Employ
RecruitGusto vs Paychex
Managing people is getting trickier. Organizations that used to have their teams all in one place now find themselves dealing with workers in different cities and states or even spread out around the world. While some still head to the office every day, others only drop by once in a while, and others still work remotely. Governments are also continuously adding benefits requirements and changing labor laws.
What’s an HR professional to do? The good news is that there are lots of new tools to use to facilitate human capital management, and many service providers that you can outsource functions to. Even small startups can get their hands on comprehensive professional HR services without having to hire a whole team of experts.
What You’ll Discover:
- In-Depth Feature Analysis: A thorough breakdown of the features and usability of both platforms.
- Pricing Comparison: A detailed look at the costs associated with each service to assist with effective budgeting.
- Pros and Cons: Unbiased assessments of the strengths and limitations of Gusto and Paychex.
In this review, we’ll examine two HR service providers, Gusto and Paychex, in the HR services space. We’ll examine each provider’s features and particular strengths. Then, we’ll compare them to find the use cases where each is a better choice. Our goal is to give you a detailed introduction to each provider so you can make the best choice of who your organization should partner with.
Gusto vs Paychex Overview
Feature | Gusto | Paychex | Explanation |
User Reviews | G2: 4.5/5 Trustradius: 8.4/10 | G2: 4.2/5 Trustradius: 6.6/10 | Gusto’s reviews are very good, while Paychex’s are somewhat mixed. |
Pricing | $399 (India and Philippines) or $599 (other countries) /international employee per month; $35 base fee + $6/ contractor per month | Starting at $39/month + $4 per employee/month | Gusto is very up-front about its prices. Paychex only posts its basic starting price online. |
User-friendliness | Excellent | Very good | While Gusto has very good reviews, Paychex has received somewhat mixed reviews for ease of use and support. |
Customer Support | 24/5 live chat (and phone support in the US) | 24/7 live chat and phone support | Gusto has live support just 24/5, while Paychex offers live chat or phone support all the time. |
Integrations | Excellent | Excellent | Gusto has integrations with nearly 200 apps. Paychex can integrate with nearly 300 apps. |
Data security | Excellent | Excellent | Gusto is HIPAA and SOC 2 compliant. Paychex is SOC1 and SOC2 compliant and follows the NIST1.1 cybersecurity framework. |
International hiring (EOR) | Good | Good | Gusto helps with hiring employees in nine countries and contractors in 120+. Paychex partners with G-P to help with hiring employees and contractors in 180+ countries. |
Recruitment | Good | Good | Gusto doesn’t recruit on its own but integrates with its related Gusto Recruiting job board. Paychex offers advice and support for recruiting but no direct recruiting services. |
Benefits administration | Excellent | Excellent | Both platforms offer extensive benefits like health insurance and pensions. |
Payroll | Very Good | Very Good | Gusto provides comprehensive payroll services in the US and for contractors and international employees. Paychex offers payroll services independently and within its PEO and EOR packages. |
Gusto Overview
San Francisco-based Gusto was launched in 2012 as a service to help businesses hire and manage independent contractors across the US. In the decade that followed, it has greatly expanded its services. This provider now bases its services around an online platform like most of its competitors. This platform has gained more and more functionality so that it can now be used as a standalone HRMS (human resources management system) by small and medium businesses (SMBs). Larger enterprises may find that it doesn’t have the complete extent of functions they need to manage thousands or millions of staff. The platform can help users by automating payroll and tax calculations, administering paid time off (PTO) and benefits, managing performance reviews and team development, and much more. Clients can use the platform for payroll for just $40/month plus $6/person in a single state or $60/month plus $9/person for multi-state payroll, including time-tracking.
For a step-up, clients can pay $135/month plus $16.50/person for Gusto’s Premium service package which is essentially a PEO or Professional Employment Organization offering. This service includes scalable multi-state payroll, benefits administration, priority support, and regular help from a dedicated customer success manager. Gusto’s platform essentially automates everything you need to manage all of your employees’ HR needs.
If you want to hire employees in other countries, Gusto also makes this possible. Gusto partners with Remote to enable hiring in nine countries currently, with more on the way. This EOR or Employer of Record service lets companies hire full-time employees even though they don’t own entities in these countries. Instead, Gusto’s partners become the legal employers of local staff who are contracted to work for the clients. This service, which costs $399/employee per month in India and the Philippines and $599/employee per month elsewhere, covers contract generation, onboarding, payroll, tax filings, benefits administration, and constant compliance monitoring to ensure employment is always in line with local laws.
Don’t forget about hiring contractors, the original purpose of Gusto. Organizations in the US that want to only hire contractors and no W-2 employees can do so for just $6/contractor per month. International contractors can be hired and paid in 120 countries worldwide and Gusto doesn’t charge any fees for this service, though it does charge payment transfer fees and exchange fees in some cases.
Finally, Gusto partners with other providers to offer mandatory and optional benefits to their employees. Packages include health, medical, vision, and dental insurance, worker’s compensation, health savings accounts (HSAs) and flexible savings accounts (FSAs), as well as 401(k) retirement savings. Existing brokers and plans can also be integrated into the Gusto platform.
Gusto Pros and Cons
Gusto started as a contractor management service and has expanded to offer payroll, benefits, PEO, and EOR services. The advantages and disadvantages of working with Gusto are:
- Pros
User-Friendly Interface
User reviews give Gusto great scores for ease of setup and administration.
Extensive Administration Tools
Gusto’s platform includes lots of features like time and attendance tracking, payroll entry, PTO management, tax calculation and filing, check and W-2 printing and delivery, and direct deposit management.
