This article is part of a larger series on Payroll Services.
Gusto and Zenefits are both cloud-based HR software that manage employee data, run payroll, and provide employer-sponsored benefits. Gusto includes payroll in its base plans, while Zenefits offers it as a paid add-on. However, Zenefits’ additional HR options (like performance and compensation management) are helpful if you want to appeal to top-tier talent plus have the resources to devote toward using the tools to manage employee growth and development. Meanwhile, Gusto is great if you need a solid solution just for running payroll for a small business (<100 employees) and complying with basic payroll regulations.
When to Choose Gusto vs Zenefits
You are a very small business (with fewer than five employees) that wants affordably priced full-service payroll with HR support
You are a growing business with a small HR team looking for HR software to organize your systems, processes, policies, and employee data
You want robust integrations with a wide range of third-party solutions (such as POS, accounting, learning and performance management, and hiring tools)
Your company has employees who work different shifts, i.e., first shift, rotating shift, etc., and you need scheduling software to keep it flowing smoothly
You need multiple payment options that include paychecks, pay cards, and direct deposits
You want online benefits enrollments but with the option to retain your own brokers to manage benefits plans
There are instances that neither Gusto nor Zenefits is the best option. If you’re looking for a more personalized service that can handle your HR and payroll needs (or think you may want to transition to one in the future), consider partnering with Rippling. It will serve as a co-employer, advise you on compliance issues, including what needs to go in your policies, and give you access to competitive benefit rates that neither Gusto nor Zenefits can offer. Rippling is great for businesses with plans to grow in the future that want the option to easily turn their PEO off and still have access to the HR and payroll software they’re familiar with.
Gusto vs Zenefits Overview
$39 to $149
plus $6 to $12 per employee
$10 to $27 per employee
(all plans and add-ons have a minimum five employee requirement)
Contractor Payroll Pricing
$6 per contractor; no base monthly fee
$6 per contractor plus the base monthly fee of your chosen Zenefits plan
Unlimited Pay Runs
Employee Payment Options
Direct deposits, pay cards, and manual checks
Direct deposits and manual checks
Direct Deposit Timelines
Next-day available with premium tiers; Four-day is optional
Upgrade to at least a Gusto Complete plan
Available in all plans
Available in all plans
Health insurance, dental, vision, life and disability, health savings accounts (HSAs), flexible spending accounts (FSAs), commuter benefits, 401(k), college savings plans, and free access to Gusto Wallet (a financial wellness app)
Health insurance, dental, vision, 401(k), HSA, FSA, commuter benefits, life and disability, and supplemental benefits
Health Insurance Coverage
All US states
With the option to use your own benefits broker (paid add-on; costs $5 per employee monthly)
Workers’ Compensation and COBRA Compliance
Access to HR Experts
Available only in highest tier
Paid add-on; costs $10 per employee monthly
Phone, chat, and email support; offers a direct phone number to contact if you upgrade to its highest tier
Email, and chat (via ZenBot) support; also offers phone support but you have to schedule a call through the Zenefits dashboard
If you want more information about which options to look for when choosing a payroll service, check our guide on finding the right payroll service for your business. If you’ve already made your decision and need to end the relationship with your current provider, read our how to switch payroll solutions guide to help you manage the transition better.
Common Features That Gusto and Zenefits Both Have
- Automatic payroll tax calculations, payments, and filings
- Time tracking
- Multiple pay rates and schedules
- Tip reporting
- Garnishments support
- New hire reporting
- Paid-time-off (PTO) requests and approvals
- Document management and electronic signatures
- Onboarding tools and digital offer letters
- Employee surveys
- Employee self-service
Gusto Pros and Cons
|Offers affordably priced full-service payroll with unlimited and automatic pay runs||May not be flexible enough for businesses scaling quickly|
|Has two-, four- and next-day direct deposits (aside from pay cards and manual paycheck options) plus on-demand pay for employees||Next-day direct deposits available only in higher tiers|
|Integrates with more than 100 third-party solutions||Health insurance plans cover only 39 states|
Zenefits Pros and Cons
|Has unlimited pay runs||All plans and add-ons require a minimum of five employees|
|Time tracking and scheduling are included in all plans||Payroll is a paid add-on|
|Has a wide range of HR solutions; includes employee engagement, performance management, and compensation planning tools||Integration options are limited (40+ solutions) compared to Gusto|
Still unsure whether Gusto or Zenefits is a good fit? See how both providers compare with our top recommended HR software for small businesses.
