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Gusto Payroll Software Review

Chad Brooks
Chad Brooks

Gusto is our choice as the top online payroll service for S corporations and sole proprietors. We chose Gusto from a pool of more than 70 payroll companies. 

Gusto Payroll Software

Gusto Payroll Software

The Best Online Payroll Services of 2021

The Verdict

Gusto is a comprehensive payroll solution that can also handle most of your HR-related needs, which is why it's our choice for the best online payroll service with added HR tools.

Visit our best picks page to see all of our recommendations for online payroll services.

Why Gusto?

Many S-corps and sole proprietors rely on part-time or contract-based employees. That means a payroll solution that can compensate both full- and part-time W-2 employees is crucial for these types of businesses. An ideal payroll solution will also offer payment options for freelancers, consultants and other 1099 contractors.

The best software is one where designating employee type within an organization is as simple as switching their status within the software. You shouldn’t have to jump through hoops to pay multiple employee types, and it should treat all types of workers the same, including W-2 and 1099 contractors. After that, paying employees should be quick and easy. 

In addition, there should be self-service access to the software for both full and part-time W-2 employees. Contractors, freelancers and consultants should also be able to log in to the payroll system to review pay stubs, access year-end forms and view other relevant payroll information

Another important consideration S-corps and sole proprietors should look for in a payroll solution is the ability to run unlimited payrolls each month. Since you may have to pay contractors and freelancers on a different schedule than your full- and part-time employees, having the flexibility to run payrolls as often as you like for no added cost is a big plus. 

S-corps and sole proprietors may also find value in choosing a comprehensive payroll solution that offers HR services. Many of these businesses don't have a full-time HR representative on staff. Finding a payroll solution that offers on-demand HR services can provide businesses with the valuable guidance they otherwise wouldn't have access to. In addition, being able to tack HR services onto your payroll plan is much more affordable than paying a salary and benefits to have an HR rep on staff. 

Other features important to sole proprietors and S-corps are complete payroll tax services and the ability to pay employees in multiple ways. While some employees appreciate being paid via direct deposit, others prefer a printed check or the option of using a pre-paid debit card. 

Gusto fills all the above needs. Gusto handles all payroll processing and payroll tax responsibilities for all employee types. The payroll software makes easy to add new employees and designate which type of worker – W-2 or 1099 – they are. When it comes to cost, both types of workers are considered an "employee," so there is no change in pricing for running payroll for someone considered a full or part-time employee versus a freelancer or contractor. 

Rather than a per-payroll cost structure that other payroll companies use, Gusto charges monthly fees. You have a base monthly fee as well as a per employee/contractor fee. This means that you have the same monthly costs whether you run payroll once a month or five times a month. You can run payroll as many times as you want for no added charge. 

Another aspect of Gusto that sole proprietors and S-corps may find appealing is the added HR services that are available. 

Gusto Pricing and Service Plans 

Unlike some payroll services that don't offer multiple service plan options, Gusto gives businesses a choice of three different plans to choose from. While each plan includes payroll processing and payroll tax services, they differ in the number of human resources features and tools they include. 

The three service plans comprise the following: 

  • Core: Gusto's Core service plan has a base fee of $19 per month, plus $6 per employee. After six months of service, the base fee increases to $39 per month. This is the cheapest plan and includes the fewest HR features. Included in this plan are full-service payroll, employee self-service, health benefits and workers' compensation administration and paid time-off tracking.

  • Complete: Gusto's Complete service plan also has a base fee of $39 per month. However, the per employee fee is $12 per month. This plan includes everything in the Core plan as well as employee offers and onboarding tools, more complete paid time-off management, and employee directories and surveys.

  • Concierge: This is Gusto's most feature-rich plan and is significantly more expensive than the other two plans. The Concierge plan has a base fee $149 per month, plus $12 per employee. This plan offers everything in the Core and Complete plans plus more extensive HR support. This extra level of HR support includes HR on-demand services that give you anytime access to HR professionals who can walk you through any questions or issues you have. It also includes an HR resource center that can help with creating employee handbooks, job descriptions, HR guides and harassment training. You also have a dedicated support team you can contact should you have any problems with the service.

  • Contractor: This is designed for employers who don't have full-time employees and only work with contractors and freelancers. There is no base fee for this plan. You only pay $6 per contractor, per month. The plan allows you to pay contractors as often as you like, gives contractors self-service options, and handles all of the 1099 form creation and filings.

