Payroll management software can be an invaluable tool for companies of all sizes, but the right payroll software for your business depends on your specific needs and budget.

SEE: Payroll processing checklist (TechRepublic Premium)

Gusto and ADP are leading payroll solutions that offer a variety of features to help you manage payroll, taxes, benefits, onboarding and time off 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 that serves more than 1 million customers across the globe.

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


What is Gusto?

Gusto logo.
Image: Gusto

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

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

ADP vs. Gusto: Feature comparison table

Tax reporting (W-2s and 1099)YesYes
Employee health benefits Available in all 50 statesAvailable in 37 states
24/7 customer supportYesNo
Automated direct depositYesYes
Mobile appYesYes
New hire reportingYesYes
HR toolsYesYes

ADP vs. Gusto: Head-to-head feature comparison

Tax reporting

One of the most important aspects of your business is making sure that you’re staying up to date on taxes and filing them accurately. Both ADP and Gusto calculate, file and pay federal, state and local taxes on behalf of their clients.

However, there are some differences in what they offer. W-2s and 1099s are included in all of Gusto’s plans, whereas ADP charges extra fees for these forms. Business owners with freelancers or contractor employees can save more with Gusto because of this difference.

Employee health benefits

It is essential to have a payroll system that can administer employee benefits like health insurance. If your company offers a benefits package to its employees, the payroll system you use should be able to track who is enrolled in what plan and send out invoices accordingly. When looking for a new payroll system, consider how it handles benefits management.

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

Meanwhile, Gusto offers several 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 plus D.C., while excluding Alabama, Alaska, Hawaii, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia and Wyoming. In comparison, ADP covers all 50 states plus Washington, D.C.

Customer support

One of the most important things to consider when evaluating payroll systems is customer support. The last thing you want as a business owner is to have an issue arise and not be able to get help.

ADP has live customer service representatives available 24/7 who can assist in resolving issues related to payroll tax reporting, direct deposit setup and other system-related questions. ADP offers email and 24/7 phone support as well as access to HR advisors. ADP is also BBB accredited with an A+ rating, which means that customers are more likely to find answers about the company’s products and services online.

Gusto provides email, chat and phone support five days per week, from 7 am to 6 pm MST, Monday through Friday, as well as access to HR advisors. Unlike ADP, Gusto is not accredited by the BBB.

Mobile app

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

With ADP, you can view your paychecks and tax information using their mobile app. It also syncs up with the 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.

Pricing for ADP and Gusto

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

What is the cost of ADP?

ADP’s pricing plans are grouped into two main categories:

  1. Small Business Payroll: For companies with 1 to 49 employees. The vendor is currently running a three months free payroll offer when you sign up for small business payroll processing (subject to terms and conditions).
  2. Mid and Large Business Payroll: For companies with more than 50 employees.

Each category above has four pricing plans; however, ADP does not disclose actual pricing publicly. Potential customers must enter their data into an online form to get a personalized quote or contact the ADP sales team.

What is the cost of Gusto?

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

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

Choosing between ADP and Gusto

An ADP vs. Gusto comparison can be a challenging purchase decision to make, but it’s essential to weigh the pros and cons of both systems to figure out which is right for your business. To help you decide, we’ve broken down the most important points below.

  • Gusto is best for contractor-only businesses, while ADP is best for complex companies with full-time employees and contractors.
  • Small to midsize businesses will find that Gusto offers more tailored solutions at a better price than ADP, which favors larger enterprises.
  • Gusto is intuitive and easy to use compared to ADP, where navigating the interface can take some getting used to.

Ultimately, deciding on the best payroll service for your business depends on what services are necessary for your payroll processing workflow and what your budget can accommodate.

If you’re just starting out and only have a few employees, Gusto might be a good option for you because they offer simplified payroll features at an affordable price. But suppose your company has over 600 employees. In that case, ADP may be a better option because they have comprehensive benefits packages and offer multiple levels of support depending on the size of your company.

Read next: Best payroll software for small businesses (TechRepublic)