Running payroll involves navigating complex processes, from calculating taxes to ensuring timely payments and benefits administration. As a result, businesses need efficient tools to handle these tasks without compromising compliance or employee satisfaction.

Square Payroll and Gusto are two leading software solutions designed to simplify payroll management. Square Payroll integrates seamlessly with point-of-sale systems, offering automated tax filing and flexible pricing, making it a great fit for small to medium businesses. Gusto, on the other hand, delivers an all-in-one platform with robust features for payroll, benefits, and HR services.

Thus, this article will compare Square Payroll and Gusto, delving into their various benefits, features, as well as potential drawbacks.

Square Payroll Vs Gusto: Atx A Glance

Features 

Square Payroll

Gusto 

Payroll Management

Offers a streamlined payroll solution that integrates seamlessly with other Square products 

Offers features such as unlimited payroll runs, next-day direct deposit, and more 

Time Tracking 

Uses timecards to track employee hours, breaks and overtime 

Features mobile time tracking, geolocation, and overtime alerts

Benefits Administration

Supports a variety of insurance plans as well as 401(k) retirement plans 

Offers a comprehensive suite of options, including HSAs, FSAs, 401(k) retirement plans, and commuter benefits 

Reporting 

Offers a range of reporting features such as customized reports 

Provides a wide variety of reporting features including customizable reports, compliance alerts, and cost reports 

Pricing 

Starting at $35/month + $6 monthly fee per person

Starts at $40 per month + $6 per month per person 

Integrations

Integrates with apps in the Square marketplace such as QuickBooks, Wix, Shippo, etc.  

Integrates with a variety of third-party platforms such as Asana, Dropbox, GitHub, etc.

What Is Square Payroll?

Square Payroll is a payroll solution designed to streamline processing. Fully integrated with Square's ecosystem, it allows seamless import of timecards and tips, facilitating faster payroll runs. The software also automates federal and state tax filings and payments, ensuring compliance and reducing administrative burdens. In addition to all this, it also provides integrated benefits management, such as health insurance and retirement plans, and supports multiple payment methods, including direct deposit and checks.  

Square Payroll was designed with small businesses in mind. To this end, it offers flexible pricing plans, including options for full-service payroll and contractor-only payroll, with unlimited monthly pay runs and no long-term commitments.

Unique Square Payroll Features

Integration With Square POS: Square Payroll seamlessly integrates with Square's ‘Point of Sale’ (POS) system, allowing businesses to automatically import timecards and tips, reducing manual data entry and errors.  

Tip Management: The software includes specialized tools for managing and distributing employee tips, catering to industries like food service where tip handling is a critical function.  

Square Payroll Pros And Cons 

Pros: 

  • Integrates payroll taxes, time management, and HR paperwork 
  • Provides excellent customer support when needed 
  • Features a user-friendly interface for easy navigation 

Cons: 

  • Requires manual calculation of sick pay on timecards 
  • Some users reported issues with employees clocking in/out 

What Is Gusto?

Gusto HR is a comprehensive platform offering payroll, benefits management, and HR solutions on one platform. Its payroll services include automated deductions, direct deposit, and tax filing, simplifying the payment process for employers. Additionally, it offers employee benefits such as health insurance, automatic savings plans, and 401(k) options, enabling businesses to support their teams effectively. Gusto's integrations with popular software further enhance its functionality, making it a versatile choice for businesses seeking an all-in-one HR solution.

Gusto caters to small and medium-sized businesses across various industries, including real estate, professional services, healthcare, retail, manufacturing, and construction. As such, its transparent pricing and comprehensive service offerings make it a preferred choice for businesses aiming to streamline their HR, payroll, and benefits processes.

Unique Gusto Features 

  • Anonymous Employee Surveys: Gusto's tools for gathering employee feedback anonymously help employers improve workplace satisfaction and engagement.  
  • Customizable Onboarding Tools: Employers can use Gusto to create offer letters, manage electronic signatures, and design onboarding checklists, streamlining the hiring process.  

Gusto Pros And Cons

Pros:

  • User-friendly interface simplifies payroll processing
  • Automated tax filings reduce administrative workload
  • Comprehensive benefits management that is also easy to administer, according to various users

Cons:

  • Occasional delays in customer service response times
  • Mobile app lacks some desktop features 

Square Payroll Vs Gusto – Features Comparison

Payroll Management

Square Payroll offers a streamlined payroll solution that integrates seamlessly with Square's ecosystem, enabling businesses to manage payroll efficiently. Key features include automated tax calculations and filings, unlimited monthly pay runs, and the ability to pay both W-2 employees and 1099 contractors. The platform also supports importing timecards and tips directly from Square POS, reducing manual entry and errors.

Gusto delivers a comprehensive payroll service designed for small to medium-sized businesses, offering automated deductions, direct deposit, and tax filing. The platform supports unlimited payroll runs, multiple pay schedules, and handles payments for both employees and contractors across all 50 states. Furthermore, its user-friendly interface and advanced tools, such as next-day direct deposits, make payroll processing efficient and hassle-free.

Winner: It’s a tie for this category since both software offer comparable features to streamline payroll processing.

