Gusto vs Justworks: Complete Comparison for Small Businesses

Gusto and Justworks both handle payroll, but they're fundamentally different products. Gusto is payroll software with HR features bolted on. Justworks is a PEO (Professional Employer Organization) that becomes your co-employer. That distinction matters more than any feature comparison.

Here's the quick answer: If you want affordable, self-service payroll with optional HR tools, go with Gusto. If you want someone else to handle compliance, benefits administration, and employment liability-and you're willing to pay significantly more for it-Justworks makes sense.

Let's break down the specifics.

Pricing Comparison: Gusto vs Justworks

This is where the difference is stark. Gusto charges a base fee plus per-employee costs. Justworks charges a flat per-employee rate that's considerably higher.

Gusto Pricing

For detailed pricing breakdowns, check our Gusto pricing guide and Gusto cost analysis.

Justworks Pricing

Real Cost Example: 10 Employees

PlatformPlanMonthly Cost
GustoSimple$109
GustoPlus$200
GustoPremium$400
JustworksPayroll$130
JustworksPEO Basic$590
JustworksPEO Plus$1,090

The gap is massive. Gusto's Plus plan costs $200/month for 10 employees. Justworks PEO Basic costs $590/month. That's an extra $4,680/year. Is it worth it? Depends entirely on what you need.

Cost Analysis at Different Company Sizes

Let's look at how the pricing scales as your team grows:

25 Employees:

50 Employees:

100 Employees:

The pricing gap narrows slightly at scale, but Gusto remains 3-7x cheaper depending on the plan. For companies with 100 employees, choosing Gusto Plus over Justworks PEO Basic saves $43,440 per year.

The PEO vs Payroll Software Difference

This is the crux of the decision. Gusto is software you use to run payroll. Justworks is a service that runs your HR for you.

What You Get with Justworks PEO

When you use Justworks' PEO plans, they become your co-employer. That means:

For startups and small businesses that don't have an HR person, this outsourcing can be valuable. You're not just buying software-you're buying a service that handles the messy employment stuff.

Understanding the Co-Employment Relationship

The PEO model creates a co-employment arrangement where your employees technically become employees of both your company and Justworks. This sounds complex, but it works like this:

This arrangement is mandatory for using Justworks' PEO services. You cannot opt out of workers' compensation coverage, even if you already have a policy. This can result in double coverage during transition periods.

What Gusto Does Well

Gusto isn't trying to be your co-employer. It's trying to be dead-simple payroll software that you run yourself. And it succeeds at that:

Read our full Gusto review for more details.

Feature Comparison: Deep Dive

Payroll Processing

Both handle core payroll well. Gusto offers unlimited payroll runs on all plans. Justworks automates deductions and direct deposits for salaried and hourly employees.

For pure payroll functionality, they're comparable. The difference is what comes bundled around it.

Gusto Payroll Features:

Justworks Payroll Features:

Benefits Administration

Gusto: Health insurance administration is free if you use Gusto as your broker (you just pay premiums). If you keep your own broker, it's $6/employee/month. 401(k), HSA, FSA, and commuter benefits available as add-ons.

Gusto partners with over 30 carriers and offers access to more than 9,000 health insurance plans. Their licensed benefits advisors help you navigate options and find plans that fit your budget. The benefits administration platform handles enrollment, deductions, and compliance automatically.

Specific Gusto Benefits Options:

Justworks: On PEO plans, you get access to large-group health insurance rates. The PEO Plus plan includes medical, dental, vision, HSA/FSA, mental health benefits, and fertility benefits. The purchasing power advantage is real-small companies can get better rates through Justworks' pool.

Specific Justworks Benefits Options:

Winner for benefits: Justworks, if you're on a PEO plan. Their group purchasing power can save money on health insurance that partially offsets the higher platform cost. However, Gusto offers more flexibility-you're not locked into their workers' comp policy, and you can choose your own broker if preferred.

Compliance and Tax Management

Gusto: Automated tax filings, new hire reporting, compliance alerts (on Premium). But you're responsible for understanding employment law. Gusto gives you tools; you use them.

Gusto handles:

Justworks: As a PEO, they take on shared liability. They handle state registrations, unemployment insurance, workers' comp, and more. Their compliance support for multi-state operations is strong.

Justworks handles:

Winner for compliance: Justworks. The co-employment model means they have skin in the game on compliance. They're liable if something goes wrong with tax filings or unemployment claims, which incentivizes them to get it right. However, this also means less control-you're dependent on their processes.

Time Tracking and Scheduling

Gusto: Built-in time tracking on Plus and Premium plans. Includes geofencing, project tracking, and integrates with tools like Homebase.

