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Gusto Payroll Software Review

Matt D'Angelo
Matt D'Angelo

After conducting extensive research and analysis, we recommend Gusto as the best online payroll service for sole proprietors and S corporations that have only one full-time employee or work with outside contractors in 2019. 

Gusto Payroll Software

Gusto Payroll Software

Best Payroll Services for 2020

The Verdict

Gusto is our choice as the best payroll service for S-corps and sole proprietors because it can easily handle both W-2 and 1099 employees, is affordably priced, and lets you run unlimited payrolls each month.

When it comes to payroll, the biggest factor for S-corps and sole proprietors is the ability to handle 1099 contractors and freelancers. These businesses rely on contract labor, consultants and other non-W-2 employees. As such, these businesses need software that supports a variety of employee types and payment options as well as other tax issues.

Businesses with a large contractor base may need to make unlimited pay runs each month. Some payroll companies charge small businesses every time they run payroll. The best payroll solutions for S-corps and sole proprietors charge small businesses by the month as opposed to each pay run. Being able to run as many payrolls as you need to each month for no added cost allows you to pay contractors on whatever schedule best fits your company's needs.

Businesses using 1099 workers may also want an online payroll system that allows all workers, both W-2 and 1099, to log in to the payroll software to review their pay stubs and access year-end tax forms. This can save those in charge the time of providing that information to workers when they ask for it.

Gusto fills all of these needs. It can handle the payroll and payroll tax responsibilities for both types of employees. You can run as many payrolls as you want for one monthly fee. Gusto is also easy to use and has excellent customer service.

To learn how we selected our best picks and see a comprehensive list of online payroll services, visit our best picks page.


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Gusto Service Plans and Cost

Gusto is available in three service plans: Core, Complete and Concierge. All three plans include all payroll and tax services, and allow you to pay W-2 employees, as well as 1099 contractors and freelancers. The plans vary in the HR services they include. Each plan has a monthly base and per-employee fee.

  • Core: This plan costs $19 a month, plus $6 per employee or contractor. Pricing increases to $39 per month after six months. It includes full-service payroll, employee self-service, health benefits and workers' compensation administration, and paid time-off (PTO) tracking.

  • Complete: Like the Core plan, this plan has a monthly base fee of $39. You pay $12 per employee or contractor on top of that. It has all the features of the Core plan, plus employee offers and onboarding services, time tracking, PTO tracking, requests and approvals, and employee directory and surveys.

  • Concierge: The monthly base fee for this plan is $149, plus $12 per employee or contractor. It offers everything in the Complete plan, plus access to Gusto's HR professionals, HR compliance help, employee relations advising, harassment prevention training, a dedicated support representative, and the HR resource center for help with employee handbooks, job description templates, HR guides and policy templates.

  • Contractor: There is no monthly base fee for this plan. You pay $6 per contractor, per month. The plan includes unlimited contractor payments, contractor self-service options, and 1099 forms and filings. 

There are no contracts with Gusto. You pay for the service on a month-to-month basis and can cancel at any time.

Gusto Features

Gusto offers a wide range of payroll features that sole proprietors and S-corps will find especially valuable.

In addition to full- and part-time employees, Gusto supports contractors and freelancers. You pay them in the same way you do your other employees.

You can run as many payrolls as you want each month for no extra cost. This is especially valuable for businesses working with contractors who aren't all on the same pay schedule. Unlimited payroll gives you the freedom to pay everyone when you want instead of syncing each contractor to the same pay cycle.

Gusto allows you to make payments to your employees and contractors via direct deposit, printed check or prepaid debit card.

One nice aspect of the system is the autopilot setting. With this option, your payroll automatically runs each pay period without any special input.

In addition to the payroll services it offers, Gusto takes care of all your payroll tax responsibilities. The company automatically calculates, pays, and files your local, state, and federal payroll taxes. At the end of the year, the service generates and sends all of your employees and contractors their W-2 and 1099 forms.

Gusto integrates with a wide selection of accounting, time and attendance, expense management, and HR programs, including Capital One Spark Business for banking; QuickBooks, QuickBooks Online, FreshBooks, Xero and Aplos for accounting; TSheets, When I Work, Deputy, Ximble, Boomr, Time Tracker and Homebase for time tracking; and Expensify and Receipt Bank for expense management.

Depending on the service plan you select, Gusto can also handle some or all of your PTO management. With the Core plan, you can track PTO, while the other two plans also let employees request time off and managers to approve or deny those requests.

Some of Gusto's service plans include a host of HR services, including anonymous employee surveys, the ability to create a company holiday schedule, an organizational chart, an employee handbook builder, job description templates, and HR guide and policy templates. Additionally, Concierge plan users have on-demand access to HR professionals.

Gusto also provides healthcare plans designed specifically for small businesses. However, those benefits are not available in all states. Healthcare benefits through Gusto are currently available in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Washington, D.C., and Wisconsin. Gusto also offers HSAs, FSAs and commuter benefits.