Pricing: Gusto Wins
For companies with fewer than 100 employees, Gusto provides the best value, as you’ll receive HR functions, an employee database, payroll processing, and benefits administration for a reasonable price (monthly fees start at $39 plus $6 per employee). Zenefits does not charge a monthly base fee, but its per-employee pricing is more expensive than Gusto’s and its minimum five employee requirement and extra cost for payroll also play a part.
Let’s calculate: If you need to process the payroll of three employees, subscribing to Zenefits’s basic Essentials plan ($10 per employee monthly) with a payroll add-on ($6 per employee monthly) will cost you $80 per month (remember, there’s a 5-employee minimum, so you’ll be charged even if you don’t have the minimum employees). With Gusto, you only have to pay $57 monthly for three employees.
However, if you only want basic HR, time tracking, and scheduling, then consider Zenefits since its Essentials plan has all of these features and is affordably priced. In case your business is growing fast past 100 employees and you want an HR tool that includes compensation and performance management, Zenefits is a good option and may save you from having to upgrade or purchase additional software later (Gusto doesn’t have these features).
- Core plan: $39 plus $6 per employee monthly
- Includes full-service payroll, unlimited and automatic pay runs, payroll tax filings, two- and four-day direct deposits, employee benefits, reporting, and onboarding tools
- Complete tier: $39 plus $12 per employee monthly
- Has all of Core’s features plus next-day direct deposits, time tracking, PTO management, employee surveys, permissions, and an employee directory
- Concierge option: $149 plus $12 per employee monthly
- Includes all of the Complete tier’s features plus access to certified HR experts
- Contractor-only plan: $6 per contractor monthly
- 401(k) plans: Starts at $49 per month plus $8 per participating employee
- College savings: $6 per participant monthly with an $18 monthly minimum
- Commuter benefits: $4 per participant monthly with a $20 monthly minimum
- HSA: $2.50 per participant monthly
- FSA: $4 per participant monthly
- Health reimbursement: $15 per employee monthly
- Health insurance: Custom priced (pay only for premiums)
- Essentials plan: $10 per employee monthly
- Includes core HR, time tracking, scheduling, document management, onboarding, PTO tracking, reporting, and employee information management tools
- Growth tier: $18 per employee monthly
- Comes with compensation and performance management in addition to all of the Essentials plan’s features
- Zen option: $27 per employee monthly
- Has all the tools included in Growth plus employee engagement surveys and a “People Hub” that contains collaboration tools and a company feed
- Contractor-only plan: $6 per contractor monthly
- Payroll: $6 per employee monthly
- HR advisory services: $10 per employee monthly
- Benefits administration using own broker: $5 per employee monthly
*All Zenefits plans and add-ons require a minimum of five employees. The provider also offers discounted pricing for annual subscriptions (billed in a lump sum).
Payroll Features: Gusto Wins
Payroll is the feature where Gusto really shines. In addition to unlimited and automatic pay runs, Gusto can manage payroll in all 50 states and includes automatic tax filings and year-end W-2/1099 reporting in its payroll services. While Zenefits has pay processing tools that are similar to Gusto’s, its payroll module is a paid add-on. Zenefits also doesn’t let you pay employees through pay cards as Gusto does, nor does it have on-demand pay that allows employees to access their paychecks before payday.
HR Features: Zenefits Wins
Although Gusto and Zenefits have similar HR features, Zenefits is a better choice, especially if you need time tracking and scheduling. It includes the two features in all of its plans; Gusto only offers time tracking in its higher tiers and it lacks employee scheduling capabilities. You can, however, opt to integrate Gusto with Homebase, which lets you create schedules and track employee attendance for free.
Another reason why Zenefits offers better HR tools than Gusto is because of its extensive health benefits coverage (covers all states versus Gusto’s 39 states). In addition, only Zenefits offers HR-centric tools, like performance management and compensation planning.
