If you’re a small business with one to 100 employees, both Gusto and Paychex are capable of processing your payroll and providing some HR support. Gusto, however, is better suited for price-conscious companies that don’t have large growth plans, while Paychex is designed to support businesses that scale or those that already have more than 100 employees.
- Gusto: Best for mom-and-pop businesses that need help running payroll and onboarding employees more efficiently
- Paychex: Best for small growing businesses with less than 300 employees that need strong HR support, from onboarding to management and training
An In-Depth Look at Gusto vs Paychex Features
*Cost for 10 employees
$1,188 per year
$3,364 per year
Manual check (in-house), direct deposit, pay card
Paper checks signed and delivered, payroll card, direct deposit
Only in 27 states
In all 50 states
Other Employee Benefits
Health insurance, flexible spending accounts, retirement, commuter, tuition savings
Health insurance, retirement, financial wellness
Payroll on Autopilot
Onboarding, new hire support, advising
Background checks, compliance, onboarding, analytics, handbooks, advising
Phone support five days/week; reliable
24/7 phone support; dedicated rep
Time and attendance, benefits, advising, PTO tool, software integration
For In-Depth Reviews From Real Users
4.8 out of 5 stars
4.3 out of 5 stars
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Gusto: Best for Unlimited Payroll Runs
Gusto has unlimited payroll runs, which means you can run payroll as many times as you want without being charged extra. With Paychex, you’ll pay more if you run payroll more often (weekly is more expensive than biweekly). If you find yourself needing to run off-cycle payroll payments often, for instance if you give random bonuses or allow employees to get paid as their sales come in, Gusto will save you money.
When Paychex’s Limited Payroll Runs Are Enough
- Your business is on a structured payroll cycle and rarely departs from it.
- All of your employees are paid a salary rate versus hourly.
Gusto: Best for Affordable Pricing
Gusto can be less than half the cost of Paychex. There are no setup fees (Paychex charges $250) and no charge for year-end tax forms. Pricing is transparent; what you see on the website is what you get, so you don’t have to call a rep to estimate your potential costs.
When Paychex’s Pricing Is Right
- The value of having access to more HR tools is worth the extra money.
- You’re willing to negotiate and work with the rep to customize a plan to your budget.
Paychex: Best for Health Insurance
Paychex wins at health insurance, because it offers insurance benefits in all 50 states. Gusto, on the other hand, only offers health insurance in 27 states. Paychex also offers individual health insurance in addition to group insurance, so you have options if you need it.
When Gusto’s Health Insurance Benefits Are Enough
If you live in one of the 27 states that Gusto offers small business group health insurance, it could be a good option:
Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington DC, Washington, and Wisconsin
Paychex: Best for HR Support
Paychex offers most of the HR support that Gusto does in addition to a ton of others that Gusto doesn’t:
- Background Checks
- Employee Assistance Programs (EAP)
- Learning and Management System to help with training
- Talent Acquisition
- Recruiting and Applicant Tracking
When Gusto’s HR Support is Enough
Gusto has quality human resource support for small businesses with basic HR needs and is a great value for those that have been operating without any HR tools. If the following HR features are sufficient for your business, Gusto may be a solid choice:
- New hire reporting to the state
- Paid-time-off policies
- Offer letter preparation for new hires
- HR advising on complex issues
- Document storage
Flexible spending accounts, health savings accounts, and tuition savings programs are also available.
Gusto and Paychex: Tie for Basic Payroll Features
Both Gusto and Paychex:
- Process payroll and manage your payroll taxes
- Pay employees using direct deposit at no additional cost
- Offer onboarding and compliance support
- Have features that manage year-end tax reporting (W2s and 1099s)
- Give you access to provide employee benefits
- Have HR experts on staff you can speak with if you pay extra
- Receive notable compliments on their quality customer service
Gusto and Paychex Reviews
- Gusto: Users gave Gusto 4.8 out of 5 stars. They like how easy it makes payroll; the automated payroll feature is useful. Some complained that it doesn’t scale well, and sometimes customer service is lacking.
To explore Gusto’s features in more detail, visit our Gusto review.
- Paychex: Our user-reviewers give Paychex 4.3 out of 5 stars. Several users like the hands-off approach it allows them to take to payroll, but some complained that the software has a steep learning curve.
When to Use Gusto as a Payroll Processing Company
You should use Gusto as a payroll processing company if your business has less than 100 employees, because it provides a mix of payroll and HR services all under one umbrella—without nickel-and-diming you.
You can get unlimited monthly payroll runs, onboarding support, tax filing, and even year-end tax reports starting at $5 monthly for one employee.
When to Use Paychex as a Payroll Processing Company
Consider using Paychex if you have a small business you expect to grow in the near future. It’s best for businesses with less than 300 employees but can support up to 1,000 if your needs aren’t complex. You can offer benefits in any state, get access to a dedicated customer service rep, and customize your plan with features like talent acquisition and performance management when you need them and can pay the extra cost.
If you’re looking for a payroll provider that provides a unique customer service experience, you can’t go wrong with Gusto or Paychex. To really decide which is a better fit for you, we recommend you choose the payroll solution that best supports the size of your company and features you need (not just want).
Choose Paychex if your company is or will grow larger than 100 employees; if you ramp up your hiring, you may need recruiting services, which Gusto doesn’t offer. If you’re focused on getting your business off the ground with just a handful of employees, go with Gusto; it’s much cheaper and works well for small businesses that mainly need help with payroll but will gladly accept any HR services that are included.