Switching from ADP to cheaper payroll in 2026
ADP Run customers commonly discover after two or three annual renewals that their monthly bill has crept up 20 to 40 percent above the original quote. Switching to OnPay, Gusto Simple, or Patriot Full Service saves $40 to $80 per month for a typical small business. The cleanest switch points are start of quarter and start of calendar year, but mid-year switches are doable if you handle the YTD data carefully.
Monthly savings switching from ADP Run by headcount and new provider
| Headcount | ADP Run / mo | OnPay save / mo | Patriot Full save / mo | Annual save (OnPay) |
|---|---|---|---|---|
| 3 | $91 | $33 | $42 | $396 |
| 5 | $99 | $29 | $42 | $348 |
| 10 | $119 | $19 | $42 | $228 |
| 15 | $139 | $9 | $42 | $108 |
| 25 | $179 | -$11 | $42 | $-132 |
OnPay's savings shrink as headcount grows because OnPay's $6 per employee compounds faster than ADP's $4. Above 25 employees, ADP and OnPay are essentially tied. Patriot Full Service's $4 per employee fee maintains a roughly $42 a month advantage over ADP at every headcount.
The clean ADP-to-cheaper migration playbook
Step 1: Pick the switch date. Calendar year-end (December 31 last pay date, January 1 new provider go-live) is cleanest. Quarter starts (April 1, July 1, October 1) are second-cleanest. If you must switch mid-quarter, pick a Friday so the new provider has the weekend to validate YTD data before the first pay run.
Step 2: Sign up with the new provider 2 to 4 weeks before the switch date. OnPay, Gusto, and Patriot all offer free guided migration. Tell them up front you are migrating from ADP and want their dedicated migration support team.
Step 3: Export from ADP. Request the year-to-date wage and tax data export through the ADP portal or by calling ADP support. The export typically arrives as a CSV or PDF within 1 to 3 business days. Include all employee personal data, all YTD wage data per employee, all YTD employer tax liability per agency, all current benefit deduction setups, and a full pay-rate-history report.
Step 4: Import to the new provider and validate. The new provider will load the YTD data into their system. Validate carefully: total YTD gross wages should match exactly between the ADP export and the new provider's reports. Total YTD federal withholding should match. Each employee's individual YTD numbers should match. Discrepancies are usually formatting issues that the migration team can resolve, but you have to find them first.
Step 5: Run a parallel test pay period before going live. Set the new provider to calculate the next pay run without actually paying anyone. Compare to what ADP would calculate. Numbers should match. Differences are usually tax-table version issues or benefit deduction misconfigurations. Resolve before going live.
How year-end W-2s work when you switched providers mid-year
If you ran the entire calendar year on one provider, that provider issues the W-2. Easy.
If you switched providers mid-year, the new provider issues a single W-2 that includes the full year's wages, including the portion paid through ADP. This requires the YTD data import in Step 4 above to be accurate. The new provider treats the ADP YTD numbers as if they had paid them themselves.
For this to work, the new provider needs the complete year-to-date data at the switch date. If you forget a payroll run or misreport a deduction, the year-end W-2 will be wrong, and correcting a W-2 after it has been filed with the SSA requires Form W-2c and a paper filing process that takes weeks. Validate the YTD data carefully.
The alternative is that ADP issues a partial-year W-2 for the wages they paid, and the new provider issues a partial-year W-2 for the rest. The employee then has two W-2s for the year. This is allowed but is harder for employees to file taxes with and produces support calls. The single-W-2 approach is preferred.
What to do about health insurance and 401(k) during a payroll switch
Health insurance and 401(k) are typically separate from the payroll provider. If your health insurance is direct with the carrier (not brokered through ADP), the switch is transparent to the carrier. The new payroll provider just needs to know the deduction amount and the carrier account info for payroll-deducted contributions.
If your health insurance is brokered through ADP and ADP is the broker of record, switching payroll providers does not change the broker relationship. You can keep ADP as broker and use a different payroll provider. Or you can move broker too, usually with one to three months of administrative friction.
