Zenefits vs. Gusto Payroll 2023

Both the Zenefits and Gusto payroll services specialize in delivering beautiful, user-friendly interfaces. The differences lie in each title’s target audience.

Zenefits excels in its human resource (HR) administration functions and impressive analytics. It’s quite expensive though, and it requires some basic administrative expertise.

Gusto, on the other hand, lacks HR prowess but makes up for it with a far lower price and elaborate educational resources.

So, which payroll service is right for your small business? Let’s find out.

Payroll and human resources (HR) obligations go hand-in-hand. And since you’ll likely depend on software to manage these duties, Zenefits takes the cake when it comes to this marriage of people and paychecks. In fact, the colorful platform is an HR solution first and foremost. In direct contrast to payroll-first solutions like Gusto and QuickBooks Payroll, payroll through Zenefits is merely an add-on.

So what makes Zenefits so beautifully suited for HR tasks? It includes nearly everything a small business needs, with many things automated to save time. For example, you can create a standardized onboarding process for new hires. This task list can populate with just a few clicks, saving you the trouble of manually handling paperwork and other documents.

Beyond onboarding, the platform has several other handy perks:

• Richly detailed charts and reports
• Employee self-service portal
• Background checks
• Elaborate time-tracking functions
• Performance management tools

For comparison, Gusto includes some HR functions, but they’re minimal and inadequate. In short, you can’t use it for much beyond onboarding and basic time-tracking.

Zenefits is the far better option, but it isn’t perfect. The software title doesn’t offer any recruiting tools (much like Gusto), so you’re on your own when it comes to finding talented jobseekers.

Also, it’s undeniably expensive. Many competitors, such as Uzio and Zoho People, offer a similar array of features for single-digit prices per worker. Zenefits, on the other hand, soars to an above-average $21 per employee (with an annual subscription) for its top tier plan—and that’s before adding on payroll for an additional $6 a worker.

If you’re constantly on the move, then Zenefits is the better option for dealing paychecks from your smartphone or tablet. The user-friendly platform delivers a full-featured mobile app for both Android and iOS. And most importantly—it’s actually quite good.

The app’s user ratings on the Google Play Store and the Apple App Store average around 4.4 stars (out of 5).^1,2 We agree with this assessment because business owners can use the app to execute many essential tasks, such as approving timecards and reviewing new-hire documents.

Although this is still a limited number of functions, the real magic is reserved for employees. Your staff will have everything they need at their fingertips. Paystubs, performance reviews, benefits information, and time-off requests, among other perks, are all locked and loaded in the app.

On the other hand, Gusto only serves up its Wallet mobile app. This tool is chiefly used to offer cash management accounts and access to paystubs for employees. But it offers few other functions for employees. Plus, it lacks productive functions for business owners that need to cut paychecks on the go.

Let’s say you’ve never signed a paycheck before. Or perhaps your employees are pushing back on a specific policy at your business, and you’re not sure how to respond. In either case, Gusto is the best choice to help guide you down the right path.

That’s because Gusto is bursting with educational materials galore. Its Talk Shop blog is constantly updated with straightforward HR advice written from a practical, real-life perspective. The platform also dishes out handy tax and payroll calculators, easy-to-understand guidebooks, and a personalized onboarding process. Zenefits, for comparison, offers few educational resources beyond documentation on using its software.

We’re not done yet, though. Gusto also offers unlimited access to certified HR professionals on its top-tier Premium plan. This means you can ask as many questions as you need regarding personnel administration and payroll, ranging from basic topics to more complex ones.

Combine all these graceful perks with Gusto’s colorful, jargon-free user interface, and you’ve got a payroll service tailor-made for people with no administrative background.

We can’t emphasize it enough: Zenefits is expensive and not suitable for businesses only needing a payroll service without HR features. That’s because you must subscribe to the platform’s Essential HR package before you can add on payroll—no exceptions.

Gusto, on the other hand, has no hidden mandates, making it far more affordable if you primarily want payroll. Let’s compare monthly costs for each platform’s entry-level plans.

Clearly, if you have 20 or more employees, you’ll save around 50% or more with Gusto.

Gusto’s affordability extends to its health insurance benefits, too. Specifically, the platform supports health reimbursement arrangements (HRA) on all plans. This money-saving strategy offers employees the freedom to pursue their own health care options while cutting out extra costs for business owners.

Meanwhile, Zenefits doesn’t handle HRAs. It supported this benefit in the past but no longer offers it to new subscribers. This makes Gusto the only option between the two contenders if you insist on offering HRAs.

Bottom line, if you primarily need a comprehensive payroll service and you’re not concerned about HR support, then Gusto will save you boatloads of cash over Zenefits—hands down.

If you need a user-friendly standalone payroll service that makes cutting paychecks a breeze, opt for Gusto. You won’t have elaborate human resource functions or an adequate mobile app for employer needs, though. But not to worry: Gusto is far cheaper than Zenefits while offering many similar perks.

On the other hand, Zenefits offers more than enough HR solutions, along with a highly-rated mobile app that will please both employers and staff alike. It won’t carefully hold your hand through complex topics like Gusto, though. Also, you’ll pay far more than Gusto, so it’s not ideal for cash-strapped businesses.

Want to shop around before committing to a payroll service? Check out our list of the best payroll software for small businesses.

Zenefits’ competitors generally target small businesses, offer both payroll and HR functions, and emphasize user-friendly interfaces. Other than Gusto, some example alternatives include Uzio, Zoho People, and Patriot Software.

You should choose Zenefits if you oversee a small business and you need both human resource and payroll functions in one convenient software suite. You’ll need a working knowledge of personnel administration, though, since the platform only offers a limited number of educational resources.

We compared each platform’s suitability for small businesses, user-friendliness, value for the money, educational resources, and appeal for people without extensive administrative expertise, among other factors.

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.