When it comes to managing your business's payroll, tax filings, and employee benefits, choosing the right platform is crucial for operational efficiency and compliance. Square Payroll and Gusto have emerged as leading contenders in the small to medium-sized business payroll software market, each offering distinctive features tailored to different business needs. Both platforms aim to simplify payroll processes, but they approach this goal with different strengths and priorities. Square Payroll, developed by the same company known for its point-of-sale solutions, offers seamless integration with other Square products while providing streamlined payroll services. Gusto, on the other hand, positions itself as a comprehensive HR and payroll solution with extensive features beyond basic payroll processing. This comparison will delve into their pricing structures, feature sets, user experiences, and integration capabilities to help you determine which solution aligns best with your business requirements. Understanding the nuances between these platforms is essential, as the right choice can save you time, reduce compliance risks, and potentially lower operational costs. Whether you're a restaurant owner, retail shop manager, or professional services provider, this analysis will highlight how each platform addresses specific industry needs and challenges, guiding you toward a more informed decision for your payroll management needs.

Pricing Structures: Breaking Down the Costs

Square Payroll and Gusto offer distinct pricing models that cater to different business sizes and needs. Square Payroll takes a straightforward approach with its pricing structure: $35 per month plus $6 per employee or contractor paid. This flat-rate model provides all-inclusive access to their payroll features without tiered limitations. For businesses that only need to pay contractors, Square offers a contractor-only plan at $6 per contractor with no base fee, making it particularly cost-effective for businesses with primarily contract workers.

Gusto's pricing, by comparison, is more stratified across multiple tiers. Their Simple plan starts at $40 per month plus $6 per person, offering basic payroll functions. The Plus plan increases to $80 per month plus $12 per person, adding features like time tracking and team management tools. Their Premium plan, with custom pricing, includes additional HR resources and dedicated support. Like Square, Gusto also offers a contractor-only option at $6 per contractor with no base fee.

The primary difference in these pricing structures becomes evident as your business grows. With Square, costs increase linearly with employee count, while Gusto's tiered approach means you might need to upgrade plans to access certain features as your needs evolve. For small businesses with straightforward payroll needs, Square's pricing is generally more economical. However, if you anticipate needing expanded HR functionality beyond basic payroll, Gusto's higher-tier plans may provide better value despite their higher price points. Consider your anticipated growth trajectory and feature requirements when evaluating which pricing structure aligns with your budget and business needs.

Core Payroll Features: Essential Functions Compared

Both Square Payroll and Gusto excel in delivering the fundamental payroll functions businesses need, but with varying approaches and strengths. Both platforms handle the essentials: automatic calculation of employee wages, tax withholdings, direct deposits, and generation of W-2 and 1099 forms. They also both offer unlimited payroll runs, allowing businesses to process payroll as frequently as needed without additional charges.

Square Payroll's core strength lies in its simplicity and efficiency. The platform automatically calculates and files federal and state payroll taxes, manages tax forms, and offers four-day direct deposit processing. Square also provides instant payments via the Cash App, giving employees faster access to their earnings. The platform excels in integrating with Square's point-of-sale system, making it particularly valuable for retail and restaurant businesses that need to incorporate tips and hourly wages seamlessly.

Gusto takes a more comprehensive approach to payroll processing. Beyond the basics, it offers automatic tax filing in all 50 states and handles local taxes, which Square does not cover. Gusto provides two-day direct deposit on its basic plan and next-day direct deposit on higher-tier plans. The platform also includes more sophisticated payroll features like wage garnishment services (except in South Carolina), tip credit management, and comprehensive reporting tools that give deeper insights into labor costs and payroll expenses.

Both platforms support multi-state payroll operations and automatic new hire reporting, but Gusto's implementation tends to be more robust, especially for businesses with complex payroll scenarios or employees in multiple states. Square's strengths lie in its simplicity and seamless integration with other Square products, while Gusto offers more sophisticated payroll capabilities for businesses with diverse needs.

User Experience: Interface and Ease of Use

The user experience of payroll software significantly impacts day-to-day efficiency and adoption rates among business owners and administrators. Both Square Payroll and Gusto have invested heavily in creating intuitive interfaces, but they cater to different user preferences and business contexts.

Square Payroll provides a streamlined, minimalist interface consistent with Square's design philosophy across all its products. Navigation is straightforward, with clear labels and logical workflow progression. The dashboard presents essential information at a glance, allowing users to quickly run payroll, review employee details, or access tax documents. Square's mobile app is particularly robust, enabling business owners to manage payroll functions on the go, which is especially valuable for business owners who aren't desk-bound. Users frequently commend Square Payroll's simplicity, noting that even those with minimal payroll experience can navigate the system confidently after minimal training.

Gusto offers a more feature-rich interface with a friendly, approachable design that incorporates helpful elements like contextual tooltips and step-by-step guidance. The dashboard is more comprehensive than Square's, displaying upcoming payroll dates, outstanding tasks, recent activities, and team insights. While this provides more information upfront, new users may experience a slightly steeper learning curve. Notably, Gusto lacks a true administrator mobile app—their mobile solution primarily serves employees rather than administrators, which can be limiting for on-the-go management. However, Gusto excels in providing clear explanations of complex payroll concepts and offers an intuitive employee self-service portal that receives high marks from staff members.

