Gusto VS Zenefits Comparison

*Zenefits offers payroll in all 50 states, but benefits administration is only supported in 26 states.

Zenefits and Gusto stand out among other payroll and HR processing software apps as two popular solutions. High-quality software solutions that streamline your business’s processes usually include helpful features and competitive pricing, which both Zenefits and Gusto have in spades. But which one of these products suits you and your business needs the best?

This article provides you with definitive conclusions on the showdown between Gusto vs. Zenefits.

Gusto VS Zenefits

Gusto focuses on payroll processing and benefits administration (BA), while Zenefits boasts a strong HR management system that bundles together companies’ HR and employee data. Gusto is the better small business payroll software, while Zenefits offers better HR and is more scalable for growing businesses.

It’s clear that each of these software solutions has clear strengths that shine in different business niches. But how can you determine what your company needs the most from a payroll app? Before you choose between Zenefits and Gusto, it’s helpful to learn more about their best and most prominent features — and the companies they’re most targeted towards.

Let’s compare each product in detail to see which one makes the most sense for your business.

Gusto Overview

Gusto combines processes to manage payroll, new employee onboarding, and benefits administration into one sleek package. Businesses that are especially new or staff fewer than one-hundred employees are best off with Gusto’s Simple — or lowest-priced — tier package. This is because Gusto was initially created to simplify HR and payroll processes for startups and small businesses.

Gusto’s 401(k), HR, benefits administration, and new hire onboarding services all use a platform that exists on the cloud. This cloud platform automates services with Gusto’s AutoPilot payroll process. This process saves literally countless hours on payroll calculations, deductions, and withholdings. Other services that Gusto offers to streamline your business’s processes include options to file taxes and communicative, highly rated customer support.

Gusto makes itself available to business owners nationwide in every state. If your business happens to staff employees across various states in the US, Gusto can also support them as a platform. Gusto does limit its health benefits capabilities to certain states, as well as its reporting and time-tracking capabilities.

Zenefits Overview

Zenefits, like Gusto, uses a cloud-based platform to offer its services to business owners. But Zenefits targets more medium-sized businesses that are looking to grow even larger.  Zenefits’ bread and butter is its HR and benefits administration service, which it wraps up nicely in an easy-to-use, intuitive interface.

Launched in 2013 as a San Francisco startup, Zenefits has used a software-as-a-service business model to centralize its services for businesses’ off-the-shelf use. A SaaS model works best for growing businesses that need a smarter method of streamlining the way they process HR and benefits administration. This still holds true for smaller businesses, although Zenefits isn’t valid for use if you staff fewer than five employees.

The Key Differences Between Gusto & Zenefits

Zenefits and Gusto both do a great job of simplifying your business’s internal processes and helping you stay organized. Of course, we wouldn’t be comparing these two solutions if they didn’t have at least a few differences. Here are the biggest differences between Zenefits versus Gusto that will help you decide which solution is best for your business:

• Gusto Has Better Payroll Capabilities: There are no two ways around the fact that Zenefits’ payroll act isn’t quite as together as Gusto’s. Payroll is, after all, a relatively recent addition to Zenefits’ suite of tools. Zenefits started as an HR management system and is still catching up to Gusto in terms of robust and operational payroll solutions.
• Gusto Is More Customizable: Zenefits again pales in comparison to Gusto’s extensible, customizable user dashboard. One of the areas this issue arises most prominently is in Zenefits’ HR processing solutions, which are restrictive to HR managers who are used to adding features of their own and fine-tuning their options. Gusto has a history of robust simplicity and takes the win when it comes to overall customization.
• Gusto’s Benefits Administration Is Easier To Use: Gusto’s benefits administration is decidedly more straightforward than Zenefits’. This is due in large part to Zenefits charging an extra fee for companies who already use brokers to administer benefits. Gusto charges no extra fees for benefits administration and will make it easy to manage all your benefits from one localized dashboard.
• Zenefits Has The Slight Edge On Security: The big difference between Gusto and Zenefits’ security measures is encryption standards. Gusto relies on the highest-level encryption technology to transmit data: 256-bit Secure Sockets Layer transmission. The company uses SSL to protect sensitive employee data and makes constant backups in multiple locations of its critical data. Zenefits encrypts data using Transport Layer Security and layers its resting data with AES-128 technology. Zenefits uses two-factor authentication to grant access to data, whereas Gusto makes implementation of this added security layer optional.
• Zenefits Offers More Affordable Pricing: The pricing models between Gusto and Zenefits are quite similar. Both offer tiered levels of service packages that offer exponentially greater features. However, Zenefits does edge Gusto out when it comes to overall affordability. Gusto slips in a base rate for each of its three packages in addition to its per-person and per-month fees, whereas Zenefits does not include any base rates with any of its packages.
• Zenefits Employee Portal Is Better: Zenefits’ employee portal stands out by offering a desktop as well as mobile app version for employees. Zenefits’ portal merges company HR features with its HRMS for ease of access to all HR data. Gusto does not offer a mobile-based employee portal but still provides an easy-to-use dashboard for employees, complete with a sidebar navigation pane.

