Payroll software is a low-priced, automated, often turnkey management solution for everything from employee payments to human resources, benefits and taxes.

Scalable platforms like Gusto and QuickBooks are ideal for small and midsize businesses that don’t necessarily have the fiscal wherewithal to onboard an entire HR department but need flexibility when it comes to handling all things HR. Nothing against carbon-based AI (people), but these frameworks are great for avoiding a major pain point: human error.

SEE: Best payroll software for your small business in 2022 (TechRepublic)

Two of the top software-as-a-service payroll options are Gusto and Intuit’s QuickBooks Payroll — both flexible, scalable and based on a subscription model with several pricing tiers. Gusto is ideal for small companies looking for ease of use and versatility, and QuickBooks Online is good for midsize firms that likely have in-house bookkeeping and accounting.

Jump to:

• What is Gusto?
• What is QuickBooks Payroll?
• Gusto vs. QuickBooks: Feature comparison
• Choosing between Gusto and QuickBooks Payroll

What is Gusto?

Gusto‘s payroll management software is great for businesses with 10-20 employees. It automates a range of payroll functions, from easy to complex, both for employees and contractors. The framework also handles a plethora of HR tasks, including budget-based disability insurance coverage and employee dental insurance.

Gusto also has the ability to expedite tax filing and reporting requirements, time tracking, expense tracking, scheduling shifts and employee onboarding. Importantly, no domain experts are required. Because of ease of use and setup, it’s ideal for companies with no or new payroll managers.

What is QuickBooks?

QuickBooks Payroll by Intuit is a scalable product for inventory, payroll, benefits, taxes, time tracking and much more. It has several pricing tiers for its QuickBooks Online SaaS packagers, including its most popular Simple Start, Plus and Advanced versions, but it also sells locally-hosted desktop versions (Desktop Plus and Pro). The core product, QuickBooks Online Plus, includes:

• File access for two accountants
• Advanced invoicing, payroll, cash flow management, tax category features and more
• Access to clients accounts

It’s definitely a good option for companies with dedicated bookkeeping and accounting.

Gusto vs. QuickBooks Payroll: Feature comparison

Cloud-based vs. desktop software

There are locally-hosted desktop versions of several payroll software packages available, but the trend is definitely toward cloud-based SaaS, which follows and complements the shift to remote and hybrid work. The major benefit: You can access cloud-based platforms anytime and anywhere as long as you have internet access, and they are more cost-effective, scalable, easier to get up-and-running, and ideal for the requirements of smaller businesses.

Terrestrial products can only be accessed from the computer on which it was installed. Gusto does not have a locally-hosted product, and while QuickBooks Desktop SKUs are still available for a yearly subscription price, the company is sunsetting QuickBooks Desktop in 2023.

Pricing tiers and add-ons

The price of entry is relatively low for both Gusto and QuickBooks Payroll, but add-ons add up. Gusto starts at $39/month and an additional $6 for every employee enrolled in the software. With the addition of features like multi-state payroll, custom onboarding templates, time tracking, next-day direct deposit and PTO management bumps, the price jumps to $80/month and $12 per user.

QuickBooks’ entry tier is Simple Start, which is $30/month for just a single user. Add two more users plus bill management and time tracking and the price increases to $55/month. Five users plus project tracking and inventory tracking is $85/month.

Employee benefits

Benefits such as family and medical leave, Social Security and Medicare tax payments, unemployment insurance, workers’ comp and time off are critical to employee satisfaction, so it’s no surprise that they are integral to payroll and HR SaaS. Both Gusto and QuickBooks can help set up and implement these programs.

Gusto offers built-in benefits administration that sifts through thousands of group health insurance plans — 9,000 plans offered by 30 carriers — based on a business’s size, location, budget and other parameters. It also integrates payroll deductions for medical, dental and vision insurance. Compliance support is included at no extra charge.

By contrast, QuickBooks Payroll partners with online broker SimplyInsured, which offers medical, dental and vision insurance from major carriers based on HR parameters and lets HR managers create a comprehensive coverage plan, complete an application, add employees and upload documents. It also helps review and approve employee eligibility for a chosen plan. Additionally, the QuickBooks framework calculates health, medical and vision, and it adds them directly into the company’s payroll software. QuickBooks also partners with Guideline to provide 401(k) plans.

International or local only?

While a growing number of companies in the U.S. have employees and contractors overseas, some payroll and accounting products are domestic alone, with no ability to facilitate payments from other countries, which requires a separate payroll framework.

QuickBooks Payroll handles overseas transactions, and Gusto supports international contractor payments in its “contractor-only” plan via Remote Team but only after a domestic contractor has been added, according to the company.

SEE: The best QuickBooks Payroll alternatives for 2023 (TechRepublic)

Integration with other software

Not all automated payroll software products do it all. Some, for example, don’t do accounting and billing, making ease of integration with other products key. While Gusto doesn’t expedite accounting or billing, it does integrate with many applications, including QuickBooks, Xero, FreshBooks, Jirav and Sage to do training, record keeping and performance reviews.

QuickBooks is easily integrated with other apps and Intuit’s own products like Mailchimp, which allows users to sync marketing and financial data to a specific Mailchimp audience for targeted marketing.

SEE: What is Software as a Service? (TechRepublic)

Choosing between Gusto and QuickBooks

It’s not all about the cost, although budget is part of the process. Both Gusto and QuickBooks Payroll offer low-cost entry tiers and core products, but when you consider upgrades and additional features, the prices can rise sharply.

If you are a contractor with 10 employees, Gusto will probably be right for you, as it fits a smaller budget and fewer employees. Because it’s online, it lets users pay a monthly subscription fee rather than an upfront fee and offers a secure login through your web browser. It includes features like automated charitable donations and virtual wallets to help employees manage their finances, and there’s built-in free checking and high-yield savings accounts with paycheck advance for employees.

QuickBooks Payroll, which is more appropriate for the midsize companies — its clients range from Gruhn Guitars to the University of Massachusetts at Amherst — offers industry-specific editions, purchasing and vendor management, and sales and expense forecasting tools. Of note: Users of QuickBooks Desktop will lose security updates, live support, online backup, banking and other services as of June 2023, so this might be a good time to get with the cloud.