Managing human resources (HR), payroll services, and compliance with shifting regulations can be a challenge, especially for small to medium-sized businesses. Studies show that automating these tasks can decrease administrative workload by 40% and reduce employee turnover rates by 30%. This highlights the need for companies to implement HR management solutions that provide a centralized platform to automate operations and enhance workforce satisfaction.
Considering this, Gusto and Paylocity are two top-rated payroll and HR software providers, trusted by businesses for their comprehensive features and ease of use. Both platforms offer tools to streamline payroll, enhance HR operations, and ensure compliance.
This guide will compare Gusto and Paylocity in terms of their key features, benefits, and pricing to help you choose the right solution for your business.
Gusto Vs Paylocity – At A Glance
Feature
Gusto
Paylocity
Benefits Administration
Comprehensive coverage including health, dental, vision, 401(k), HSA/FSA, commuter benefits, and broker integration
Full-service benefits administration with flexible options for medical, dental, vision, HSA/FSA, COBRA coverage, and transportation benefits
Talent Management
Tools for self-evaluations, manager reviews, and learning and development resources
Recruiting, performance evaluations, learning management, and onboarding tools
Payroll Management
Automated payroll processing, flexible direct deposits, contractor payments, and tax registration in all 50 states
Expense management, tax services, on-demand payment, garnishment managed services, and global payroll
Integrations
Custom integrations via API and an App Directory with tools like QuickBooks, Xero, TSheets, Asana, and several other popular platforms
Extensive integrations through the Paylocity Marketplace and open APIs for custom integrations
Pricing
Starts at $40/month + $6 per month per person
Custom pricing based on features and company size
What Is Gusto?
Gusto is a cloud-based payroll and HR management software designed for small and medium-sized businesses across various industries. It offers a centralized platform for payroll processing, benefits administration, compliance management, and time tracking.
Trusted by over 300,000 businesses, Gusto HR Software automates tasks such as tax filing, employee onboarding, and performance evaluation to help organizations stay compliant with state and federal regulations.
Unique Features Of Gusto
HR Tools: Offers a comprehensive suite of HR management features including, custom job posts, applicant tracking system (ATS), document storage, compliance alerts, and performance reviews
Insights and Reporting: Provides customizable reports and anonymous team surveys to help businesses analyze key data, track workforce costs, and measure employee performance
Time Tracking: Includes built-in time tracking tools that allow employees to log their work hours, request time off, and view their schedules
Gusto Pros And Cons
Pros:
Simplifies pay breakdowns and W-2 access for employees
Automated tax filing reduces manual work and error risks
Allows users to set up custom benefits for remote employees
Cons:
The FSA platform can be complex to use
Occasional issues with customer support response times
What Is Paylocity?
Paylocity is a comprehensive payroll and HR management platform designed for businesses of all sizes. The software integrates employee experience management, benefits administration, and talent acquisition tools in a centralized dashboard. Organizations can attract talent, ensure compliance, and streamline HR workflows to optimize operational efficiency.
With its all-in-one solution, Paylocity HR & Payroll empowers businesses across multiple industries to manage their workforce effectively and drive growth.
Unique Features Of Paylocity
Employee Experience: Facilitates employee engagement through voice and video feedback collection tools, along with customized employee recognition programs
HR Reporting: Provides robust reporting features that allow businesses to track key metrics and make informed decisions based on insights gathered from employee data
Time and Labor Management: Includes tools for employees to clock in and out, view schedules, and request time off directly through the platform
Paylocity Pros And Cons
Pros:
Customizable onboarding tasks improve new hire workflows
User-friendly app for clocking in and time tracking
Community section enhances staff morale and engagement
Cons:
Some users report occasional issues with PTO tracking
Standard reports can be difficult to use due to merged cells
Gusto Vs Paylocity – Key Features Comparison
Benefits Administration
Gusto offers comprehensive benefits administration that includes health, dental, vision, 401(k) plans, HSA/FSA options, and commuter benefits with all subscription plans. The platform simplifies the enrollment process for employees and provides integration with brokers to help businesses find suitable plans. Moreover, it offers a Gusto Wallet mobile app to help employees manage their paychecks.
