Choosing the right payroll software is a critical decision for small business owners. With numerous options available, two platforms consistently rise to the top of consideration lists: Square Payroll and Gusto. These payroll solutions offer compelling features designed to simplify the complex world of employee payments, tax filings, and benefits administration.

Which Payroll Solution Best Fits Your Business?

Selecting between Square Payroll and Gusto requires careful consideration of your specific business needs, growth trajectory, and existing technology infrastructure. Each platform brings distinct advantages to the table, catering to different business workflows and operational requirements. Square Payroll integrates seamlessly with Square's ecosystem of products, providing a familiar interface design for existing users. Gusto, meanwhile, has built a reputation as a comprehensive HR and payroll solution with robust feature sets extending beyond basic payroll processing.

How Business Size Affects Your Payroll Choice

Small businesses with straightforward payroll needs often find Square Payroll's streamlined approach and lower price point particularly attractive. The platform excels at handling basic payroll functions without overwhelming users with unnecessary features or complexity. Medium-sized businesses with more complex requirements might benefit from Gusto's expanded capabilities, especially those needing comprehensive HR functionality alongside payroll processing. Growing companies should consider not just their current size but their anticipated growth over the next three to five years when making this decision.

What Industry-Specific Features Matter Most

Different business types have unique payroll requirements that influence which platform might serve them better:

• Retail and restaurants: Square's POS integration creates seamless tip reporting and time tracking
• Professional services: Gusto's benefits administration and contractor management shine for knowledge workers
• Healthcare providers: Gusto offers HIPAA compliance features and complex scheduling management
• Construction: Square's mobile-friendly approach works well with job-site time tracking needs

The ideal choice often depends on your specific industry challenges and operational workflows. Businesses with tipped employees particularly benefit from Square's automatic tip reporting integration. Companies with remote workers across multiple states might find Gusto's multi-jurisdiction tax handling more robust and user-friendly.

How Pricing Structures Compare Between Platforms

Understanding the cost implications of each platform helps ensure you're making a financially sound decision for your business. Square Payroll implements a straightforward pricing approach that many small businesses find appealing and predictable. Gusto utilizes a tiered structure that increases in both cost and functionality as you move up the ladder.

What Square Payroll Costs Your Business

Square Payroll offers a refreshingly simple pricing model that makes budgeting straightforward for small business owners. The base price starts at $35 per month plus $6 for each employee paid, regardless of which features you utilize. Businesses working exclusively with contractors benefit from an even more cost-effective option at just $6 per contractor with no monthly base fee. This contractor-only pricing makes Square particularly attractive for businesses with primarily contract workers.

How Gusto's Tiered Pricing Works

Gusto structures its pricing in multiple tiers that correspond to increasing levels of functionality:

• Simple plan: $40 monthly base plus $6 per person
• Plus plan: $80 monthly base plus $12 per person
• Premium plan: Custom pricing starting around $149 plus $12 per person
• Contractor-only: $6 per contractor with no base fee

The higher costs of Gusto's advanced plans reflect their expanded feature sets, particularly in HR functionality and benefits administration. Businesses must carefully evaluate whether these additional capabilities justify the increased expense. A small business with five employees would pay $65 monthly with Square versus $70 with Gusto's Simple plan, with the gap widening as employee counts increase.

What Core Payroll Features Each Platform Offers

Both Square Payroll and Gusto deliver robust fundamental payroll capabilities that satisfy the essential needs of most small businesses. They handle the critical functions that form the backbone of any payroll system, though with some notable differences in implementation and specialty areas. Understanding these core features helps determine which platform aligns better with your specific payroll workflows.

How Automatic Tax Filing Works

Tax compliance represents one of the most challenging aspects of payroll management for small businesses. Both platforms excel in this area by providing comprehensive tax filing services. Square Payroll and Gusto automatically calculate, withhold, and file federal, state, and local taxes based on your business location and employee information. They generate and distribute year-end tax forms including W-2s for employees and 1099s for contractors, significantly reducing compliance risks.

What Makes Payroll Processing Different

The actual process of running payroll varies somewhat between the platforms:

• Payment speed: Square offers Instant Payments allowing payroll processing just one business day in advance
• Scheduling options: Gusto provides more flexible pay schedules including multiple concurrent schedules
• Customization: Gusto offers more advanced options for pay stub customization and specialized reporting
• Time integration: Square's POS integration creates seamless timecard synchronization for retail businesses

Neither platform cuts corners on essential payroll features, making the core functionality comparable for most small businesses. The decision often hinges on specific workflow requirements rather than fundamental capabilities. Both solutions effectively automate the most time-consuming aspects of payroll processing.

