Gusto Payroll Review 2021

The bottom line: Gusto’s affordable starting price and free multi-state payroll runs are two of many reasons Gusto consistently tops best payroll software lists for small businesses, including ours. Plus, its fully automated, fully featured payroll software has far fewer hidden fees and far more employee benefit options than many of its competitors.

But of Gusto’s three plans, only its cheapest plan is truly affordable for the smallest of small businesses. And since Gusto’s HR features are pretty minimal, Paychex and ADP are better matches than Gusto for growing businesses that want thorough HR management.

On the other hand, if you want to run payroll in multiple states, offer unique employee benefits, and spend as little time as possible on payroll, Gusto is hard to beat.

Gusto, previously known as ZenPayroll, has only been around since 2011, but its easy-to-use online payroll software is easily one of the best. Why? Because its user-friendly interface, thorough automation, and full payroll tax administration ensure you have more time for your business while worrying less about potential payroll (and payroll tax) mistakes.

All three of Gusto’s plans have thorough payroll features:

• Automatic state, local, and federal payroll tax filing
• Automatic W-2 and 1099 form filing
• Automatic new hire reporting
• Automatic payroll runs
• Automatic wage garnishment (not available in South Carolina)
• Support for multiple pay schedules
• Employee self-service portal
• Easy integration with accounting software like FreshBooks and Xero
• Easy integration with time-tracking software like TSheets and Homebase

Notably, Gusto automates every payroll task, which makes it a lifesaver for busy small-business owners who literally can’t afford to waste time manually running payroll every single pay period.

Sure, it takes work to get Gusto up and running—you’ll spend some time entering employee information, setting up direct deposit, and determining pay schedules. After that, though, you can set payroll to run automatically. If you have Gusto-integrated bookkeeping software, your automatic payroll runs should also automatically update your accounting info. You’ll save on bookkeeping time without sacrificing accounting accuracy.

And unlike some competitors (namely Paychex and ADP), Gusto automatically submits your quarterly payroll taxes and end-of-year tax paperwork without charging an extra fee. So while Gusto has a higher per-employee charge than, say, Paychex, its overall cost is honestly just more up front. (In other words, don’t let that above-average monthly charge of $6 per employee deter you right off the bat, though we’ll definitely dive into Gusto’s priciness later on.)

Gusto’s HR features aren’t as thorough as those you’ll get with ADP, Paychex, and even QuickBooks Payroll. But while Gusto doesn’t have thorough HR administration, it’s perfect for small businesses that need just the basics at an affordable cost. With Gusto Core (Gusto’s cheapest plan), you’ll find these HR perks:

• PTO (paid time off) policy creation
• Health benefits administration
• Expansive employee benefits options, including life insurance and commuter benefits

With Gusto’s two pricier plans, Gusto Complete and Concierge, you get these additional HR features:

• Employee onboarding
• Built-in time tracking
• Employee directory
• Thorough HR compliance assistance
• Compliance updates
• Employee handbooks
• Dedicated Gusto support team

If we’re being honest, these HR features aren’t quite enough to warrant the two pricier plans’ higher cost. 

Their monthly charge of $12 per payee makes them cost-prohibitive for a lot of small businesses, including those with just a handful of employees. (For instance, if you have 10 employees, Gusto Complete costs $159 a month—compared to Gusto Core, which costs $99 a month for the same number of employees. With the Concierge plan, that monthly number jumps to $269 a month.)

Most customers are more than satisfied with Gusto’s plans, prices, and customer service: 86% of verified Gusto users on the review site TrustRadius an “excellent” score, TrustRadius’s highest.¹ Unfortunately, since the start of the COVID-19 crisis, Gusto’s customer service has gone way down in terms of quality. Most importantly, multiple business owners report tax errors caused by Gusto that the company still hasn’t resolved—in part because no one can reach a representative.

And while Gusto has a low starting base cost, its above-average per-employee fee makes it less affordable the more employees you have. Gusto can be fairly affordable for businesses with five to ten employees—but if you have more employees than that, you’ll get more HR features at a lower starting cost with a competitor like QuickBooks Payroll, OnPay, or Paychex. (Bear in mind, though, that Gusto’s payroll features are its main selling point. If you want excellent payroll assistance and don’t care as much about total HR administration, Gusto is still a good fit—its comprehensive features warrant the price.)