Gusto's time tracking includes:

Justworks: Basic time tracking included, with an optional intensive time-tracking add-on called Justworks Hours ($8/employee/month additional).

Justworks time tracking includes:

Comparable feature: Neither is exceptional, but both get the job done. Gusto includes time tracking in higher-tier plans without additional charges, while Justworks requires add-on fees for advanced features. If time tracking is critical to your operations, consider dedicated solutions like Deputy or When I Work that integrate with both platforms.

HR Tools and Employee Management

Gusto: Onboarding, offer letters, document storage, employee directory, org charts. Premium plan adds access to certified HR experts and an HR resource center.

Gusto's HR features include:

Justworks: Similar HR tools plus 24/7 support on all PEO plans. The PEO model means HR support is more hands-on.

Justworks' HR features include:

Support Structure Differences: This is crucial. Gusto's support operates on standard business hours (6 AM - 6 PM Mountain Time, Monday-Friday) for most plans. Chat is the fastest contact method. Premium plan customers get priority support and dedicated account management.

Justworks offers 24/7 customer support on all PEO plans, which is valuable for urgent payroll issues. However, user reviews note that your account representatives are generalists, not specialized payroll or compliance experts. Getting answers to complex questions may require escalation.

International Payments and Global Hiring

Gusto: Pays international contractors in 120+ countries. EOR (Employer of Record) services through a partnership at $599/employee/month.

Gusto's global capabilities:

Justworks: International contractor payments in 60+ countries ($39/contractor/month additional). EOR services at $599/employee/month for hiring international employees.

Justworks' global capabilities:

Roughly comparable for international: Gusto has broader contractor coverage (120+ vs 60+ countries), but Justworks charges per contractor for international payments while Gusto includes international contractor payments in their standard plans. For full-time international employees, both charge $599/month through EOR partnerships.

Reporting and Analytics

Gusto: Provides standard payroll reports, time-off reports, and workforce cost reports. Premium plan includes custom report builder.

Gusto reporting includes:

Justworks: Offers workforce reporting, expense tracking, and compliance reports. All PEO customers get access to standard reports.

Justworks reporting includes:

Neither platform is a true HRIS with deep analytics capabilities. If you need advanced reporting, you'll likely need integrations with business intelligence tools or a dedicated HRIS platform.

When to Choose Gusto

Choose Gusto if:

Gusto works best for small businesses under 50 employees who want modern, easy-to-use payroll software without the cost and complexity of a PEO relationship.

Best Use Cases for Gusto

Scenario 1: Bootstrapped Startup (5 employees)

A software company with five W-2 employees, all in the same state. The founder handles basic HR tasks and wants affordable payroll with clean software. Gusto Simple at $79/month fits perfectly-that's $948/year for full-service payroll.

Scenario 2: Growing Services Business (25 employees)

A marketing agency with employees across three states needs multi-state payroll, time tracking, and basic benefits administration. Gusto Plus at $380/month ($4,560/year) provides everything needed without PEO overhead.

Scenario 3: Contractor-Heavy Business

A consulting firm with two W-2 employees and 15 contractors. Using Gusto's mixed model: Simple plan for employees ($61/month) plus contractor payments for 15 contractors ($90/month in months they're paid) = ~$151/month average. Total annual cost under $2,000.

When to Choose Justworks

Choose Justworks if:

Justworks makes sense for companies with 5+ employees who value the outsourced HR model and can afford the premium pricing. Tech startups and distributed teams particularly benefit from their compliance support.

Best Use Cases for Justworks

Scenario 1: Venture-Backed Startup (15 employees)

A SaaS company just raised a Series A and needs to offer competitive benefits to attract senior talent from larger companies. The $885/month ($10,620/year) for PEO Basic gives them large-company benefits and compliance support while the founders focus on growth.

Scenario 2: Remote-First Company (30 employees across 12 states)

A distributed team operating in multiple states faces complex compliance. Justworks PEO Basic at $1,770/month ($21,240/year) handles all state registrations, unemployment insurance, and multi-state tax compliance automatically. The time saved and liability reduced justifies the cost.

Scenario 3: Healthcare-Related Business

A medical device company needs robust benefits, including comprehensive health insurance and fertility benefits, to compete for specialized talent. Justworks PEO Plus provides the full benefits package their employees expect from healthcare-adjacent employers.

What Each Platform Gets Wrong

Gusto Weaknesses

Common Gusto Complaints

Based on user reviews, common issues include:

Justworks Weaknesses

Common Justworks Complaints

Based on user reviews, common issues include:

Setup and Implementation

Getting Started with Gusto

The Gusto setup process is straightforward and can typically be completed in under a week:

Step 1: Account Creation (30 minutes)

Step 2: Employee Setup (1-2 hours)

Step 3: Payroll Configuration (1 hour)

Step 4: First Payroll (15 minutes)

Premium plan customers get full-service migration assistance, where Gusto's team handles data import and setup for you.

