Gusto vs. Zenefits: Differences, pros and cons in 2024

Gusto and Zenefits are two powerful cloud-based payroll and human resources (HR) platforms used by businesses to manage payroll, benefits, time tracking and tax compliance. While there are many overlapping features, there are also key differences between them.

Gusto is primarily known for its payroll and basic HR services and is best for startups to midsize businesses that need access to additional features like benefits administration, employee onboarding, contractors payments and tax compliance management tools. Gusto is known for its intuitive user interface and strong payroll capabilities — specifically automatic payroll tax processing.

Zenefits originated as a benefits administration platform and now includes payroll and other HR services designed for small to midsize companies. It offers a more comprehensive set of features than Gusto, including more robust employee management, compliance and tax-filing tools in its lower-tiered plans. While services included within the Zenefits plans are not customizable, available add-on tools enable business owners to configure an HR solution that works best for their organizations.

While Gusto and Zenefits offer similar services, the best choice will depend on the specific needs and future growth of your business.

Gusto vs. Zenefits side-by-side comparison

Pricing

Winner: Gusto

Gusto is the cheaper option with its Simple plan starting at $40 per month, plus $6 per employee. Included in this plan are basic payroll functions, employee hiring and onboarding tools, health insurance administration and customer support access via call, email or chat.

Gusto offers two more premium plans. Its $80 per month, plus $12 per person Plus plan adds features such as time tracking and project tracking, custom document e-signing, an employee directory and performance surveys and reviews. Its Premium plan includes health insurance broker integration, federal and state compliance alerts, access to certified HR experts, an HR resource center and a dedicated customer support manager.

Gusto also offers its Contractor-only plan (currently $0 per month for six months, then $35 per month, plus $6 per person) and a Premium plan option. You can find out about its Premium plan pricing by asking for a customized quote from Gusto’s sales team.

Zenefits overview

Zenefits offers a flexible subscription plan that allows users to pay month-to-month or commit to an annual plan. The difference with Zenefits’ pricing structure is that users must choose from three base employee management plans and can only access Zenefits payroll as an add-on feature in the first two tiers. The cost for the payroll add-on is $6 per employee per month while the cost for the core plan with payroll tools is $33 per employee per month.

Zenefits offers three core plans:

• Essentials: The Zenefits Essentials plan starts at $10 per employee per month or $8 per employee per month if signing up for the annual billing option. This plan includes automated employee onboarding, employee management tools, time-off tracking, scheduling, integrations, a mobile app and an analytics dashboard.
• Growth: The Growth Plan is $20 per employee per month and adds predictive analytics to help identify workforce trends and compensation and performance management.
• Zen: The Zen plan ($33 per employee per month) adds access to employee engagement surveys and the Zenefits People Hub. The People Hub is designed for employee collaboration and team information sharing. This plan also offers a payroll add-on, including unlimited payroll runs, direct deposits, contractor payments and reporting for an additional $6 per month per employee.

Note that if you sign up for a Growth or Zen annual plan, you can get the payroll add-on for free for one year. In addition, there is a five-employee minimum requirement for all plans, meaning Zenefits users are required to pay for five employees even if they employ fewer people.

Payroll tools

Winner: Gusto

Gusto provides a comprehensive set of payroll tools that will meet the needs of most business owners. This includes unlimited payroll runs per month, automated tax filings and payments, generated W-2s and 1099s, wage garnishments and unemployment insurance.

Users can manage expenses, reimbursements, multi-state payroll and tax filing services in its Plus and Premium plans, as well as access time-tracking tools and time-off requests and approvals. Gusto’s Contractor-only plan provides the option to pay national and international contract workers.

One standout payroll tool is Gusto’s AutoPilot feature. AutoPilot is designed to save time and reduce manual administrative tasks. It does this by automatically running payroll on a regular pay schedule and sending reminders before each payroll run to allow for any needed changes.

