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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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When comparing the best payroll software for small businesses, the battle between Square Payroll vs. Gusto is a close one. Both platforms handle payroll well, but they’re built for very different types of businesses. Square Payroll is designed to work seamlessly within the Square ecosystem, while Gusto is a full-service payroll and HR platform built to manage your entire team.
We’ll dive into each software’s features, pricing, integrations, and more to find out which software is the best option for your business.
| Square | Gusto | |
|---|---|---|
| Ideal For | Independent contractors and businesses that already use Square | Small to mid-sized businesses that need full-service payroll and HR |
| Pricing | $6/contractor to $35/month + $6/employee + add-ons | $49/month + $6/person – $180/month + $22/month per person |
| Standout Features |
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| What’s Missing |
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Table of Contents
Both Square Payroll and Gusto offer competitive pricing, strong customer support, intuitive interfaces, and unlimited payroll runs, which is why they consistently rank among the best payroll software for small businesses.
But the key differences come down to how each platform is built.
Square Payroll is designed to work seamlessly within the broader Square ecosystem, integrating directly with tools like Square POS, payments, and time tracking. This makes it a strong option for businesses already using Square to run day-to-day operations.
Meanwhile, Gusto is a full-service payroll and HR platform. It offers more robust employee management features, including onboarding tools, compliance support, and built-in benefits administration. While Gusto is available nationwide, some specific benefits options — such as certain insurance plans — may vary by state.
Both platforms cover the core payroll essentials, but they take different approaches to managing your team and scaling your business.
Square is well-known in the small business community for its wide range of products and services, including point of sale (POS) and payment processing. Square Payroll continues that trend by offering a straightforward, easy-to-use payroll solution that covers all the essentials, including direct deposit and automated tax filing.
For small businesses already using other Square products, adding Square Payroll is a natural next step to further integrate operations. For example, businesses using Square POS can carry over its time-tracking functions at the register for employees to clock in or out of their shifts. That time data flows straight into payroll, reducing manual entry and saving time.
The other areas where Square Payroll wins include:
Square Payroll is built for simplicity, but that also means it can feel limiting for businesses with more complex payroll or HR needs.
For example, businesses that require more flexibility in payroll scheduling, custom pay structures, or detailed deductions may find Square Payroll less accommodating than more full-featured platforms.
Other drawbacks of Square Payroll include:
When it comes to integrations, Square Payroll is designed primarily to work within the Square ecosystem. It does connect with a handful of external tools — including QuickBooks, QuickBooks Time, and ZipRecruiter. But overall, its integration options are more limited compared to Gusto.
Gusto is a cloud-based payroll platform designed to go beyond basic payroll by combining payroll, HR, and employee management into a single system. It’s known for its intuitive interface and its ability to automate payroll runs, tax calculations, and filings with minimal manual input.
Gusto also offers more flexibility with payroll scheduling, making it easy to run standard payroll cycles, off-cycle payments, bonuses, and commissions without added complexity.
Where Gusto really stands out is in its broader approach to team management. In addition to payroll, it includes built-in tools for employee onboarding, document management, and benefits administration — creating a more complete solution for businesses managing a growing business.
Other advantages of Gusto include:
While Gusto offers a more complete payroll and HR solution, it’s not the best fit for every business.
One of the biggest limitations is that Gusto is primarily designed for U.S.-based businesses. Companies with international employees or more complex global payroll needs may need to look elsewhere or rely on additional tools.
Gusto also doesn’t integrate directly with Square’s ecosystem. For businesses already using Square POS, payments, or time tracking, this can create extra steps and reduce the efficiency of syncing payroll with day-to-day operations.
Here’s a breakdown of Gusto’s limitations:
| Square Payroll | Gusto | |
|---|---|---|
| Price | $6/contractor to $35/month + $6/employee + add-ons | $49/month + $6/person to $180/month + $22/month per 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 $35/month + $6/person per month. Plans to pay employees and contractors start at $49/month + $6/person.
As you would expect from the pricing differences, Gusto includes more functionality upfront, while Square Payroll keeps costs lower by offering a more streamlined feature set with optional add-ons. Depending on how many features you need, total costs between the two platforms can end up being similar.
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.
| 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 offer many of the same core payroll features. However, the depth, flexibility, and overall experience of those features differ significantly in practice.
Let’s take a closer look at how they compare.
There’s no one-size-fits-all approach to running a small business, and the same goes for payroll. Both Gusto and Square Payroll are well-reviewed platforms, and most small business owners will find either option capable of handling their core payroll needs.
That said, the better choice ultimately comes down to how your business operates.
With more advanced HR tools, built-in benefits administration, and broader integration options, Gusto is generally the better fit for businesses that want a more complete payroll and team management system.
However, Square Payroll can be the stronger option in certain situations. If you don’t need the added HR features that Gusto provides, Square Payroll offers a more streamlined and often more affordable solution. It’s also a natural fit for businesses already using Square’s ecosystem, where payroll can connect directly with POS, payments, and time tracking tools.
Still undecided? Here are some key scenarios to consider.
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:
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Gusto is an all-in-one people platform that simplifies payroll many human resources tasks. Get Started.
Free Trial: Try A Top Pick For Payroll
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Gusto is an all-in-one people platform that simplifies payroll many human resources tasks. Get Started.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
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