Gusto Review: Is It Right for Your Business?
Charlette has over 10 years of experience in accounting and finance and 2 years of partnering with HR leaders on freelance projects. She uses this extensive experience to answer your questions about payroll.
Robie has more than five years of content writing experience and specializes in writing about payroll and human resources software for small businesses.
This article is part of a larger series on Payroll Services.
Gusto is a full-service payroll software that many new and small business owners use to pay their employees. Apart from providing automatic and unlimited pay runs, Gusto handles all of your payroll tax payments and filings, including year-end reporting. It’s ideal for small businesses because of its affordability and user-friendly interface. Plus, it is easy to set up—allowing you to start using it in minutes.
Before you dive into the specifics, check out the video version of our Gusto review.
What We Recommend Gusto For
Aside from offering reasonably priced monthly plans, Gusto provides an intuitive payroll platform for both employers and employees. Its features are easy to learn, and you can run payroll in a few steps. Tax penalties are covered if Gusto ever makes a mistake, and year-end W-2 and 1099 preparation are included in all plans at no extra cost. Its direct deposit option is also a favorite for many users—they can switch between it and manual checks at any time, and there’s HR support.
In short, Gusto is best for:
- Mom-and-pop businesses looking for an affordable payroll solution: Gusto’s affordability is one of the reasons why it is our leading payroll software for small businesses. Its starter Core plan (priced at $39 plus $6 per employee, per month) comes with all the essential tools you need to process employee pay, and you can run payroll, off-cycle payments, and bonus payouts as many times as you want.
- Businesses with 50 and more full-time equivalent employees: Once companies reach 50 full-time employees, they’re no longer considered a mom-and-pop business. Gusto, which also topped our list of best HR payroll software, can help small employers streamline and automate payroll and basic HR processes. It enables you to provide employees access to onboard themselves via a self-service portal (all new hire documents are available), offer benefits (like health insurance, which is required at 50 full-time employees), and even electronically track employee work hours.
- Companies that use contract help: Gusto ranked No. 1 in our best contractor payroll software buyer’s guide, primarily because of its contractor-only plan and year-end reporting. It waives the $39 monthly base fee it charges if you’re only paying contractors and costs $6 per month for each contractor. And if you skip a month paying them, you don’t pay for the service at all. It also preps and files 1099 year-end reports (essential for contractors).
- Self-employed business owners: Gusto is our top-recommended self-employed payroll provider for business owners or sole proprietors who only need to pay themselves. Running payroll for one employee costs $45 monthly (Core plan, computed as $39 plus $6 per staff monthly) and includes full-service payroll, automatic tax filings and payments, and two-day direct deposits.
When Gusto Would Not Be a Good Fit
- Large enterprises or startups planning to scale quickly: Businesses planning to quickly scale to 1,000+ employees may not find all the support they need under Gusto. HR needs tend to increase as companies grow, so a provider like ADP or Paychex, with plans that include payroll plus robust HR features (such as training, talent management, and recruiting support), would be more suitable.
- International payroll operations: Gusto doesn’t support international employees or those living in US territories. So, if half of your staff is overseas and the other half is scattered throughout the US, you will run into issues. A top international payroll provider would work best for those types of scenarios.
Looking for something different? Read our guide to the best online payroll services for small businesses to find a payroll service or software that’s right for you.
