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Imagine not doing payroll by hand. That’s a nice thought, right? There are many cloud-based payroll software solutions designed to make running your payroll and HR processes more user-friendly. Two of the most popular payroll software options available today are Gusto and Paychex.
While Gusto is a newcomer to the payroll services industry, arriving on the scene as a fully software-based payroll service, Paychex has over 50 years of experience. It began its life cutting paper checks out of a single office in Rochester, NY. Read our Gusto vs Paychex comparison to see how the two popular payroll systems measure up in terms of pricing, features, ease of use and more.
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Justworks
Benefits Administration
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Contractor Payments
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SurePayroll
Benefits Administration
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$29.99/mo plus $5 per employee
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OnPay
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month + $6 per user
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Rippling
Benefits administration
Yes
Contractor Payments
Yes
Base Price
$35 per month + $8 per user
5
Gusto
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month plus $6 per user
Gusto vs. Paychex: At a Glance
Gusto is a full-service payroll, benefits and HR software designed for startups and small businesses in the United States. Gusto offers automated or manual payroll for employees in all 50 states, self-service profiles for employees and contractors, the ability to set up two- and four-day direct deposits, employee onboarding and benefits administration. With its combination of key features and affordable prices, Gusto is clearly the winner for small businesses.
With Paychex, employee benefits are taken to the level of a professional employer organization, or PEO, which offers a more comprehensive range of HR and payroll services (note that Gusto partners with brokers to offer employee benefits). The amount of HR expertise that Paychex PEO provides may not be necessary for small businesses with fewer than ten employees.
Gusto
4.4
Our ratings take into account a product's cost, features, ease of use, customer service and other category-specific attributes. All ratings are determined solely by our editorial team.
Starting Price
$40 plus $6
Per month
Benefits Administration
Yes
Contractor Payments
Yes
On Gusto's Website
$40 plus $6
Per month
Yes
Yes
Editor's Take
Gusto is an online payroll and HR administration system designed to help small businesses simplify the process of managing payroll and benefits. The system also offers health and retirement benefits to employees. Using the employee wallet, employees can automate charitable donations and manage how and when they spend their money.
Pros & Cons
- Automatic tax filing and compliance guidance
- Easy employee and contractor payroll
- Integrated free checking and high-yield savings account with paycheck advance for employees
- Per-person pricing becomes costly for larger businesses
- No invoicing or accounts receivable features
Paychex Flex
4.2
Our ratings take into account a product's cost, features, ease of use, customer service and other category-specific attributes. All ratings are determined solely by our editorial team.
Starting Price
$39 monthly plus $5 per person
Benefits Administration
Not without additional add-on cost
Contractor Payments
Yes
On Paychex's Website
Paychex is currently offering a 3-month free trial
Paychex is currently servicing ~740,000 Businesses
$39 monthly plus $5 per person
Not without additional add-on cost
Yes
Editor's Take
Regardless of the size of your business, Paychex offers comprehensive payroll and HR services. Paychex Flex is Paychex’s payroll platform for small businesses with fewer than 50 employees. It offers stripped-down payroll processing with an employee and contractor self-service platform, but without the HR and benefits administration offered by some competitors. Small businesses looking for an affordable payroll solution might find this to be an appealing option.
Pros & Cons
- Slightly cheaper than Gusto
- Customizable plans
- Easy employee payroll
- Garnishment payment service included
- Extra add-on fee for payroll tax filing
- Extra fee for W-2 and 1099 filing
- Additional platform needed for time tracking
How the Payroll Services Stack Up
| Gusto | Paychex Flex | |
|---|---|---|
Forbes Advisor Rating |  |  |
Starting Price | $40 per month plus $6 per person | $39 per month plus $5 per person |
Payroll | Direct deposit for employees and contractors | Direct deposit or in-house printed checks for employees and contractors |
Tax Reporting | Automatic calculation, filing and paying of federal, state and local payroll taxes | Federal, state and local taxes automatically calculated, filed and paid. Add-on fee for end-of-year filings |
Benefits Administration | Administer health, wellness, retirement, transportation, housing and custom benefits | PEO-level benefits available with significant additional cost |
Employee Portal | Lifetime access to see pay stubs, W-2s, hours worked and more | Employees can view pay stubs and tax documents |
Integrations | Third-party integrations with QuickBooks, Xero, FreshBooks, Clover, Shopify and more | Integrates with accounting, HR, POS and other apps including QuickBooks, Xero, Clover, Indeed and Glassdoor |
Read Gusto Review | Read Paychex Flex Review |
Selecting the best payroll service will likely come down to determining which features of a payroll service are most important for you and your business. Gusto and Paychex Flex both offer the standard payroll service features such as direct deposit payroll, tax calculation and filing, and an employee portal for your team to track their pay stubs, hours worked and view tax documents. Both payroll services also integrate well with third-party software and have good live support services.
