- You want payroll and HR tools in one platform, including onboarding, benefits, and compliance support. You plan to offer health insurance, 401(k), or other employee benefits and want to manage them alongside payroll. You have employees in multiple states and need reliable multi-state tax filing. Your team is growing past 10 to 15 employees and you want a platform with room to scale. You need phone support or want access to HR advisors for compliance questions. You are not already embedded in the Square ecosystem and want broader third-party integrations.
- You already use Square POS, Square Team Management, or other Square tools and want payroll that connects directly to your existing setup. You only pay contractors and want a plan with no monthly base fee at $6 per contractor per month. You run a small retail shop, restaurant, or service business with fewer than 25 employees and do not need HR features. You want the simplest possible payroll experience without extra features you will not use. You want employees to receive funds through Cash App for faster access. Your payroll needs are straightforward and you prefer the lowest base cost available.
Gusto's Simple plan costs $49 per month plus $6 per employee per month. That gets you full-service payroll, automatic tax filing in all 50 states, basic onboarding, and employee self-service. The Plus plan jumps to $80 per month plus $12 per employee per month and adds next-day direct deposits, time tracking, PTO management, and multi-state payroll support. The Premium plan is quote-based and includes a dedicated support team, HR resource center, and compliance alerts. Every Gusto plan includes unlimited payroll runs with no extra charge for off-cycle payments.
Square Payroll keeps it simpler. The full-service plan costs $35 per month plus $6 per person per month. That covers payroll processing, automatic tax calculations and filings, direct deposits, and integration with Square's ecosystem. The contractor-only plan costs just $6 per contractor per month with no base fee, which makes it one of the cheapest options available for businesses that only pay 1099 workers.
For a team of 10 employees, Gusto's Simple plan runs about $109 per month. Square Payroll runs about $95 per month. The $14 gap is not huge, but it widens on Gusto's Plus plan ($200/month for the same team). The real pricing difference shows up in what you get for the money. Gusto bundles HR tools and benefits administration into every plan. Square gives you clean payroll at a lower price but leaves HR, benefits, and advanced features off the table.
Payroll processing: Both platforms handle unlimited payroll runs with automatic tax calculations and filings across all 50 states. Gusto and Square both support multiple pay schedules and direct deposit. Square adds Cash App as a payment option, which can speed up access to funds for employees who use it.
Tax filing: Gusto and Square both calculate, file, and pay federal, state, and local payroll taxes automatically. Gusto has a longer track record here and handles multi-state tax filing natively on the Plus plan. Square covers multi-state as well but with less granularity in complex scenarios.
Onboarding: Gusto offers digital onboarding with electronic document signing, custom checklists, and automated welcome emails. Square Payroll has a basic onboarding flow but it is more manual and has drawn criticism for being clunky compared to competitors.
Benefits administration: Gusto partners with insurance carriers to offer health, dental, and vision insurance, plus 401(k) plans, HSAs, FSAs, commuter benefits, and workers' compensation. Square Payroll does not offer benefits administration at all.
Time tracking: Gusto includes time tracking on its Plus plan and integrates with tools like TSheets. Square Payroll connects directly with Square's built-in time tracking through Team Management, which works especially well for hourly workers clocking in through a Square terminal.
Reporting: Gusto provides payroll summaries, tax liability reports, contractor payment reports, and custom reporting. Square Payroll offers basic payroll reports and tax summaries but lacks the depth and customization that Gusto provides.
Employee self-service: Both platforms give employees access to pay stubs, W-2s, and tax documents. Gusto extends self-service to benefits enrollment, PTO requests, and personal information updates. Square keeps self-service limited to payroll basics.
Integrations: Gusto connects with QuickBooks, Xero, FreshBooks, and a range of HR and time-tracking tools. Square Payroll integrates deeply with Square POS, Square Invoices, Cash App, and Square Team Management but has a smaller third-party integration library.
Final Take
Gusto is the stronger all-around platform for small businesses that want payroll, HR, and benefits in one place. Its feature set is deeper, its review history is longer, and it scales better as your team grows past a handful of employees. Square Payroll is the better fit for businesses that already run on Square and want payroll bolted onto their existing tools without paying for HR features they do not need. The contractor-only plan at $6 per person with no base fee is a standout for freelance-heavy businesses. If you need more than just paychecks, go with Gusto. If you need clean, cheap payroll that plugs into Square, Square Payroll does exactly that and nothing more.
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