Getting Started with Justworks

Justworks PEO setup is more complex due to the co-employment relationship:

Step 1: Application and Approval (2-5 business days)

Step 2: Start Date Selection

Step 3: Benefits Setup (1-2 weeks)

Step 4: Employee Migration

Step 5: First Payroll

The Justworks implementation is more intensive but includes dedicated support from account representatives throughout the process.

Integration Ecosystem

Gusto Integrations

Gusto offers 100+ integrations across multiple categories:

Accounting:

Time Tracking:

HR and Performance:

Benefits and Financial:

The Gusto API is also available for custom integrations, particularly useful for larger businesses with proprietary systems.

Justworks Integrations

Justworks offers 14 core integrations:

Accounting:

Hiring and Performance:

Equity and Expense Management:

Justworks' integration ecosystem is more limited than Gusto's, which can be a drawback for businesses relying heavily on connected software tools.

Security and Compliance Certifications

Gusto Security

Justworks Security

Both platforms maintain strong security standards appropriate for handling sensitive employee and financial data. Justworks' CPEO certification provides an additional layer of assurance-the IRS holds CPEOs to stricter financial standards and conducts annual audits.

Customer Support Comparison

Gusto Support

Availability:

Support Tiers:

Response Times:

Gusto emphasizes self-service through their comprehensive Help Center with articles, videos, and step-by-step guides.

Justworks Support

Availability:

Support Structure:

Response Quality:

User reviews are mixed. Some praise the 24/7 availability and responsive service. Others note frustration with representatives who lack deep technical expertise in payroll, tax, or benefits. Complex issues may take multiple contacts to resolve as questions get escalated to specialists.

Alternatives to Consider

If neither quite fits:

For more options, browse our best payroll software for small business guide.

Industry-Specific Considerations

Technology and Startups

Best choice: Gusto for early-stage, Justworks for post-funding

Early-stage startups benefit from Gusto's low cost and flexibility. Once funded, many shift to Justworks for competitive benefits packages that help recruit talent from larger companies. Stock option management integrates with both platforms.

Healthcare and Medical Practices

Best choice: Justworks PEO Plus

Medical practices need robust benefits and compliance support. Justworks' large-group health insurance rates and HIPAA-compliant systems make it attractive. However, some practices prefer Gusto Premium for access to HR consultants who understand medical practice employment law.

Retail and Restaurants

Best choice: Gusto Plus

High employee turnover, hourly workers, and tight margins favor Gusto's lower pricing. Time tracking integration with POS systems and scheduling tools is critical. Justworks' higher cost per employee becomes prohibitive with 20+ hourly workers.

Professional Services (Law, Accounting, Consulting)

Best choice: Depends on size

Under 20 employees: Gusto offers better value. Many firms have existing relationships with benefits brokers they want to maintain.

20-100 employees: Justworks' compliance support for multi-state operations becomes valuable as firms grow across markets.

Construction and Manual Labor

Best choice: Limited options

Justworks doesn't accept high-risk manual labor businesses. Gusto works but may have higher workers' comp costs. Consider ADP or Paychex for better workers' comp pooling in high-risk industries.

Migration and Switching

Switching to Gusto

Gusto offers free migration assistance on Premium plans. For other plans:

Switching to Justworks

PEO transitions are more complex:

Switching Away from Either Platform

Both platforms require 30 days' notice to cancel. Key considerations:

Real User Feedback Summary

Gusto User Sentiment

Most Praised Aspects:

Most Criticized Aspects:

Justworks User Sentiment

Most Praised Aspects:

Most Criticized Aspects:

The Bottom Line: Decision Framework

Gusto and Justworks serve different needs despite both handling payroll.

Choose Gusto If:

Choose Justworks If:

Final Recommendation

For most small businesses: Start with Gusto. The pricing is transparent, the software is excellent, and you can always upgrade to Premium for more support as you grow. The cost savings compared to a PEO are substantial, and many businesses simply don't need the co-employment model.

For funded startups and fast-growing companies: Justworks makes sense if benefits are a recruiting priority and you have the budget. The compliance support and large-group insurance rates provide real value, particularly once you exceed 15-20 employees across multiple states.

Consider your growth trajectory: Many companies start with Gusto and switch to Justworks (or another PEO) once they reach 30-50 employees and can afford the premium pricing. There's no wrong answer-just different solutions for different business stages.

The best choice depends on your specific circumstances. Use this guide to evaluate which platform aligns with your budget, compliance needs, and HR capabilities. Both are solid options that serve thousands of satisfied businesses.