Managing human resources (HR) tasks can be challenging for growing businesses, but using the right software simplifies the process and boosts efficiency. While some companies prefer simpler tools with essential features, others require comprehensive platforms with advanced functionality to meet their needs. Gusto and Justworks are two widely used platforms, each offering flexible features to support various business requirements.

But how do you decide which one is right for your organization?

Gusto is ideal for growing teams on a budget as it offers comprehensive payroll and benefits management at a lower base cost. Meanwhile, Justworks is better suited for companies prioritizing PEO service and extensive wellness benefits to support larger, multi-state operations.

This guide provides a detailed Gusto vs Justworks comparison, highlighting their key features, unique functionalities, and pricing models. It also outlines their strengths and weaknesses to help you understand the pros and cons of each platform.

Gusto Vs Justworks – At A Glance

Features 

Gusto 

Justworks 

Payroll 

Unlimited payroll runs, supports R&D tax credits, handles salaried/hourly pay, and offers direct deposit with Gusto Wallet 

Supports multi-state payroll, contractor payments, custom pay schedules, integrated time tracking, and off-cycle payments 

Benefit Administration 

Provides medical, dental, vision coverage, 401(k), HSAs/FSAs, life/disability insurance, and COBRA management 

Offers health/dental/vision plans, mental health support, fitness memberships, commuter benefits, and family planning services 

Compliance 

Automates payroll tax filings, ACA reporting, state tax registration, manages SUI filings, and ensures labor law compliance with geolocation tracking 

Handles payroll filings, ACA compliance, COBRA administration, and multi-state compliance tools 

Pricing 

Plans start at $40/month + $6/month/person 

Plans start at $8/month/person + $50/month base fee 

What Is Gusto?

Gusto HR is a comprehensive cloud-based human resources (HR) platform designed to streamline and simplify administrative functions for small and medium-sized businesses. It automates critical tasks such as payroll processing, state tax registration, and compliance while also offering tools for time tracking, hiring, onboarding, and performance management.

The software stands out by providing health insurance at no additional cost, and its ‘Broker Integration’ allows your trusted broker to manage employee benefit plans directly within the platform.

Gusto works well for healthcare businesses because of its advanced compliance tools. It is ideal for manufacturing teams due to its flexible benefits scheduling, while real estate and construction companies benefit the most from its commission-based payment system and detailed project costing features.

Unique Features Of Gusto 

  • Paycheck Splitter: This feature allows employees to divide their paycheck into multiple accounts. They can allocate specific amount or percentage towards savings goals, external bank account, or their Gusto spending account. Any changes are automatically applied to the next unprocessed payroll 
  • Free Payroll Setup: Gusto provides users with full access to Gusto’s payroll platform for free. You can set up your account, explore features such as time tracking and detailed reports with no commitments, credit cards, or contracts 
  • Gusto Wallet: The platform offers a free app with a spending account that includes a debit card, early direct deposit (up to 2 days faster), 2. 00% APY, and access to 37,000+ fee-free ATMs. Employees can view paychecks, W2s, and tax documents, with FDIC-insured accounts through nbkc bank, manageable even after leaving a job 

Gusto Pros And Cons 

Pros 

  • The software offers users the flexibility to edit payroll, even after submission 
  • It offers a Wallet App that allows you to make online purchases and quick payments by linking directly to your e-wallet 
  • Handles communication with IRS on behalf of the users, simplifying tax-related tasks 

Cons 

  • Despite offering a valuable Gusto Wallet app, its inability to add funds to the Gusto debit card outside of payroll deposit, limits its usability
  • Onboarding new employees require some manual work, which can be frustrating

What Is Justworks?

Justworks HR is an all-in-one professional employer organization (PEO) platform that simplifies HR, payroll, compliance, and benefits for small and midsize businesses (SMBs). It also enables businesses to hire and manage international teams through its ‘Employer of Record’ (EOR) services without the need for local entities.

Additionally, it stands out with its ESAC accreditation, signifying the highest standards of financial reliability, compliance, and operational integrity for PEOs. It is best for remote teams because its PEO services cover 2,000 tax localities, simplifying employer tax filings, while its workers’ compensation for all worksite employees makes it equally compelling for construction businesses.

Unique Features Of Justworks 

  • Custom Overtime Alerts: The software includes automated safeguards such as custom overtime alerts to notify managers when employees approach overtime limits, while meal and rest break reminders ensure employees take their designated time off 
  • 24/7 Multi-Channel Customer Support: The platform’s customer support, which has earned six consecutive wins at the Stevie Awards, allows customers to reach support via phone, email, live chat or Slack, offering quick and accurate solutions anytime 
  • Professional Employer Organization (PEO): Justworks is IRS certified, as well as SOC1 and SOC 2 audited, guaranteeing complete compliance with financial regulations 

Justworks Pros And Cons 

Pros

  • New hires can independently complete most of their pre-employment paperwork, reducing the need for administrative assistance 
  • Provides access to customizable templates for employee handbooks and policies, making it easier for small businesses to organize essential documents 
  • Through its PEO model, users can take advantage of a broad selection of benefits at lower costs 

Cons 

  • Although the platform provides an advanced time-tracking system, some users find using two separate apps for clocking in inconvenient 
  • PTO balances update only after the request date passes, which can confuse users and lead to duplicate entries

Gusto Vs Justworks – Key Feature Comparison

Payroll

Gusto provides unlimited payroll runs with no additional charges for off-cycle payments or bonuses. Employers can manage child support garnishments seamlessly, with automatic payment submissions to the state once deductions are set up.

The platform offers multiple pay schedules, supporting salaried and hourly employees, and ensures paperless paydays through direct deposit or Gusto Wallet. Businesses in the restaurant industry can rely on this software for FICA Tip Credit support, while its R and D Tax Credit feature helps those who claim federal and state incentives.