Reporting Tools: Tie
Both Gusto and Zenefits have efficient reporting capabilities that include a set of standard reports and customization options that even allow you to create new ones directly from their systems. You can run basic reports with details about each employee and create your own using special fields or parameters.
Ease of Use: Gusto Wins
Gusto and Zenefits both have intuitive interfaces with online tools that are easy to learn and use. They also have how-to guides and FAQ resources that you can access online. Where Gusto wins in this criteria is through its robust integration options with more than 100 solutions (Zenefits has only 40+ integration partners) and in that it offers email, chat, and phone support.
Upgrading to Gusto’s Concierge’s option even comes with an exclusive number to contact if you have questions or require assistance accessing its features. Zenefits doesn’t offer a dedicated phone line to contact support for its Zen plan subscribers, plus you have a schedule a call back from its customer team through the Zenefits dashboard.
What Users Say About Gusto and Zenefits
While Gusto and Zenefits both scored an average rating of 4 or higher in third-party review sites like G2 and Capterra, Gusto’s score is higher compared to Zenefits (4.5 versus 4) as of this writing. Reviewers like how user-friendly and intuitive both software are. The common complaint that both Gusto and Zenefits received is the slow response times of their support teams, wherein many complained most about Zenefits’s poor customer service.
At the time of publication, the two providers earned the following scores on popular user review sites:
How We Evaluated Gusto vs Zenefits
We evaluated Gusto vs Zenefits using a 5-star scale with six criteria that include payroll and HR functionalities in addition to pricing, ease of use, and reporting tools. We also considered user reviews from third-party sites like G2 and Capterra.
In our evaluation, Gusto scored higher with an overall rating of 4.66 out of 5, whereas Zenefits earned a 4.19 out of 5. To view our full evaluation criteria, click through the tabs in the box below.
25% of Overall Score
25% of Overall Score
Automatic payroll runs, payroll tax filing, 1099 form preparation, multiple pay options, and two-day direct deposits are just some of the features that we looked for. Providers also got points if they offer both employee and contractor payroll services, including a penalty-free guarantee. While both Gusto and Zenefits have efficient pay processing tools, Gusto scored the highest here because it offers multiple payment options—from direct deposits and manual paychecks to pay cards. Zenefits only supports paycheck and direct deposit payments.
25% of Overall Score
Aside from having a user-friendly, intuitive, and customizable platform, payroll software that integrates with common third-party systems (like QuickBooks, Homebase, and TSheets) are awarded extra points. We also prioritized providers that offer quick problem resolutions and live phone support. Gusto, again, posted high scores here given its wide selection of third-party software integrations and multiple customer support options that include live phone support (Zenefits doesn’t offer this).
10% of Overall Score
Having access to a professional who can provide expert advice on compliance issues is one of the criteria we looked for, including new hire state reporting and time tracking. Following closely behind these is the capability to provide online onboarding and employee benefits (like health insurance and workers’ compensation) that are available in all 50 states. Zenefits posted higher marks here because its time tracking solution is already included in its base plan and the medical insurance options via its partner broker cover 49 states. With Gusto, you have to upgrade to at least its Complete tier to get time tracking and its health insurance options are available only in 39 states as of this writing.
10% of Overall Score
We looked at reviews that users left on popular third-party sites like G2 and Capterra. Providers with an average score of 4+ stars and 1,000+ reviews is ideal. Gusto received a perfect score in this criteria; its average user rating and the number of online reviews are above 4 stars and 1,000, respectively.
5% of Overall Score
In addition to having basic payroll reports, providers with customizable reporting and allow new ones to be built within their payroll systems are rated favorably. Gusto and Zenefits met all of the requirements for this criteria, both scoring 5 out of 5.
Gusto and Zenefits are both solid small business software products that can provide HR, payroll, and employee benefits in a self-service, cloud-based software. Zenefits is a good choice if you’re looking for an HRIS option that can grow with your business. But if you want an affordable way to pay employees while providing your workers with full benefits, onboarding tools, and basic time tracking, Gusto is the HR and payroll software we recommend.