In today's fast-paced business environment, efficient payroll management is crucial for businesses of all sizes. Square Payroll and Gusto have emerged as leading contenders in the payroll software marketplace, each offering unique features designed to streamline payroll processes and reduce administrative burden. For small business owners, selecting the right payroll solution can significantly impact operational efficiency, employee satisfaction, and compliance with tax regulations.

Both Square Payroll and Gusto provide cloud-based platforms that automate payroll calculations, tax filings, and employee payments. These solutions eliminate the manual work traditionally associated with payroll processing, reducing the risk of errors and ensuring timely payment of employees. Additionally, both platforms offer integrations with other business software, further enhancing their utility for small business operations.

When comparing Square Payroll vs Gusto, it's important to consider your business's specific needs, budget constraints, and growth trajectory. While both platforms share some core functionalities, they differ in pricing structures, advanced features, and integration capabilities. Understanding these differences is essential for making an informed decision that aligns with your business requirements and long-term goals. This comprehensive comparison aims to provide an in-depth analysis of both payroll solutions, highlighting their strengths, limitations, and ideal use cases.

Pricing Structure Comparison

Pricing is often a primary consideration for small business owners when selecting payroll software. Square Payroll offers a straightforward pricing model with two options: a full-service payroll plan priced at $35 per month plus $6 per employee or contractor paid, and a contractor-only plan at $6 per contractor with no base fee. This simple pricing structure makes it easy for businesses to anticipate their monthly payroll software expenses.

Gusto, on the other hand, provides a tiered pricing structure with multiple options. Their Simple plan starts at $40 per month plus $6 per person, while their Plus plan increases to $80 per month plus $12 per person, offering additional HR features. Gusto's Premium plan, designed for businesses with more complex needs, requires custom pricing. Like Square, Gusto also offers a contractor-only option at $6 per contractor with no monthly base fee.

For very small businesses or startups with limited payroll needs, Square Payroll's lower entry price point ($35 vs. Gusto's $40) may be more attractive. However, as businesses grow and require more advanced HR functionalities, Gusto's tiered approach allows for scalability without needing to switch providers. It's worth noting that while Square's basic plan is slightly less expensive, Gusto's higher-tier plans include features that would require additional third-party solutions if using Square, potentially offsetting the initial cost difference for businesses needing comprehensive HR support.

Core Payroll Features

Both Square Payroll and Gusto excel in providing essential payroll functionalities that simplify the payment process for small businesses. Each platform offers automatic tax calculations and filings at the federal, state, and local levels, ensuring compliance with tax regulations while reducing the administrative burden on business owners. Both solutions support unlimited payroll runs, allowing businesses to process regular payrolls, bonuses, and off-cycle payments without incurring additional fees.

Direct deposit is standard in both platforms, with Square offering next-day and two-day options, while Gusto provides two-day, four-day, and next-day direct deposit depending on the plan selected. Both systems allow employees to access digital pay stubs and tax forms through self-service portals, enhancing transparency and reducing paper waste. Additionally, both platforms support multiple pay rates, overtime calculations, and various employee types including W-2 employees and 1099 contractors.

Where Square Payroll particularly shines is in its tip management functionality, making it especially suitable for restaurants and service-based businesses. Square automatically imports tips from Square POS, streamlining the payroll process for tipped employees. Gusto, while also supporting tip reporting, offers more advanced payroll features including wage garnishment management (except in South Carolina) and international contractor payments, which Square doesn't currently support. Both platforms handle paid time off tracking, though Gusto's implementation offers more customization options for different leave types.

HR Features and Employee Management

Gusto significantly outperforms Square Payroll when it comes to HR functionality and employee management capabilities. While Square Payroll offers basic employee onboarding tools and simple profile management, Gusto provides a comprehensive suite of HR features designed to support the entire employee lifecycle. Gusto's platform includes customizable onboarding workflows, offer letter templates, and electronic signature capabilities that streamline the hiring process.

Employee self-service features also differ substantially between the two platforms. Gusto allows employees to complete their own onboarding paperwork, update personal information, access company documents, request time off, and view their benefits information through a user-friendly portal. Square's employee self-service options are more limited, primarily focusing on accessing pay stubs and tax documents rather than supporting broader HR functions.

Performance management is another area where Gusto excels. The Plus and Premium plans include tools for creating and conducting performance reviews, sending employee surveys, and gathering feedback - features entirely absent from Square Payroll. Additionally, Gusto offers a team directory with organizational charts and employee celebrations like birthdays and work anniversaries, fostering a more connected workplace culture. For businesses looking for robust HR functionality alongside payroll processing, Gusto's comprehensive approach provides significant advantages over Square's more streamlined payroll-focused solution.

