Introduction: Gusto vs Justworks for HR and Payroll
Comparing Gusto vs Justworks gives you two distinct routes for managing payroll, benefits, and HR. Gusto is a well-known payroll and HR software with a reputation for user-friendly automation, aimed at companies needing streamlined in-house solutions. Justworks is a Professional Employer Organization (PEO), meaning it becomes the employer of record and delivers risk management, multi-level compliance, and access to large-group benefits—often appealing to businesses with complex HR and compliance needs. Choosing between them often depends on the depth of services you require, your business size, and how you prefer to approach HR management.
- Gusto is payroll/HR software ideal for up to 100 employees; Justworks is a scalable PEO for small to mid-sized firms.
- Justworks offers employer-of-record compliance and access to large-group benefit rates; Gusto does not operate as a PEO.
- Gusto is recognized for its easy-to-use interface and automated payroll tools.
- Justworks stands out for compliance management, workers’ comp, and EPLI coverage as part of its PEO model.
| Feature | How Gusto handles it | How Justworks handles it | Best for |
|---|---|---|---|
| HR model | Payroll and HR software (not a PEO) | PEO/co-employment model (employer of record) | Gusto – simple, in-house HR; Justworks – hands-off, outsourced HR |
| Payroll processing | Automated, user-friendly payroll with compliance support | Managed payroll as employer of record, with risk and compliance support | Gusto – ease of use; Justworks – compliance-heavy needs |
| Benefits administration | Offers benefits; not large-group rates | Large-group health insurance rates through PEO model | Justworks – stronger benefits bargaining power |
| Tax compliance | Supports payroll tax filings; not employer of record | Manages local, state, and federal compliance as employer of record | Justworks – full compliance delegation |
| Pricing | From $40/mo base + $6/employee (tiered) | From $59/employee/month (Basic plan) | Gusto – lower entry cost; Justworks – all-in-one for growing teams |
| Company size & scalability | Best up to 100 employees | Scales to mid-sized businesses; no explicit limit | Justworks – ongoing growth; Gusto – smaller businesses |
| User interface | Highly rated for ease of use and automation | Simple, suited for PEO/co-employment workflow | Gusto – intuitive DIY; Justworks – collaborative HR model |
| Integrations | Not publicly specified | Not publicly specified | Investigate for critical business tools |
| Security/SOC 2 | Compliance support; technical certifications not specified | Compliance managed as PEO; SOC 2 status not specified | Request documentation for audit needs |
Pricing Comparison
Gusto uses a tiered pricing structure that starts at $40 per month plus $6 for each employee. This approach lets you select core payroll with the option to pay more for additional HR features as needed. As your headcount grows, costs scale but remain predictable. Justworks charges strictly per employee, with the Basic plan beginning at $59 per employee per month. This fee bundles payroll, benefits administration, and compliance. Consider the total cost as your team expands—Justworks is a higher baseline investment but includes more bundled services due to the PEO model.
Scalability and Business Fit
Gusto best suits businesses with up to about 100 employees. Above that threshold, you may encounter limitations in functionality, support, or cost-effectiveness. Justworks, designed to scale from small to mid-sized businesses, does not specify an upper employee limit. If you expect sustained growth or increasing HR demands, Justworks offers flexibility for expanding teams. For tight-knit companies staying under 100 staff, Gusto provides efficiency without unnecessary extras.
Payroll Processing and Tax Compliance
Gusto handles payroll processing with automation and compliance support for payroll taxes and filings—valuable for owners who want to control processing in-house. However, as Gusto is not a PEO, you remain the legal employer and bear ultimate responsibility for compliance. Justworks, as your business’s employer of record, takes on compliance at the federal, state, and local level, and offers additional protections like workers’ compensation and employment practices liability insurance (EPLI). This model suits those seeking hands-off compliance management and risk mitigation.
