Gusto is an online payroll and HR platform for US businesses that calculates pay, files payroll taxes and adds onboarding and benefits. It suits small teams in one or a few states. Check plan features, multi-state setup and support before you commit.
Payroll is the one admin job where a small mistake lands on someone else's bank account, which is why owners want more than a sales page before they choose a provider. This Gusto review is a buyer's guide. I haven't run a company's payroll through it for this page, so I won't pretend to know how it behaved on a specific pay day. I'll explain what Gusto does, walk through a pay run so you can picture it, and list the questions that decide whether it fits your business.
What Gusto is
Gusto is an online payroll and HR platform for businesses in the United States. It calculates pay, withholds taxes, files federal, state and local payroll taxes, pays employees and contractors, and handles year-end forms. Around that core it adds benefits administration, hiring and onboarding tools, time tracking and basic HR features. It doesn't run payroll for companies outside the US, so UK and European businesses need a different provider.
A pay run, step by step
The easiest way to judge payroll software is to picture what you'll do each pay period. Here's how a typical Gusto pay run works.
- Hours and changes: you or your team add hours, overtime, bonuses or time off, either by hand or from a connected time tracker.
- Review: Gusto shows gross pay, taxes and deductions for each person, so you can spot anything that looks wrong.
- Approval: you submit the run before the processing cut-off for your chosen pay date.
- Funding: Gusto debits your business bank account for wages and taxes.
- Payment: employees receive direct deposits and can view pay slips in their own accounts.
- Filing: Gusto files and pays the payroll taxes it's responsible for on your behalf.
Two things are worth knowing. First, pay runs have cut-off times before the pay date, so build those into your calendar. Second, you can set up automatic payroll for salaried staff whose pay doesn't change, which removes most of the routine work.
What sits around payroll
| Area | What's included | What to check |
|---|---|---|
| Contractors | Pay contractors and handle their year-end forms | Whether you can run a contractor-only plan |
| Benefits | Health insurance, retirement plans and other benefits through Gusto's partners | Availability in your state and for your headcount |
| Hiring and onboarding | Offer letters, digital paperwork and new-hire reporting | How it fits your existing hiring process |
| Time and attendance | Time tracking and time-off policies | Whether higher plans are needed for these |
| HR tools | Employee records, documents and some compliance help | How much HR support you need beyond software |
| Integrations | Accounting, time tracking and other business tools | Test the accounting sync before relying on it |
If you want to see how Gusto compares with a long-established payroll giant, read my Gusto vs ADP guide, which looks at fit by company stage.
Who it suits, by size
Just you and a few contractors
If you only pay contractors, Gusto's contractor plan is a tidy way to pay them and keep records. If you pay yourself through payroll as an owner of an S corporation, Gusto can handle that too. The structure you choose affects how you pay yourself, so read my guide to S corp vs LLC before you set things up.
A small team in one state
This is the sweet spot. Most small US employers with staff in a single state find Gusto straightforward: payroll, filings and onboarding in one place, with a clean interface that employees can use on their phones.
A team spread across several states
Gusto supports employees in multiple states, but each new state brings registrations and tax accounts you'll need to set up. Ask exactly what Gusto handles for you and what you must register yourself, because this is where owners are most often surprised.
A larger company with complex needs
If you're managing unions, complicated shift pay or heavy reporting, a more specialised or enterprise payroll provider may suit better. For a wider view of the options, see my roundup of the best payroll software for small businesses.
Strengths and weak spots
- Strength: a clear, friendly design that non-specialists can use.
- Strength: automatic tax filings, which remove a large chunk of admin.
- Strength: employee self-service, so staff can find pay slips and tax forms themselves.
- Weak spot: support quality is a common topic in user reviews, so ask how to reach a person.
- Weak spot: some features sit on higher plans, so the headline plan may not be the one you need.
- Weak spot: it's US only, which rules it out for teams elsewhere.
What employees see
Owners often forget that payroll software is also something staff use. With Gusto, employees get their own accounts where they can view pay slips, download tax forms, update bank details and, depending on your plan, request time off or enrol in benefits. That self-service saves you from a steady stream of small requests, especially at year end when everyone wants their tax forms at once.
It also means onboarding happens online. New hires fill in their tax and payment details before day one, sign documents digitally and see their first pay slip in the same place. For a small team without an HR person, that tidy first impression matters more than it sounds.
Common setup mistakes
- Choosing a pay date without checking the processing cut-off, then rushing the first run.
- Forgetting to register for state tax accounts before the first pay date in a new state.
- Classifying someone as a contractor when they should be an employee, which creates tax problems later.
- Skipping the accounting sync, then reconciling payroll by hand every month.
- Not giving a second person admin access, so payroll stalls when the owner is away.
Switching payroll providers without trouble
- Pick a start date, ideally at the beginning of a quarter, so tax records are simpler.
- Gather year-to-date payroll figures for each employee from your old provider.
- Collect tax account numbers for every state where you have staff.
- Invite employees to set up their accounts and check their bank and tax details.
- Run a parallel check on the first pay run, comparing totals with what your old system would have produced.
- Keep your old provider's records for the period before the switch.
The year-to-date figures step matters most. If they're wrong, year-end forms will be wrong too, and fixing them later takes far longer than checking now.
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Questions to ask before you sign up
- Which plan includes the features we need, such as time tracking or multiple states?
- What exactly does Gusto file for us, and what do we register ourselves?
- What are the cut-off times for our pay schedule?
- How do we reach support, and in what hours?
- Which benefits are available in our state and for our headcount?
- How do we export our payroll records if we leave?
A fair verdict
Gusto is a sensible payroll choice for small US businesses that want filing, onboarding and employee self-service in one easy tool. It shines for teams in one or a few states and for owners who don't want to become payroll experts. Check which plan you need, understand the multi-state setup and ask about support before you commit.
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Frequently asked questions
What does Gusto do?
Gusto runs payroll for US businesses, files payroll taxes, pays employees and contractors, and adds benefits, onboarding, time tracking and HR tools.
Is Gusto good for small businesses?
Yes, for many US small businesses. It's easy to use and handles tax filings automatically. Check plan features and support before you choose.
Does Gusto work outside the US?
Gusto runs payroll for US businesses. Companies elsewhere need a provider that supports their country's payroll rules.
Can Gusto pay contractors only?
Yes. There's a contractor plan for businesses that only pay contractors, which also handles year-end contractor forms.
Does Gusto file payroll taxes for me?
Gusto files and pays the federal, state and local payroll taxes it supports. You may still need to register for some state accounts yourself, so ask what applies in your states.
How hard is it to switch to Gusto?
It's manageable if you plan it. Collect year-to-date figures, tax account numbers and employee details, start at a clean point such as a new quarter and check the first pay run carefully.
Does Gusto handle benefits?
Gusto can administer health insurance, retirement plans and other benefits through partner providers, depending on your state and headcount. Ask which options are available to you before you sign up.
Can Gusto run payroll for employees in different states?
Yes, Gusto supports employees in multiple states. You'll usually need to register for tax accounts in each new state, so check what Gusto does for you and what you must set up yourself.