The biggest difference when comparing these two software is that even though Paychex Flex’s most affordable plan is less costly per employee, Gusto’s similarly priced plan includes significantly more features for nearly the same price. For example, Gusto’s Core plan offers benefits administration including medical, dental and vision while Paychex Flex does not offer those benefits without a significant add-on cost. In fact, Paychex Flex’s similarly priced Essentials plan does not even have W-2 and 1099 forms, payroll tax administration or workers’ compensation insurance.
Benefits Administration
One big feature difference between Gusto and Paychex Flex is the benefits administration. Gusto offers health benefits administration including medical, dental and vision even on its most affordable plan, while Paychex Flex requires an additional add-on price for benefits. However, with that additional cost, Paychex is able to offer PEO-level benefits so you have access to a better retirement plan, health insurance, and dental and vision coverage for your employees. Note: Gusto does not offer health benefits in every state and 401(k) plans, 529 college savings accounts and pretax accounts all require add-on coverage.
Employee Portals
Another key feature difference between Gusto and Paychex Flex is the employee portal. Gusto’s employee portal is well designed and easy to use with a user-friendly interface. It also allows your employees lifetime access to pay stubs, hours worked and W-2s, and allows them to update their own personal information and direct deposit details. Paychex Flex’s employee portal is functional but is nothing to write home about, and it does not give your employees lifetime access.
Pricing
Each company offers a suite of tiered pricing packages that vary in price per month and per employee based on the plan selected. There are also options for adding extra features to both payroll services if your business needs them.
Gusto offers three plans: the Core, Complete and Concierge, as well as a contractor-only option that is $6 per person with no additional monthly fee. The Gusto package cost breakdown is:
- Simple: $40 per month, plus $6 per employee per month
- Plus: $80 per month, plus $12 per employee per month
- Premium: Custom pricing
Unlike Gusto, Paychex Flex’s pricing is not so transparent. Paychex Flex offers its Essentials plan for $39 per month plus $5 per employee, but this plan is truly the base level and does not include a significant number of features common in its competitors’ most affordable plans. Paychex Flex’s higher-level plans, such as the Select and Pro, require quotes to determine the custom pricing based on your company’s needs.
Featured Partners
Advertisem*nt
1
Justworks
Benefits Administration
Yes
Contractor Payments
Yes
Base Price
$50/month + $8/user
2
SurePayroll
Benefits Administration
Yes
Contractor Payments
Yes
Base Price
$29.99/mo plus $5 per employee
3
OnPay
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month + $6 per user
4
Rippling
Benefits administration
Yes
Contractor Payments
Yes
Base Price
$35 per month + $8 per user
5
Gusto
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month plus $6 per user
Bottom Line
Overall, we feel Gusto is a better choice for most small businesses. Even its most affordable plan includes a longer list of useful payroll and HR features. These key features and a solid benefits administration make Gusto an excellent choice for small business owners looking for an easy-to-use, affordable payroll service software.
If you want to seriously improve your health insurance options or fully outsource your entire HR system, Paychex may be the better choice. With Paychex’s higher-cost plans, HR professionals are assigned to your business to help manage payroll processing, employee benefits, workers’ compensation, employee relations issues and more. The Paychex PEO means your business can improve its buying power when it comes to getting the best retirement plans, health insurance, and dental and vision coverage.
Ultimately, your needs as a business will determine which software service is best for you.
Read More:
- Best Payroll Software
- Best Free Payroll Software
Frequently Asked Questions
What are the best payroll services for small businesses?
The best payroll services for small businesses include OnPay for those that already use QuickBooks for accounting purposes, Gusto for those looking to save a good deal of time and ADP run for those with fewer than 50 employees. Learn more about the best payroll services for small businesses.
What features should a payroll service for small businesses have?
The features you want in a payroll service for your small business include one that is simple to set up, provides payroll processing and management, makes it possible to do tax filing, creates detailed payroll reports, offers direct deposit to your employees, allows employees to make certain changes as needed, and offers quality customer support.
Which is better: Gusto or QuickBooks?
Gusto and QuickBooks are both top-rated providers, however, QuickBooks has a slightly higher rating due to its comprehensive feature set making it the more versatile choice. Get the complete comparison of Gusto vs Quickbooks.
Is Paychex better than ADP?
ADP is worth considering if you want a customizable and scalable payroll service platform with one-to-one assistance from a customer service representative. Paychex is a suitable choice for smaller firms looking for an affordable payroll solution. Read our ADP vs. Paychex review to learn more.