Having access to this range of service plans could be beneficial to businesses without a full-time HR team. One nice aspect is that you can switch plans at any time. So, if you start with the Concierge plan to get help setting up your HR department, you can. You can use the tools to complete tasks, like creating an employee handbook and job descriptions. If you reach a point where you feel you no longer need those services, you can always change to one of the less comprehensive plans. 

There are no contracts with Gusto. You pay month-to-month. Additionally, there are no setup fees, and there is no penalty to cancel the service. This gives you the opportunity to test the service for a couple of payroll runs. If you decide it isn't meeting your needs, you can cancel for no charge. 

The only other costs you may incur are for some of Gusto's added services, which you can tack on to any of the three service plans. Here's more about those added services and their costs: 

  • Health benefits: No administration fees. You pay only for the premiums.

  • Retirement savings plans: $8 per month, per participant. There is a $40 per month minimum. There is also a $500 setup fee.

  • Workers' compensation insurance: No administration fees. You pay only for the premiums.

  • 529 college savings plan: $6 per month, per participant. There is an $18 per month minimum. No setup fees.

  • Health savings account: $2.50 per month, per participant. There is no minimum.

  • Flexible spending account: $4 per month, per participant. There is a $20 minimum.

  • Commuter benefits: $4 per month, per participant. There is a $20 minimum.

Gusto Features

Gusto offers a number of specific features that sole proprietors and S-corps will find especially valuable. These include: 

  • Employee types: The biggest plus for S corporations and sole proprietors is that Gusto can be used to pay all employee types. This includes full and part-time W-2 employees as well as freelancers, consultants and other 1099 contractors. In essence, the software treats both types of employees the same. You simply designate which type of worker each person is and the software takes it from there. You are charged the same fee for each employee – there is no additional cost to pay 1099 contractors.

  • Payroll processing: Once all the pertinent information is entered into the software, such as pay rate, hours worked, deductions, etc., the system automatically calculates the payroll each pay period. Each pay period, the only information typically needed is how many hours each employee worked for hourly workers, as well as any bonuses or commissions earned. In all, payroll can be run in just a few minutes. If you don't have much variation to your payroll each pay period, you can set the system to run on autopilot. With this, your payroll automatically runs each pay period without any additional input. Payroll can be run as many times is as needed each month. This gives you the flexibility and freedom to run payroll as often as you like for no additional cost. This can be especially valuable to employers that have both full-time and employees and freelancers.

  • Payment options: With Gusto, there are several ways employees can be paid each pay period. There is direct deposit, pre-paid debit cards and printed checks. With direct deposit, paycheck amounts are automatically deposited into each worker's bank account on payday. Pre-paid debit cards work in a similar fashion: Paychecks are automatically deposited onto the pre-paid debit cards on paydays. Deposits are made two days after the payroll is run. The final option is to print checks straight from your business's printer. While no special software is needed, check stock paper is required.

  • Payroll taxes: Gusto handles all payroll tax responsibilities. The payroll software automatically calculates the payroll taxes and fills out and files the required payroll tax forms with each local, state and federal agency. In addition, payroll service makes all the required payroll payments on your business's behalf.

  • Year-end forms: The payroll software automatically generates all year-end W-2 and 1099 tax forms. Digital copies of the forms are then sent to each employee and contractor.

  • Paid time off: Depending on the service plan selected, Gusto can handle some, or all, of your paid time off management. All service plans include paid time off tracking. Employers can set up vacation and sick time policies and then track accruals and balances. Both the Concierge and Complete plans can handle time off requests. Employees can submit requests for time off in the payroll software and managers can either approve or deny those requests.

  • New hire reporting: Gusto will complete and file of all the required paperwork with the state for each new hire. Each state requires official notification when employees are hired. The forms include the employee's name, address and Social Security number, along with the employer's name, address and federal identification number.

  • Integrations: The service integrates with a wide range of accounting, time and attendance, expense management, and human resources programs, such as QuickBooks, Xero, FreshBooks, TSheets and Deputy.

  • Human resources services: Gusto offers a wide range of human resources services. Among the available services are employee offer and onboarding tools, such as online offer documents and signature documents; employee directories; organizational charts; anonymous employee surveys; survey trend analysis; HR compliance help; on-demand access to HR professionals; employee relations advising; custom employee handbooks; job description templates; HR guides and policy templates; harassment prevention training; and proactive compliance updates.

