Wave Payroll and Gusto are both payroll software that will allow you to pay employees and contractors. Gusto is a standalone payroll service that offers additional HR features (e.g., employee benefits, time tracking, and hiring support tools); whereas Wave Payroll is an add-on to its free accounting software and is very limited in HR features. Each offers unique benefits to small businesses.
- Wave Payroll: Best for small businesses that need free accounting software and those with seasonal employees
- Gusto: Best for small businesses looking for affordable payroll options with employee benefits and basic HR features
Gusto vs Wave Payroll: Compared
Pricing | $40-$80 base fee + $6-$12 per employee/contractor monthly | $20-$40 base fee + $6 per employee/contractor monthly |
Multiple Plan Options & Add-ons Available | ✓ | ✕ |
Tax Payment & Filing Services | ✓ | Limited to 14 states |
Workers' Compensation | ✓ | ✓ |
Health Benefits Administration | Included, but not available in all 50 states | ✕ |
Time & PTO Tracking | ✓ | ✕ |
Unlimited Pay Runs | ✓ | ✓ |
Employee Onboarding | ✓ | ✕ |
Mobile Payroll Option | ✓ | ✕ |
Customizable Interface | Limited options | ✕ |
Third-party Software Integration | ✓ | Limited options |
Customer Support | Live chat, email, and phone service | Live chat and email only |
Alternatives to Wave Payroll and Gusto
If neither Wave Payroll nor Gusto is right for your small business, we recommend the following alternatives.
Pricing | $35 base + $6 per employee per month | $39 base + $7 per employee per month | $99-$199 base + $5-$14 per employee per month |
Best For | Small restaurants, retail, and Square POS users | Small companies with employees in multiple states | Small businesses with 50+ employees and complex payroll processing needs |
Tax Payment & Filing Services | ✓ | ✓ | ✓ |
Includes Employee Benefits | ✓ | Third party | ✓ |
Best for Pricing: Gusto
Gusto gives you a better bang for your buck due to its larger selection of HR functionalities. While Wave Payroll offers a cheaper plan, you are required to handle all tax reporting, payments, and processing as a self-service; tax service is only available in 14 states. Gusto will prepare, file, and pay taxes on your behalf, as well as year-end tax forms. Additionally, with Gusto you can integrate time and PTO tracking directly to your payroll; with Wave Payroll all entries are manual.
Base Fee ($/Monthly) |
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Per Employee Fee ($/Monthly) |
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Set-up Fees | None | None |
Free Trial | ✕ | 30-days |
Best for Payroll: Gusto
Although Gusto could potentially be pricier than Wave Payroll, it excels in the category of best for payroll due to the additional offerings available, such as time and PTO tracking that integrates directly into your payroll. Additionally, with Gusto, you can automatically submit payroll either from your computer or your phone.
Unlimited Pay Runs | ✓ | ✓ |
Automated Payroll Options | ✓ | ✕ |
Time and PTO Tracking | ✓ | ✕ |
Payroll Tax Filing and Year End Reporting | ✓ | Available only in 14 states |
Best for HR Features: Gusto
Gusto is the clear winner when it comes to human resources features. It includes time-tracking, employee benefits, and onboarding solutions. Wave Payroll focuses more on providing payroll services, although it does offer a few select HR services, like workers’ compensation and new hire reporting.
Employee Onboarding | ✓ | ✕ |
Workers' Compensation Insurance | ✓ | ✓ |
New Hire Reporting | ✓ | Limited to 14 tax filing states |
Applicant Tracking Services | ✓ | ✕ |
Email & Software Provisioning | ✓ | ✕ |
Employee Performance Insights | ✓ | ✕ |
Recruiting Solutions | ✓ | ✕ |
Best for Popularity & Ease of Use: Gusto
Gusto scores high marks among users for how easy it is to run payroll. In fact, you can get Gusto set up in less than 24 hours and ready to run your first payroll. Users also love Gusto’s features, including Gusto Wallet, which allows employees to save money with incentives. Users did complain about time tracking and PTO issues within the system, however, Gusto’s excellent customer service helped resolve the issues quickly.
Users liked Wave Payroll for its simplicity. However, they complained about the lack of support and the non-existence of complex payroll features. Users also disliked the difficulty of using the Wave app, citing it doesn’t have the same capabilities as the website.
User Review Score* | 4.6 out of 5 | 4.1 out of 5** |
# of Reviews | 5616 | 31 |
Mobile Friendly | ✓ | App for accounting services only; does not include payroll |
Access to Certified HR Pros | $8/employee with Plus plan; included in Premium plan | ✕ |
Customer Service Options | Live chat, email, and phone service | Live chat and email only |
* Scores derived from third-party user review sites (G2, Capterra) ** Wave Payroll was only featured in G2. There are no user reviews for this software in Capterra. |
How We Evaluated
When determining whether Gusto or Wave Payroll is right for your small business, we evaluated each software using a scoring system for pricing, payroll functionality, HR features, popularity, ease of use, and customer service. In our review Gusto scored 4.83 out of 5; Wave Payroll earned 3.31 out of 5. Gusto outscored Wave Payroll in most categories including pricing, due to its multiple plan options; HR features, due to its ability to handle employee benefits; popularity, due to its advanced scoring of user reviews; payroll features, due to its ability to pay taxes in more states; and ease of use, due to its customizable interface and integration with third-party software. Wave Payroll scored a perfect mark (as did Gusto) for its reporting features.
Bottom Line
Unless you are looking for simple payroll options to add to an existing Wave Accounting service, we recommend using Gusto for your small business payroll and HR needs. Gusto allows you to pay both employees and contractors with unlimited pay runs and tax processing and filing in all 50 states. Additionally, its automated time and PTO tracking will convert directly to your payroll. With Wave Payroll you must manually enter time and PTO. Sign up today and get one month free when you run your first payroll. Offer will be applied to your Gusto invoice(s) while all applicable terms and conditions are met or fulfilled.