ADP Payroll vs. Gusto

The bottom line: Gusto is one of the most comprehensive, affordable, and easy-to-use payroll providers in the small-business sector, especially for small to midsize businesses. But while ADP Payroll (on ADP’s RUN platform) costs more than Gusto, its solid HR features make it a good fit for midsize businesses to larger corporations.

Of the two payroll providers, Gusto absolutely gives you the most bang for your buck. With its $40-a-month base price, it’s among the most affordable full-service payroll solutions. And Gusto’s even cheaper for employers who pay contractors only, not W-2 employees. Like Square Payroll, Gusto’s contractor plan waives the monthly base fee, charging you just $6 per person paid per month. 

It also doesn’t hurt that you know exactly how much Gusto costs before you sign up. In contrast, ADP doesn’t list pricing on its site—you have to contact the company directly to get ADP’s cost. Instead of signing up online, you’ll have to deal with a sales agent and, it’s safe to assume, a higher price point.

ADP does offer a three-month free trial, which helps take the edge off its higher price. But Gusto’s one-month free trial is a good bargain too. No matter which software you end up with, you should test drive it for free for as long as you can before committing.

Both ADP and Gusto have the same key payroll features (for instance, two-day direct deposit, accounting software integration, and employee access). But Gusto, including its cheapest Simple plan, has several unique perks that ADP lacks—and at a more affordable price, too:  

• Built-in health benefits administration and 401(k) options
• Optional employee perks like commuter benefits and 529 college savings plans
• Automatic wage garnishment and child support paycheck deductions

Most notably, Gusto doesn’t charge you extra to file end-of-year payroll tax forms. Against industry standards, ADP does charge an additional fee for this particular service: most other payroll software providers (from Square Payroll to QuickBooks Payroll) include it free of charge. 

You can still get employee benefits administration with ADP, but you have to pay extra. Even ADP’s priciest plan doesn’t include fee-free benefits administration. Meanwhile, even Gusto’s cheapest plan includes benefits administration at no additional cost.

Gusto has the best all-around payroll system features. It also includes crucial HR features like free benefits administration that ADP lacks. But in terms of overall HR features, ADP wins out—though you’ll pay quite a bit to access ADP’s HR tools, which only come with ADP’s two priciest plans. 

Starting with ADP’s cheaper payroll-plus-HR package, you get these HR-specific features: 

• Access to a dedicated HR support team
• Legally compliant, customizable employee handbooks
• Advanced HR tracking and reporting
• Step-by-step guidelines for completing HR tasks like hiring and firing

ADP RUN’s priciest HR-and-payroll package adds more in-depth HR support, comprehensive employer training, and employee training (including sexual harassment training). 

Gusto does have one HR-and-payroll package: the Concierge plan, which costs $139 a month plus $12 per payee. With custom employee handbook access, 1:1 HR support, and thorough HR guides, Gusto Concierge’s key HR features compare to ADP HR Pro’s. Since ADP doesn’t list its pricing online, we aren’t sure how ADP HR Pro compares to Gusto Concierge’s starting price—but we’re betting Gusto Concierge is cheaper.

ADP is one of the only payroll service providers to offer a mobile payroll app for employers. Fortunately, ADP’s app ranks pretty highly these days. Users gave the app 4.8 out of 5 stars on Google Play¹ and 4.9 out of 5 on Apple’s App Store,² noting the app’s ease of use, convenience, and good customer support.

In contrast, Gusto’s online payroll system is fully cloud-based, so you can access your dashboard and run payroll from a laptop, desktop, smartphone, or tablet. But as any mobile-first business owner knows, browser access isn’t as user-friendly as an app—even an app as flawed as ADP’s. 

If mobile access is one of your most important payroll software requirements, you’ll want to look into ADP over Gusto. Or, if you’re put off by ADP’s app ratings, we recommend checking out QuickBooks Payroll, Paychex, or Square Payroll instead.

ADP Payroll’s customer service is available round the clock. In contrast, you can only reach Gusto customer service Monday through Friday, 6:00 a.m. to 5:00 p.m. (PT). Business owners who encounter payroll issues on a weekend or outside typical business hours will have to wait for help. 

There’s a catch, though: ADP payroll customer support is fully automated, which means you might not reach a real human at ADP during non-standard business hours . . . if at all. And the most recent customer reviews for Gusto and ADP report extremely poor customer service from both providers, regardless of hours.^3,4

We’re guessing COVID-19 impacted both brands’ ability to serve their customers. Hopefully, as the economy gets back on track, both companies are able to rebound. (We’ll keep tracking customer satisfaction and let you know if anything changes.) 

If you pay employees in multiple states, Gusto is a clear choice over ADP. Gusto offers full-service payroll—including direct deposit and payroll tax filing—in all 50 states. Most notably, it doesn’t charge extra for businesses with locations in more than one state. 

Meanwhile, ADP doesn’t automatically allow for unlimited payroll in more than one state. A customer service agent can tell you how much running payroll in multiple states costs—all we know for sure is that it isn’t free.

Even with its declining user ratings and limited customer service, Gusto remains our top payroll pick for small-business owners. Its thorough payroll features, reasonable prices, and scalable plans help set it apart from other payroll solutions. On the other hand, if you’d prefer payroll and HR software for your midsize business or larger enterprise, ADP could work nicely—as long as you pay employees in one state only. 

Looking for a payroll option beyond Gusto and ADP? Check out our article on the year’s best payroll companies to explore additional payroll solutions. 

In general, Gusto is a good payroll solution if you want affordable payroll with optional human resource features, like workers comp plans and health benefits administration. Most customers also consider Gusto a good payroll company: the majority of reviewers on sites like TrustPilot and TrustRadius give Gusto a high rating.^4,5 

More recently, though, users have reported problems with how Gusto handled the 2020 tax year. Some customers have experienced payroll tax filing issues and struggle to contact customer service reps.^4,5 For now, we still consider Gusto one of the best payroll companies for small businesses, but we’re keeping our fingers crossed that Gusto’s ratings improve soon. 

To compare ADP and Gusto and derive our star ratings, we examined each company’s pricing, plans, payroll and HR features, customer service, ease of use, and overall functionality. We also considered our payroll expert’s opinion and subject matter expertise. We then weighted each section equally to derive our star ratings. Star ratings are reviewed frequently and subject to change.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.