  • Additional services: Other services available through Gusto include 401(k) retirement plans, 529 college savings plans, health benefits, workers' compensation insurance, health savings and flexible spending accounts, and commuter benefits. 

Ease of Use

Gusto is a cloud-hosted payroll service that doesn't require any special software to install or maintain. You can access the payroll system from any web browser. In addition, the Gusto platform is also mobile friendly and can be accessed from any smartphone or tablet. 

When logging into the system, you are first taken to the platform's homepage. In the middle of the homepage are your to-do items. They may include things like Run Payroll or Time Off Requests. Along the left-hand side of the page are other aspects of the platform, including seeing or editing employee details and reminders about which contractors need to be paid. 

Running a payroll can be completed in just minutes. After logging in, you click on the Run Payroll tab and fill in the number of hours each employee worked, vacation or sick days taken, bonuses or commissions earned, and expense reimbursements. 

After clicking the Submit Payroll link, you receive a confirmation letting you know that the money is being sent via direct deposit or that you can print checks for those who need it.

If you don't have much variation to your payroll each pay period, you can set the system to run on autopilot.

Adding an employee into the system is also a simple task. You click on the Add Employee link in the People section and add in all of their details, which includes their name, address, email address, compensation, direct deposit information, and federal and state filing statuses. 

Gusto gives all employees and contractors access to the system. Each worker is provided their own login credentials. They can then access the software in order to review their pay stubs, see time off details and access year-end forms. Gusto offers lifetime access to these accounts. This means that employees can log into their accounts even after they have left the company.

Customer Service

We are very impressed with Gusto's customer support. To test the level of service provided, we contacted the company by phone and live chat numerous times posing as a small business owner interested in their services. 

When we reached out by phone, most of our calls were answered immediately. There was one instance where we had to wait on hold for several minutes before a representative spoke with us; however, all of our other calls were promptly answered. 

Each time we called, we spoke with a friendly and helpful representative. At no time did any of the representatives pressure us into committing to the payroll service. Instead, they focused on our needs. They listened to our questions and gave thorough and detailed answers that always left us with a very clear understanding of what Gusto had to offer and how it worked. 

During our calls, we spoke about cost, how easy the system was to use and learn, the different employee types the system accommodated, the payroll tax services, the HR services available, the cost and the customer support options. 

We also tested Gusto's live chat support. Each time we sent a question, we received prompt attention. Other live chat tools from other companies we evaluated had us wait for lengthy periods of times before we were connected with a representative. 

With Gusto, we received attention almost instantly. In addition, we always pleased with the answers we received to our questions. When testing the live chat tools of other payroll services, we were often left dissatisfied with the support they offered, because we were never able to get answers to our questions. Many times, we were told that in order to get the answers we needed, we would have to reach the company by phone – something that discounts the value of live chat. 

In addition to the personal attention you can receive, Gusto has a number of valuable resource tools on its website. One of the most impressive was the demo of the payroll software. The website includes a full simulation of the software that you can test out. You can see what the software looks like and browse through every aspect of it. You can test out adding employees in and other important functions. Additionally, the website includes a help center and answers to frequently asked questions. 

The Gusto support team is available between 8 a.m. and 5 p.m. (PT), Monday through Friday. 


While there is a lot to like about Gusto, there were two drawbacks we uncovered during our research. 

One negative is that Gusto is not an accredited member of the Better Business Bureau, and it has a D- rating. Despite the low rating, however, there have only been 12 complaints filed against the company with the BBB over the past three years. 

Another downside is that Gusto went through a four-year period where prices were regularly raised. However, since the company moved to its three-tiered service model, pricing has stayed the same.

Image Credit: AndreyPopov / Getty Images
Gusto Payroll Software

Gusto Payroll Software

The Best Online Payroll Services of 2021

The Verdict

Gusto is a comprehensive payroll solution that can also handle most of your HR-related needs, which is why it's our choice for the best online payroll service with added HR tools.

Chad Brooks
Chad Brooks
business.com Staff
See Chad Brooks's Profile
Chad Brooks is a Chicago-based writer and editor who has spent more than 20 years in media. A 1998 journalism graduate of Indiana University, Chad began his career with Business News Daily in 2011 as a freelance writer. In 2014, he joined the staff full time as a senior writer. Before Business News Daily, Chad spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including local and state government, crime, the legal system and education. Chad has also worked on the other side of the media industry, promoting small businesses throughout the United States for two years in a public relations role. His first book, How to Start a Home-Based App Development Business, was published in 2014.