Zenefits VS Gusto Comparison: Which Is Better For Small Businesses?
Take a look at our head-to-head Zenefits VS Gusto comparison to see which payroll software has better pricing, features, and support.
Zenefits and Gusto stand out among other payroll and HR processing software apps as two of the most 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 Zenefits VS Gusto.
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Zenefits VS Gusto Overview
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.
Zenefits Pros & Cons
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.
- Completely cloud-based platform
- Excellent HR and BA capabilities
- Easy-to-use mobile app version
- Package tiers scale well with company growth
- No base rate for any pricing tiers
- Invalid for extremely small (<5 employees) businesses
- Requires purchase of payroll processing add-on
- Benefits features limited to 26 states
Gusto Pros & Cons
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 ‘Core’ — or lowest-priced — tier package. This is because Gusto was initially created to simplify HR and payroll processes for startup 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 like 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 U.S., 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.
- Highly rated customer support
- Excellent integration with business platforms
- “One-stop shop” employee dashboard
- Cloud-native automated payroll processes
- Transparent pricing with zero hidden fees
- Health plans limited to certain U.S. states
- Limited reporting and time-keeping capabilities
- Poor scalability with company growth
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:
- 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.
- Customization: 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 for robust simplicity and takes the win when it comes to overall customization.
- Benefits Administration: 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.
- 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.
- 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.
- Employee Portal: 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.
Zenefits VS Gusto: 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 that steadily increase the per-month/per-person rates. Zenefits’ per-employee rates are higher, but are incredibly easy to understand and offer a free 14-day trial version in lieu of a guided demo.
A key difference between the pricing options these products present is the base rate and per-person/per-month structure. When it comes to a direct comparison, Zenefits offers business owners a cheaper pricing model that doesn’t include a base rate. Gusto pricing tiers are marginally more expensive since they include a starting base rate of $19/mo on the ‘Base package in addition to their per-person/per-month rates.
Gust offers four pricing tiers that range from $19/month plus $6/month/person to $149/month + $12/month/person. Plans vary based on the number of features and users a small business needs. The larger the plan, the more onboarding and HR features are available. All plans come with great customer support options.
Read our in-depth breakdown of Gusto’s plans and pricing to learn more.
Zenefits offer three pricing plans ranging from $8/month/person to $21/month/person. All plans come with basic HR functions. The larger the plan, the more features and advanced HR capabilities you and your employees have access to.
Read our full Zenefits review for more pricing details.
Zenefits VS Gusto: Features
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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.
Gusto’s payroll processing solution comes built-in, whereas Zenefits requires its users to pay an additional amount for a new module. Zenefits’ payroll services are also a relatively new addition to its suite of tools, whereas Gusto’s payroll solution is much more mature and arguably more robust.
Zenefits slightly edges out Gusto when it comes out to tracking employees’ time worked. Gusto’s two, higher-tier ‘Complete’ and ‘Concierge’ plans do offer basic time-tracking capabilities. But Zenefits links time-tracking capabilities directly to its payroll systems, which allows for a more seamless way to pull information for the end-user.
Zenefits is the clear winner when it comes to reporting capabilities. Its “Business Intelligence” reporting system allows access to about 50 premade reports based on categories like HR, attendance, and benefits, which are simple to access and use. Gusto, on the other hand, offers relatively barebones reporting services with just 11 premade reports. Gusto does offer basic reporting tools for payroll journals and summaries but lacks the advanced and customized reporting system that Zenefits boasts.
Paid Time Off (PTO)
Both Gusto and Zenefits allow for paid time off policies on any plan, although some options are only available under certain plans. Gusto only allows you to add in holidays if you’ve purchased their ‘Complete’ or ‘Concierge’ plans, which are also necessary for employees to request paid time off directly from their program portal.
With Zenefits, vacation and sick days are available under all plans, but you need to be using Zenefits’ payroll add-on to set your sick and vacation days as well as accrued sick and vacation days.
Benefits administration is typically simpler and more straightforward with Gusto, which lets you view the benefits you already offer employees, the ones you don’t, and the ones you’re enrolled in. Gusto manages all BA tasks in one location to make it easy to manage your benefits. Zenefits, however, will charge additional fees to merge your BA with its program if you already use a broker. If you don’t already use a broker to administrate your benefits, Zenefits does let you connect with a broker to compare plans and choose your coverage.
Zenefits’ employee portal stands out by offering a desktop as well as a 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.
Ease Of Use
Gusto and Zenefits both consider business owners’ need for simple-to-use user interfaces. Zenefits gets bonus points for its social-media savvy that is apparent from its mobile app. Zenefits offers a robust suite of HR programs that run more smoothly than those of its industry counterparts and provides a great mobile application to boot. However, HR enthusiasts and experts will note that Zenefits can limit their customization options for their user interface.
Gusto, on the other hand, sports a host of major features easily accessible from its main dashboard. Business owners and employees can both enjoy a modern user interface complete with a dashboard and sidebar navigation tool. Unfortunately, Gusto requires users to manage the software implementation process themselves, which can be troublesome for the non-tech-savvy.
Customer Service & Support
Gusto’s customer service and support is one of the product’s most highly touted features. Gusto offers clients different ways to get in touch with customer service reps, including phone calls, emails, in-software support, and help and resource centers. The company also offers a dedicated team of HR and compliance experts for businesses that have upgraded to its ‘Concierge’ plan, but even with the basic ‘Core’ plan, Gusto’s communicative representatives are always quick to respond between 6 AM – 5 PM (PT), Monday through Friday.
Zenefits’s customer service is a mixed bag. Zenefits has a B- rating from the Better Business Bureau and the bulk of customer complaints on the site have to do directly with customer service. This is likely due to the software-as-a-service business model that Zenefits relies on, which typically sacrifices industry and niche expertise for quicker, more responsive service representatives. Unfortunately, this means it’s not always easy to get an answer to your specific payroll, HR, or tax question if you contact Zenefits’ customer service.
Both Gusto and Zenefits have good track records for integrations and partnering with recognized applications. Each platform also has an application programming interface — or API — that is ready for use by tinkering software developers. Notable, though, is Zenefits’ history of not playing nicely with other platforms (in particular, popular ones such as QuickBooks for accounting purposes).
Gusto has a conversely stellar record of integrating with notable platforms such as Xero, QuickBooks, and TSheets (time-tracking program).
User Reviews & Complaints: Which Payroll Software Do Users Like 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 recieves only 5.9/10 stars from TrustRadius.
Which Is Best For My Business: Zenefits Or Gusto?
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.
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 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 W2 employees
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. Their 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.
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.