Another available service is a college savings plan. Gusto partners with Gradvisor to offer 529 college savings plans that integrate with the payroll service. The 529 contributions automatically sync with the Gusto system, so there's nothing to update. In addition, employers have the option to offer company contributions.

Other add-on services include workers' compensation, employee offer and onboarding programs, and 401(k) retirement plans.

Ease of Use

As a cloud-based system, Gusto doesn't require you to install or maintain any software. The system's online portal is mobile-friendly, accessible from any smartphone or tablet, and easy to navigate.

When you log in each time, you are taken to the Gusto dashboard, which shows a to-do list, important updates and upcoming activities. The homepage also walks you through the entire process of setting up the system, which includes adding a company address, adding employees, setting up federal and state taxes, setting up and verifying your bank account, and configuring the payroll schedule.

To run payroll, you click the Run Payroll tab on the Gusto homepage and enter the number of hours each employee worked, vacation or sick days they took, bonuses or commissions they earned, and expense reimbursements. You then click Submit Payroll, and you'll receive confirmation that the money is going to your employees or contractors via direct deposit, and that you can print out any necessary checks.

To add employees or contractors into the system, all you need are their names, email addresses and pay rates. You then have the option of filling in additional details, such as Social Security numbers, home addresses, and tax withholding and bank information. You can also use the employee self-onboarding feature, which gives employees and contractors the ability to enter all of that information on their own.

All employees – full-time, part-time and contract workers – can log in to the system to review their digital paystubs and get their year-end tax forms. These are lifetime accounts, giving employees access to their information even if they move on to new employers.

Customer Service

We were extremely pleased with Gusto's customer service. To get a feel for the type of support it provides, we called and emailed the company numerous times, posing as a new business owner.

While we did have to wait on hold to speak with someone during one of our calls, all of the other times we reached out to Gusto, our calls were answered immediately. During our conversations, the representatives gave clear and detailed answers to all of our questions. At the end of each call, we had a strong understanding of how the system works, the services it provides and how much it all costs.

At no time did any of the representatives try to push us to sign up for the service. Some of the other payroll providers we spoke to quickly tried to get all of the specifics on our company and quote us prices. Gusto, however, seemed focused on first making sure our needs were met.

We were also happy with the prompt response we received when we contacted the company via email. Our emails were all returned within a couple of hours and included detailed and helpful answers to our questions.

Gusto representatives are available for support by phone and email between 6 a.m. and 6 p.m. (MST), Monday through Friday. Gusto also has a complete library of resources on its website, including a full list of articles, videos and webinars, with tips on not only using the payroll system, but also running a small business.


One disappointment we had with Gusto is that the company isn't an accredited member of the Better Business Bureau and has a D- rating. However, as of September 2018, the company had only 11 complaints filed against it in the past three years.

Another downside could be the cost. Gusto was once one of the cheapest payroll companies, but that is no longer the case. It went through a several-year stretch in which it regularly increased prices. However, since the company moved to its three-tiered service plan, costs have remained flat. If you need a more affordable payroll service, we would encourage you to consider Wagepoint, our runner-up in this category. Note, however, that Wagepoint charges per pay run, so if you run multiple payrolls each month, the costs of Gusto and Wagepoint will likely be pretty similar. You can read more about Wagepoint below.

Runner-Up: Wagepoint

Here are a few reasons to consider our runner-up for this award, Wagepoint.

Payroll services: You can use Wagepoint's cloud-based system to pay hourly and salaried employees, as well as contract workers, by direct deposit or check. It allows you to easily add bonuses, commissions, expenses, holiday pay and overtime to any employee paycheck. You can also make any type of deduction you need, such as for 401(k) plans or healthcare benefits.

Payroll tax: Wagepoint takes care of all your payroll tax responsibilities. That includes calculating, filing, and paying all federal, state, and local taxes for you. At the end of the year, Wagepoint automatically fills out all W-2 and 1099 forms and submits them to the IRS on your behalf.

Employee self-service: All your workers and contractors can access the system to view their current and past paystubs, as well as to view and print year-end tax forms.

Cost: Wagepoint charges a base fee of $20 per payroll, plus $2 per employee for biweekly or semimonthly pay schedules. There is only a $10 base fee for making weekly payments. Being charged per pay run might be a negative for employers who want to run payroll multiple times a month, but it could be an advantage for businesses that have larger 1099 workforces and make payments only once a month.

Better Business Bureau: Wagepoint is an accredited member of the Better Business Bureau and has an A+ rating. As of September 2018, no complaints had been filed against the company within the past three years.

Ready to choose a payroll service? Here's a breakdown of our complete coverage:


Image Credit: AndreyPopov / Getty Images
Gusto Payroll Software

Gusto Payroll Software

Best Payroll Services for 2020

The Verdict

Gusto is our choice as the best payroll service for S-corps and sole proprietors because it can easily handle both W-2 and 1099 employees, is affordably priced, and lets you run unlimited payrolls each month.

Matt D'Angelo
Matt D'Angelo,
Business News Daily Writer
See Matt D'Angelo's Profile
I'm a staff writer for Business.com and Business News Daily. I cover various small business topics, including technology, financing and marketing.