Gusto Review for SMBs

hr payroll tool · $40–$80+/mo base plus per-person fees for payroll

Gusto is a payroll and HR platform built for small teams that hire W-2 employees. It bundles payroll processing, benefits administration, and basic tax filings into one dashboard. Most SMBs with 5–50 employees will find it covers the essentials without overwhelming complexity.

What it does

Gusto automates payroll calculations, tax withholding, and direct deposit for your employees. It handles the paperwork side—new-hire reporting, quarterly tax filings, unemployment insurance—so you don't file those manually with the state. The platform includes a self-serve onboarding portal where new hires enter their W-4 and direct deposit info. You can also use it to administer health insurance, retirement plans (like a simple IRA), and paid time off policies. There's no built-in time tracking; you'll either manually input hours, integrate a third-party time clock, or upload timesheets.

Who it's for

✓ Ideal user

You're an SMB owner with 5–50 W-2 employees who needs payroll off your plate entirely and wants one vendor handling both payroll and basic HR compliance. You're willing to pay per-employee fees for that simplicity.

✗ Not for

If you have a large contractor base, multiple state tax complexities, or fewer than 3 employees, look elsewhere. Contractors and 1099 workers aren't supported here.

Typical team size

5–50 employees

Typical industries

Professional services (accounting, consulting, law)Retail and food serviceConstruction and tradesHealthcare practicesMarketing and creative agencies

Pros

✓ One invoice for payroll and benefits administration eliminates the need to juggle separate vendors for tax filings, health insurance, and retirement. Most payroll competitors charge separately for each piece.

✓ New-hire onboarding through a self-service portal reduces back-and-forth emails and paper forms. Your employee completes W-4, I-9, and direct deposit in a few minutes, and it flows into payroll automatically.

✓ Built-in compliance filing for federal and state payroll taxes, unemployment insurance, and new-hire reporting means you don't manage deadlines or worry about penalties from missed filings.

✓ Mobile app for approving timesheets and payroll runs on the go, plus real-time visibility into payroll costs and tax liability before you process a run.

Cons

✗ Per-employee fees on top of the base monthly subscription add up quickly. A 15-person team paying $60/month base plus $15 per person equals $285/month—over $3,400 a year just for payroll.

✗ No time tracking built in, so you'll need to integrate a third-party tool (like Toggl or Clockify) or manually input hours every pay period, adding friction if your team is hourly.

✗ Limited reporting and analytics compared to enterprise payroll platforms. If you need detailed labor cost breakdowns by department or project, you'll export data to Excel often.

Pricing breakdown

$40–$80/month base plus per-employee per-payroll-cycle fees (typically $8–$15 per person)

Gusto charges a monthly base fee (typically $40–$80) plus a per-employee fee per pay period. The exact per-employee cost varies by add-ons like benefits administration and compliance support. There are no free tiers, but you can try the tool with a limited free trial.

Where it gets expensive

Adding health insurance administration, 401(k) setup, workers' compensation filing, or accountant support increases costs. A 20-person company with benefits can easily exceed $600–$800 per month.

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Alternatives worth considering

QuickBooks
accounting
Small-business accounting and payroll hub for bookkeeping, billing, and tax prep handoffs.
QuickBooks Payroll integrates directly with QuickBooks Online if you already use it for accounting, eliminating double-entry and syncing tax data automatically. It's a good fit if payroll is one piece of a larger accounting workflow.
FreshBooks
accounting
Online invoicing and light bookkeeping geared toward freelancers and tiny service firms.
FreshBooks pairs payroll with invoicing and expense tracking, useful if your team invoices clients and you want one platform for accounting and payroll. Simpler pricing structure with no separate per-person fees.
Toast
pos
Restaurant point-of-sale and payments stack built for table service and quick service.
Toast is built for restaurants and retail with integrated POS, inventory, and payroll, so if you're a restaurant or quick-service operation, it handles shift scheduling and tips alongside payroll in a way Gusto doesn't.

Verdict

Gusto is a solid choice if you have 10–50 W-2 employees, process payroll every two weeks, and want the administrative burden gone. The one-platform approach to payroll, tax filing, and benefits saves time and reduces errors. However, the per-employee fees and lack of built-in time tracking make it less attractive for very small teams or those with hourly workers who clock in and out multiple times a day.

Worth it when

You have at least 10 W-2 employees, pay them on a regular schedule (biweekly or monthly), and want state tax compliance and benefits admin handled without thinking about it. Your ROI comes from not hiring a part-time payroll person or accountant.

Skip when

You have fewer than 5 employees (you can still do payroll manually or via your bank), rely heavily on contractors, or process highly variable hourly timesheets where the per-person fees stack up. Also skip if you're using QuickBooks for accounting and need tight integration—QuickBooks Payroll is a better match.

FAQ

Can I integrate Gusto with my time-tracking app?▼

Yes, Gusto integrates with common time-tracking tools like ADP TimeForce and Bamboo HR, but not with all of them. Check the integration list during signup to confirm your tool is supported. If not supported, you'll need to manually upload timesheets or type in hours.

What happens if I switch payroll providers later?▼

Gusto can export your employee data, tax history, and payroll records in a standard format, so moving to another provider is straightforward. The main hassle is setting up new tax withholding and benefits in the new system, not data loss.

Does Gusto handle workers' compensation insurance?▼

Gusto doesn't manage workers' compensation directly, but it can report payroll to your carrier or help you set up a policy through a partner. You'll still need to enroll and pay your carrier separately based on your state's requirements.

Can I use Gusto for multiple business entities or locations?▼

Gusto allows one account per entity, so if you have multiple LLCs or S-Corps, you'll need separate subscriptions. This can get expensive quickly; larger multi-entity operations often move to ADP or Paychex for better pricing and entity management.

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