Gusto

Review Summary

Gusto is a top choice for small business payroll. It is known for its simple and friendly design. The platform makes paying employees and contractors easy. It also automates most tax filings. This saves founders a lot of time. Gusto is best for US-based companies with simple needs. However, the costs can grow with your team. Businesses needing complex HR tools may find it limiting.

What is Gusto

Gusto is an online platform for payroll and human resources. It serves over 400,000 small businesses. The main goal is to simplify paying your team. Gusto handles direct deposits and tax calculations. It automatically files federal, state, and local payroll taxes. This helps businesses stay compliant without needing an expert.

The system also includes tools for employee onboarding. New hires can enter their own information. This reduces administrative work for owners. Gusto offers benefits administration. You can manage health insurance, 401(k) plans, and more. It is designed for founders who are not HR professionals. Most users can run their entire payroll in just a few minutes.

Pros and Cons

Gusto is famous for its ease of use. The interface is clean and intuitive. It guides you through every step of payroll. Automating tax filings is a major advantage. It removes a significant compliance burden from small businesses. The Contractor Only plan is a great entry point. It has a $0 monthly base fee for the first 6 months.

However, Gusto has some clear downsides. The base fee for its popular Simple plan recently increased. It went from $40 to $49 per month. This made some users reconsider its value. The entry-level contractor plan is also limited. It does not handle certain state-required withholding. While Gusto has many features, key tools and benefits administration cost extra. Finally, it offers fewer software integrations than competitors like Rippling.

Key Features

Payroll Automation

Gusto’s core feature is its automated payroll. You can set payroll to run on its own with AutoPilot. This is perfect for teams with consistent salaries. The platform supports both 2-day and 4-day direct deposit speeds. It calculates wages, taxes, and deductions automatically. Gusto handles W-2s for employees and 1099s for contractors. It also manages tax filings at all government levels. This automation is a primary reason businesses choose Gusto. It reduces errors and saves hours each pay period.

Employee and Contractor Management

Gusto provides a self-service portal for your entire team. Employees can log in to view paystubs. They can also access their W-2 forms at year-end. New hires can onboard themselves completely online. They enter personal details, tax information, and bank accounts. This process is simple and secure. For contractors, Gusto supports payments in over 120 countries. This makes it a viable option for businesses with a global, remote workforce. However, international payments can incur extra fees.

Benefits Administration

You can manage employee benefits directly within Gusto. The platform helps you set up and administer health insurance. It also supports dental, vision, and life insurance. Gusto offers access to 401(k) retirement plans and HSAs. The system handles payroll deductions for these benefits automatically. This integrates benefits tightly with your payroll process. It is important to note that these are add-ons. They are not all included in the basic plans. You pay for the benefits you choose to offer.

HR Tools and Compliance

Beyond payroll, Gusto offers essential HR tools. This includes time tracking and paid time off management. Employees can request time off through the portal. Managers can approve it with a click. Higher-tier plans provide access to an HR resource center. This includes compliance updates and expert support. These tools help small businesses build a more formal HR function. They provide templates for employee handbooks and job descriptions. This support is valuable for growing teams navigating new regulations.

Pricing

Gusto offers several pricing tiers. The plans are designed to grow with your business.

• Contractor Only: This plan is for businesses that only pay 1099 contractors. The base fee is $0 per month for the first 6 months. After that, it becomes $35 per month. You also pay $6 per month for each contractor you pay.

• Simple: This is the most popular plan for small businesses with W-2 employees. It costs $49 per month as a base fee. You also pay $6 per month for each employee. This plan includes single-state payroll, W-2s, and basic hiring tools.

• Plus: For larger teams or businesses with more complex needs. The Plus plan has a higher base fee and a per-employee cost. Sources suggest it is significantly more than the Simple plan. It adds features like multi-state payroll, time tracking, and next-day direct deposit.

Additional services cost extra. This includes benefits administration, 401(k) plans, and international contractor payments.

Final Verdict

Gusto is an excellent choice for US-based small businesses. It is ideal for teams under 50 people. If you prioritize speed and simplicity for payroll, Gusto delivers. Founders hiring their first employee will find it very approachable. The automated tax filing alone can justify the cost.

The main dealbreaker is its price at scale. As your team grows, the per-employee fees add up. Businesses needing advanced HR customization or many software integrations may feel constrained. Competitors like Rippling or ADP might offer more robust solutions for complex needs.

If you only work with contractors, try the Contractor Only plan. For W-2 employees, explore the interactive demo on their site. See if the Simple plan's workflow is right for you before you commit.