Square Payroll VS Gusto
Both Square and Gusto offer affordable and easy to use payroll software for small businesses. Which one is the best fit for your needs?
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Square Payroll and Gusto are two of the best payroll software options for small businesses, but they’re built for different needs. Square Payroll is a strong fit for businesses already using Square POS or payments, while Gusto offers a broader payroll and HR platform for businesses that need more employee management tools.
In this Square Payroll vs. Gusto comparison, we’ll look at pricing, features, ease of use, integrations, and ideal business types to help you decide which payroll software is the better fit.
| Square | Gusto | |
|---|---|---|
| Ideal For | Businesses already using Square, and businesses that need simple payroll for employees or contractors | Small to mid-sized businesses that need payroll plus stronger HR, benefits, and employee management tools |
| Pricing | $6/contractor to $35/month + $6/employee + add-ons | $49/month + $6/person – $80/month + $12/person |
| Standout Features |
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| What’s Missing |
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Table of Contents
Square Payroll VS Gusto At A Glance
Square Payroll and Gusto are both strong payroll software options for small businesses. Both support unlimited payroll runs, automated payroll tax calculations and filings, employee self-service, direct deposit, and year-end tax forms.
The biggest difference is how each platform is built. Square Payroll is designed for businesses already using Square to manage sales, staff, tips, and timecards. It connects directly with Square POS, Square Team Management, and Square time tracking tools, making it especially useful for restaurants, retailers, service businesses, and other businesses already in the Square ecosystem.
Gusto is built more as an all-in-one payroll, HR, and benefits platform. It offers full-service payroll alongside employee onboarding, HR tools, benefits administration, and plan-based support for more advanced team management needs. Benefits availability and specific insurance options may vary by location and plan.
Both platforms cover the core payroll essentials, but Square Payroll is stronger for Square-based businesses that want simple, connected payroll, while Gusto is stronger for businesses that need more built-in HR and benefits tools.
Where Square Payroll Wins
Square Payroll wins for businesses that already use Square to run daily operations. If your business uses Square POS or other Square tools, Square Payroll can pull employee hours, timecards, and tips directly into payroll, reducing manual entry and helping payroll run more smoothly. Square specifically notes that users can import timecards and tips from Square POS into payroll.
Square Payroll is also a strong option for businesses that want simple, full-service payroll without a large HR platform. It supports employee and contractor payments, direct deposit, automated payroll tax calculations and filings, and unlimited payroll runs.
Square also has an edge for contractor-only businesses. Its contractor-only payroll plan has no monthly base fee. If you need to pay employees and contractors, Square Payroll is still competitively priced.
- Seamless integration with Square POS, timecards, tips, and team management
- Simple payroll setup for businesses already using Square
- Contractor-only payroll with no monthly base fee
Where Square Payroll Falls Short
Square Payroll is built for simplicity, but that can make it limiting for businesses with more complex payroll, HR, or benefits needs.
Businesses that need more advanced HR tools, broader employee management features, or deeper payroll customization may outgrow Square Payroll faster than they would a more full-service platform like Gusto. Square is strongest when it’s paired with other Square tools, so businesses that rely on a wider mix of third-party software may also find its integration options more limited.
Other drawbacks of Square Payroll include:
- Fewer advanced HR and employee management features
- Less flexibility for complex payroll setups and custom workflows
- Benefits options depend on Square’s benefits partners
- More limited third-party integrations compared to Gusto
Square Payroll does connect with some outside tools, including QuickBooks Online and QuickBooks Time, and it partners with benefits providers for health benefits and 401(k) plans. But overall, Square Payroll is still best suited for businesses that want simple, Square-connected payroll rather than a highly customizable payroll and HR system.
Where Gusto Wins
Gusto wins for businesses that want payroll, HR, benefits, and employee management tools in one platform. While Square Payroll is strongest for businesses already using Square, Gusto offers a broader set of built-in tools for hiring, onboarding, document management, benefits, and team administration.
Gusto also offers more payroll flexibility. It supports unlimited bonus and off-cycle payrolls, multiple pay rates, multistate payroll, and flexible pay schedules. Gusto also offers Payroll on AutoPilot, which can automatically run payroll one day before the payroll deadline once it’s enabled.
Where Gusto really stands out is its broader approach to HR and benefits. Depending on the plan, businesses can access onboarding tools, document storage, e-signing, time tracking, PTO tools, performance tools, HR support, health benefits administration, 401(k) integrations, and other employee management features. Gusto says health insurance administration is available at no extra cost when Gusto is the broker, while businesses that keep their own broker may pay an additional fee unless they’re on Premium.
- More robust HR and employee management tools
- Built-in onboarding, document storage, and e-signing
- Benefits administration for health insurance, retirement, workers’ comp, and more
- Broader third-party integrations across accounting, HR, and business tools
- More flexibility for payroll schedules, off-cycle payments, bonuses, commissions, and pay structures
Where Gusto Falls Short
While Gusto offers a broader payroll and HR platform than Square Payroll, it’s not the best fit for every business.
One of Gusto’s biggest drawbacks is cost. Its full-service payroll plans start at a higher monthly base price than Square Payroll, and some features that growing businesses may want, such as advanced HR tools, time tracking, and broker integration, are tied to higher-tier plans or add-ons.
