Gusto for Small Business: Is It Actually Worth It?

If you're running a small business and trying to figure out payroll, you've probably heard of Gusto. It's one of the most recommended payroll platforms out there, trusted by over 400,000 businesses. But is it actually the right fit for your company?

I've dug into the pricing, features, and real user reviews to give you the straight answer. No marketing fluff-just what you need to know to decide if Gusto makes sense for your business.

What Is Gusto?

Gusto is a cloud-based payroll and HR platform designed specifically for small to medium-sized businesses. It handles payroll processing, tax filing, benefits administration, onboarding, and basic HR tasks all in one place.

The platform is known for its clean interface and ease of use. Most businesses can set up payroll in under 30 minutes, and the system automates the tedious stuff like tax calculations and filings in all 50 states. It integrates with over 180 apps including QuickBooks, Xero, and FreshBooks.

The standout feature is the AutoPilot function-set it once and payroll runs automatically on schedule. For salaried employees with consistent pay, this is a massive time saver.

Founded in 2011, Gusto has grown from a simple payroll tool into a comprehensive people platform. The company holds the #1 ranking for payroll software on G2 and maintains a 4.6 out of 5 rating across thousands of reviews. But impressive ratings don't tell the whole story-let's dig into what actually matters for your business.

Gusto Pricing Breakdown

Gusto offers four main pricing plans. Here's what you'll actually pay:

Simple Plan: $49/month + $6/person

This is the entry-level option, best for small businesses with straightforward payroll needs. You get:

The catch: You're limited to employees in one state only. If you have remote workers in multiple states, you'll need to upgrade. Also note that four-day direct deposit means you need to submit payroll four business days before payday-if you need faster processing, you'll need the Plus plan.

Plus Plan: $80/month + $12/person

This is where most growing businesses land. Everything in Simple, plus:

If you have employees scattered across different states (which is increasingly common with remote work), this is your minimum viable option. The next-day direct deposit alone can be worth the upgrade for businesses that need payroll flexibility.

Premium Plan: $180/month + $22/person

Built for scaling businesses with more complex needs. Adds:

This tier makes sense if you're pushing past 20-30 employees and need actual HR guidance, not just software. The dedicated customer success manager can be invaluable when dealing with complex payroll scenarios or compliance issues.

Contractor Only Plan: $35/month + $6/contractor

If you're only paying 1099 contractors (no W-2 employees), this stripped-down plan handles contractor payments, 1099 forms, and four-day direct deposit. Freelance agencies and consulting firms can save money here.

Note that Gusto files 1099 forms for all contractors regardless of whether they reach the $600 threshold, which helps contractors file their taxes more easily.

For a deeper dive into the numbers, check out our complete Gusto pricing guide and Gusto cost breakdown.

Understanding the True Cost of Gusto

While Gusto's base pricing is transparent, it's important to understand what you're actually paying once you factor in your team size and any add-ons.

Real-world pricing examples:

The good news: No long-term contracts, free account setup, and you can cancel anytime. Many competitors charge implementation fees ranging from $500-$2,000, so Gusto's free setup is a genuine advantage.

The gotcha: Add-ons can increase costs quickly. Time tracking on the Simple plan costs an additional $6 per person per month after a two-month trial. Next-day deposits on Simple add $15/month plus $3 per person. Performance management tools cost $3 per person monthly. If you find yourself adding multiple features, the Plus plan often becomes more cost-effective.

How Gusto Stacks Up Against Competitors Pricing-Wise

Compared to other payroll solutions in the market:

Gusto sits in the middle of the pack for pricing but offers more comprehensive features than most budget options and better transparency than enterprise providers.

What Gusto Does Well

Dead-Simple Payroll Processing

Gusto's payroll interface has minimal learning curve. The dashboard highlights upcoming tasks and sends email reminders so you don't miss deadlines. Even the base plan handles complex calculations like wage garnishments, holiday pay, and tip credits automatically.

Customers save an average of 4 hours per month on payroll tasks-that's 48 hours per year you're getting back. When you consider the value of your time as a business owner, those hours quickly justify the monthly subscription cost.