Why HR Capabilities Matter Beyond Payroll

The human resources functionality included with your payroll solution can significantly impact your overall business operations. Gusto positions itself as a comprehensive HR platform, while Square Payroll focuses more narrowly on payroll processing with limited HR features. This distinction becomes increasingly important as businesses grow and face more complex workforce management challenges.

How Employee Onboarding Differs

First impressions matter when bringing new team members aboard. Gusto offers a significantly more robust onboarding experience with customizable workflows, digital document storage, and automated onboarding sequences. New hires receive personalized welcome emails and guided setup instructions that create a positive first impression. Square Payroll provides more basic onboarding tools focused primarily on collecting essential information for payroll processing rather than creating a comprehensive welcome experience.

What Benefits Administration Includes

Benefits management capabilities show perhaps the starkest contrast between the two platforms:

• Health insurance: Gusto offers coverage in most states through direct integration
• Retirement plans: Both platforms support 401(k) plans through partnerships
• Additional benefits: Gusto supports HSAs, FSAs, commuter benefits, and more
• Administration: Gusto provides a unified dashboard for all benefits management

Square Payroll offers more limited benefits administration through third-party integrations with SimplyInsured for health coverage and Guideline for retirement plans. While functional, these integrations lack the seamless, comprehensive approach that Gusto delivers. Businesses anticipating growth and increasing HR demands may find Gusto's robust offerings provide room to scale without changing platforms.

How Time Tracking Integration Streamlines Payroll

Efficient time tracking integration can save hours of administrative work and reduce payroll errors. The approaches of Square and Gusto to time tracking reveal their distinct business focuses and target markets. Understanding these differences helps determine which platform might better align with your time management needs.

What Makes Square's Time Tracking Unique

Square Payroll offers native integration with the Square Point of Sale system, creating a seamless workflow for businesses already in the Square ecosystem. Employees can clock in and out directly from Square registers, with hours automatically flowing into payroll calculations. Square's Team app enhances this functionality by enabling managers to create work schedules and allowing employees to view their schedules from mobile devices. This tight integration particularly benefits retail and restaurant businesses using Square's POS system.

How Gusto Handles Employee Scheduling

Gusto provides more comprehensive time management tools, especially in its higher-tier plans. The built-in time tracking allows employees to clock in and out through Gusto's interface from any device. Gusto excels in PTO management with customizable policies, time-off requests and approvals, and calendar syncing capabilities. The platform also offers more robust reporting on time utilization and labor costs across departments or projects.

Which Software Integrations Matter Most

The ability of your payroll solution to connect with other business software significantly impacts overall operational efficiency. Square and Gusto take notably different approaches to integration, reflecting their distinct market positioning and development philosophies. These integration capabilities can make a substantial difference in your day-to-day workflow.

How Square's Ecosystem Works Together

Square Payroll demonstrates exceptional integration within its own product ecosystem. Businesses using other Square products benefit from seamless data flow between systems:

• Point of Sale: Automatic timecard and tip synchronization
• Appointments: Service-based scheduling integration
• Square for Retail/Restaurants: Industry-specific features connect directly to payroll
• Financial services: Simplified banking and payment processing connections

This native integration creates a cohesive workflow that reduces duplicate data entry and streamlines operations for businesses committed to the Square ecosystem. Outside its own products, Square offers more limited third-party connections, primarily with major accounting platforms like QuickBooks Online and Xero.

What Third-Party Apps Connect With Gusto

Gusto shines with its extensive third-party integration network, offering connections to over 100 business applications. This broad integration capability makes Gusto more adaptable to businesses with complex software requirements or those using specialized industry tools. Notable integrations include accounting platforms, time tracking solutions, expense management systems, HR tools, and various project management applications.

How User Experience Impacts Daily Operations

The usability of your payroll platform significantly affects administrator efficiency and employee satisfaction. Both Square Payroll and Gusto have invested considerably in creating intuitive interfaces, though they approach design from different perspectives. Understanding these differences helps determine which platform might better suit your team's preferences and technical comfort level.

