Which payroll software is best for your business?

The ADP and Gusto logos.
Rebecca Olason/TechRepublic

Payroll software can be an invaluable tool for any size company, but the right payroll software for your business depends on your unique needs and budget.

SEE: Payroll Checklist (TechRepublic Premium)

Gusto and ADP are leading payroll solutions that offer a range of services to manage payroll, taxes, benefits, hiring and leave requests in one place. We’ve created this guide to help you understand how their functions and features compare, so you can find the best solution for your business.

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What is ADP?

The ADP logo.
Image: ADP

ADP is an HR software and services company that has been in the industry since 1949. ADP is a full-service cloud-based human capital management company serving more than 1 million clients worldwide.

They offer online payroll and HR solutions, as well as tax, talent, time, compliance and benefits administration for businesses of all sizes. ADP provides payroll services to a variety of industries, including retail, hospitality, construction and manufacturing.

What is Gusto?

Gusto logo.
Image: Gusto

Taste is an all-in-one online HR and payroll service specifically designed to make it easier and cheaper for small businesses to manage their employees. Gusto helps small businesses simplify the time-consuming and complicated process of payroll.

Gusto automates aspects of the payroll process, such as calculating salaries, filing taxes, sending W-2s to employees, and issuing 1099 forms to contractors. The company also offers HR tools for time tracking, employee onboarding portals, time off management and performance appraisals.

ADP vs. Gusto: Feature Comparison Chart

Characteristics ADP Taste
Tax returns (W-2s and 1099s) Yes Yes
Employee health benefits Available in all 50 states Available in 37 states
24-hour customer service Yes No
Automated direct deposit Yes Yes
Mobile application Yes Yes
New rental report Yes Yes
HR tools Yes Yes
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ADP vs. Gusto: Head-to-head comparison

Tax return

One of the most important aspects of your business is making sure you are up-to-date on your taxes and reporting them accurately. Both ADP and Gusto calculate, file and remit federal, state and local taxes on behalf of their clients.

However, there are differences between the products they offer. W-2s and 1099s are included in all of Gusto’s plans, while ADP charges separately for these forms. Business owners with freelancers or contractor employees can save more with Gusto because of the difference.

Employee health benefits

A payroll system that can handle employee benefits such as health insurance is essential. If your company offers a benefits package to its employees, the payroll system you use should be able to keep track of who is enrolled in which plan and send invoices accordingly. When you’re looking for a new payroll system, consider how you’ll handle benefits management.

ADP provides nationwide coverage through the Automatic Data Processing Insurance Agency, which includes health, dental, vision, short and long term disability, premium only plans and life insurance.

Meanwhile, Gusto offers a variety of health benefits, including medical, dental, vision, health savings accounts, disability insurance, flexible spending accounts, life insurance and dependent care FSAs.

However, Gusto currently covers 37 states and DC, excluding Alabama, Alaska, Hawaii, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming. By comparison, the ADP covers all 50 states as well as Washington, DC

Customer service

One of the most important things to consider when evaluating payroll systems is customer service. As a business owner, the last thing you want is to have a problem and not be able to get help.

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ADP has 24/7 customer service representatives who can help with payroll tax filing, direct deposit setup, and other system questions. ADP provides email and 24-hour phone support and access to HR consultants. ADP also has an A+ rating with BBB accreditation, which means customers are more likely to find answers about the company’s products and services online.

Gusto provides email, chat, and phone support five days a week, Monday through Friday, from 7:00 a.m. to 6:00 p.m. MST, as well as access to HR consultants. Unlike ADP, Gusto is not accredited by the BBB.

Mobile application

Today’s workforce is mobile, so a robust mobile app is essential to keep up. Gusto offers a mobile wallet mobile app that allows employees to track, save and access their money. However, non-resident entrepreneurs cannot use the Gusto Wallet mobile app to track their time.

With ADP, you can view your pay and tax information using their mobile app. It also syncs with your payroll system so you can easily access your data when you’re on the go. Compared to the Gusto Wallet mobile app, the ADP mobile app is more robust in terms of what it can do while still being user-friendly.

ADP and Gusto pricing

Pricing is essential when purchasing a payroll system for your organization. To make the best decision, you need to know what each company offers and how they compare to other payroll solutions.

How much does ADP cost?

ADP appears to offer four pricing plans; however, they are not transparent with their exchange rates. Prospective customers should contact ADP’s sales team to receive a personalized offer for their company.

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How much does Gusto cost?

Gusto offers three pricing plans with different service levels. They include:

  • Simple Plan: Starts at $40 per month, plus $6 per employee per month
  • Plus Plan: Starts at $60 per month, plus $9 per employee per month
  • Premium package: Pricing information for the package is available upon request

Choosing between ADP and Gusto

ADP vs. Comparing Gusto can be a difficult decision, but it’s essential to weigh the pros and cons of both systems to figure out which one is right for your business. In order to make the decision easier, we have collected the most important aspects below.

  • Gusto is best for subcontractor-only businesses, while ADP is best for complex companies with full-time employees and contractors.
  • SMBs will find that Gusto offers more customized solutions at better prices than ADP, which favors larger businesses.
  • Gusto is intuitive and easy to use compared to ADP where navigating the interface takes some getting used to.

Ultimately, choosing the best payroll service for your business depends on what services you need for your payroll workflow and what your budget is.

If you’re just starting out with just a few employees, Gusto might be a good choice because it offers simplified payroll features at an affordable price. But let’s say your company has more than 600 employees. In this case, ADP may be a better option as they have comprehensive benefits packages and offer multiple levels of support depending on the size of the company.

Read: The Best Payroll Software for Small Businesses (TechRepublic)

Source: https://www.techrepublic.com/article/adp-vs-gusto/