The payroll process itself is remarkably simple: review hours (if applicable), approve any changes, and click submit. Gusto handles the rest-calculating gross pay, withholding taxes, processing deductions, initiating direct deposits, and filing tax forms. You can run payroll from your computer or mobile device, and employees can access their pay stubs instantly through the employee portal.

Comprehensive Automated Tax Filing

This is where Gusto truly shines. The platform automatically calculates, withholds, and files payroll taxes at the federal, state, and local levels. Every time you run payroll, Gusto:

Gusto also identifies potential tax credits your business may qualify for, including R&D tax credits that can offset payroll taxes. Eligible businesses can save up to $250,000 through these credits.

The system handles state tax registration assistance, though there is a fee for this service. If you're hiring employees in new states, Gusto can help navigate the registration process with state agencies, which can otherwise take weeks of back-and-forth paperwork.

Transparent Pricing (No Hidden Fees)

Unlike ADP and Paychex where you need custom quotes and fees pile up unexpectedly, Gusto publishes its pricing upfront. Month-to-month billing, no long-term contracts, free account setup. Cancel anytime without penalties.

Every plan includes unlimited payroll runs. They don't nickel-and-dime you for off-cycle payrolls or additional pay periods. This is a significant advantage if you need to process bonuses, commissions, or correction runs throughout the year.

Solid Benefits Administration

For a small business, offering benefits can feel impossible. Gusto makes it manageable with:

The workers' comp integration is particularly useful-premiums adjust automatically based on actual payroll data, so you're not overpaying at the beginning of the year and dealing with reconciliations later. This pay-as-you-go model helps with cash flow management.

If you want Gusto to serve as your health insurance broker, that service comes at no additional cost. However, if you want to bring your existing broker into the Gusto platform, there's a $6 per employee monthly integration fee.

Benefits administration is deeply integrated with payroll, meaning deductions happen automatically. Employees can make election changes during enrollment periods, and everything syncs seamlessly. This eliminates the manual spreadsheet tracking that many small businesses struggle with.

Gusto Wallet (Employee Perk)

Employees get access to the Gusto Wallet app, which lets them manage pay, split deposits between accounts, access funds up to 2 days early, and set savings goals. It's a small perk that makes your business look more modern and employee-focused.

The Wallet app also includes financial wellness tools like a refund estimator, paycheck optimizer, and even automated tax filing for employees. These features can help with employee retention by providing genuine financial value beyond just their paycheck.

Hiring and Onboarding Made Simple

Gusto's hiring tools help streamline the entire recruitment and onboarding process:

The onboarding checklist feature is particularly powerful. You can create templates for different employee types (hourly vs. salaried, different departments, different states) and assign tasks to different team members. Tasks can include everything from signing documents to setting up company email accounts to scheduling first-day meetings.

Employees can complete most onboarding tasks before their first day, which means they can jump right into productive work instead of spending their first week filling out paperwork. The system sends automated reminders to complete outstanding tasks, and you can track progress from your admin dashboard.

New hire reporting to state agencies is automated in all 50 states, which eliminates another compliance headache. Most states require new hire reports within 20 days of hire, and Gusto handles this filing for you.

Contractor Payments Made Easy

You can pay contractors in all 50 states, and Gusto handles 1099 filing. The platform files 1099-NECs for all contractors, even those who earned less than $600, to help them file their tax returns accurately.

They also support global contractor payments in 100+ countries, though international payments carry service and foreign exchange fees. The global contractor feature was added through Gusto's acquisition of a global payroll startup, expanding their capabilities beyond domestic-only payroll.

Contractors get their own portal where they can update their information, view payment history, download 1099 forms, and set up direct deposit. You can pay contractors on different schedules than employees-weekly, monthly, or one-time payments as needed.

Time Tracking and Scheduling

On the Plus and Premium plans, Gusto includes built-in time tracking:

The time tracking automatically feeds into payroll, eliminating manual data entry. Managers can review and approve hours before payroll runs. The system flags issues like missed punches, late clock-ins, or potential overtime, helping you stay compliant with labor laws.

