The Free HRMS Tools Nobody Tells Small Businesses About

Zoho says its Free edition of Zoho People is "forever free for up to 53 users", and OrangeHRM calls its Starter edition free and open source. Those are the two most useful starting points for a small business as of 12 October 2026. The catch in every free plan is a cap on users, apps, locations or features, so the real question is which cap you can live with.

Which free HRMS plans exist for small businesses?

Six options publish a free route on their own sites as of 12 October 2026. They are Zoho People Free, OrangeHRM Starter, Frappe HR, Horilla, Odoo's One App Free plan and Homebase Basic. All limits below are the vendors' own statements.

If you also need to compare paid payroll options, see Gusto vs ADP vs Paychex: What Each Payroll Tool Publishes on Cost for US Small Businesses.

What does Zoho People's free plan include?

Zoho People Free covers employee database management, time-off management, vacation planning and document management, according to Zoho's pricing page. The comparison table lists one administrator on the Free edition and unlimited on paid tiers.

Zoho also says that after a 30-day trial of a paid plan, "your account will be moved to the Free plan." That makes the trial a low-risk way to see paid features first. Paid tiers add things like attendance, performance and compensation modules, and Zoho's page requires a quote above 500 users. Confirm the user cap at sign-up, because plan limits change.

What does OrangeHRM Starter give you?

OrangeHRM Starter covers the core of a small HR office. OrangeHRM lists a mobile app, HR administration tools, employee management, PTO and leave management, reporting and analytics, 180-degree performance reviews, recruitment (ATS) and time tracking.

You can run it on OrangeHRM's cloud or download it and host it yourself. The pricing page says organisations of 20 to 50 employees "LOVE our open-source offering." That is a suggestion, not a cap. Onboarding, asset tracking, an API and other features appear only in the Advanced feature lists, and Advanced is priced per employee per month on a custom quote. No payroll module is listed for Starter.

Are Frappe HR and Horilla actually free?

The licences are free, but hosting is not. Frappe says Frappe HR is "free and open-source, but needs to be hosted on cloud," under the AGPL-3.0 licence. Its managed Frappe Cloud is billed on usage, "not per user," with a Sites tier from $5 a month. Self-hosting starts at around $40 a month for a VPS, plus email, security and backup costs, per the same page.

On features, the Frappe HR docs describe over 13 modules, including employee lifecycle, leave and attendance, expense claims, performance management, and payroll and taxation. Horilla is a Django-based project under the LGPL-2.1 licence. Its README lists employee management, recruitment, onboarding, attendance, leave, payroll, performance, assets and helpdesk, with paid professional support available from the maintainers.

Both suit a business that has someone technical on hand. Without that person, updates and backups become your problem.

Is Odoo's free plan enough for HR?

Only if HR is the only thing you need Odoo for. Odoo's pricing page lists a One App Free plan with "one app, unlimited users" on Odoo Online. The HR apps it lists are Employees, Payroll, Recruitment, Time Off and Appraisals, so you would pick one of them.

That means free employee records, or free recruitment, but not both. The paid Standard plan includes all apps. Check Standard pricing on Odoo's page for your own region.

Does Homebase work as a free HRMS?

Homebase is closer to a time clock and scheduler than a full HRMS, but it is free for the smallest teams. Basic costs $0 per location per month for one location and up to 10 employees, with basic scheduling, basic time tracking and 90 days of timesheet storage.

It suits hourly teams. Above 10 employees or a second location, Homebase asks you to pick a paid plan. Essentials is $30 per location per month with unlimited employees, as of 12 October 2026. Payroll is an add-on at a $49 monthly base fee plus $6 per employee paid.

What do paid tools cost if you skip the free ones?

For a sense of the alternative, two paid HRMS vendors publish prices. BambooHR lists a flat rate of $250 a month for Core at 25 or fewer employees, and $10.25 per employee per month above 25 in its FAQ (the plan cards show $10), as of 12 October 2026. Deel HR says Core starts at $5 per employee per month.

For a 10-person company, BambooHR's flat rate works out to $25 per employee per month. A free tool saves real money at that size, but only if you will use what it offers.

What records does a US employer still have to keep?

A free tool does not change your legal duties. The US Department of Labor says employers must keep payroll records for at least three years, and wage computation records such as time cards for two years. The fact sheet, revised July 2008, says "any timekeeping plan is acceptable as long as it is complete and accurate."

So check that your free tool can store and export these records. A tool that deletes timesheets after 90 days, as Homebase Basic does for storage, needs a separate archive.

What's still unclear?

Three things limit how far this comparison goes. First, free plans change. Every cap above is the vendor's current statement and not a promise. Second, only Odoo's Online free plan is covered here, not its self-hosted editions. Third, none of these tools has been tested for this article, and we make no claims about ease of use or support quality.

The weakest point of the "free" argument is hidden cost. Open-source software shifts spending to hosting and admin time. Free cloud plans shift it to the day you outgrow them, when you must migrate data. Read the export options before entering your first employee.