Time Tracking

Square Payroll offers integrated time tracking through timecards, enabling businesses to monitor employee hours, breaks, and overtime. Employees can clock in and out using unique passcodes via the ‘Square app’, ensuring accurate timekeeping. Advanced features, available with a ‘Shifts Plus’ subscription, include shift scheduling, time-off management, and overtime tracking. This approach facilitates seamless payroll processing by automatically syncing timecard data, reducing manual entry and potential errors.

Meanwhile, Gusto provides comprehensive time and attendance tools designed to simplify workforce management. Unlike Square, employees can clock in and out through web, mobile, or a dedicated time kiosk, with GPS-enabled clock-ins to verify locations. The platform supports time-off requests and approvals, overtime alerts, and project tracking with cost reports. Gusto's time tracking features integrate seamlessly with its payroll system, ensuring accurate wage calculations and compliance with labor laws.

Winner: While Square Payroll offers more advanced features such as shift scheduling and time-off management, Gusto offers more clock-in methods alongside geofencing to verify locations. Therefore, Gusto wins this category.

Benefits Administration

Square Payroll offers integrated benefits administration, allowing businesses to provide health insurance and 401(k) retirement plans to their employees. Through partnerships with providers like ‘SimplyInsured’, employers can offer medical, dental, and vision insurance, with contributions and deductions syncing automatically with payroll.

Additionally, Square Payroll supports 401(k) plans, enabling businesses to help employees save for retirement. This seamless integration simplifies benefits management, ensuring accurate deductions and compliance with regulations.

Gusto provides a comprehensive benefits administration platform designed to help all kinds of businesses attract top talent. Employers can offer a wide range of benefits, including health insurance, health savings accounts (HSAs), flexible spending accounts (FSAs), 401(k) retirement plans, and life and disability insurance. These benefits are also geared towards talent retention, helping companies in the long run.

Furthermore, Gusto's platform integrates these benefits with payroll, automating deductions and streamlining the enrollment process. With access to over 9,000 health insurance plans across more than 30 carriers, businesses can customize benefits packages to fit their team's needs and budget.

Winner: Gusto offers a more comprehensive benefits plan as compared to Square Payroll, making it the winner here.

Reporting

Square Payroll offers a range of reporting features that provide businesses with detailed insights into their payroll operations. Users can access custom reports detailing team member earnings, paystubs, and company payroll totals.

In addition, Square Payroll handles federal and state tax filings on behalf of the business, with copies of these filings available in the Square Dashboard for review. This centralized access to payroll and tax reports simplifies compliance and financial management for businesses.

Gusto provides comprehensive HR insights and reporting tools designed to help businesses understand their workforce better. The platform offers customizable reports, allowing employers to analyze crucial data briefly and make informed decisions swiftly.

Features include anonymous employee surveys to gauge team satisfaction, compliance alerts to stay ahead of regulatory changes, and workforce cost reports detailing time spent on projects, including wages and benefits. These insights enable businesses to allocate resources effectively and support their teams more efficiently.

Winner: Gusto’s wide range of reporting features in comparison to Square Payroll’s make it the winner here.

Pricing

Square Payroll offers a pricing plan that has two main options:

  • Full-Service Payroll: Priced at $35/month plus $6/month/person
  • Contractor-Only Payroll: $6/month/person

The Full-Service Payroll plan includes automated tax filings, unlimited pay runs, and support for both employees and contractors. Conversely, the Contactor-Only Payroll is designed for only contractors in mind. However, both plans feature no long-term contracts, allowing businesses to adjust their payroll services as needed.

Gusto provides several pricing tiers to accommodate varying business needs:

  • Simple Plan: $40/month plus $6/person
  • Plus Plan: For $80/month plus $12/person
  • Premium Plan: $180/month plus $22/person

Gusto also offers a Contractor-Only plan at $35 per month plus $6 per contractor, ideal for businesses without W-2 employees. In addition, each pricing plan includes many features per tier such as employee self-service, time tracking, compliance alerts, etc. They also include unlimited payroll runs and integrates with various benefits and HR tools, providing flexibility as businesses grow.

Winner: Gusto’s pricing plans offer a variety of features per tier, making it the winner here. However, small businesses will find Square Payroll more suited to their choices due to being more affordable while covering all their needs.

Which One To Choose – Square Payroll Or Gusto?

In the end, both Square Payroll and Gusto provide reliable payroll solutions, but each caters to distinct business requirements. Square Payroll is a strong choice for small businesses and contractors looking for an affordable, straightforward platform with seamless integration into the Square ecosystem. Its focus on ease of use and transparent pricing makes it ideal for businesses already utilizing Square's tools, particularly in the retail and food service industries.  

Gusto, on the other hand, offers a comprehensive payroll and HR platform that is well-suited for small to medium-sized businesses seeking a robust suite of tools, including benefits administration and advanced reporting. It is particularly appealing for businesses in industries like professional services, healthcare, and startups that value a more holistic approach to HR management.  

Ultimately, the right choice depends on your business size, industry, and whether you prioritize simplicity and integration or a broader set of features. However, if neither of these software have what you need, then try other alternatives that offer similar features such as Workday HCM or Rippling HR .