For businesses that don't need Gusto's built-in time tracking, the platform integrates with popular tools like Homebase, TSheets, Deputy, and When I Work.

Reporting and Analytics

Gusto provides a range of reports to help you understand your workforce costs and make better decisions:

The Premium plan includes competitive compensation tools that let you benchmark salaries against market data. This is valuable when making hiring decisions or conducting performance reviews.

Where Gusto Falls Short

Limited HR Depth

Gusto handles basic HR tasks well-onboarding, offer letters, employee handbooks, document storage. But if you need advanced recruiting, sophisticated performance management, or deep compliance tools for regulated industries, you'll outgrow it.

The performance review tools are fairly basic-you can create review cycles and collect feedback, but it's not as robust as dedicated performance management platforms. There's no applicant tracking system built in (though you can integrate with external ATS tools). Learning management and training features are essentially non-existent.

For businesses in construction, healthcare, or other compliance-heavy industries, Paychex or ADP might be better fits despite the higher price. Gusto works best for service businesses, agencies, tech startups, and other companies without unusual compliance requirements.

Customer Support Can Be Slow

This is Gusto's Achilles heel. Support hours are limited compared to competitors like Paychex (which offers 24/7 support). Email responses can take 2-5 business days. If you hit a payroll emergency the day before payday, you might be sweating.

Multiple user reviews mention frustration with support quality. Common complaints include:

The Premium plan gets priority support and a dedicated success manager, but that's a significant price jump just for better service. For basic questions, the help center is comprehensive. But for urgent, complex issues, the support experience can be frustrating.

Phone support exists but isn't always easy to find-many users report being pushed toward email or chat support first. Once you do get someone on the phone, experiences vary widely. Some users report excellent, knowledgeable support, while others describe unhelpful interactions.

Costs Add Up With Add-Ons

The base pricing looks clean, but watch out for extras:

That $49/month Simple plan can easily become $100+ once you enable the features you actually need. Many businesses find that jumping to the Plus plan is more cost-effective than adding multiple features to Simple.

No Same-Day Direct Deposit

Even on the highest tier, same-day deposits aren't available. You're looking at next-day (Plus and up) or four-day (Simple). For businesses that need maximum payroll flexibility, this is a limitation.

Some competitors like Square Payroll offer same-day processing for an additional fee. If you frequently have last-minute payroll needs or variable pay schedules, this constraint might be frustrating.

Single-State Limitation on Simple Plan

With remote work being the norm, the single-state restriction on the cheapest plan pushes many businesses to the $80/month Plus tier right out of the gate. If you have even one remote employee in another state, you'll need multi-state payroll capabilities.

This isn't necessarily a dealbreaker-the Plus plan offers strong value-but it does mean the advertised $49 starting price isn't realistic for most modern businesses with any remote workers.

Limited Customization for Complex Payroll

Gusto works great for straightforward payroll scenarios but struggles with edge cases. Businesses with highly variable pay structures, complex commission calculations, or industry-specific pay requirements may find the platform limiting.

Union payroll, certified payroll reporting for government contractors, and tip pooling arrangements are either unsupported or require workarounds. Job costing is basic-it exists but isn't as sophisticated as construction-specific payroll platforms.

International Limitations

While Gusto supports global contractor payments, full-time international employees require Gusto Global-a separate service with significantly higher costs. If you're building a globally distributed team with W-2 equivalent employees abroad, you'll likely need a true Employer of Record (EOR) service like Deel or Remote.

Gusto was designed primarily for U.S. businesses, and international capabilities feel like an afterthought rather than a core strength.

Who Should Use Gusto?

Gusto is ideal if you:

Gusto probably isn't right if you:

Gusto vs. The Competition

Wondering how Gusto stacks up against alternatives? Here's the quick version:

Gusto vs. ADP: ADP offers more robust compliance and scales better for large organizations, but pricing is opaque and add-ons pile up fast. ADP has 24/7 support and more customization options. For businesses under 50 employees, Gusto is typically cheaper and more transparent. ADP makes more sense for enterprises or highly regulated industries. See our full Gusto vs. ADP comparison.