Benefits Administration and Coverage
Gusto offers benefits management, allowing you to set up health, dental, and vision packages, but it does not grant access to the same insurance rates or breadth of offerings available through a PEO. In contrast, Justworks leverages its co-employment model to provide access to large-group health insurance rates, potentially more options, and PEO-exclusive perks. This makes Justworks a stronger fit for companies prioritizing competitive benefits and risk management add-ons. If you’re content with off-the-shelf benefits, Gusto remains an affordable and practical solution.
User Experience and Interface
Gusto is widely recognized for its clean, user-friendly interface and automation that simplifies payroll and HR for non-specialists. It’s regularly highlighted for easy onboarding and an approachable user experience. Justworks has a streamlined interface, too, but its workflow revolves around the PEO relationship, which can alter the user journey. If you value do-it-yourself administration with clear guidance, Gusto stands out. If you want your provider to coordinate HR tasks closely with your team, Justworks’ model is more collaborative.
Customer Support and Service
Both Gusto and Justworks aim to support users with onboarding and ongoing service, but detailed coverage differences are not specified in available sources. Gusto is generally considered best for smaller businesses that prefer self-service with responsive help when required. Justworks, meanwhile, suits businesses wanting dedicated partner-style support due to its PEO responsibilities. If high-touch, ongoing support is essential, Justworks is structured to be more involved.
Integrations and Tooling
Neither Gusto nor Justworks publicly specify which integrations or API capabilities they support. If syncing with accounting, time tracking, or productivity tools is fundamental for your workflows, review the providers’ integration directories before making a decision. Both offer onboarding tools and time tracking, but the specifics—especially concerning third-party integrations—are unconfirmed in current sources.
Security, Compliance, and Certifications
Gusto provides payroll, tax, and benefits compliance support but does not detail technical security protocols such as SOC 2 certification. Justworks, by managing compliance as a PEO and offering risk protections, addresses the employer’s obligations on paper, but its SOC 2 or other security certifications are not publicly specified. Both platforms fulfill major regulatory requirements, yet it’s prudent to request explicit documentation if your policies demand specific certifications.
When to Choose Gusto vs Justworks
- Choose Gusto if your company has up to 100 employees, prefers an easy-to-use interface, enjoys direct control of payroll/HR, and only needs standard benefits administration at a lower price point.
- Choose Justworks if you want a scalable partner for compliance and risk management, need access to large-group benefits rates, or are planning for ongoing headcount growth with complex HR needs.
Conclusion
Both Gusto and Justworks cover the core areas of payroll processing, benefits, and HR management but differ fundamentally in how they deliver these services. Gusto best fits smaller teams wanting accessible in-house HR tools at an affordable entry price. Justworks is preferable for businesses seeking the comprehensive compliance and benefits leverage of a PEO model. Your choice hinges on the complexity of HR support you need and your strategic priorities for growth and compliance coverage.
FAQs
What are the main differences between Gusto and Justworks?
Gusto is payroll and HR software where you stay the employer of record. Justworks is a PEO, meaning it manages compliance and benefits as the official employer, offering additional protections and access to large-group benefits rates.
Which is more cost-effective for small businesses: Gusto or Justworks?
For businesses under 100 employees, Gusto is usually more cost-effective due to lower entry pricing. Justworks offers more comprehensive services but at a higher per-employee rate.
How do Gusto and Justworks handle HR and payroll compliance?
Gusto supports compliance for payroll and tax filings but does not act as employer of record. Justworks assumes legal employer status, handling compliance and risk management at all jurisdictional levels.
What integrations do Gusto and Justworks support?
Not publicly specified. Check each provider’s website or consult sales for current integrations or API access.
Which provider offers better benefits administration?
Justworks offers better benefits administration via PEO-exclusive and large-group rates. Gusto has standard benefits options but not the same volume leverage.
How do customer support options compare between Gusto and Justworks?
Specific differences in customer support are not publicly detailed. Gusto is known for helping small businesses; Justworks provides partner-style support for compliance and risk as a PEO.
Is Gusto or Justworks more suitable for remote teams?
Both tools support remote payroll and HR. Justworks may be stronger for distributed teams that need comprehensive compliance and risk management in multiple states.