401(k) is similar. If your 401(k) is at a third-party recordkeeper (Guideline, Vestwell, Empower, Fidelity), the switch is transparent to the recordkeeper. The new payroll provider configures the 401(k) deduction and the wire instructions for the employer contribution.
If your 401(k) is bundled with ADP (using ADP as recordkeeper), you have a more substantial migration to handle. Most small businesses leaving ADP simultaneously move 401(k) to Guideline or a similar low-cost recordkeeper. This is a separate project and adds 2 to 4 weeks to the overall switch timeline.
What to do when ADP's retention team calls to win you back
ADP routinely offers retention discounts when customers signal they are leaving. Discounts of 20 to 40 percent off the current monthly fee are common. Sometimes ADP offers to waive the year-end W-2 fees for a year. Sometimes they offer to lock the current rate for two years with no annual increase.
Whether to accept depends on the absolute price after the discount. ADP at $119 per month discounted to $85 per month is competitive with OnPay at $100. ADP at $119 discounted to $75 is cheaper than OnPay.
The downside of accepting the retention offer is that the discount is typically temporary (often 6 to 12 months) and the price resets to higher than the original rate when the discount expires. Read the agreement carefully.
For most cheap-payroll-focused customers, completing the switch to OnPay or Patriot Full Service is the cleaner outcome because the price is permanently lower and there is no annual retention dance.
Other switching and cheap-vendor pages
Switching from Paychex to cheaper
The undisclosed-pricing exit
Switching from QuickBooks Desktop Payroll
Discontinued 2024
Cheapest ADP plan
Why ADP is rarely the cheapest
Cheapest OnPay plan
Flat $40 + $6, multi-state included
Cheapest Patriot plan
$17 + $4 self-tax or Full Service
Switching (existing)
General switching mechanics
Common questions
When is the best time to switch from ADP?
Start of calendar year (January 1) is cleanest because there is no year-to-date wage data to transfer. Start of quarter (April, July, October) is second-best because the new provider only needs YTD data for the current quarter, which is easier to validate. Mid-quarter switches are possible but require careful YTD wage and tax data export from ADP and import into the new provider to avoid double-counting on year-end W-2s.
What does it cost to switch from ADP?
ADP does not charge a termination fee on month-to-month accounts. Annual contracts may have a cancellation fee in the small print, typically $50 to $200. New provider setup is free at Gusto, OnPay, and Patriot. Time cost is the bigger investment: 4 to 8 hours of data export, entry, and validation, plus 1 to 2 hours of employee re-onboarding to the new self-service portal.
How much can I save switching from ADP Run to OnPay?
For a typical 10-employee small business, ADP Run is around $119 per month, OnPay is $100 per month. Annual saving is $228. For 25 employees, ADP Run is around $179, OnPay is $190, so OnPay is slightly more expensive at that headcount, which is the breakeven. The savings are biggest at under-20-employee businesses.
Will my employees lose their W-2 history?
No. ADP retains your W-2 historical records on your account after you stop running payroll, and employees can access them through the ADP MyADP portal. You should export and save copies of all historical W-2s before terminating the account in case ADP changes its retention policy.
What data do I need to export from ADP?
Year-to-date employee wage data (gross wages, federal income tax withheld, FICA withheld, state income tax withheld, state unemployment, all per employee), year-to-date employer tax liability per agency, employee personal information (name, address, SSN, W-4 elections, direct deposit info), prior-year W-2s for record-keeping, all current employee benefit deductions (health insurance, 401(k), etc), and pay rate history.
Can the new provider help with the migration?
Yes. OnPay, Gusto, and QuickBooks Payroll all offer free guided migration for ADP customers. They will request the data export, configure your account, validate the YTD wage data, and run a parallel pay period in test mode before going live. The migration is the new provider's most common acquisition channel; the support is genuinely good.