What Makes Square's Interface User-Friendly

Square Payroll follows the clean, minimalist aesthetic consistent throughout Square's product ecosystem. The dashboard prioritizes the most common tasks with a straightforward layout that minimizes distractions. Users familiar with other Square products will find the payroll interface immediately recognizable and intuitive. The mobile app extends this experience, allowing administrators to run payroll from anywhere with the same streamlined interface.

How Gusto Creates an Engaging Experience

Gusto embraces a more colorful, friendly design philosophy that has earned praise for making payroll processing feel less intimidating. The platform uses conversational language, helpful illustrations, and contextual guidance to walk users through complex processes. Gusto's dashboard provides a comprehensive overview of upcoming tasks, recent activities, and important deadlines. The employee self-service portal is particularly noteworthy, with personalized onboarding and a comprehensive benefits selection interface.

What Support Options Each Platform Provides

Access to reliable support and educational resources can make a significant difference when implementing and using payroll software. Both Square Payroll and Gusto offer multiple support channels, though their approaches differ somewhat in availability, depth, and specialization.

How To Get Help With Square Payroll

Square provides multiple support channels to assist users with payroll questions and issues:

• Phone support: Available Monday-Friday, 6 AM to 6 PM Pacific Time
• Email assistance: Typically responds within one business day
• Live chat: Available during regular business hours
• Knowledge base: Extensive articles and tutorials covering common procedures

Square's support team has developed a reputation for responsiveness, particularly for issues related to integration with other Square products. All customers receive the same level of support regardless of plan level or business size. The knowledge base provides comprehensive self-service options for users who prefer finding answers independently.

What Makes Gusto's Customer Service Stand Out

Gusto offers tiered support options that correspond to their pricing plans. Basic support includes phone, email, and chat assistance during business hours for all customers. Plus and Premium plan subscribers receive priority support with reduced wait times. Premium plan customers benefit from a dedicated customer success manager who provides personalized guidance and proactive assistance. Gusto's knowledge base is particularly comprehensive, offering detailed guides, video tutorials, webinars, and customizable templates.

How To Choose The Right Payroll Solution

After examining Square Payroll and Gusto across multiple dimensions, making the final decision requires weighing these factors against your specific business needs. Consider not just your current requirements but your anticipated growth and changing needs over the next several years. Switching payroll providers can be disruptive, so choosing a platform that can accommodate your evolving business is valuable.

When Square Payroll Works Best

Square Payroll represents the optimal choice for specific business scenarios:

• Square ecosystem users: Businesses already using Square POS or other Square products
• Retail and restaurants: Companies with tipped employees benefit from automatic tip reporting
• Cost-conscious operations: Businesses prioritizing straightforward pricing and lower costs
• Simple payroll needs: Organizations requiring basic payroll without extensive HR functionality
• Mobile-first operations: Businesses valuing Square's robust mobile capabilities

Square's focused approach to payroll delivers exceptional value for businesses with straightforward needs, particularly those already invested in the Square ecosystem. The platform's simplicity makes it accessible even for users without extensive payroll experience.

When Gusto Delivers More Value

Gusto emerges as the superior choice under different circumstances:

• Growing businesses: Companies anticipating significant hiring and expansion
• Multi-state employers: Organizations with employees across multiple tax jurisdictions
• Benefits-focused companies: Businesses offering comprehensive benefits packages
• HR-centric operations: Organizations needing robust HR functionality beyond payroll
• Integration-dependent workflows: Businesses requiring connections to numerous third-party applications

Companies requiring more sophisticated employee management might find Gusto's additional features worth the premium price. The platform's scalability makes it particularly suitable for businesses with ambitious growth plans.

Why Taking Action On Payroll Matters Now

Implementing the right payroll solution directly impacts your business efficiency and compliance. Delays in selecting and deploying an appropriate system can lead to unnecessary administrative burden, potential compliance issues, and employee dissatisfaction. Both Square Payroll and Gusto offer free trials or demos, providing an opportunity to test their interfaces and workflows before committing.

Taking advantage of these trial options allows you to evaluate how each system aligns with your specific processes and team preferences. Consider involving key stakeholders in the evaluation process to ensure the chosen solution meets departmental needs across your organization. The right payroll solution reliably handles your compliance obligations while minimizing administrative burden, freeing you to focus on growing your business.

The payroll landscape continues to evolve with changing regulations and technological advancements. Choosing a provider committed to ongoing development ensures your business remains compliant and efficient as requirements change. Both Square and Gusto have demonstrated commitment to platform enhancement and regulatory compliance, though their development priorities reflect their different market positions and business philosophies.