When it comes to payroll software, Paychex, ADP, and Gusto are popular but for different reasons. ADP and Paychex are established providers that offer comprehensive HR and payroll services for businesses of all sizes, and Gusto is a newer provider that gives small businesses an affordable full-service payroll option with features they’d pay extra for with other services. ADP and Paychex are very similar overall but have some different products that might make them a better fit for certain businesses.
- Paychex: Best for self-employed business owners to midsize companies that need strong HR and payroll support; Paychex is the only provider out of the three that has a self-employed product plus it has more benefit options
- ADP: Ideal for startups and businesses that plan to scale quickly (from startup to enterprise); ADP’s overall features are the most robust, i.e., posts to exponentially more job boards than Paychex (Gusto doesn’t have recruiting tools at all)
- Gusto: Best for small businesses (fewer than 100 employees or contractors only) looking for an affordable payroll and HR software; Gusto provides all the basics at a low cost, like automatic pay runs, payroll tax and year-end tax report filing, and benefits.
Payroll Features at a Glance
Features | |||
|---|---|---|---|
Pricing ($/Month) | Starts at $59 plus $4 per employee | Starts at $59 plus $4 per employee | Starts at $39 plus $6 per employee |
Pay Options | Pay-on-demand, paper check, pay card, and direct deposit | Pay card, direct deposit, and paper checks signed and delivered | Pay card, direct deposit, and manual check (printed in-house) |
Payroll on Autopilot | ✔ | ✔ | ✔ |
Payroll Tax Calculations, Payments, and Filings | Federal, state, and local payroll taxes | Federal, state, and local payroll taxes | Federal, state, and local payroll taxes |
Employee Benefits | Health insurance, retirement, flexible spending account (FSA), health savings account (HSA), and financial wellness tools | Health insurance, retirement, and employee discounts with local retailers and nationally recognized brand-name products | Health insurance, retirement, FSA, HSA, commuter benefit, and college tuition savings |
Health Insurance Coverage | All 50 states | All 50 states | Only in 39 states |
Workers’ Comp | Pay-as-you-go plans | Pay-as-you-go plans | Pay-as-you-go plans |
Other HR Tools* | Background checks, new hire reporting, job postings, onboarding, time tracking, HR documents and compliance, and learning management | Job posting, background checks, new hire reporting, onboarding, time tracking, HR documents and compliance, and learning management | New hire reporting, onboarding, time tracking, HR documents and compliance, offer letters, and employee surveys |
Software Integration Options | Accounting, POS, hiring, time tracking, and HR-related tools (such as Xero, Clover, OnShift, Glassdoor, SimplyHired, and BambooHR) | Accounting, POS, hiring, time tracking, productivity, and HR-related solutions (such as QuickBooks, Xero, Clover, GoodHire, JazzHR, iCIMS, ZipRecruiter, and Slack) | Accounting, POS, hiring, time tracking, business operations, expense management, and HR-related systems (such as Xero, Clover, Greenhouse, When I Work, 7shifts, Vagaro, Expensify, and Ethena) |
Customer Service | 24/7 phone support | Email and 24/7 phone support | Email and chat; phone support five days per week |
*Note that some of these HR tools are available either as paid add-ons or included in the premium plans.
If you’re unsure about which payroll provider is best for your business, answer a few questions in our ADP vs Paychex vs Gusto quiz, and we will help you decide.
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How We Evaluated Paychex, ADP, & Gusto
We evaluated Paychex, ADP, and Gusto, by looking at each provider’s pricing structures, features, and ease of use. We even considered online feedback from actual users. Customer support was also an important factor since small business owners may need help navigating through the software.
When We Recommend Paychex
As payroll systems, all three offer efficient online tools for processing employee pay. For self-employed to midsize business owners who require strong HR and payroll support, we recommend Paychex. Aside from its robust HR solution suite, it has US-based customer support that you can reach 24/7 and those who subscribe to its higher tiers get a dedicated payroll specialist. Its Paychex Solo option even provides sole proprietorships and owner-only businesses access to payroll and tax services, 401(k) plans, and incorporation services.
Paychex Pros and Cons
| PROS | CONS |
|---|---|
| Payroll tax payments and filings cover federal, state, and local taxes | Its basic small business payroll package (Paychex Go) has limited features; pricing for other plans isn’t transparent |
| Has a suite of HR tools (new hire reporting, onboarding, background checks, time and attendance, etc.) | Some modules (such as time tracking and accounting software integration) are paid add-ons |
| US-based 24/7 customer support | Dedicated payroll support available only in higher tiers |
When We Recommend ADP
We recommend ADP for startups and scaling companies (with more than 1,000 employees) that need flexible plans. The provider offers numerous subscription options that cater to different-sized businesses. Its packages for mid- to large-sized companies even include hands-on implementation assistance and expert support from certified payroll and HR professionals.
Similar to Paychex, ADP offers a wide range of HR tools—from recruitment and time tracking to payroll and benefits administration. It also automatically calculates, deducts, pays, and files payroll taxes for you. In addition, ADP’s partnership with JobTarget and other job posting sites (like ZipRecruiter) enables it to distribute job listings to more than 25,000 job boards. With Paychex, you don’t get that wide coverage and ZipRecruiter access.
ADP Pros and Cons
| PROS | CONS |
|---|---|
| Multiple plans to choose from | Pricing isn’t all transparent |
| Automatic quarterly and annual tax filings | Access to time and attendance and workers’ compensation cost extra |
| Advanced HR support available | Premium plans require a setup fee |
When We Recommend Gusto
We recommend Gusto for small companies that employ fewer than 100 staff. Aside from Gusto being cheaper than ADP and Paychex, it lets you run payroll as many times as you need without having to pay extra. It also offers automatic payroll runs and payroll tax filings with multiple pay options that include two-day and next-day direct deposits. Aside from payroll, Gusto provides basic hiring and onboarding tools plus employee benefits, and simple time tracking options.