Gusto Overview
| PROS | CONS |
|---|---|
| Affordable plans with unlimited pay runs | Time tracking is available only in higher tiers |
| Full-service payroll with automated payroll tax filings and payments | Health insurance coverage isn’t in all 50 states |
| Year-end tax reporting included in all plans | Doesn’t pay international employees |
| Offers employee benefits and onboarding tools | No dedicated payroll specialist |
Gusto Pricing
Features | Core | Complete | Concierge |
|---|---|---|---|
Monthly Base Pricing | $39 | $39 | $149 |
Per Employee Monthly Fees | $6 | $12 | $12 |
Full-Service Payroll | |||
Direct Deposit Timelines | 2 and 4 days | Next-day; 2 and 4 days | Next-day; 2 and 4 days |
Automated Tax Filings and Payments | |||
Year-End Tax Reporting | |||
Workers’ Compensation | |||
Health Benefits Administration | |||
Onboarding Tools | |||
Employee Self-Service | |||
Time Tracking | N/A | ||
Employee Directory and Surveys | N/A | ||
Paid Time-Off (PTO) Tracking | Tracks accruals and balances only | Tracks accruals and balances; online PTO requests | Tracks accruals and balances; online PTO requests |
Customer Support | Expert | Expert | Dedicated; with direct line for phone support |
Access to Certified HR Pros | N/A | N/A |
If you employ contractors, Gusto has a contractor plan that costs $6 per person. It comes with unlimited pay runs, Form 1099 creation and filings, and a self-service portal. What’s great about this option is that Gusto won’t charge you monthly fees in case you don’t have any contractors to pay for the month.
Gusto Features
Gusto is an easy-to-use software that small businesses can use to start processing payroll quickly. Its customer representatives will walk new users through the setup process for free, but the way the dashboard is laid out makes it easy to follow. You can also check our guide on setting up and running payroll with Gusto. It even contains a video walk-through, in case you’re more of a visual person.
Payroll Processing
With Gusto, you can run unlimited payrolls each month and pay employees either with a paper check, through a pay card, or via direct deposit. You can even set employees up on different pay schedules—some weekly and others on a semi-monthly period. If you need to add a bonus, commission, or reimbursement pay-out to an employee’s weekly or monthly salary, Gusto’s payroll module has editable fields where you can type in the amount for payment.
You also have to manually input your hourly staff’s total hours worked—both regular and overtime hours—directly into the system. While this is manageable for those who only have a handful of employees, this isn’t advisable for small businesses with more than 10 staff. However, there are ways to avoid manual entry of time data into Gusto:
- Sign up for one of Gusto’s premium plans, which comes with time tracking tools.
- Use one of Gusto’s partner time tracking software (like Homebase and When I Work) that integrates seamlessly with its payroll solution.
With Gusto, you can also add short personal notes to indicate the type of reimbursement or additional earning processed.
Payroll Tax Management
Gusto calculates, files, and pays all taxes (federal, state, and local), which is notable because some services require you to know which local payroll taxes you’re responsible for paying. It also promises to pay any penalties that are a result of its mistakes. And to top it off, year-end tax forms come with each plan at no extra cost. This is unlike some of the payroll providers that charge you an additional per-employee fee to prepare and distribute W-2s and 1099s.
If an employee has an IRS levy or child support garnishment, Gusto can withhold the applicable amount from the employee’s payroll. It even sends the funds to all states, except South Carolina, at no additional charge.
Employee Benefits
Employee benefits is an area where Gusto shines. Small businesses that otherwise wouldn’t be able to offer perks to their employees can easily sign up for one of the many benefits Gusto offers.
- Medical insurance
- Dental insurance
- Vision insurance
- Retirement savings plans, like 401(k)
- Commuter benefits
- 529 college savings
- Health and flexible savings accounts
- Financial management app called Gusto Wallet
- Early paycheck access through Gusto Cashout
Employers and employees can manage benefits online through Gusto’s one-stop-shop online portal.
However, some benefits (like health insurance and Gusto Cashout) are limited to certain states. To help you confirm whether the state where your business is located is covered, check out the health benefits map below.
Time Tracking
Gusto has its own time and attendance solution that hourly employees can use to enter hours worked. Employees can also download Gusto Wallet, its free financial management app, as it has clock-in/out capabilities. However, as of this writing, your contractors won’t be able to use Gusto Wallet to track their time. Note that this feature isn’t included in Gusto’s Core plan. You have to subscribe to either its Complete or Concierge package to gain access to it.
The platform can also help track your PTO policies, making it easier for you to manage leave accruals and balances. If you want your employees and people managers to raise and approve PTO requests online, you have to sign up for either its Complete and Concierge plans.