Gusto vs. Paychex: Paychex has 24/7 support and deeper HR features, but the platform can feel dated. Paychex offers more hand-holding and account management, which some businesses value. Gusto wins on user experience and modern design. The pricing is usually similar, but Paychex structures fees differently. Read our Gusto vs. Paychex breakdown.

Gusto vs. Justworks: Justworks is a full-service PEO (they become co-employers and handle everything). Better for businesses that want to completely offload HR and gain access to Fortune 500-level benefits. More expensive-plans start at $59 per employee monthly. Gusto gives you more control; Justworks takes more off your plate. Check our Gusto vs. Justworks comparison.

Gusto vs. QuickBooks Payroll: If you're already in the QuickBooks ecosystem, their payroll add-on integrates seamlessly and may be slightly cheaper. But Gusto offers more comprehensive HR tools, better benefits administration, and a superior user experience. QuickBooks wins for accounting integration; Gusto wins for being a complete people platform. See Gusto vs. QuickBooks Payroll.

Gusto vs. Rippling: Rippling is more powerful for growing teams that need IT and device management alongside HR. It automates more workflows and offers deeper customization. More complex setup and higher learning curve, but better for scaling from 25 to 250+ employees. Rippling handles software provisioning, app management, and global payroll better. Gusto is simpler and more focused. Read our Gusto vs. Rippling review.

Gusto vs. OnPay: OnPay offers slightly lower base pricing ($40/month + $6/person) and excellent support, but fewer features. No time tracking, more limited reporting, and basic benefits administration. OnPay is great for very small businesses (under 10 employees) who need simple payroll. Gusto offers more features and better scalability.

For a broader look at payroll options, check out our guide to payroll software for small business.

Real User Reviews: What People Actually Say

Gusto holds a 4.6/5 rating on G2 across thousands of reviews. Here's what keeps coming up:

The good:

The frustrations:

From Trustpilot and BBB: Gusto has more mixed reviews on platforms like Trustpilot (3.2/5) and BBB. Common complaints include billing issues after cancellation, difficulty reaching competent support, and problems with FSA and benefits administration. Several users mention that Gusto was great when they were small but quality declined as they and the company grew.

It's worth noting that review sites tend to attract more negative feedback (happy customers rarely leave reviews), but the support concerns appear consistently across multiple platforms.

Overall sentiment: Great for straightforward small business payroll, but don't expect white-glove service if something goes wrong. The software works well when everything runs smoothly, but problem resolution can be frustrating.

Getting Started With Gusto

Setup is straightforward. You'll need:

Gusto offers free account setup and migration assistance. The best time to switch is at the beginning of the year (January 1), but you can migrate any time-just give yourself at least two weeks lead time to avoid gaps in paying your team.

There's no free trial, but you can use the software free until you actually run your first payroll. This lets you explore the interface, add employees, set up benefits, and get comfortable before committing. You only get charged once you process your first payroll run.

The Setup Process Step-by-Step

Step 1: Create Your Account Enter your business information, choose your plan, and verify your identity. Gusto uses your Social Security Number or EIN to verify your business and set up tax accounts.

Step 2: Add Your Company Details Provide your mailing address, filing address, and work address. These may all be the same, or they might differ. Enter your business structure (LLC, S-Corp, C-Corp, etc.) and industry.

Step 3: Connect Your Bank Account Link the checking account you'll use for payroll. Gusto uses this account to pay employees and remit taxes. You'll verify the account through micro-deposits or instant verification.

Step 4: Add Your Team Enter employee information manually, or invite them to self-onboard. If you invite employees, they'll receive an email prompting them to enter their own information-address, SSN, W-4 elections, direct deposit details. This saves you data entry time and puts the accuracy burden on them.

Step 5: Set Up Your Pay Schedule Choose weekly, biweekly, semi-monthly, or monthly pay periods. Gusto will recommend a schedule based on your team composition. Make sure to leave adequate time between pay period end and payday for hour approvals and processing.

