Gusto vs. Paychex: Which Payroll Software is Better?

Gusto and Paychex are two of the top payroll solutions for small businesses in 2021. They both support timely direct deposit, time tracking, and automatic tax filing. This means with either solution, you’ll have a system in place that makes sure your employees are being paid the correct amount for the time they worked while also ensuring that you’re meeting all tax compliance requirements.

However, these two competitors offer unique advantages for different situations. Keep reading for an in-depth breakdown of Gusto and Paychex’s key functionalities so you can determine which solution might work best for your business.

Gusto and Paychex comparison

Because Gusto and Paychex handle their core functionality—payroll—very similarly, let’s take a look at what sets each tool apart:

HR features

Gusto shines brightest when it comes to HR features. It’s not an all-in-one HR solution, but look no further if you want a payroll tool that also has features for hiring and onboarding, benefits administration, company directory, and employee engagement. Gusto makes it easy to handle core HR functions and payroll all in one place.

Paychex offers some HR features for learning management, onboarding, and time management, but some tools like benefits administration, onboarding, and employee engagement are either totally excluded or only available if you pay extra. It does integrate with a large number of HR software solutions (more on that below), but you’ll be disappointed if you’re looking for a highly versatile tool.

Winner: Gusto

Employee self-service tools

Gusto offers a huge self-service benefit to your employees through the Gusto Wallet app. This free app serves as a versatile financial health tool that your employees can use to manage multiple savings goals and access emergency funds between paydays at no cost to you. Gusto also offers an FDIC-backed debit card that allows your employees to manage their cash flow and savings all in one place. 

Paychex also offers employee self-service benefits, but they may be a bit more traditional than the Gusto Wallet app. For example, Paychex offers an employee financial wellness program and an employment/income verification service. These are tools that your employees may use occasionally, but they are somewhat less impactful than something that directly impacts your employees’ finances. 

Winner: Gusto


Gusto’s app directory is filled with integrations for many popular software vendors, including QuickBooks, Clover, Deputy, Expensify, and Homebase. There’s a good chance that Gusto will integrate with your tools, especially if they’re top contenders in accounting, time tracking, POS, operations, learning management, hiring, or performance management. If the software you want to integrate isn’t listed in the app directory, however, Gusto just announced the availability of the Gusto Embedded Payroll API. Many Gusto partners like Varago and Xendoo are already using this API to streamline payroll functionalities with their apps, so there’s a chance the tools you’re using will adopt a similar strategy in the near future.

Paychex has a wider range of integrations than what Gusto offers. This could be because of how long each solution has been on the market—Paychex has offered payroll tools since 1971, so it started integrating with leading software companies well before Gusto was introduced in 2011. Integrations with popular accounting software is standard across all editions, but expect to pay more for integrations with vendors for other third-party systems, like HR software, POS software, and others. Even with this disparity, the variety of integrations Paychex offers puts it ahead in this category.

Winner: Paychex


Gusto offers an easy-to-use report generator that lets you customize fields and filters, so you can see the right information you need. There are also a number of templates for summary reports in Gusto’s Reports section, including time off requests, cash requirements, bank transactions, and year-to-date employee compensation. Once you select a template, you can refine which fields are populated, how the data is grouped, and other features to generate a report that makes sense to you.

Paychex’s reporting capabilities are what set it apart from the competition. The general ledger report is included across all Paychex editions and gives users an overview of all financial transactions. This is a critical element when it comes to forecasting and planning. You can also use Paychex’s library of 160+ report templates to get data-backed insights for a number of unique situations—more than Gusto offers by a long shot. For customizable reports, though, you’ll have to pay for the most expensive package. If reports are one of your primary needs, be prepared to pay more for customization.

Winner: Paychex


Gusto’s pricing is transparent and very straightforward. There are four different editions that each offer a different level of functionality. If you have basic needs, you might find the Core package most suitable. If you’re looking for a solution with more features, the Complete or Concierge solution might be a better fit. Or, if you only work with freelancers or other non-employees, the Contractor plan might be what you need.

Each edition is outlined below:

  • Core: $39 + $6 per person
  • Complete: $39 + $12 per person
  • Concierge: $149 + $12 per person
  • Contractor: $6 per person

Paychex, on the other hand, is less straightforward with pricing for the three different editions. They provide pricing details for their most basic plan, but both of the Flex packages require you to contact their sales team to get more information. By default, this makes it impossible to compare Paychex’s features-to-cost value with Gusto.

Each edition is outlined below: 

  • Go: $39/mo. + $5 per employee
  • Flex Select: Contact sales
  • Flex Enterprise: Contact sales

Winner: Gusto (by default)

Choosing the right payroll software

Gusto and Paychex are formidable opponents in the payroll arena. They both offer basic capabilities for paying your employees the right amount on time, but that’s not where their features end. If you’re looking for an affordable payroll/HR hybrid solution that your employees will love, Gusto might be right for you. Or, if you’re willing to spend a little more money for a payroll software that offers powerful reporting tools and a wide range of integrations, Paychex might be your best choice. To compare more payroll options, check out our list of the Best Payroll Software for Small Businesses.

Kaiti Norton
Kaiti Norton
Kaiti Norton is the editor of Small Business Computing. She is passionate about creating relatable, research-based content that helps small businesses thrive.

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