With Gusto, all approved employee hours automatically sync to its payroll tool for processing.
Hiring Tools
Gusto’s hiring support helps set it apart from basic providers. Small businesses looking to manage payroll and taxes appreciate the paperless onboarding process they can use to bring on new hires. Once you set up the new employees in the software, Gusto will send an email prompting them to start their online accounts where they can fill out all new hire forms (including Forms I-9 and W-4). It even submits new hire reports to the state—all at no extra cost.
With the Complete and Concierge plans, Gusto provides offer letter templates that you can customize and send to new hires. If you need other HR documents, its online resource center has custom handbooks, policies, compliance updates, and training programs.
Third-Party Software Integrations
Gusto integrates with a wide range of third-party software—from accounting solutions to point of sale (POS) systems and collaboration tools. Here are some of its partner software:
- Accounting: FreshBooks, QuickBooks, Xero, and ZipBooks
- Collaboration tools: Asana, Box, Monday.com, Google Workspace, and Dropbox
- Expense management: Expensify and Dext Prepare
- Hiring: ApplicantPro, BreezyHR, Greenhouse, JazzHR, Lever, and Teamtailor
- Learning management: EasyLlama, Ethena, and Traliant
- POS: Shopify, Clover, Upserve, and SpotOn
- Time tracking: 7shifts, ClockShark, Homebase, When I Work, Deputy, Sling, Ximble, and QuickBooks Time (formerly TSheets)
Gusto Ease of Use
- Intuitive dashboard
- Guided onboarding and setup
- Live phone support
- In-app chat
- Online help center
- How-to guides
Gusto’s service is very easy to use. You can be completely set up in less than 24 hours if you have all of your business and employee information on hand, plus you can link your bank electronically. Once you sign up for the service, a rep will reach out to you to see if you need additional assistance or have questions—for instance, regarding importing prior period payroll information so that your annual records are complete.
The dashboard is user-friendly, with a menu placement on the left-hand side of the display that’s easy to follow. And, since Gusto provides the services that a small business would need versus trying to serve all employers, the interface is not overwhelming, and there’s no steep learning curve. When problems do arise, it has live phone support and an online help center with answers to frequently asked questions.
Top Gusto Alternatives
Best for: QuickBooks accounting small business users | Best for: Retailers and restaurants | Best for: Small businesses and agricultural companies that need to file Form 943 |
Base monthly fee from: $45–$125 | Base monthly fee from: $35 | Base monthly fee from: $36 |
Per employee monthly fee from: $4–$10 | Per employee monthly fee from: $5 | Per employee monthly fee from: $4 |
If you’re unsure this tool is right for you, see how it compares with Gusto competitors.
What Users Think About Gusto
Users left primarily positive Gusto payroll reviews on the web—and most were from small businesses. Many reviewers said that it has an intuitive and user-friendly interface that makes employee pay processing easy for them. However, several users are unhappy with Gusto’s customer support, adding that the wait times can be long and that its reps aren’t always responsive.
At the time of publication, Gusto earned the following scores on popular user review sites:
- Capterra: 4.7 out of 5 based on 3,050 reviews
- G2: 4.3 out of 5 based on around 510 reviews
I noticed some of these trends when reading through its user reviews.
Users Like | Users Don’t Like |
|---|---|
Robust features for the price | Customer support isn’t very unresponsive; service wait times can be long |
Software is easy to use | Pricey for very small businesses |
Automatic pay runs | Some features like benefits coverage and report customization need to be improved |
Bottom Line
Gusto is a popular payroll software that’s accessible to the smallest of employers. It is a full-service provider and manages payroll taxes under all of its plans. Plus, the multiple payment options, online onboarding tools, and variety of benefits it offers give you some flexibility, helping you provide attractive perks to potential new employees. This makes your company much more desirable to work for.
While Gusto has several benefits that you can offer to your employees, the coverage of its health insurance is limited to 39 states. However, the provider has continued to actively expand its benefits coverage, meaning if it’s not in your location yet, it will likely be available soon. Sign up with Gusto today.