Both platforms prioritize reducing complexity in payroll processing, but Square edges ahead for absolute simplicity and mobile functionality, while Gusto offers a more comprehensive dashboard and superior contextual guidance. Your preference may depend on whether you value streamlined efficiency or informative depth in your user experience.

HR and Benefits Administration: Beyond Basic Payroll

The distinction between Square Payroll and Gusto becomes most pronounced when examining their HR and benefits administration capabilities. These features extend beyond core payroll functions and can significantly impact your overall workforce management approach.

Square Payroll offers basic HR functionality with employee onboarding tools that allow new hires to self-onboard by entering their personal information, tax details, and direct deposit information. The platform provides access to benefits options through partnerships with providers like SimplyInsured for health insurance and Guideline for 401(k) plans. However, these integrations function primarily as referral relationships rather than deeply integrated systems. Square's approach to HR is functional but minimal, focusing on essential employee data management rather than comprehensive HR workflows.

Gusto, by contrast, positions itself as an integrated HR platform with significantly more robust capabilities. Its onboarding tools include customizable welcome packets, digital document signing, and automated state new hire reporting. Gusto offers a broader range of benefits administration options, including health insurance in 39 states, dental and vision coverage, 401(k) plans, commuter benefits, health savings accounts (HSAs), and flexible spending accounts (FSAs). The platform provides employee self-service portals for benefits enrollment and management, significantly reducing administrative burden. Gusto's higher-tier plans include additional HR features like an HR resource center, custom employee handbooks, and organization charts.

For businesses seeking a more comprehensive approach to workforce management, Gusto's extensive HR and benefits capabilities represent a substantial advantage. While Square Payroll offers adequate basic HR functionality, it's designed primarily for businesses that need simple employee data management rather than a full HR ecosystem. Companies with more complex HR needs will find Gusto's offerings more aligned with building a comprehensive human resources infrastructure.

Time Tracking and Scheduling: Managing Employee Hours

Effective time tracking and scheduling integration can significantly streamline payroll processing by automatically converting work hours into wage calculations. Here, the approaches of Square Payroll and Gusto diverge considerably, reflecting their different orientations toward business operations.

Square Payroll offers native time tracking through the Square Team app, which integrates seamlessly with Square's Point of Sale system. This integration is particularly valuable for retail, restaurant, and service businesses already using Square's ecosystem. Employees can clock in and out directly through the Square POS terminal or via the mobile app, with geofencing capabilities to verify location. Square's system also includes scheduling features that allow managers to create employee schedules, track overtime, and manage time-off requests. The platform automatically syncs worked hours with payroll processing, eliminating manual data entry and reducing errors. Additionally, Square excels at tracking and distributing tips, making it especially suitable for service industries where gratuities form a significant portion of compensation.

Gusto provides time tracking capabilities in its Plus and Premium plans but not in its basic Simple plan. The system allows employees to track time through the web or mobile app and includes overtime calculations and PTO management. Gusto's time tracking features project tracking functionality, enabling businesses to allocate labor costs to specific projects or clients—a valuable feature for professional services firms. While not as deeply integrated into a point-of-sale ecosystem as Square, Gusto's time tracking is more oriented toward office environments and professional services. For businesses needing more specialized time tracking, Gusto also integrates with third-party solutions like Homebase, When I Work, and TSheets.

For businesses already using Square's point-of-sale system or those with significant tip tracking needs, Square Payroll's time tracking integration offers superior convenience. Conversely, Gusto's project-based time tracking may better serve professional service businesses that need to monitor time allocation across different clients or projects.

Integration Capabilities: Connecting Your Business Tools

The ability to integrate payroll software with other business systems can dramatically improve operational efficiency and data accuracy. Both Square Payroll and Gusto offer integration capabilities, but they differ significantly in scope and approach.

Square Payroll shines in its native integration with other Square products, creating a cohesive ecosystem for businesses already using Square's point-of-sale, payment processing, or business banking solutions. This tight integration enables seamless data flow between sales, time tracking, and payroll—particularly valuable for retail and service businesses. Beyond the Square ecosystem, Square Payroll offers modest third-party integrations, connecting with popular accounting software like QuickBooks Online and Xero. However, its integration catalog is notably more limited than Gusto's, focusing primarily on essential accounting connections rather than a broad spectrum of business tools.

Gusto boasts a significantly more extensive integration network, connecting with over 130 third-party applications across categories including accounting, time tracking, expense management, HR, and business operations. Key integrations include QuickBooks, Xero, FreshBooks, Expensify, Shopify, Zoom, Slack, and various POS systems. This broad integration capability makes Gusto more adaptable to diverse business technology stacks and allows it to function effectively as a central hub in a larger business software ecosystem. Gusto's API is also more accessible for custom integrations, providing greater flexibility for businesses with specialized software needs.

