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June 6, 2024
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Gusto vs Square Payroll


When it comes to managing HR needs, choosing the right tool can make a significant difference in day-to-day business operations. Gusto and Square Payroll are two popular tools in the HRIS (Human Resources Information System) space, each catering to slightly different market needs. Gusto offers a comprehensive suite of modern HR features including payroll, benefits, hiring, and management resources—all in one place. On the other hand, Square Payroll is an online payroll service trusted by small businesses for its simplicity and efficiency.

Comparing these HRIS tools can help businesses identify which one aligns better with their specific needs, ensuring smoother HR processes and better employee management.

Gusto Overview

Gusto presents itself as an all-in-one HR platform designed to cater to the comprehensive HR needs of businesses. From processing payroll to handling employee benefits and onboarding, Gusto offers a robust suite designed to make HR management seamless.

Key Features

  • Payroll Processing: Automated federal, state, and local tax filings, direct deposits, and year-end W-2 and 1099 forms.
  • Employee Benefits: Health insurance, 401(k) retirement plans, commuter benefits, and more.
  • Hiring and Onboarding: Offer letter templates, e-signatures, detailed employee profiles, and onboarding checklists.
  • Time and Attendance: Track time-off requests, integrate with third-party time-tracking systems, and sync hours directly with payroll.
  • HR Tools: Compliance support, employee directory, document management, and performance review templates.


Square Payroll Overview

Square Payroll is a streamlined payroll solution designed primarily for small businesses. It aims to simplify the payroll process while ensuring compliance and accuracy.

Key Features

  • Payroll Processing: Easily manage wage payments either via direct deposit or check, automatic payroll tax calculations, and tax filings.
  • Employee Benefits: Integration with health benefits and retirement savings plans, though not as extensive as Gusto.
  • Time Tracking: Seamless integration with Square Point of Sale (POS) for accurate timekeeping, import hours worked, and track overtime.
  • Employee Management: Basic employee profiles, direct deposit setup, and worker’s compensation tracking.
  • Contractor Payments: Flexibility to pay both employees and contractors, with automatic generation of Form 1099s.


Both Gusto and Square Payroll serve as effective HRIS tools tailored to enhance business efficiency. Some of their shared features include:

  • Payroll Processing: Both services offer automated payroll processing, including tax calculations and filings.
  • Employee Benefits: Each offers integration with health and retirement benefits, though Gusto’s offerings are more extensive.
  • Direct Deposit: Both platforms support direct deposit functionality for timely wage payments.
  • Time Tracking Integrations: Integration with time-tracking systems to streamline payroll processing.
  • Tax Compliance: Automatic generation and filing of necessary tax forms, including W-2s and 1099s.


Despite their similarities, Gusto and Square Payroll have several distinguishing factors that cater to different business needs.


  • Comprehensive HR Suite: Gusto includes a wider range of HR services such as performance reviews, compliance support, and detailed onboarding processes.
  • Employee Benefits: A more comprehensive selection of benefit options, including health insurance, commuter benefits, and 401(k) plans.
  • HR Management Tools: Extensive tools for tracking employee performance, maintaining records, and managing internal HR processes.
  • Scalability: Ideal for growing businesses with potential to expand its range of services to accommodate increased HR needs.

Square Payroll

  • Simplicity and Ease of Use: Primarily focused on simplicity and ease of use, making it a great fit for small businesses.
  • Integration with Square Ecosystem: Seamless integration with Square POS and other related tools.
  • Contract Workers Focus: Strong support for contractors, making it easier to handle mixed workforces.
  • Cost-Effective: Generally more affordable for very small businesses or those with fewer HR management needs.

Pros and Cons



  • Comprehensive HR features in one platform
  • Extensive integrations with various apps
  • Robust employee benefits management
  • Detailed onboarding tools and templates
  • Scalable solutions for growing businesses


  • Higher cost compared to simpler payroll solutions
  • Potentially overwhelming for very small businesses
  • Additional fees for certain features

Square Payroll


  • Simple and user-friendly interface
  • Cost-effective for small businesses
  • Excellent integration with Square POS
  • Strong support for contractor payments
  • Quick setup and easy to manage


  • Limited HR features beyond payroll
  • Fewer employee benefits options
  • Less suitable for larger or rapidly growing businesses
  • Basic employee management tools

Use Cases


Gusto is ideal for businesses that are looking for a comprehensive HRIS solution that goes beyond payroll. Whether you’re managing a small-to-medium-sized business or scaling up, Gusto's extensive feature set, including robust onboarding tools and employee benefits management, can provide the support you need for all aspects of HR.

Square Payroll

Square Payroll is best suited for small businesses that need a straightforward, efficient payroll solution. Its simplicity, affordability, and seamless integration with the Square ecosystem make it an ideal choice for businesses that prioritize ease of use and require basic payroll and contractor management without additional HR functionalities.


Comparing Gusto and Square Payroll highlights the unique strengths and target markets for each tool. Gusto stands out with its comprehensive suite aimed at businesses needing extensive HR functionalities and scalability. In contrast, Square Payroll's simplicity, affordability, and excellent integration with the Square ecosystem position it as an ideal solution for small businesses with straightforward payroll needs.

When choosing between Gusto and Square Payroll, consider your business’s size, specific HR needs, and long-term growth plans. If you require a broad range of HR services and anticipate scaling up, Gusto may be the better fit. However, if you’re a small business looking for an affordable, simple payroll solution, Square Payroll is likely the more suitable choice. 

By assessing your unique requirements and weighing the pros and cons of each option, you can make an informed decision that aligns with your business goals and ensures smooth HR operations.

Key takeaways 🔑🥡🍕

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