ADP vs Paychex for Contractor Management in 2025

ADP and Paychex are two of the largest payroll providers in the United States. Both offer contractor payment features alongside their core employee payroll services. But which one is better if you're working exclusively with independent contractors?

This comparison breaks down pricing, features, and the fundamental question: do you need a payroll platform at all for contractor management? We'll look at both platforms objectively, then show you a different approach built specifically for contractors.

Quick Comparison

ADP Overview

ADP (Automatic Data Processing) is one of the world's largest payroll and HR providers, serving over 1 million clients globally. Founded in 1949, ADP offers comprehensive payroll, tax filing, benefits administration, and HR management services.

Contractor pricing: ADP uses custom pricing based on company size, number of payees, and features needed. For contractor-only management, you'd typically pay $500+ per month for 10 contractors, though exact pricing varies. ADP's pricing includes payroll processing, tax filing, and compliance features.

Payment processing: ADP processes contractor payments through their payroll system. You fund your ADP account, they handle the transfers, and contractors receive payments via direct deposit or check. ADP handles 1099 generation and tax reporting.

Features: ADP offers contractor onboarding, payment scheduling, 1099 generation, tax reporting, time tracking integration, and accounting software integration. Their platform is enterprise-grade with extensive features and support.

Strengths: Established brand with decades of experience, comprehensive payroll and tax compliance, strong support and service, good for large companies with complex needs, extensive integrations.

Weaknesses: Expensive for contractor-only use, built for employee payroll (contractors are an add-on), complex setup and onboarding, overkill if you only work with contractors, custom pricing lacks transparency.

Paychex Overview

Paychex is a major payroll and HR services provider serving over 730,000 businesses, primarily small and medium-sized companies. Founded in 1971, Paychex offers payroll processing, tax filing, benefits administration, and HR support.

Contractor pricing: Paychex uses custom pricing based on company size and needs. For contractor-only management, you'd typically pay $400+ per month for 10 contractors, though exact pricing varies. Paychex's pricing includes payroll processing, tax filing, and basic HR features.

Payment processing: Paychex processes contractor payments through their payroll system. You fund your Paychex account, they handle the transfers, and contractors receive payments via direct deposit or check. Paychex handles 1099 generation and tax reporting.

Features: Paychex offers contractor onboarding, payment scheduling, 1099 generation, tax reporting, time tracking, and accounting integration. Their platform is designed for small and medium businesses with straightforward needs.

Strengths: Strong reputation in SMB market, good customer service, comprehensive payroll and tax compliance, easier setup than ADP, good for companies with employees and contractors.

Weaknesses: Expensive for contractor-only use, built for employee payroll (contractors are secondary), custom pricing lacks transparency, overkill if you only work with contractors.

The Problem Both Platforms Share

Both ADP and Paychex are built for employee payroll services—processing payroll, tax withholding, benefits administration, and compliance. This makes sense if you need:

• Payroll processing with tax withholding and filing
• Benefits administration (health insurance, retirement, etc.)
• W-2 generation and year-end tax reporting
• HR compliance and labor law support

But if you're working with independent contractors who handle their own taxes and already have bank accounts or Wise/PayPal? You're paying for payroll infrastructure you don't need.

Contractors aren't employees. They don't need payroll processing, tax withholding, or benefits administration. They need clear contracts, milestone tracking, timely payments, and documentation. Paying $400-500+ per month for payroll features you don't use is expensive overhead.

Additionally, both platforms process payments through their payroll systems. This means you're funding their accounts, they're moving money to contractors, and you're locked into their payment timing and methods. You lose direct control over when and how you pay.

A Different Approach: Kontrable

We built Kontrable specifically for businesses working with contractors (not employees). The core difference: we don't process payroll. You pay contractors directly via your existing Wise, PayPal, Payoneer, or bank accounts. Kontrable organizes the work, tracks milestones, and documents payments—but the money flows directly from you to your contractors.

Pricing: $99/month flat for up to 25 contractors. No per-contractor fees, no payroll processing fees, no hidden costs. For 10 contractors, that's $99/month vs $400-500+ per month for ADP or Paychex.

Direct payments: Keep using your existing payment methods. You control when and how you pay. Kontrable helps you track which payments are due, attach proof of payment, and get contractor confirmations—but you make the actual transfers.

Contractor-focused features: Contracts and scopes of work, milestone-based project tracking, invoice management and approvals, payment proof and contractor confirmations, clean audit trail for finance, monthly exports for reconciliation.

What we don't do: We don't process payroll (your contractors aren't employees). We don't withhold taxes (contractors handle their own). We don't offer benefits administration (contractors are self-employed). We don't generate W-2s (contractors get 1099s from you directly).

This focused approach means lower costs, more control, and features built specifically for contractor relationships—not adapted from employee payroll systems.

Who Should Choose What

Choose ADP if: You have full-time employees who need payroll processing, tax withholding, and benefits administration. You're a large company with complex payroll needs and want enterprise-grade support. You need comprehensive HR and compliance features.

Choose Paychex if: You're a small or medium business with employees who need payroll services. You want a more affordable alternative to ADP with good customer service. You need payroll, tax filing, and basic HR features in one platform.

Choose Kontrable if: You're working exclusively with independent contractors (not employees). You want to pay contractors directly via Wise/PayPal/Payoneer without a payroll system. You need contractor management (contracts, milestones, payments, documentation) without payroll overhead. You're managing 5-25 contractors and want flat pricing instead of custom payroll fees.

The Bottom Line

ADP and Paychex are excellent platforms for what they're designed to do: process payroll for full-time employees. Both offer contractor payment features, but these are add-ons to full payroll systems. If you're only working with contractors, you're paying for payroll infrastructure you don't need.

If you're hiring employees, use a payroll platform. If you're working with independent contractors, consider whether you need payroll processing at all. Kontrable offers a contractor-specific alternative: direct payments, flat pricing, and features built for contractor relationships—not adapted from employee payroll systems.