Like Gusto, Justwork's payroll enables custom schedules including weekly, biweekly, semi-monthly, or monthly payments, and allows one-time payments without extra charges. The software supports multistate payroll and contractor payments, making it suitable for remote employees in different locations.

SaaS (Software as a Service) industries also benefit from integrated time tracking, available as an add-on for an additional cost per employee or active contractor. Companies like ApproveMe. com benefitted from these payroll and contractor management features by saving their HR team over 84 hours annually despite doubling their employee headcount.

Winner: Gusto takes the lead with unlimited payroll runs and advanced capabilities, making it ideal for small businesses and niche industries like restaurants and startups. Its cost-effective tools and employee-focused options like Gusto Wallet offer greater value than Justworks.

Benefit Administration

Employers can use Gusto's benefits administration to provide medical, dental, and vision coverage, with options to integrate current health plans or create new ones guided by licensed benefits advisors. It offers 401(k) retirement plans to help employees save for their future, along with HSAs and FSAs for pre-tax contributions towards healthcare expenses.

This software provides employees with life insurance and disability coverage and helps businesses manage COBRA for continued healthcare coverage after employee departures. It allows employers to offer pre-tax commuter benefits to reduce employee commuting costs and manage workers' compensation effectively with Next Insurance.

Through Justworks PEO, businesses can access the same comprehensive insurance plans as Gusto from trusted carriers while managing benefits like open enrollment and policy changes without additional fees. It provides mental health, primary care, family benefits, and fitness memberships through partners like Talkspace and Peloton.

Beyond health insurance, the platform supports 401(k) retirement plans, HSA/FSA accounts, commuter benefits, COBRA administration, and life and disability insurance. Employers can ensure compliance with HIPAA and ACA, and employees gain the ability to enroll, manage plans, and share insurance cards effortlessly via the Justworks app or desktop.

Winner: While Gusto delivers strong benefits like health coverage and retirement plans, Justworks excels by including wellness perks such as mental health support and fitness memberships. Its PEO model provides access to competitive insurance plans, which gives it an edge in modern workplaces.

Compliance

Gusto's compliance feature helps businesses adhere to labor laws and tax regulations by storing forms like I-9s, W-2s, and 1099s online while automating payroll tax calculations, filings, and ACA-compliant reports to ensure IRS compliance. It manages state unemployment insurance (SUI) taxes by calculating deductions based on state rates and filing these payments quarterly or annually.

The platform supports state tax registration in all 50 states, adapts to tax law updates, and performs automatic calculations to guarantee accuracy. This makes Gusto ideal for companies with multiple offices, for example, a marketing firm operating out of five different states may rely on it to ensure multi-state compliance. Businesses can use geolocation-enabled time tracking to oversee hourly workers' hours, lunches, and breaks while ensuring compliance with labor laws.

On the other hand, Justworks handles payroll filings, including W-2, W-3, 1099, 940, and 941 forms, with accuracy and timeliness to meet compliance standards. Companies with Affordable Care Act (ACA) requirements can rely on it to streamline compliance by managing filings for 1094-C and 1095-C.

The software provides tools to manage state unemployment insurance filings and workers’ compensation, while also offering COBRA administration for continued health coverage. It offers time-tracking tools to ensure accurate reporting of employee hours, calculate overtime, and enforce rest and meal break rules for labor law compliance.

Winner: It's a tie. Both Gusto and Justworks offer the same level of compliance tools to meet business needs. Although Gusto’s compliance features are not consolidated under a single category on its website, it still provides a comprehensive set of tools comparable to Justworks, ensuring both platforms meet diverse compliance requirements effectively.

Pricing

Gusto's pricing plans are designed to meet the diverse needs of businesses of all sizes. The plans include:

  • Simple: $40/month + $6/month/person
  • Plus: $80/month + $9/month/person
  • Premium: $180/month + $22/month/person
  • Contractor Only: $35/month + $6/month/person

The entry-level Simple Plan includes single-state payroll, employee management tools, and Gusto Wallet access, while the Plus Plan adds multi-state payroll and advanced workforce management features like time tracking, reimbursements, and scheduling. However, the Contractor Only Plan excludes back-up withholding, state-required withholdings, and additional features beyond global contractor payments.

Meanwhile, Justworks offers flexible pricing plans tailored to the needs of small and growing businesses. These plans include:

  • Payroll: $8/month/person + $50/month base fee
  • PEO Basic: $59/month/person
  • PEO Plus: $109/month/person
  • EOR: $599/month/person

The software provides optional add-ons, such as Time Tracking ($8/month per employee), International Contractor Payments ($39/month per active contractor), and Health Insurance Administration ($8/month per eligible employee).

Winner: It's a tie again. Gusto offers more competitive rates but limits its entry-level plan to single-state payroll. In contrast, Justworks comes with a higher starting price but includes multi-state payroll and full PEO service, making both platforms suitable depending on business needs.

Final Verdict – Which HR Software Is Better?

In conclusion, choosing between Gusto and Justworks depends on your business's specific needs, size, and priorities. Gusto stands out for small to medium-sized businesses that prioritize affordability and essential HR tools, offering features like automated payroll, tax filing, and employee benefits. Justworks, however, is designed for businesses looking for a comprehensive PEO solution, advanced compliance support, and wellness-focused benefits like mental health programs and fitness memberships.

Both platforms support global hiring and muti-state compliance, making them suitable for businesses with distributed teams.

Ultimately, the decision comes down to evaluating your immediate HR requirements and long-term growth plans of your business. While these platforms are strong contenders, they might not suit every organization. In that case, BambooHR or Quantum Workplace might be better options to consider.