Employers can easily make changes or adjustments for non-recurring payments, such as bonuses and commissions before the automated payroll processes. If any discrepancies are detected, Gusto will pause the AutoPilot feature and notify the employer to review and resolve the issue first.

Additionally, Gusto offers its own Gusto Wallet app and spending account. This account comes complete with automated savings features, financial goal-setting and a debit card. Employees can receive paychecks directly into this account and use the app to access their direct deposit up to two days early, earn interest on their balance and access no-charge withdrawals at 37,000 ATMs nationwide. Gusto Wallet can also be used for employees to track their work hours.

Zenefits only offers payroll tools in its highest paid plan and only as an add-on option. At $27 per month per employee, this plan’s pricing quickly surpasses Gusto’s first-tier payroll plan when several employees are added to it. Then, users must pay $6 more per employee per month to add payroll tools.

However, the Zenefits payroll add-on offers a robust set of payroll tools. It includes automated and unlimited payroll runs, W-2 and 1099 filing, direct deposit, integrated systems between payroll and other functions (such as Zenefits’ time tracking tool), wage garnishments, reporting, an employee portal, accounting software integrations and payroll compliance updates.

Gusto and Zenefits both offer well-rounded sets of payroll tools. However, since Zenefits payroll is not available as a standalone option, Gusto is the best choice for a business seeking a payroll-first software system at an affordable price.

Automated filing and tax compliance

Winner: Zenefits

Both Gusto and Zenefits offer automated tax filing and will file all required forms with the appropriate local, state and federal agencies. However, there are some differences. Notably, while Zenefits offers tax filings in all 50 U.S. states, this service is only available for a single state in Gusto’s lowest-tier plan.

In addition, Zenefits stands out with its dedicated compliance assistant resource tool, which is included in all plans. It is designed to assist customers in accessing the latest updates and information on federal compliance deadlines for HR, benefits and payroll. Users receive detailed explanations and insights on critical compliance deadlines, can set and sync custom reminders to a personal calendar and can use the compliance assistant dashboard to constantly monitor their compliance status.

While Gusto does offer an accuracy guarantee for its tax filing, these compliance alerts are only available within its Premium plan. Gusto does, however, provide support through its online help center. Users can access tax compliance information (including a federal compliance resource center), information on state laws, tax forms by state and other relevant compliance resources.

Time tracking

Winner: Tie

All Zenefits’ plans include a built-in time and attendance module that enable employees to clock in and out, record breaks and request paid time off (PTO). Employees can use the Zenefits mobile app or a desktop option for time tracking and employers can view the locations of all employee check-ins. Zenefits’ time tracking feature also automatically calculates overtime and employee breaks to ensure compliance and integrates the data with its payroll system for seamless and accurate payments.

One standout feature that Zenefits offers is shift scheduling for businesses that rely heavily on shift workers (such restaurant owners and healthcare practices). Users can create and edit shifts, notify employees when a new schedule is ready, block out dates and build schedules around specific roles or time slots.

Gusto’s time tracking feature enables employees to track hours using any web browser, the Gusto Wallet app or Gusto’s Time Kiosk (an add-on). U.S.-based contractors can also use these systems to submit billable hours. In addition, Gusto provides access to geolocation tracking for remote and geofenced employees, enables overtime and break monitoring to remain in compliance with labor laws and provides time-off requests management.

Gusto’s standout time tracking feature lies in its ability to use time tracking to manage project resources. Workers can tag their time based on the project where time is spent. In doing so, employers gain a clear understanding of which tasks and projects require the most time and labor resources. With this insight, they can either allot the appropriate labor to that task or investigate to understand why tasks are taking longer than expected.

While both platforms provide comprehensive time tracking tools, businesses that need advanced shift scheduling may find that Zenefits offers the best fit. Gusto’s time-tracking tools are a better fit for companies that manage large projects, such as construction companies that need to manage time closely to keep costs within projected ranges.