Gusto VS Zenefits Pricing

Both Gusto and Zenefits do a great job of being transparent and up-front about their pricing options. With Gusto, business owners can choose between three tiers of plans for salaried employees that range from $40/month +$6/month per employee to $80/month + $12/month per employee.

Zenefits also offers three base plans operating under a per person rate ranging from $8/month/person to $21/month/person and a five-user minimum. Due to its five-user minimum, Zenefits’ lowest base price is $40 per month + $6 per person. This rate is equal to Gusto, but the base rate increases as you add more paid employees.

The key difference between the pricing options these products present is the base rate and per-person/per-month structure. However, in a direct comparison, Zenefits is more expensive than Gusto.

Read our in-depth breakdown of Gusto’s plans and pricing to learn more.

Read our full Zenefits review for more pricing details.

Gusto VS Zenefits Features

The main, eye-catching features of Zenefits and Gusto are similar, but there are several key differences. Both platforms have easy-to-use interfaces that allow for customizable features and a range of services. Gusto tends to dominate the payroll processing side of the feature battle, whereas Zenefits is in its greatest element with HRMS and HR data connectivity capabilities.

Do Users Like Gusto Or Zenefits Better?

Gusto and Zenefits both enjoy generally positive reviews from their end-users across the board. Gusto maintains an average rating of 4.7 stars out of 5 on Capterra based on more than 2,000 ratings, with Zenefits close behind with an average 4.1 out of 5 rating based on more than 700 reviews.

Negative user reviews for these two programs are few, but there are several complaints levied against both that you should be aware of. As far as complaints toward Gusto go, by and large, the biggest issue for users is the limited reporting capabilities, followed by a lack of private payroll processing options and an inability to scale well for growing businesses.

When it comes to Zenefits, there are multiple complaints regarding its poor integration with certain platforms such as QuickBooks. Zenefits also has a track record of withdrawing its fees and funds from client payrolls even after businesses stop using the service. It’s also worth noting that the complaints for Zenefits have increased since we last updated this post, and it now receives only 5.9/10 stars from TrustRadius.

Which Is Best For My Business: Gusto Or Zenefits?

Zenefits and Gusto overlap in many ways, but each fills a niche that caters to a different kind of business. The best product for you will depend on what your business’s immediate and long-term focuses are and what you’ll be using the product for most often.

Gusto Is Best For…

• Companies that need to streamline payroll for fewer than 100 employees
• Business owners who need easy-to-reach customer service reps
• Companies handling 1099 contractors as well as W-2 employees

Zenefits Is Best For…

• Companies that need to scale their HRMS processes
• Business owners who want an emphasis on mobile app usability
• Companies that don’t need to integrate with many platforms

Gusto VS Zenefits Comparison: The Bottom Line

Gusto is renowned for its seamless combination of payroll processing, new hire onboarding, and HR and benefits management services. Gusto medical, vision, 401(k), dental, and savings plans are all easily accessible through the company’s benefits options. And the best part is the transparent pricing model and structure that Gusto provides its clients.

Zenefits shines brightest with its HRMS and HR data aggregation, benefits management options, and robust add-ons for payroll to boot. For business owners who are just starting to build out their HR infrastructure but are also focused on growth, Zenefits may be the perfect choice. Zenefits’ HR management is structured for novices and is easy to hit the ground running with. The all-in-one system for managing employees offers the benefits of a professional employer organization, and its pricing structure includes no base rates for any tier packages. If HR is the deal breaker for you, get started with Zenefits.

When ultimately stacked up against each other, though, Gusto comes out as the winner with more consistent quality, reliable features, and well-rated customer service. Unfortunately, Zenefits’ overall quality is weighed down by serious integration issues, a constant stream of complaints regarding customer support service, and relatively barebones payroll processing options. Gusto, while limited in certain areas such as reporting and health care coverage, has an all-around more customizable and complete package to offer small-sized, up-and-coming businesses.

Get started with Gusto for a full payroll package with benefits administration and HR. Or, if you want to compare all of your options first, check out our top payroll software choices for small businesses.

Gusto VS Zenefits FAQs