The integration decision largely hinges on your existing technology infrastructure. If you're already invested in the Square ecosystem, Square Payroll's native integrations offer unparalleled convenience. However, if you use a diverse set of business tools or anticipate needing connections to a wide range of applications, Gusto's extensive integration network provides superior flexibility and connectivity. Consider mapping your current and planned business applications to determine which platform better complements your overall technology strategy.

Customer Support: Getting Help When You Need It

Reliable customer support is crucial for payroll software, where timely assistance can prevent costly errors and compliance issues. Both Square Payroll and Gusto offer multiple support channels, but with different availability and specialization levels.

Square Payroll provides customer support through phone, email, and chat from Monday to Friday, 6 AM to 6 PM PST. Support is primarily focused on technical assistance and basic payroll questions. Square's support team is generally praised for responsiveness but may have limitations when addressing complex payroll compliance questions or state-specific tax issues. Square also offers a comprehensive knowledge base with articles, tutorials, and FAQs covering common payroll scenarios. Some users report challenges reaching live support during peak times, though the overall support experience is generally positive according to customer reviews.

Gusto delivers customer support through similar channels—phone, email, and chat—during business hours Monday through Friday. The company distinguishes itself with specialized support teams dedicated to specific areas like benefits, compliance, and technical issues, allowing for more expert assistance. Gusto's higher-tier plans include priority support and access to HR professionals who can address more complex workplace issues beyond basic payroll questions. The platform also features an extensive help center with searchable articles, video tutorials, and webinars covering payroll, benefits, and compliance topics. While Gusto historically received high marks for customer service, recent user reviews indicate some satisfaction decline, particularly regarding response times.

Neither service offers weekend support, which could be problematic for businesses needing urgent assistance outside standard business hours. For basic payroll support, both companies provide comparable assistance, but Gusto's specialized support teams and HR expertise give it an edge for businesses with complex compliance needs or those utilizing more advanced HR features. Consider your support requirements—particularly whether you need basic technical help or more sophisticated compliance guidance—when evaluating which service better meets your support expectations.

Industry Suitability: Which Businesses Benefit Most

The ideal payroll solution varies significantly depending on your industry, business model, and operational needs. Square Payroll and Gusto each excel in different business contexts based on their feature sets and design philosophies.

Square Payroll demonstrates particular strength for retail, restaurant, service, and hospitality businesses. Its seamless integration with Square's point-of-sale system creates a unified ecosystem for businesses where hourly employees, shift scheduling, and tip management are central operational concerns. The platform handles tip distribution efficiently and allows employees to clock in directly through POS terminals, streamlining operations for customer-facing businesses. Small retail shops, cafes, bars, salons, and quick-service restaurants frequently cite Square Payroll as an intuitive extension of their existing Square-based operations. The platform also works well for small businesses with straightforward payroll needs and limited HR requirements.

Gusto better serves professional service firms, technology companies, nonprofits, and businesses with more complex HR needs. Its robust benefits administration, detailed reporting capabilities, and extensive third-party integrations make it well-suited for knowledge-worker intensive operations. Companies that need to track billable hours across different projects, manage comprehensive benefits packages, or require sophisticated HR functionality tend to favor Gusto's more comprehensive approach. Businesses with distributed teams across multiple states particularly benefit from Gusto's handling of complex multi-state tax compliance. Growing businesses that anticipate scaling their HR functions find Gusto's tiered plans accommodate their evolving needs.

Your industry's typical workflows, compliance requirements, and operational patterns should heavily influence your choice between these platforms. Consider not just your current business needs but also your anticipated growth trajectory and future requirements when determining which platform provides the best alignment with your industry-specific challenges and opportunities.

Final Verdict: Making the Right Choice for Your Business

Selecting the optimal payroll solution requires balancing immediate needs against long-term business goals. Based on our comprehensive analysis, several clear patterns emerge to guide your decision between Square Payroll and Gusto.

Square Payroll represents the superior choice for businesses already embedded in the Square ecosystem, particularly retail, restaurant, and service establishments using Square POS. Its streamlined approach, straightforward pricing, and seamless integration with other Square products create an efficient operational framework for businesses with straightforward payroll needs. Small businesses with limited HR requirements and those primarily focused on hourly employees will appreciate Square's simplified approach and lower overall cost structure. The ability to process instant payments through Cash App and its superior mobile app functionality also make Square particularly attractive for businesses where owners and managers aren't desk-bound.

Gusto stands as the preferred option for businesses seeking a comprehensive HR and payroll platform rather than just payroll processing. Its extensive benefits administration capabilities, sophisticated reporting, broader integration options, and scalable feature set make it ideal for growing businesses with evolving HR needs. Professional service firms, technology companies, and organizations with complex compliance requirements will find Gusto's more robust feature set justifies its potentially higher cost. Businesses operating across multiple states or those anticipating growth into new jurisdictions will benefit from Gusto's more comprehensive tax compliance features.

Your decision ultimately hinges on several key factors: your existing business technology stack, the complexity of your HR needs, your growth trajectory, and your budget constraints. Consider not just your current requirements but where your business will be in two to three years when making this decision. Both platforms offer strong core payroll capabilities, but their divergent approaches to broader business operations mean your specific context will determine which represents the optimal solution for your organization.