Gusto Pros and Cons
| PROS | CONS |
|---|---|
| Affordably priced | Time tracking is only included in premium plans |
| Unlimited payroll runs | Health insurance coverage limited to 39 states |
| Responsive customer support | No dedicated payroll specialist |
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.
Pricing Comparisons
Both ADP and Paychex are tied in terms of pricing. The two offer basic payroll plans with monthly subscription fees that start at $59 plus $4 per employee. While the cost of their premium plans isn’t available on each provider’s websites, you can contact ADP and Paychex to request a custom quote.
The provider that offered the best pricing is Gusto. Compared to Paychex and ADP, it is more affordable—with its Core plan costing only $39 plus $6 per employee monthly. You also get unlimited payroll runs and standard two-day deposits, which can be upgraded to next-day deposits if you subscribe to its higher tiers.
- Paychex pricing: Three payroll packages; Paychex Go ($59 plus $4 per employee monthly), Paychex Flex Select and Paychex Flex Enterprise (both custom priced)
- ADP pricing: Four small business payroll tiers (starts at $59 plus $4 per employee monthly); four midsize to large business payroll packages (custom priced)
- Gusto pricing: Three plans; Core ($39 plus $6 per employee monthly); Complete ($39 plus $12 per employee monthly); Concierge ($149 plus $12 per employee monthly); Contractor plan costs $6 per employee
For more information on Gusto’s payroll and HR features, including its plan options, see our Gusto review.
When ADP’s Plan Options Are Enough
If you’re looking for a payroll provider that offers a large variety of plan options that will fit your business at every stage, ADP will be a good fit. It has twice as many payroll and HR product plans as Paychex and Gusto.
For instance:
- Startups and companies (with up to 49 employees) can use ADP Run, which has four small business payroll tiers.
- Those who want to scale (with 50 up to 999 employees) can select one of the four plans under its ADP Workforce Now product.
- ADP even offers customizable end-to-end human capital management (HCM) solutions for enterprises (with more than 1,000 employees) with payroll and HR features designed to meet global business needs.
- And when you’re in the middle of scaling but can’t yet hire HR staff, ADP has a PEO option.
When Paychex’s Plan Options Are Enough
If you’re expecting to maintain a mid-size business and don’t anticipate having constant company growth changes, Paychex’s payroll and HR plans may provide enough flexibility for you. You also have access to many of the same features as you would from ADP, such as automated payroll, payroll tax filing services, and HR compliance support. The company doesn’t serve as many different types of businesses, so you may have an easier time navigating customer service.
When Gusto’s Plan Options Are Enough
Subscribing to Gusto makes more sense if your company needs to do payroll for fewer than 100 employees. What’s great is that all of its plans include full-service payroll with unlimited pay runs and automated tax filings and payments.
Gusto also offers a reasonably priced option for businesses that pay independent contractors. It costs $6 per person and includes unlimited contractor payments and Form 1099 preparation and filing. Further, instead of paying subscription costs on a monthly basis, you pay only for the months that you processed contractor payroll.
Payroll Feature Comparisons
There are several payroll features that both Paychex and ADP, including Gusto, have in common with each other. All three can handle pay processing for all 50 states. They also provide multiple pay options, such as direct deposits and pay cards. However, Paychex has a pay-on-demand feature, while Gusto and ADP provide support for in-house pay check processing and paper check delivery, respectively.
In terms of payroll tax payments and filings, Paychex, ADP, and Gusto can process federal, state, and local taxes. However, while both Paychex and Gusto have included the preparation and delivery of digital Form W-2s and 1099s in each of their plan costs, it costs extra with ADP.
Employee Benefits With ADP, Paychex, & Gusto
If you want to offer employee health insurance that covers all 50 states, then you may want to consider either Paychex or ADP. However, Paychex’s benefits offerings are more robust. Aside from health insurance and retirement, it has FSA, HSA, and financial wellness tools. This is unlike ADP that offers only health insurance, retirement benefits, and employee discounts with brand-name products and local retailers.
Similar to Paychex and ADP, Gusto also has health insurance although its coverage is limited to only 39 states as of this writing. Aside from health insurance, Gusto provides retirement, HSA, FSA, college tuition savings, and commuter benefits.
Customer Support With ADP, Paychex & Gusto
All three providers offer phone support—with ADP providing additional email support while Gusto also has email and chat. You can contact ADP and Paychex’s support team 24/7, but you can only call Gusto’s customer service representatives during weekdays. Further, upgrading to each of these providers’ premium plans grant you access to HR professionals who can provide expert advice.
However, if you want dedicated support, Paychex is the right solution for you. It provides the service to all its clients—ADP and Gusto only offer it with its premium tiers. On the other hand, if you don’t need a dedicated rep—many small businesses don’t—then you may want to consider the more affordable option, Gusto. Many users commended Gusto for its responsiveness; unlike Paychex and ADP, wherein several reviewers complained about having occasionally experienced long wait times and a few delayed responses.
Bottom Line
Deciding among ADP, Paychex, and Gusto can be challenging, since they have a lot of similar payroll and HR tools. However, we recommend you choose the best payroll software based on both your current and expected future business needs.
ADP can support large growth plans, from mom-and-pop to enterprise, given its multiple yet flexible payroll tiers. If you’re planning to stay a mid-size employer, Paychex can provide you with a more personalized payroll experience and service. If your business has a simple structure with fewer than 100 employees, Gusto’s full-service plans would likely be a better fit.
