In today's competitive business landscape, managing payroll efficiently is crucial for small business success. Two popular payroll solutions that have gained significant traction are Square Payroll and Gusto. Both platforms aim to streamline payroll processing, tax filings, and employee benefits administration, but they differ in various aspects that might make one more suitable for your business than the other. This comprehensive comparison will help you determine which service better aligns with your specific business needs, budget constraints, and future growth plans.

Selecting the right payroll service is not merely about cost—it involves evaluating feature sets, ease of use, integration capabilities, and support quality. As small businesses increasingly rely on digital solutions to manage their operations, understanding the nuances between these two leading platforms becomes essential. Whether you're a startup looking for your first payroll solution or an established business considering a switch, this analysis will guide you through the key differences between Square Payroll and Gusto to help you make an informed decision.

Pricing Structure

Square Payroll offers a straightforward pricing model with two main options. Their full-service payroll costs $35 per month plus $6 for each person paid. This flat-fee structure includes all essential payroll features such as automatic tax calculations, filings, and unlimited payroll runs. For businesses working exclusively with contractors, Square offers a contractor-only plan at $6 per contractor per month with no base fee, making it particularly attractive for businesses with a primarily contract-based workforce.

Gusto's pricing structure is more tiered, starting with their Simple plan at $49 per month plus $6 per person. Their Plus plan increases to $80 monthly plus $12 per person, while their Premium plan requires a custom quote. Like Square, Gusto also offers a contractor-only option at $6 per contractor with no monthly base fee. The higher-tier plans include additional HR features and benefits administration, which might justify the increased cost for growing businesses with more complex needs. When comparing purely on cost, Square Payroll typically emerges as the more budget-friendly option, especially for smaller teams, though Gusto's expanded feature set in higher tiers provides more scalability for growing organizations.

Core Payroll Features

Both Square Payroll and Gusto offer robust core payroll functionality that handles the essentials efficiently. Both platforms provide unlimited payroll runs, allowing businesses to process payroll as frequently as needed without incurring additional costs. They both also offer automatic tax calculations and filings for federal, state, and local taxes, helping businesses stay compliant with minimal effort.

Where they begin to differ is in the execution of these features. Gusto's payroll system includes more advanced capabilities like multi-state payroll processing included in all plans, which is particularly valuable for businesses with employees working across different states. Square also supports multi-state payroll but with a more streamlined approach. Both services offer direct deposit options, though Gusto provides faster options in their higher-tier plans with next-day direct deposit, while Square offers four-day, two-day, and even instant payment options through their Cash App integration. Square's deep integration with their own POS system creates a seamless experience for businesses already using Square for transactions, allowing automatic syncing of tips and hours worked directly into the payroll system.

Time Tracking and Scheduling

Square Payroll offers integrated time tracking functionality through their Team app and Square POS system. This allows employees to clock in and out directly through the Square ecosystem, with hours automatically syncing to payroll. Managers can create schedules up to 10 days in advance, track overtime, and approve timecards all within the Square platform. However, Square's scheduling capabilities are somewhat limited compared to full-featured time management solutions.

Gusto provides more comprehensive time tracking tools, especially in their Plus and Premium plans. Their system supports various time tracking methods, including web-based clock-in/out and mobile apps. Gusto's scheduling features are more robust, allowing businesses to create and share employee schedules, manage attendance, and track time off requests all in one place. Additionally, Gusto offers PTO management capabilities that allow employees to request time off and managers to approve these requests directly within the platform. While both systems integrate with third-party time tracking solutions, Gusto's native time tracking capabilities are generally more comprehensive and better suited for businesses with complex scheduling needs or those requiring detailed tracking of employee hours across various projects.

Employee Benefits Administration

Gusto offers an extensive suite of benefits administration tools across health insurance, retirement plans, and additional perks. Their platform supports health benefits in 37 states and DC, with options including medical, dental, vision, HSA, and FSA accounts. Gusto also facilitates 401(k) plans, life and disability insurance, and commuter benefits. Their system automatically calculates benefit deductions after running payroll, creating a streamlined experience for both employers and employees. One standout feature is Gusto Wallet, which offers employees financial wellness tools and the ability to access earned wages before payday.

Square Payroll's benefits offerings, while solid, are somewhat more limited. They provide health insurance through SimplyInsured, 401(k) plans via Guideline, and workers' compensation insurance. The integration with payroll ensures smooth processing of benefit deductions, but Square lacks some of the more advanced financial wellness tools that Gusto offers. For businesses primarily concerned with core benefits like health insurance and retirement plans, Square provides adequate coverage. However, companies looking for a wider range of benefit options and more sophisticated benefits management tools may find Gusto's offerings more comprehensive and better suited to attracting and retaining talent in competitive markets.