Mobile App
Gusto Wallet, Gusto’s mobile app for iOS and Android devices, helps employees manage their finances as well as manage their profiles, edit tax elections, and view their payslips.
Benefits Packages
Gusto provides extensive benefits options including health, dental, vision, and disability insurance as well as 401(k) plans at competitive rates.
- Cons
Limited International Hiring
While Gusto enables contractor hiring in 120 countries, its EOR offering is much more limited to just nine countries. This is far less than the hundreds of countries that other competitors offer.
Limited Support
Gusto’s live support is only available 24/5. This means that organizations that need to work over weekends may find themselves waiting for support.
Paychex Overview
Paychex is an HR service provider based in New York that has been around since 1971. Started as a payroll company, Paychex, too, has expanded to provide a much broader offering. This company now works as a PEO in the US and provides HR services in Brazil, Denmark, Germany, Norway, and Sweden.
As a PEO, Paychex handles HR administration, payroll, time and attendance, and benefits administration. It also includes compliance and safety as well as guidance from a dedicated HR professional and a team of experts specializing in different functions. These experts help provide talent, risk, and employee experience management services for PEO clients. While it doesn’t actively recruit for its clients, Paychex provides consultation for hiring strategies, job descriptions, and interviewing approaches. It also includes an applicant tracking system to help clients manage their recruitment functions.
Through its platform, Paychex Flex, this provider offers basic payroll and employee management services for a price of just $39/month plus $4 per employee/month. Its PEO and EOR services, however, are not publicly listed. Paychex isn’t really an EOR but, like Gusto, partners with one. In this case, it uses G-P (Globalization Partners) which helps its clients hire and manage employees and contractors in over 180 countries.
Paychex offers health, vision, dental, and life insurance as well as HSAs, FSAs, and 401(k) plans to its clients who can provide them for their domestic or international employees.
Paychex Pros and Cons
Paychex offers basic payroll services or full-service PEO and EOR packages mostly aimed at SMBs. The advantages and disadvantages of working with Paychex include:
- Pros
User-Friendly Interface
The Paychex Flex platform has received very good user reviews for ease of set-up and use.
Mobile App
Paychex has different mobile apps for iOS and Android devices. Employers can review payroll and employee data with the Paychex Flex app. Workers can use Paychex Oasis to view paystubs and manage benefits and PTO, as well as Time Kiosk to clock in and out of work. The Paychex Pay app gives employees savings accounts and linked debit cards.
Service Tiers
Paychex has a lot of service tiers that clients can choose from to get the specific services they need from basic payroll to PEO and EOR packages.
- Cons
Limited Pricing Online
Paychex only publicly lists the starting price for using its platform. Potential clients need to ask for tailored quotes for all other services.
Extra Fees
Services that are normally standard with competitors are add-ons to Paychex’s service packages. These include ACH payments, W-2 and 1099 filing, and time & attendance management and it can be confusing to try to work out the services clients need and what they’ll cost.
Head-to-Head Comparison: Gusto vs Paychex
We’ve just had a look at each provider on its own so now it’s time to compare them directly to see where each one is better. We’ll see how they stack up against several criteria to help you make the best choice for your organization.
User-friendly platform: Gusto Wins
Both platforms have user interfaces that are intuitive and relatively straightforward. However, Gusto has received consistently better user reviews for ease of setup and administration.
Resources: It’s a tie
Gusto’s resources include an assortment of calculators for taxes, business planning, and payroll in different states as well as a useful blog, research, and data publications. Paychex has webinars and podcasts to help clients use its system. It also has state compliance resources and tools for calculating expenses and tax credits. To us, these resources are equally useful.
Integration with other software: Paychex Wins
Gusto can integrate with over 200 software solutions right out of the box including apps like Google Workspace, Hubspot, Zendesk, Cloudflare, and Dropbox. Paychex has even more pre-built integrations with over 270 apps that include Oracle, TimeTracker, Salesforce, and Quickbooks. Since it comes down to numbers, Paychex wins this category.
International hiring: Paychex Wins
Gusto, through its partnership with the well-known provider, Remote, lets clients hire employees in just nine countries. It offers contractor management services in over 120 countries, however, which is a lot more extensive. It’s not as much as Paychex, however, which enables employee and contractor hiring in over 180 countries. Since we don’t know Paychex’s price, we’ll go by the numbers and declare Paychex the winner.
PEO Solution: It’s a tie
Both providers offer extensive benefits administration, payroll support, and HR consultation and guidance. They also work hard to maintain compliance with all relevant state and federal employment laws. Without knowing their comparative prices, we’re going to call it a tie in this category.
Employee Benefits: It’s a tie
These two competitors both include extensive health and financial benefits options in the US and for international employees. Both also allow clients to incorporate their current brokers and plans into their platforms. Without knowing the prices they can offer, we’re calling this yet another tie.
Payroll Management: It’s a tie
Both of these platforms provide payroll as a basic, standalone service as well as mixed into their PEO and EOR packages. They both manage tax filings and W-2 and 1099 forms for their clients and both also offer mobile apps that help employees manage their finances.
Our Verdict: Gusto vs Paychex
Instead of trying to choose a clear winner, our goal in this review has been to show each provider’s strengths to help you choose the best service for your needs.
When to choose Gusto
Gusto is a good choice for SMBs that want help managing their employees and especially contractors with an easy, centralized platform. It offers different service tiers up to full PEO service so clients can get exactly what they need.
When to choose Paychex
Paychex is a good choice for the international hiring of employees and contractors for businesses based in the US or Europe. They can use it to manage just payroll or take advantage of full PEO and EOR services.