The global HR software market was valued at USD 16.43 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 12.2% from 2024 to 2030. The growing numbers show the massive dependence of companies on HR platforms to optimize payroll procedures, administer employee benefits, and maintain compliance.
Among the top solutions in the market, Square Payroll and Gusto stand out for their intuitive user interfaces and extensive features tailored to meet the growing needs of organizations. Both systems have received positive feedback for their capacity to streamline payroll and HR operations.
This blog will provide a comparative analysis of Square Payroll vs. Gusto, analyzing their features, pricing, benefits, and drawbacks to help you decide which software is best suited to your organization's specific needs.
Square Payroll Vs. Gusto: At A Glance
Feature
Square Payroll
Gusto
Time And Attendance
Allows you to track employee time via timecards, monitor the set of shifts, including in-progress and completed shifts
Automates the entire scheduling process, including tracking time, creating and sharing schedules, managing attendance, and more
Benefits Administration
Offers financially feasible health benefits, 401(k) plans, and fully compliant HR resources
Automatically calculates benefits deductions after running payroll
Reporting
Detailed reports giving insights about your sales and business, including sales summary and trends, payment methods, tax, fee and service charges, and more
Customizable reports that can be compiled automatically to analyze important data, including your team’s performance
Payroll
Unlimited payroll runs supports W-2 and 1099 employees
Enables you to run unlimited automated payrolls monthly using the Autopilot feature
Automate Tax Filing
Integrates with several apps to reduce tax time by automating several tasks, such as bookkeeping, expense tracking, and more
Enables active W-2 employees to file their state and federal taxes
What Is Square Payroll?
Square Payroll is a cloud-based solution that simplifies payroll processes for companies of all sizes, especially small businesses and solo practitioners. It offers several functionalities to streamline payroll management, ensure compliance, and enhance employee satisfaction. Some of its noteworthy features include handling complex tax filings and managing employee benefits.
Unique Features Of Square Payroll
Unlimited Payroll Runs: Run payroll as often as needed without additional fees
Automated Tax Filing: Automatically calculate and file federal and state payroll taxes
Time Tracking: Import timecards and tips, track PTO balances, and manage schedules
Job Description And Policy Templates: Create customized employee handbooks and receive alerts for policy updates
Who Are The Main Users Of Square Payroll?
The following industries and departments use Square Payroll software:
Banking
Marketing
Retail
Human resources
Food and beverages
Pros And Cons Of Square Payroll
Pros
Easy to navigate and manage payroll tasks
Integrates seamlessly with third-party apps
Simplifies tax calculations and filings
Cons
May charge extra for additional features
No option to customize the date of the monthly payroll
What Is Gusto?
Gusto HR Software is a cloud-based payroll and human resources platform that simplifies payroll processing, employee benefits, and HR management for small businesses and startups. It improves operational efficiency and employee satisfaction by addressing several challenges, including time-consuming payroll calculations, complex tax filings, and more.
Unique Features Of Gusto
Scheduling: Allows employees to clock in and out via web browsers, mobile apps, or time kiosks
Project Tracking: Enables businesses to monitor project progress and allocate resources effectively
Reporting: Offers insights into payroll, employee benefits, and HR metrics to help businesses make informed decisions and track performance
Performance Reviews: Facilitates regular feedback and goal setting for employees to help organizations maintain a culture of continuous improvement and development
Who Are The Main Users Of Gusto?
The following industries use Gusto:
Healthcare
Real estate
Construction
Manufacturing
Retail
Staff and recruitment
Entertainment
Pros And Cons Of Gusto
Pros
Impressive user interface
A hub for tracking documents and work hours
Accurate tracking via web, mobile app, or time kiosks
Cons
No clear explanation for denying claims
Excessive time to load a screen within the app
Square Payroll Vs. Gusto – Key Feature Comparison
Payroll
Square Payroll offers unlimited payroll runs with no additional fees, allowing for quick and flexible payroll processing. The system supports direct deposit and paper check options and includes features like importing tips and managing payroll on-the-go via the mobile app.
Gusto simplifies payroll with an intuitive interface that allows you to pay your team in just a few clicks. The platform offers unlimited payroll runs and features AutoPilot® to streamline and automate processing. It integrates seamlessly with other HR features and supports payroll for both W-2 employees and 1099 contractors, ensuring comprehensive coverage.
Winner: Gusto takes the lead here because of its extensive automation capabilities and seamless integration with HR features, making it slightly more efficient for payroll management.
Tax Filings
Square Payroll automates federal and state payroll tax calculations and filings. It handles quarterly and annual filings and generates and files W-2s and 1099-NECs for employees and contractors as well. However, it does not support local tax filings, which might be a limitation for businesses operating in multiple local jurisdictions.
Gusto provides detailed tax filing services, automatically calculating, filing, and paying federal, state, and local payroll taxes. The system also covers state tax registration across all 50 states and ensures compliance by keeping track of changing tax laws. Additionally, the software enables you to hire, manage, and pay your global team in their local currency as well.
Winner: Gusto is the better choice because of its thorough coverage, including local taxes, state tax registration, and automated filing services, making it more suitable for businesses with diverse tax obligations.
Employee Benefits
Square Payroll offers customizable health benefits, including medical, dental, and vision plans through SimplyInsured. It also supports 401(k) plans via Guideline. The integration with payroll ensures smooth deductions and contributions. Square Payroll includes HR resources and compliance support, which makes it easy to manage employee benefits.
Gusto provides extensive benefits, including medical, dental, and vision plans. It also offers unique financial wellness tools like health reimbursement options, automatic savings accounts, and long-term savings plans. Additionally, the Gusto Wallet app enhances financial health management for employees, providing more comprehensive support.
Winner: Gusto It is a draw as both systems have their strengths. Gusto's additional financial wellness tools and integrated benefits enable more detailed employee support, whereas Square Payroll’s ability to tailor health benefits to different employees offers a more flexible approach.
Team Management
Square Payroll provides several tools for shift scheduling, time tracking, and staff management through the Square Team App. It integrates with POS systems and provides communication tools for team coordination. The platform also includes labor-cost reporting and advanced access for business security.
Gusto offers various talent management tools for performance evaluations and career development. Its integrated platform simplifies HR tasks, offering efficiency tools and culture-building resources to motivate and retain employees.
Winner: Square Payroll outperforms Gusto due to its versatile team management tools and seamless integration with POS systems, making it ideal for businesses needing robust scheduling and communication features.
Pricing
Square Payroll offers the following two pricing plans:
Full-service payroll – $35/month along with a $6/month/person paid
Contractor-only payroll – $6/month/person paid
On the other hand, Gusto offers the following three pricing plans:
Simple – $40/month + $6/month/person for small business needing basic payroll options
Plus – $80/month + $12/month/person for growing needs requiring advanced payroll, HR, and time-tracking options
Premium – $180/month + $22/month/person for evolving business requiring comprehensive payroll options along with benefits and HR solutions
Winner: Square Payroll takes a slight lead here for its more affordable full-service plan, making it an economical choice for small businesses with extensive payroll needs.
Choosing The Right Payroll Solution For Your Business
Square Payroll and Gusto both provide various payroll and HR solutions. Square Payroll might be ideal for businesses seeking a cost-effective solution with robust time tracking and team management features. On the contrary, Gusto offers extensive benefits management and automation tools, making it a great choice for businesses that prioritize employee wellness and HR support.
Ultimately, the choice of finalizing payroll and HR software entirely depends on your company’s preferences. When deciding between Square Payroll and Gusto, consider your business size, budget, and specific HR needs. Both platforms have their strengths, so aligning their features with your business goals will ensure you choose the right solution.