Many—though not all—payroll software solutions let you make unlimited payroll runs, which means you can process payroll as frequently as you need to instead of being limited to just one or two runs a month. But Gusto also lets you run unlimited off-cycle or bonus payrolls. Basically, that means if an employee earns a bonus and you want to pay it out before the next pay period, you can, with no financial penalties.

Just about every payroll provider includes some HR perks and employee benefits, but Gusto offers more employee benefit options at a lower price than most competitors. Along with workers compensation insurance and healthcare administration, employers who use Gusto can add the following benefits:

• 401(k) plans
• Life insurance
• HSAs and FSAs
• Commuter benefits
• Gusto Cash Account access (a saving and budgeting platform)
• Flexible healthcare options, including Qualified Small Employer Health Reimbursement Arrangements (QSEHRA) for small-business owners who don’t offer group healthcare
• 529 college savings

Gusto also works with in-house insurance brokers, so you don’t pay extra for medical, vision, and dental plans: you only pay the monthly premium. (In contrast, both ADP and Paychex charge an additional monthly fee on top of the typical insurance premium.)

If you’re running payroll in multiple states, Gusto is one of the most affordable picks. Top competitors like QuickBooks, ADP, and Paychex all charge extra for multi-state payroll. Gusto doesn’t. (For the record, neither does OnPay, and SurePayroll charges a monthly flat fee of just $10 to run payroll in more than one state.)

Own a restaurant, cafe, or coffee shop? Gusto adjusts your employees’ wages to account for tips so your business meets the FLSA tip credit minimum wage requirement. Gusto will also send you an end-of-year report if you qualify for the FICA tip credit, a restaurant-specific tax incentive.

Gusto’s affordability and simplicity make it an excellent choice for small businesses—especially its cost-effective Core plan, which has enough features to turn payroll from a gale to a breeze. If you have fewer than 100 employees, love a low-grade learning curve, and are more than ready to put tax form filing on someone else’s shoulders, a one-month free trial from Gusto could be your next step in running payroll stress-free.

Not sure if Gusto's payroll service is the right fit for you? Explore other payroll processing options on our list of the year’s best payroll companies.

Gusto payroll starts with a $39-a-month base fee, plus an additional $6 per employee paid per month. If you're paying contractors only, you can skip the monthly base fee—Gusto's contractor plan costs $6 per contractor paid per month.

QuickBooks Payroll and Gusto are two of the top payroll software providers for small businesses. Both brands have plenty to recommend them: they both automate payroll, include unlimited payroll runs, and automatically file your payroll taxes and end-of-year tax paperwork at no additional cost. Gusto and QuickBooks Payroll also offer multiple plans with additional HR features for bigger businesses—if you own a midsize business planning on growth, either pick is more scalable than a one-plan provider like OnPay or Patriot Payroll.

Price-wise, QuickBooks Payroll’s basic plan has a higher starting price but a lower per-payee fee. It’s more affordable than Gusto for employers with more than two or three workers. On the other hand, Gusto includes free multi-state payroll. And thanks to its in-house insurance brokers, Gusto charges you an insurance premium only, not an additional fee on top of the premium like QuickBooks.

To learn more about how Gusto compares to QuickBooks, check out our Gusto vs. QuickBooks Payroll piece. We give you a thorough breakdown of each brand’s pros and cons.

No. You can switch to or from a payroll provider like Gusto any time. You can usually switch health benefit providers without coverage gaps too, though you’ll want to check with Gusto if you plan to switch from your current health care provider to a Gusto-brokered health plan.

Gusto was created primarily for small-business owners, but it also offers special plans for accountants who manage small businesses’ finances. Accountants can choose from four Gusto plans that vary based on how many clients they have. Every Gusto accounting plan comes with a month-long free trial and a dedicated advisor.

If you aren’t an accountant but are looking for one, Gusto offers a list of accountants and bookkeepers who partner with Gusto and offer their services to small businesses specifically.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.