daycares get no special payroll-cost relief. Some states offer childcare workforce stipends that flow as additional wages, processed through normal payroll.
Should a single-family in-home daycare use household payroll?
Depends on the legal structure. If you operate as an LLC or corporation with staff, you are a business and need business payroll. If you are an individual paying a single helper who works in your home, household payroll (Schedule H) may apply. Most licensed in-home daycares are registered businesses and use business payroll like Square or OnPay.