Time Tracking and Scheduling

Time tracking capabilities vary significantly between Square Payroll and Gusto, with each platform offering distinct advantages depending on business needs. Square Payroll integrates seamlessly with Square's Team Management app, allowing employees to clock in and out directly from Square POS systems - an invaluable feature for retail and restaurant businesses already using Square's ecosystem. Managers can review timecards, approve hours, and export time data directly to payroll with minimal effort.

Gusto offers native time tracking features in its Plus and Premium plans, allowing employees to clock in and out from any device, request time off, and track hours against specific projects or clients. While not as intuitive for retail environments as Square's solution, Gusto's time tracking provides greater flexibility for businesses with remote workers or multiple locations not using Square POS. Both platforms support overtime calculations and paid time off management, though Gusto offers more customization options for different PTO policies.

For scheduling functionality, Square's Team Management premium features include employee scheduling with shift assignments, availability management, and schedule publishing. Gusto lacks native scheduling capabilities, instead relying on integrations with third-party scheduling tools. Businesses already using Square's point-of-sale system will find tremendous value in the tight integration between their sales platform, time tracking, and payroll. However, companies with more complex time tracking needs or those not using Square POS may prefer Gusto's more versatile approach or its extensive integration options with specialized time tracking software.

Benefits Administration

Benefits administration is an area where Gusto demonstrates significant advantages over Square Payroll. Gusto offers a comprehensive benefits marketplace that allows businesses to provide health insurance, dental and vision coverage, 401(k) retirement plans, HSAs, FSAs, commuter benefits, life insurance, and disability insurance - all managed directly through their platform. This integrated approach simplifies administration for employers and provides employees with a seamless experience for enrollment and management of their benefits.

Square Payroll also offers benefits administration capabilities but with a more limited scope. Through partnerships with third-party providers, Square enables businesses to offer health insurance, retirement plans, and workers' compensation insurance. However, the integration is less robust than Gusto's native offerings, and the range of benefits available is more restricted. Square does not currently support HSAs, FSAs, or commuter benefits within its platform.

A significant limitation of Gusto's benefits offering is that health insurance administration is not available in all 50 states. As of this writing, Gusto supports health benefits in 39 states and Washington D.C., leaving businesses in unserved states to manage health insurance separately. Square faces similar limitations with its benefits offerings. For businesses where comprehensive benefits administration is a priority, Gusto's more extensive options and deeper integration likely outweigh Square's more limited capabilities, provided the business operates in a state where Gusto's health insurance services are available.

Integration Capabilities

Integration capabilities represent another significant differentiator between Square Payroll and Gusto. Gusto boasts an impressive array of over 130 integrations with popular business software across accounting, time tracking, expense management, HR, and team communication categories. Key integrations include QuickBooks, Xero, FreshBooks, TSheets, Expensify, Slack, and Zoom, allowing businesses to create a cohesive technology ecosystem that reduces data entry and improves efficiency across operations.

Square Payroll offers fewer third-party integrations but provides exceptional integration within the Square ecosystem. Businesses already using Square POS, Square Appointments, or Square for Retail will benefit from the seamless flow of data between these platforms and Square Payroll. Outside the Square ecosystem, Square Payroll does offer integrations with major accounting software like QuickBooks Online and Xero, as well as time tracking solutions like Deputy and Homebase, but the overall integration catalog is more limited compared to Gusto.

For businesses heavily invested in the Square ecosystem, Square Payroll's deep internal integrations may outweigh the need for extensive third-party connections. However, companies using diverse software solutions or specific industry tools will likely benefit from Gusto's broader integration capabilities. When evaluating integration needs, consider your existing technology stack and future software requirements to determine which platform will provide the most streamlined workflow for your specific business operations.

User Experience and Mobile Accessibility

The user experience offered by both Square Payroll and Gusto consistently receives positive feedback from small business owners, though with notable differences in interface design and functionality. Gusto's interface is widely praised for its modern, intuitive design with a dashboard that provides clear visibility into important payroll information and upcoming tasks. The platform guides users through processes step-by-step, making it accessible even for those with limited payroll experience. Gusto's colorful, engaging design incorporates helpful tooltips and explanations throughout, creating an enjoyable user experience that simplifies complex payroll tasks.

Square Payroll offers a clean, minimalist interface consistent with other Square products. Users familiar with the Square ecosystem will find the payroll interface immediately familiar and easy to navigate. Square's design philosophy emphasizes simplicity and efficiency, with straightforward workflows for running payroll and managing employee information. While perhaps less visually engaging than Gusto, Square's no-frills approach appeals to business owners who prioritize speed and efficiency.