HR Features and Compliance

Gusto excels in HR functionality, positioning itself as more than just a payroll service but rather an integrated HR platform. Their system includes employee onboarding tools with custom offer letter templates, background checks, and document management capabilities. Gusto also provides an employee directory, compliance alerts, and HR resource center with policy templates and guidance. Higher-tier plans offer performance review tools, employee surveys, and an HR resource library that can be particularly valuable for businesses without dedicated HR staff.

Square Payroll offers more basic HR capabilities focused primarily on employee self-onboarding. While employees can complete their own paperwork and set up direct deposit through Square's system, it lacks the comprehensive HR toolset that Gusto provides. Square does offer some compliance support through automatic tax filing and basic reporting, but doesn't include the more advanced HR management features that might be necessary for growing businesses. For companies that need robust HR functionality alongside their payroll processing, Gusto's expanded HR capabilities represent a significant advantage, though businesses primarily focused on simple payroll processing may find Square's streamlined approach sufficient for their needs.

Integrations and Ecosystem

Square Payroll's integration capabilities are centered around the Square ecosystem, offering seamless connections with Square Point of Sale, Square Appointments, and other Square products. This creates a unified experience for businesses already using Square's commerce platform, with automatic syncing of sales data, employee hours, and tips between systems. Outside the Square ecosystem, integration options are more limited but include essential connections with accounting software like QuickBooks and time tracking apps like Homebase.

Gusto offers significantly more third-party integrations, supporting connections with a wide range of business software including accounting platforms (QuickBooks, Xero, FreshBooks), time tracking tools (TSheets, Homebase), and business operations software. This extensive integration network allows businesses to create a more customized tech stack while maintaining data flow between systems. Gusto's approach provides greater flexibility for businesses using various software solutions, while Square's strength lies in its tightly integrated ecosystem that works exceptionally well for businesses already committed to Square products. The choice between these approaches depends largely on whether your business prioritizes ecosystem unity or integration flexibility.

Mobile Accessibility

Square Payroll offers a robust mobile experience through their dedicated mobile app, allowing business owners to manage payroll on the go. The app enables users to run payroll, view payroll history, and manage employee information from anywhere. Additionally, Square provides a separate Team app for employees to clock in and out, view schedules, and access their pay information. This mobile-first approach aligns with Square's broader focus on providing accessible business tools for merchants of all sizes.

Surprisingly, Gusto doesn't offer a dedicated mobile app for employers to manage payroll, though their website is mobile-responsive. Employees can access the Gusto Wallet app to view pay stubs, manage their finances, and access earned wages before payday through their Cash Out feature. The lack of a comprehensive employer-focused mobile app represents a notable limitation for businesses that need to manage payroll away from their desks. For companies that prioritize mobile accessibility and management capabilities, Square's more developed mobile offerings provide a significant advantage, especially for business owners who are frequently on the move or managing operations across multiple locations.

Customer Support and Service

Gusto provides customer support through multiple channels including phone, email, and live chat. Their support team is available Monday through Friday, though they don't offer weekend support. Gusto's higher-tier plans include access to dedicated customer success managers and HR professionals who can provide more personalized guidance. Their online help center features extensive documentation, tutorials, and FAQs to assist users with common questions and issues.

Square Payroll's support options include phone and chat assistance, also available on weekdays during business hours. They offer a comprehensive support center with articles and guides for self-service troubleshooting. Square's payroll-specific FAQ page addresses the most common questions about the platform. When comparing customer service reputations, Patriot users generally report higher satisfaction with support quality and responsiveness. Some Gusto users have reported challenges with support response times, particularly during busy periods. For businesses that highly value accessible and responsive customer support, it's worth noting these differences in service quality, which could become crucial during time-sensitive payroll issues or tax filing deadlines.

Which is Right for Your Business?

Choosing between Square Payroll and Gusto ultimately depends on your business's specific needs, growth trajectory, and existing systems. Square Payroll stands out as the more cost-effective option, particularly well-suited for businesses already using Square's ecosystem of products. Its straightforward pricing, seamless integration with Square POS, and mobile accessibility make it an excellent choice for small businesses in retail, food service, and other industries where Square products are commonly used. The ability to instantly pay employees through Cash App integration can also be a significant advantage for certain businesses.

Gusto shines as a more comprehensive HR and payroll solution, ideal for growing businesses that need expanded HR capabilities alongside payroll processing. Its extensive benefits administration, robust compliance tools, and wider range of integrations make it more adaptable to diverse business needs. Though more expensive in higher tiers, the additional features can provide substantial value for businesses with more complex requirements or those planning significant growth. Consider your current needs but also your future trajectory—will you need the additional HR features Gusto offers as you grow, or is Square's streamlined payroll processing sufficient? Whichever platform you choose, both Square Payroll and Gusto have established themselves as reliable solutions that can significantly simplify the payroll process for small businesses.