Gusto also may not be the most efficient choice for businesses already running heavily on Square. Gusto does offer many third-party integrations, including POS integrations, but Square Payroll is still more directly connected to Square POS, Square Team Management, timecards, and tips.
Gusto also supports global contractor payments and offers global employee hiring through its partnership with Remote. However, businesses with complex international payroll needs may still need to review whether Gusto’s global tools cover their specific countries, worker types, and compliance needs.
Here’s a breakdown of Gusto’s limitations:
- Higher starting price than Square Payroll
- Some HR, time tracking, and benefits features require higher-tier plans or add-ons
- Less seamless fit for businesses already built around Square POS, timecards, tips, and team management
- Benefits availability and broker options may vary by plan, provider, and location
- Global payroll support may not fit every international hiring or compliance need
Square Payroll VS Gusto Pricing Comparison
| Square Payroll | Gusto | |
|---|---|---|
| Price | $6/contractor to $35/month + $6/employee + add-ons | $49/month + $6/person to $80/month + $12/person |
| Number of users | Unlimited | Unlimited |
| Discounts available | No | No |
Square Payroll and Gusto both have low-cost entry points for small to mid-sized businesses, but a few key differences might help sway you one way or the other.
Square’s Payroll pricing is ideal for very small businesses that only have a handful of independent contractors and costs $6/contractor paid. This also comes with access to various add-ons like health and retirement benefits. For more features, you can subscribe to the Pay Employees & Contractors plan for $35/month + $6/employee, and includes features like time tracking integration, employee access through the Square Team app, and tax filing support.
Gusto’s payroll pricing includes multiple tiers and is slightly more expensive overall, but also includes more built-in functionality. Like Square Payroll, Gusto has a contractor-only plan that’s $180/month + $22/month per person. Plans to pay employees and contractors start at $49/month + $6/person.
Gusto offers more payroll, HR, benefits, and employee management functionality as you move up its plan tiers, while Square Payroll keeps costs lower with a more streamlined feature set and optional add-ons.
The Bottom Line On Gusto VS Square Payroll Pricing: If you want a more complete payroll and HR platform with features included out of the box, Gusto is likely the simpler choice. If you’re looking to keep costs down and pay only for what you need — especially with a contractor-heavy team — Square Payroll is typically the more affordable option.
Square Payroll VS Gusto Features Comparison
| Feature | Square Payroll | Gusto |
|---|---|---|
| Payroll processing | ||
| Tax Filing | ||
| Direct Deposit | ||
| Unlimited Pay Runs | ||
| Time Tracking | ||
| Benefits Administration | Third-party options | |
| New Hire Reporting | ||
| Mobile App | ||
| Reporting | ||
| Employee Management |
On the surface, Square Payroll and Gusto cover many of the same payroll basics, including payroll processing, tax filing, direct deposit, unlimited pay runs, new hire reporting, reporting, and employee self-service.
The difference is depth. Square Payroll is stronger for businesses already using Square POS, Square Team App, tips, timecards, and scheduling. Gusto is stronger for businesses that want more built-in HR, onboarding, benefits, integrations, and employee management tools.
Only Square Features:
- Direct integration with Square POS, Square Team App, tips, and timecards
- Simple payroll setup for businesses already using Square
- Contractor-only payroll with no monthly base fee
- Seasonal inactivity option for eligible businesses
Only Gusto Features:
- More robust HR and employee management tools
- Built-in onboarding, document storage, and e-signing
- More advanced benefits administration options, with availability varying by plan and location
- Broader third-party integrations across accounting, hiring, HR, expense management, and business operations
- More payroll flexibility for off-cycle payrolls, bonuses, multiple pay rates, and multistate teams
Is Square Payroll Or Gusto Better For My Business?
Both Square Payroll and Gusto can handle core payroll needs, including payroll runs, tax filings, direct deposit, employee self-service, and year-end tax forms. The better choice comes down to how your business operates and how much HR support you need.
Gusto is generally the stronger fit for businesses that want payroll, HR, benefits, onboarding, and employee management tools in one platform. It offers more depth for growing teams, especially if you need broader integrations, more HR features, or more flexibility around pay schedules, bonuses, commissions, and multistate payroll.
Square Payroll is usually the better fit for businesses already using Square. If your business runs on Square POS, Square Team Management, tips, timecards, or scheduling, Square Payroll can keep payroll closely connected to your day-to-day operations. It’s also a strong option for contractor-heavy businesses because its contractor-only plan has no monthly base fee.
Still undecided? Here are some key scenarios to consider.
Choose Square Payroll If…
- You already use Square POS, Square Team App, Square Online, or other Square tools
- You want simple payroll that connects with tips, timecards, and team management
- You have a small or contractor-heavy business
- You want a contractor-only payroll option with no monthly base fee
- You don’t need advanced HR tools or broader third-party integrations
Choose Gusto If…
- You want payroll, HR, benefits, and employee management tools in one platform
- You need stronger onboarding, document storage, e-signing, and HR features
- You want broader third-party integrations outside the Square ecosystem
- You need more flexibility for bonuses, commissions, multiple pay rates, or multistate payroll
- You’re willing to pay more for a more complete payroll and HR platform
Once you’ve made a decision, learn more about how to use Square Payroll or how to use Gusto. Or, if you want to explore other options, check out the cheapest payroll software for businesses or compare Gusto and Square to other products:
Erica Seppala
Editor & Senior Staff Writer at Merchant Maverick
Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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