Benefits administration

Winner: Zenefits

Zenefits takes the win in terms of benefits administration capabilities with its array of benefits offerings and its claim to offer “coverage that will make everyone happy.” Zenefits offers health, vision and dental insurance, HSAs and FSAs, 401(k), life and disability insurance, supplemental benefits, commuter benefits and more. Its plans are available in all 50 U.S. states.

Zenefits also offers a health insurance marketplace where users can search for affordable benefits plans and shop for a group insurance quote supported by a Zenefits certified broker. Once a plan has been selected, employees can enroll on the platform and view their plans and claims on their mobile devices. Additionally, Zenefits offers electronic data interchange (EDI) to automate employees’ enrollment changes to health insurance carriers, offers expert support for building custom plans and provides carrier and ACA compliance management solutions.

Gusto offers health insurance administration in all of its plans and provides access to health insurance broker integration, workers compensation, HSAs and FSAs, life and disability insurance, 401(k), 529 college saving and commuter benefits in its upgraded plans. If eligible, users can also integrate current health insurance brokers and plans into Gusto’s solution. In contrast to Zenefits 50-state offering, however, Gusto’s brokered medical insurance is currently only available in 37 states.

Customer support

Winner: Gusto

Gusto’s customer service team is available Monday through Friday, 7 a.m. to 6 p.m. Mountain Standard Time via phone, email or chat. Plus members can also add on priority phone and email support, while Premium members enjoy built-in priority support as well as access to a dedicated customer success manager. Gusto encourages users to email its support team even outside of set hours with the assurance that someone will respond as soon as possible. It also offers a 24/7 online help center.

Zenefits invites users to contact its support team ​anytime from 5 a.m. to 4 p.m. Pacific Standard Time, Monday through Friday. However, it encourages users to first access its online help center articles and training videos before opening up a chat.

Zenefits offers slightly more barriers to direct contact than Gusto. Its Zen Assist support app will attempt to provide the best solution to the proposed question. However, if it’s unable to assist, users are only then encouraged to select  ”contact support” at the bottom of Zen Assist. In addition, if contacting by phone, users must have their support ID and support reference number available or their support access will be delayed.

Gusto vs. Zenefits alternatives

Rippling

Both Gusto and Zenefits are designed to support U.S.-based small to mid-sized businesses and do not offer the global workforce management solution that Rippling provides.

Rippling starts at $8 per month per employee and acts as a workforce management solution with payroll processing both domestically and internationally. It includes access to advanced HR, IT and financial management tool suite integrations. Users can manage a global workforce through Rippling’s Unity platform. This platform is designed to bring global employee data into one unified record to manage, update and access reports.

Rippling also pays global employees in their own currencies, automates foreign tax compliance management and provides expert HR advisors who are well-versed in local jurisdictions to assist with sensitive employment issues or country-specific laws.

For businesses poised to expand to a global workforce, Rippling would be a better fit than Gusto or Zenefits. Learn more about Rippling.

Patriot

Gusto and Zenefits both offer comprehensive services, making them suitable for businesses that need a wide array of HR, time tracking and automation features. However, neither platform is the cheapest on the market.

For more budget-conscious businesses, starting at $17 per month plus $4 per employee per month, Patriot’s platform includes no setup fees, unlimited payroll runs and users, four-day and two-day direct deposit options, PTO management tools, the ability to pay contractors, an employee portal and workers’ compensation integration. However, HR tools and time tracking features are only available as an add-on as are the ability to manage payroll taxes in multiple states or e-file 1099 forms. And, Patriot does not offer benefits administration capabilities.

With cost in mind, when compared to Gusto or Zenefits, Patriot may be more appealing to smaller businesses looking for affordability and simplicity — particularly businesses with uncomplicated payroll needs and that already have solutions to manage HR and benefits administration needs.