Step 6: Configure State Accounts Add any existing state tax account numbers. If you're hiring in a new state, Gusto's tax registration service (paid add-on) can help you register with state agencies.

Step 7: Set Up Benefits (Optional) If you're offering health insurance, retirement plans, or other benefits, configure these during setup. Employees can enroll as part of their onboarding process.

Step 8: Run a Test Payroll Gusto recommends running through the payroll process before your first real run. This helps you understand the workflow and catch any setup issues.

Most businesses complete setup in 1-3 hours, though it can take longer if you're migrating from another provider mid-year or setting up complex benefits packages.

Making the Most of Gusto: Tips and Best Practices

Set up AutoPilot for salaried employees: If you have salaried employees with consistent pay, enable AutoPilot. It automatically processes payroll on schedule, eliminating the need to log in and approve each run. You'll still get notifications and can make adjustments if needed.

Use custom onboarding checklists: Take time to create thorough onboarding checklists for different employee types. Include non-payroll tasks like setting up email, assigning equipment, scheduling training, and meeting key team members. This ensures nothing falls through the cracks.

Enable employee self-service: Train employees to use their portal for updating information, viewing pay stubs, requesting time off, and managing benefits. This reduces your admin burden.

Review reports monthly: Run workforce costing reports monthly to understand where your labor dollars are going. This data is valuable for budgeting, project profitability analysis, and strategic planning.

Take advantage of integrations: Connect Gusto with your accounting software (QuickBooks, Xero), time tracking tools, and expense management systems. The more data that flows automatically, the less manual work you do.

Stay ahead of deadlines: Gusto sends reminders, but maintain your own calendar of payroll and tax deadlines. Review quarterly tax filings when they're generated to catch any anomalies early.

Document your processes: Create written procedures for running payroll, onboarding new hires, and handling common scenarios. This protects your business if the person handling payroll leaves.

Common Questions and Concerns

What happens if Gusto makes a tax filing error?

Gusto has a tax guarantee-if they make an error in calculating or filing your taxes, they'll pay any penalties and interest charges. However, getting them to acknowledge and fix errors can be a lengthy process based on user reviews. Document everything and follow up persistently if you suspect an issue.

Can I switch to Gusto mid-year?

Yes, but it requires transferring your year-to-date payroll data from your previous provider. Gusto's migration team can help (free on Premium, assistance available on lower tiers). The process takes 1-2 weeks typically. Switching at year-end or beginning of year is cleaner but not required.

What if I need to fire someone or have layoffs?

Gusto handles final paychecks, including payout of accrued PTO (if required in your state). You can mark employees as terminated, which removes them from active payroll but maintains their records for tax purposes. Gusto will include them on year-end W-2s.

Does Gusto handle garnishments and child support orders?

Yes, Gusto processes wage garnishments, child support orders, and tax levies. You enter the garnishment details and Gusto handles the calculations and remittance. There's no additional fee for this service.

Can I run payroll from my phone?

Yes, Gusto has mobile apps for both admins and employees. You can approve hours, run payroll, and manage most administrative tasks from your phone. Employees can clock in/out, view pay stubs, and request time off from the mobile app.

What integrations does Gusto offer?

Gusto integrates with 180+ apps including:

Alternatives Worth Considering

If you're not sure Gusto is the right fit, here are scenarios where alternatives might work better:

If you need cheaper payroll for under 10 employees: Consider OnPay ($40/month + $6/person) or Square Payroll ($35/month + $5/person for employees). Both offer basic payroll at lower prices, though with fewer features.

If you want fully outsourced HR: Consider a PEO like Justworks ($59/person/month), TriNet, or Insperity. You'll pay more but get co-employment benefits including enterprise-level health insurance, dedicated HR support, and compliance protection.

If you're scaling rapidly (25-500 employees): Look at Rippling ($35/month + $8/person) or BambooHR. Both offer more sophisticated HR features, better automation, and systems built for mid-market companies.

If you're hiring internationally: Deel or Remote.com specialize in global employment with EOR services in 100+ countries. They handle international payroll, benefits, and compliance properly-not as an afterthought.