Paylocity also provides full-service benefits administration with options for medical, dental, vision, HSA/FSA, COBRA, and transportation benefits. It gives businesses flexibility in offering and managing employee benefits. The software also allows employees to manage enrollments, check spending account balances, and file claims from any device.
Winner:Gusto stands out with its broker integration and licensed advisors who work with businesses to help them find affordable insurance options.
Talent Management
Gusto provides talent management tools such as self-evaluations, manager reviews, and learning resources to support employee growth. The platform helps organizations build career paths and strengthen workplace culture through integrated efficiency tools and team-building features. These tools make it easier for businesses to nurture and retain talent effectively.
Paylocity provides a full suite of talent management tools that include recruiting, performance evaluations, learning management, and onboarding features. The platform allows businesses to manage the entire employee lifecycle, from hiring to development. It is designed to measure employee engagement and support ongoing learning within the organization.
Winner:Paylocity wins in this category due to its all-in-one talent management suite that covers every stage of the employee lifecycle.
Payroll Management
Gusto offers automated payroll processing that simplifies the payroll experience for small businesses. It includes next-day direct deposit, contractor payments in over 120 countries, and tax registration in all 50 states. Gusto also allows users to set up multiple pay rates and schedules and offers unlimited payrolls every month at no extra cost.
Paylocity offers a similar suite of payroll tools, including expense management, tax services, on-demand payment options, and garnishment-managed services. The software also offers global payroll solutions, which makes it ideal for large companies with international teams. Moreover, its readiness dashboard provides users with a quick overview of their critical payroll tasks.
Winner: This round ends in a draw because both platforms offer comparable payroll management solutions that effectively meet the needs of businesses of varying sizes.
Pricing
Gusto offers a straightforward pricing structure that starts at $40 per month plus $6/month/employee. This covers basic payroll features that are affordable for small businesses. There are also higher-tier plans, such as the Plus plan at $80 per month with an extra $12/month/employee and the Premium plan at $180 per month, plus $22.month/employee.
Paylocity provides custom pricing based on the features and size of your business. It offers a flexible, all-in-one platform with options for payroll, HR, talent management, benefits, and employee engagement software solutions. The cost will vary depending on the services you choose and the specific needs of your company.
Winner:Gusto is the clear winner here due to its transparent pricing model, which makes it easier for businesses to predict costs as they grow.
Integrations
Gusto supports integration with a variety of popular platforms, including QuickBooks, Xero Accounting Solution, Trainual, 7shifts, and Asana Software. These integrations streamline data transfer across multiple apps and reduce manual data entry. Additionally, Gusto offers custom integrations via API and an extensive App Directory that includes accounting, collaboration, financial benefits, and performance management software.
Paylocity also offers extensive integration options through its Paylocity Marketplace and open APIs for custom integrations. Businesses can connect this software with various applications such as Icon, Rain, ZayZoon, and 15Five. Overall, its wide range of integration options helps organizations create a connected ecosystem tailored to their specific needs.
Winner: It’s a draw as both Gusto and Paylocity offer custom APIs and support integrations with a wide range of apps, making them equally strong in terms of integration capabilities.
Gusto Vs Paylocity: Which HR Software Fits Your Business?
Gusto and Paylocity both offer strong HR and payroll solutions. Gusto is ideal for small to mid-sized businesses due to its user-friendly interface and affordable pricing. Paylocity, on the other hand, suits larger organizations that need more comprehensive features and advanced customization options.
Ultimately, the best HR tools for your business will depend on your specific needs, size, and future goals. Focus on key priorities like usability, scalability, or integration capabilities to select the platform that best aligns with your organization’s requirements.
