Gusto Review: The Top Online Payroll Service for Small Businesses

Payroll is a chore for most small business owners. If not done correctly, it can also become a major problem for your business and employees. Online payroll services have helped lower the cost of high-quality payroll management while also easing the burden on small business owners. Gusto is the best online payroll service on the market today.

At CoBanker, we evaluated Gusto based on its usability, automated tax compliance, and scalability for growing teams.

What is an Online Payroll Service?

First, let’s clarify what this category means. An online payroll service is a software solution that supports a business’s payroll processes. Payroll is often one service offered by broader HR software or Professional Employer Organization (PEO) services, but for our purposes here, we’re defining it as a tool dedicated to running payroll. It’s a tool designed to help you pay your employees accurately and on time, and meet your tax and compliance obligations.

A payroll service should include these services:

• Payroll calculations: Automatic calculations of gross pay, withholdings for federal and state taxes, Social Security, Medicare, and other deductions.
• Tax filing: Automated payroll tax filing on your behalf, ensuring you meet all deadlines and avoid penalties.
• Direct deposit: Employees receive their pay via direct deposit.
• Year-end tax forms: All year-end tax forms, such as W-2s and 1099s, generated, filed, and distributed to employees.

Each of these core functions can be a major headache without a payroll service.

Gusto: 4.5 / 5

Gusto is the best all-around payroll solution on today’s market for small to medium-sized businesses. Its interface is arguably the most intuitive in the field, and its automation controls make it extremely hands-off and user-friendly — especially for businesses without a dedicated HR department. It’s not the lowest-cost option on the market, but the time saved and the reduction in compliance risk justify the premium.

Pros

• User experience: A modern, clean interface that makes complex tasks like dismissal payroll or PTO policies easy to navigate.
• Automated everything: Handles federal, state, and local tax filings and payments automatically across all 50 states.
• HR add-ons: Seamlessly integrates benefits (health, 401k), time tracking, and hiring tools in one dashboard — without a major upgrade to a different service.
• Employee empowerment: The Gusto Wallet app allows employees to view paystubs, manage savings, and even access earned wages early.

Cons

• Price: Recent base-fee increases ($49/mo for the Simple plan) make it one of the pricier options for very small businesses.
• Poor customer support: Phone, email, and live chat are available, but the team is under-trained, under-resourced, and wait times can be astronomical, especially during tax season.
• Limited global EOR: While they handle international contractors well, their full Employer of Record (EOR) services for foreign employees are less robust than specialized rivals like Deel or Rippling.

Feature Highlights

Full-Service Payroll Automation

Gusto’s core strength is that it essentially works on autopilot. Once you set your schedules, Gusto calculates wages, deducts taxes, and files them with the appropriate agencies. It takes just a couple of clicks every other week. (Or week, or month, depending on your pay schedule.)

Once you’ve set up your preferences, it’s incredibly easy to run the same payroll, even when you’re dealing with contractors. If you have to make adjustments, Gusto’s table view makes it easy to change employee payouts for any given period for any reason.

Unlike some legacy providers that charge extra for each state, Gusto’s Plus and Premium plans handle filings in all 50 states at no additional per-state cost—a massive benefit for remote teams.

Marisa Vallbona, Founder and President of CIM Inc PR in Houston says, “I’ve been using Gusto for around eight years and love the ease of using it for employee payroll, payroll taxes and not having to worry about compliance. It’s intuitive and sends reminders for deadlines, automatically sends payroll tax returns and W-2s and takes care of everything for me.”

Benefits Administration

One of the hardest parts of scaling a business is offering competitive benefits. Gusto acts as a broker, allowing you to offer:

• Medical, dental, and vision: They connect with top-tier carriers and automate the deductions.
• Financial wellness: Support for 401(k)s (via Guideline), HSAs, FSAs, and even 529 college savings plans.
• Workers’ compensation: They offer pay-as-you-go workers’ compensation, which helps cash flow by avoiding large upfront premiums.

Many small businesses don’t offer employee benefits, in part because they’re such a headache to implement and manage. Gusto makes it easy.

Hiring and Onboarding

Hiring and onboarding tools are areas where Gusto excels and provides outstanding support to small business owners and small HR teams. As soon as you hire an employee, Gusto sends a digital offer letter. Once signed, Gusto guides them through a self-onboarding process, entering their own bank info and tax forms, which are securely stored in Gusto’s cloud. When that process is done, Gusto guides you through adding them to your payroll, and then automatically covers all of the new-hire reporting and necessary tax filings.

When small businesses are ready to grow, Gusto is a valuable partner.

Pricing Breakdown

Gusto recently updated its pricing structure to reflect its expanded HR capabilities.

Is Gusto Right for You?

Gusto may be right for you if you’re a small business owner who:

• Doesn’t have a dedicated HR department
• Wants to spend very little time on payroll
• Wants to provide benefits to employees at a reasonable cost

If your business is very small and on a razor-thin budget, you may be better off going with a more cost-effective, less-feature-rich tool like OnPay. If your business is growing rapidly and you need more robust HR tools, you may want to consider a PEO service or more scalable service like Rippling.