If you need construction-specific features: Foundation Software or Jonas Premier offer certified payroll reporting, union payroll, and deep job costing that construction companies need.

If you're already deep in the QuickBooks ecosystem: QuickBooks Payroll integrates natively and may be the path of least resistance, especially if your bookkeeper or accountant prefers it.

The Bottom Line

Gusto is one of the best payroll solutions for small businesses that want automation, clean design, and fair pricing without enterprise complexity. It handles the core jobs-paying people, filing taxes, managing benefits-better than most alternatives in its price range.

The Simple plan at $49/month + $6/person is genuinely affordable for small teams. But realistically, many businesses will land on the Plus plan ($80/month + $12/person) once they factor in multi-state payroll and next-day deposits.

You should choose Gusto if: You're a small business (under 50 employees) with straightforward payroll needs, you value modern software over legacy systems, you want transparent pricing, and you need good-enough HR features without hiring a full HR department.

You should look elsewhere if: You need 24/7 support, you have complex or industry-specific payroll requirements, you're growing past 100 employees, or you want deep HR features like robust learning management and advanced performance tools.

For most small businesses in service industries, tech, creative fields, or general office environments, Gusto hits the sweet spot of features, ease of use, and cost. The tax filing automation alone can save you from costly mistakes and give you peace of mind.

Just set realistic expectations around support. When things work smoothly (which is most of the time), Gusto is excellent. When something breaks, fixing it can test your patience.

Try Gusto free until you run your first payroll →

Want to see how Gusto compares to other options? Read our full Gusto reviews roundup or our in-depth Gusto review.

Frequently Asked Questions

Is Gusto good for very small businesses?

Yes, Gusto works well for businesses with just one or two employees. The Contractor Only plan is particularly good for solopreneurs working with freelancers. Even the Simple plan at $49/month is cost-effective when you factor in the time saved and compliance protection provided.

Does Gusto work for S-Corps?

Yes, Gusto has a specific Solo plan designed for S-Corp owners who need to pay themselves a reasonable salary. It handles the unique requirements of owner-only payroll and helps you stay compliant with IRS requirements while maximizing tax savings.

How long does it take to get set up on Gusto?

Most businesses complete initial setup in 1-3 hours. If you're migrating from another provider mid-year, expect the full process to take 1-2 weeks including data migration and verification. You can use the platform free during setup until you run your first payroll.

Can Gusto handle tips and gratuities?

Yes, Gusto can process both cash tips (reported by employees) and credit card tips. It handles tip credits and ensures proper tax withholding on tip income. However, complex tip pooling arrangements may require manual calculations.

What states does Gusto support?

All 50 states. Gusto handles state-specific requirements including SUI (State Unemployment Insurance), state income tax withholding, and local taxes where applicable. The Simple plan only supports single-state payroll, but Plus and above handle multi-state teams.

Does Gusto offer customer support by phone?

Yes, but phone support can be hard to reach and wait times are often long. Most support happens via email or chat. Premium plan customers get priority support and a dedicated customer success manager with direct contact information.

Can I run payroll for employees in Canada or other countries?

Gusto supports contractor payments in 120+ countries but does not handle full payroll for international employees. For that, you'd need Gusto Global (expensive) or a dedicated EOR service like Deel or Remote.com.

What happens to my data if I cancel Gusto?

You can export your payroll data and reports before canceling. Gusto maintains records for tax purposes, and employees can still access their historical pay stubs and tax forms through their employee portal. There's no penalty for canceling-Gusto is month-to-month.

Does Gusto integrate with my accounting software?

Gusto integrates with QuickBooks Online, QuickBooks Desktop, Xero, FreshBooks, and several other accounting platforms. Payroll data syncs automatically, eliminating manual journal entries and reducing errors during month-end close.

How does Gusto compare to doing payroll manually?

Manual payroll takes an average of 3-5 hours per pay period when you factor in calculations, check printing, tax deposits, and quarterly filings. Gusto reduces this to minutes per payroll run. The time savings alone typically justify the cost, not to mention reduced error risk and stress.