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Gusto Review

The Best Payroll Service for Sole Proprietors or S-Corps

A Business News Daily Review

Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.

After conducting extensive research and analysis, we recommend Gusto as our 2018 pick for the best online payroll service for sole proprietors and S corporations that have only one full-time employee or work with outside contractors. To understand how we selected our best picks, see our methodology and a comprehensive list of online payroll services on our best picks page.

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

Unlimited payroll: 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. Having unlimited payrolls gives you the freedom of paying everyone when you want and not worrying about syncing each contractor to the same pay cycle.

Payment options: Gusto allows you to make payments via direct deposit, printed check or prepaid debit card.

Autopilot: You can set your payroll to run on autopilot. With this option, your payroll automatically runs each pay period.

Payroll taxes: 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.

Added services: Besides its payroll services, Gusto offers health benefits administration, workers' compensation, paid time off management, employee offer and onboarding programs, and dedicated human resources support. 

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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 employees, contractors and freelancers.

Core: This plan costs $39 a month, plus $6 per employee or contractor. It includes full-service payroll, employee self-service, and health benefits and workers' compensation administration.

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, paid time off management, 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 live HR professionals; HR compliance help; employee relations advising; access to the HR resource center for help with employee handbooks, job description templates, HR guides and policy templates; harassment prevention training; and a dedicated support representative.

Contracts: There are no contracts. You pay for Gusto's services on a month-to-month basis. There is also a one-month free trial for all plans.

Cloud-based: 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.

Running payroll: 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 being sent to your employees or contractors via direct deposit, and that you can print out any necessary checks.

Adding employees: 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.

Employee access: 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, which give employees access to their information even if they move on to new employers.

Integrations: Gusto integrates with a wide selection of accounting, time and attendance, expense management, and human resources programs, including Capital One Spark Business for banking; QuickBooks, 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.

Medical benefits: Gusto 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, Massachusetts, Maryland, Michigan, Minnesota, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Virginia and Washington. Gusto also offers HSAs, FSAs and commuter benefits.

College savings: 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.

Customer support: 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 multiple times posing as a new business owner. Each time we called, we spoke to friendly and helpful customer service representatives. They 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 worked, its services and how much it all costs. Gusto representatives are available by phone and email between 6 a.m. and 5 p.m. (PST), Monday through Friday. Gusto also has a complete library of resources on its website, including articles, videos and webinars, with tips not only on using the payroll system, but also running a small business.

Price increases: The biggest drawback with Gusto is its regular price increases. Over the past four years, prices have risen by more than 50 percent. Although Gusto is far from the most expensive payroll service, it is no longer among the cheapest. If you need a more affordable payroll service, we would encourage you to consider Wagepoint, our runner-up winner 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.

Better Business Bureau: We were also disappointed that Gusto isn't an accredited member of the BBB and has a D- rating. However, as of February 2018, the company has had only eight complaints filed against it within the past three years.

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

Payroll services: Wagepoint's cloud-based system can be used to pay hourly and salaried employees, as well as contract workers, by direct deposit or check. The system allows you to easily add in bonuses, commissions, expenses, holiday pay and overtime to any employee paycheck. In addition, you can make any deduction you want, such as those for 401(k) plans or healthcare benefits.

Payroll tax: Wagepoint takes care of all of 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: The system allows all workers and contractors to access the system to view 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. However, being charged per pay run might be a negative for employers who want to run payroll multiple times a month. Still, this 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 February 2018, there had been no complaints filed against the company within the past three years.

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

Chad Brooks

Chad Brooks is a Chicago-based writer who has nearly 15 years' experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.