Payroll software keeps all your important information about salary or hourly pay in one place. Gusto and Paychex are both respected software services, but which is better for you?
What is Gusto?
Gusto is payroll management software that puts various employee management tools, such as pay, time off and benefits, in one place. Gusto offers reporting tools with customizable reports, compliance reports and team survey capabilities as well. This payroll management software is best for small organizations that don’t foresee a lot of growth.
What is Paychex?
Paychex is a payroll processing and human resources software service. It provides online services such as geolocation and geofencing for organizations whose employees are often on the move. Paychex’s core capabilities are payroll, invoicing, insurance administration and compliance, workers’ compensation and benefits.
Paychex Flex is the company’s most popular HR platform. While Paychex offers a variety of other services, this all-in-one solution provides a good introduction to Paychex’s portfolio.
Features and pricing comparisons of Gusto vs. Paychex
|Benefits||Yes (Gusto Plus)||Yes|
|Compliance support||Yes (Gusto Premium)||Yes|
|Taxes||Yes||Yes (Paychex Flex Select)|
|Hiring and onboarding||Yes (Advanced tools in Gusto Plus)||Yes (Paychex Flex Select)|
|Pricing||Gusto’s pricing plans start at $40/month + $6 per employee.||Paychex’s pricing plans start at $39/month + $5 per employee.|
Gusto’s pros, cons and pricing details
- Wide variety of payroll services, including state tax registration, contractor payments, and W-2s and 1099s.
- Easy to switch between salaried and hourly employee reporting.
- Streamlined and easy to use.
- Gusto’s Simple tier costs $40 per month plus $6 per employee.
- Gusto’s Plus plan is $60 per month plus $9 per person and includes multi-state tax services, next-day direct deposit, PTO management, time tracking and other features.
- Gusto’s top-tier Premium plan requires talking to their sales department to discuss the details.
Paychex’s pros, cons and pricing details
- Scalable for large organizations.
- Paychex Flex combines several types of reporting in one easy-to-use dashboard.
- Reliable customer support.
- Large number of customization options.
- Handles larger teams well.
- Paychex’s Flex Essentials tier is priced at a competitive $39 per month and $5 per employee.
- For information about additional plans, prospective customers can speak to a sales representative. Note that the basic tier does not include HR services or time and attendance, only payroll.
Common features of Gusto vs. Paychex
Both payroll software services offer a typical dashboard with a main menu on the left side and other displays appearing in the middle as needed; however, Gusto and Paychex break down information differently in a way that may be more or less suitable for larger businesses.
Paychex’s dashboard (Figure A) follows the classic Windows philosophy, offering insight into what the software is doing and providing the ability to play with a lot of settings.
By comparison, Gusto’s dashboard (Figure B) is similar to Apple, hiding more information initially in order to promote an easier-to-use approach. In Gusto, instructions flow in a chronological fashion, whereas Paychex lets the user look at more information at one time in general.
Both dashboards offer a wide range of features and organize a lot of information that is useful for businesses. For instance, Figure C is an example of Gusto platform data.
Employees can log in to Paychex or Gusto (Figure D) to log their work time if they’re hourly and to check the status of payments. Gusto’s app walks employees through onboarding, while Paychex integrates with several proprietary hardware tools including a face recognition “clock-in” device called the Iris or similar retina scanning. Gusto does not offer hardware add-ons.
Both Gusto and Paychex offer benefits administration, though Paychex requires adding on a Paychex Flex subscription to use it. Gusto users can do medical, dental and vision benefits on the basic plan with licensed brokers on hand, though it doesn’t offer health benefit management in every state. Subscribing to Paychex Flex offers professional employer organization benefits beyond the ones you can get with Gusto, including retirement plan administration.
Gusto handles 401(k) management through a third-party app, which is currently unavailable. Paychex offers a variety of options for 401(k) management, which is fitting since it’s most suitable for larger and more geographically dispersed organizations.
Choosing Gusto vs. Paychex
Larger organizations with more complicated payroll needs might want to choose Paychex for the greater number of customization options and display made to show a lot more information. Growing companies might want to choose Paychex for its ease of handling larger teams.
Gusto is a good choice for organizations that want an easy-to-use payroll system. Gusto is designed to hold a small business owner’s hand through the process of doing taxes according to state and federal regulations, so there are fewer chances of a less-experienced business owner, or one who wants to focus on improving their own product or service, being surprised by unexpected payroll problems.
For more payroll software options, read about the best payroll software of 2023, the 8 best international payroll services for 2023, the best payroll software for your small business in 2023, why businesses are spending more on productivity tech and the best HR analytics software.
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