OnPay

Compared to Gusto and Zenefits, OnPay offers straightforward pricing with enhanced customer support. While Gusto’s and Zenefits’ plans are multi-tiered, priced at $40 a month plus $6 per person, OnPay’s offers only one plan that includes full service payroll, employee self-service tools, popular software integrations, essential HR tools, PTO management tools and benefits administration.

OnPay stands out for its customer support. While Gusto and Zenefits offer customer support during regular business hours, OnPay’s phone and chat support extend from 9 a.m. to 8 p.m. Eastern Standard Time on weekdays. In addition, its email support hours extend from 7 a.m. to 8 p.m. Eastern Standard Time on weekdays. The provider also offers emergency email support on the weekends.

OnPay also offers support every step of the way as you use its products. First, it helps users to switch to its platform by providing an error-free guarantee where trained payroll experts migrate the new business account and provide onboarding support. In addition, OnPay helps users integrate and customize top accounting and time tracking software.

Gusto vs. Zenefits customer feedback

Gusto enjoys a customer rating of 4.4 out of five stars based on 1,385 G2 reviews, and Zenefits weighs in at 4.0 out of five stars based on 453 reviews. Capterra shows Gusto’s current rating as 4.6 out of five stars based on 3,786 reviews while Zenefits comes in with 4.2 out of five stars with 811 reviews.

Gusto customer reviews celebrate its ease of use, sleek interface and value for the money. However, complaints from Gusto customers tend towards Gusto’s lack of satisfactory customer support and significant response-time delays.

“Gusto is a really good choice for small business owners who want to have the support of a full payroll service program, without the crazy costs that can go along with that,” states Carly F. in an online user review.

Zenefits customers also rave about the software’s ease of use and its nimble and dynamic features, while others complain about having to deal with risky errors and few customization options. Overall, Zenefits’ customer service reviews were mostly positive. However, complaints centered on inconsistency with response time and support infrastructure.

“Our experience with Zenefits has been quite positive. We use it to manage new hires, time off requests, benefits administration, and payroll all in one place. In most applications, it has been a pleasure to use because of how intuitive and simple it is,” Alyssa J. shares in her online review.

However, some Gusto and Zenefits customers have had less-than-stellar experiences.

One reddit user shares their experience about Gusto:

“I’ve found Gusto to be a great solution for payroll for a small business without dedicated HR personnel. Anything beyond that (i.e. benefits) has proved to be a disaster, as customer service is anemic.”

And another online reviewer weighs in on Zenefits:

“Some hiring documents generated contain risky errors. The information presented is not customizable enough for most businesses.”

Final verdict

When we asked for advice on choosing the best payroll software solution to fit business needs, Gert Kulla, CEO of Accountantseo.io said:

“I’d suggest looking beyond the software itself. Consider the customer support service, the scalability of the software as the business grows, and always request for a trial before settling for any software. One should not just ask ‘what’ the software does, but also ‘how’ it does it, and crucially ‘when’ you may need additional support or functionality.”

Who is Gusto Best for?

Gusto’s quick setup and ease of use make it attractive to businesses seeking to simplify and streamline its payroll processes. Its intuitive design makes it a go-to for businesses that may not have a dedicated HR department but still need efficient HR and payroll management capabilities.

Rated as best for automation by our testing team, Gusto will automatically calculate, file and pay taxes to the right government agencies and report new hires. Additionally, its AutoPilot feature is a great fit for business owners with consistent payroll needs who wish to save time and money by allowing Gusto’s software to manage repetitive administrative tasks for them.

Who is Zenefits Best for?

Zenefits is tailored to small business owners and companies seeking an all-in-one solution for payroll, benefits, HR, compliance and tax administration needs. Businesses that employ shift workers can especially benefit from its versatile and integrated time tracking features. Additionally, Zenefits offers comprehensive benefits administration in all 50 states. Couple this benefits solution with Zenefits’ flexible tracking of shift workers and its robust employee self-service portal, and this payroll solution may appeal to franchise companies such as restaurants or grocery stores nationwide.