Mobile accessibility represents a clear advantage for Square Payroll, which offers a fully-featured mobile app allowing business owners to run payroll, manage employees, and view payroll reports from anywhere. Employees can also access their own information through Square's Team app. Gusto, despite its excellent web interface, does not currently offer a dedicated mobile app, limiting on-the-go functionality to its mobile-responsive website. For business owners who frequently need to manage payroll away from their desks, Square's comprehensive mobile capabilities may be a deciding factor.

Customer Support and Resources

Both Square Payroll and Gusto recognize the importance of responsive customer support for payroll services, but their approaches differ significantly. Gusto offers phone, email, and chat support Monday through Friday from 6 AM to 5 PM PT. Their support team is known for being knowledgeable and responsive, particularly on payroll tax issues and compliance questions. Gusto also provides an extensive knowledge base, detailed help articles, video tutorials, and webinars to help users maximize their platform experience.

Square Payroll offers customer support via phone and email Monday through Friday from 6 AM to 6 PM PT. Square's support is generally well-regarded, though some users report longer wait times during peak periods compared to Gusto. Square complements its direct support with comprehensive online resources, including a searchable help center, video tutorials, and detailed guides on payroll processes and compliance requirements.

Beyond basic support, Gusto differentiates itself with its HR Experts add-on (included in Premium plans), which provides access to certified HR professionals for personalized guidance on complex HR issues, compliance concerns, and best practices. This level of specialized support is particularly valuable for businesses without in-house HR expertise. Square does not currently offer comparable HR advisory services, which may be a significant consideration for businesses seeking guidance beyond standard payroll operations. For businesses requiring extensive support and advisory services, particularly around HR matters, Gusto's more robust support offerings provide a clear advantage.

Making the Right Choice for Your Business

Selecting between Square Payroll and Gusto ultimately depends on your business's specific needs, growth trajectory, and existing technology ecosystem. Square Payroll presents an excellent option for businesses already using Square's point-of-sale system or those primarily focused on basic payroll processing. Its strengths lie in its seamless integration with other Square products, slightly lower starting price, comprehensive mobile app, and straightforward interface. Restaurants, retail establishments, and service businesses using Square POS will find particular value in the unified ecosystem Square provides.

Gusto emerges as the superior choice for businesses seeking more comprehensive HR functionality alongside payroll processing. Its extensive benefits administration, employee onboarding tools, performance management features, and broader third-party integrations make it well-suited for growing companies with increasingly complex HR needs. Professional service firms, technology startups, and businesses prioritizing employee experience tend to gravitate toward Gusto's more robust platform despite its higher price point at upper tiers.

Consider your business's current size and future growth plans when making your decision. If you anticipate needing more advanced HR capabilities as you expand, Gusto's scalable platform may save you the hassle of switching providers later. Conversely, if your business operates primarily within the Square ecosystem and has straightforward payroll needs, Square Payroll's tight integration and lower cost structure may be ideal. Many businesses find it valuable to take advantage of free trials or demos of both platforms before committing, allowing hands-on experience with each interface and workflow to inform their final decision.

Conclusion: Balancing Features and Value

Both Square Payroll and Gusto deliver robust payroll solutions that significantly streamline the process of paying employees and managing tax compliance. For small business owners, the decision between these platforms should be based on a careful assessment of specific business requirements, integration needs, and budget considerations rather than simply choosing the platform with the most features.

Square Payroll offers exceptional value for businesses seeking a straightforward, affordable solution, especially those already embedded in the Square ecosystem. Its strengths in mobile accessibility, point-of-sale integration, and competitive pricing make it particularly well-suited for retail, restaurant, and service businesses with relatively straightforward payroll and HR needs. Square's approach emphasizes simplicity and efficiency, delivering core payroll functionality without unnecessary complexity.

Gusto provides a more comprehensive platform that extends well beyond basic payroll processing to include extensive HR capabilities, benefits administration, and employee management tools. While this comes with a higher price tag for advanced features, the additional functionality can deliver significant value for growing businesses with evolving HR needs. Gusto's user-friendly interface and exceptional customer support further enhance its appeal for businesses seeking a scalable, all-in-one solution for payroll and HR management.

Ultimately, both platforms offer compelling advantages for small businesses, with the ideal choice depending on your specific priorities, budget constraints, and long-term business strategy. Whether you prioritize Square's seamless ecosystem integration or Gusto's comprehensive HR capabilities, both solutions will dramatically improve upon manual payroll processes and help ensure accurate, compliant payroll management for your business.