Gusto vs Justworks: Complete Comparison for Small Businesses

Gusto and Justworks both handle payroll, but they're fundamentally different products. Gusto is payroll software with HR features bolted on. Justworks is a PEO (Professional Employer Organization) that becomes your co-employer. That distinction matters more than any feature comparison.

Here's the quick answer: If you want affordable, self-service payroll with optional HR tools, go with Gusto. If you want someone else to handle compliance, benefits administration, and employment liability—and you're willing to pay significantly more for it—Justworks makes sense.

Let's break down the specifics.

Pricing Comparison: Gusto vs Justworks

This is where the difference is stark. Gusto charges a base fee plus per-employee costs. Justworks charges a flat per-employee rate that's considerably higher.

Gusto Pricing

• Simple: $49/month + $6/employee/month — Single-state payroll, basic onboarding, employee self-service
• Plus: $80/month + $12/employee/month — Multi-state payroll, time tracking, next-day direct deposit, PTO management
• Premium: $180/month + $22/employee/month — Dedicated support, HR resource center, compliance alerts, certified HR experts
• Contractor Only: $35/month + $6/contractor/month — Just for 1099 contractors

For detailed pricing breakdowns, check our Gusto pricing guide and Gusto cost analysis.

Justworks Pricing

• Payroll: $50/month base + $8/employee/month — Basic payroll, no PEO services
• PEO Basic: $59/employee/month (drops to $49 after 50 employees) — Full PEO with payroll, compliance, HR tools, 401(k), 24/7 support
• PEO Plus: $99-$109/employee/month ($89 after 50 employees) — Everything in Basic plus health/dental/vision insurance, HSA/FSA, mental health benefits
• EOR: $599/employee/month — For hiring international employees

Real Cost Example: 10 Employees

The gap is massive. Gusto's Plus plan costs $200/month for 10 employees. Justworks PEO Basic costs $590/month. That's an extra $4,680/year. Is it worth it? Depends entirely on what you need.

The PEO vs Payroll Software Difference

This is the crux of the decision. Gusto is software you use to run payroll. Justworks is a service that runs your HR for you.

What You Get with Justworks PEO

When you use Justworks' PEO plans, they become your co-employer. That means:

• Benefits purchasing power: Access to large-group health insurance rates typically reserved for big companies
• Compliance liability: Justworks shares employment liability with you
• Workers' comp included: Coverage comes bundled, not as an add-on
• State registrations: They handle multi-state compliance automatically
• Employment Practices Liability Insurance (EPLI): Protection against employment-related lawsuits

For startups and small businesses that don't have an HR person, this outsourcing can be valuable. You're not just buying software—you're buying a service that handles the messy employment stuff.

What Gusto Does Well

Gusto isn't trying to be your co-employer. It's trying to be dead-simple payroll software that you run yourself. And it succeeds at that:

• Fast payroll: Most users process payroll in about 8 minutes
• Automatic tax filing: Federal, state, and local payroll taxes handled automatically
• Unlimited payroll runs: No extra charges for off-cycle payrolls
• Clean interface: Actually enjoyable to use, which is rare for payroll software
• Benefits broker option: Health insurance administration at no extra cost if you use Gusto as your broker

Read our full Gusto review for more details.

Feature Comparison

Payroll

Both handle core payroll well. Gusto offers unlimited payroll runs on all plans. Justworks automates deductions and direct deposits for salaried and hourly employees.

For pure payroll functionality, they're comparable. The difference is what comes bundled around it.

Benefits Administration

Gusto: Health insurance administration is free if you use Gusto as your broker (you just pay premiums). If you keep your own broker, it's $6/employee/month. 401(k), HSA, FSA, and commuter benefits available as add-ons.

Justworks: On PEO plans, you get access to large-group health insurance rates. The PEO Plus plan includes medical, dental, vision, HSA/FSA, mental health benefits, and fertility benefits. The purchasing power advantage is real—small companies can get better rates through Justworks' pool.

Winner for benefits: Justworks, if you're on a PEO plan. Their group purchasing power can save money on health insurance that partially offsets the higher platform cost.

Compliance

Gusto: Automated tax filings, new hire reporting, compliance alerts (on Premium). But you're responsible for understanding employment law. Gusto gives you tools; you use them.

Justworks: As a PEO, they take on shared liability. They handle state registrations, unemployment insurance, workers' comp, and more. Their compliance support for multi-state operations is strong.

Winner for compliance: Justworks. The co-employment model means they have skin in the game on compliance.

Time Tracking

Gusto: Built-in time tracking on Plus and Premium plans. Includes geofencing, project tracking, and integrates with tools like Homebase.

Justworks: Basic time tracking included, with an optional intensive time-tracking add-on.

Comparable feature. Neither is exceptional, but both get the job done.

HR Tools

Gusto: Onboarding, offer letters, document storage, employee directory, org charts. Premium plan adds access to certified HR experts and an HR resource center.

Justworks: Similar HR tools plus 24/7 support on all PEO plans. The PEO model means HR support is more hands-on.

International

Gusto: Pays international contractors in 120+ countries. EOR (Employer of Record) services through a partnership at $599/employee/month.

Justworks: International contractor payments in 60+ countries. EOR services at $599/employee/month for hiring international employees.

Roughly comparable for international, though Gusto has broader contractor coverage.

When to Choose Gusto

Choose Gusto if:

• Budget is a concern: Gusto costs 50-70% less than Justworks PEO
• You're comfortable with self-service: You or your bookkeeper can handle payroll and basic HR
• You have simple needs: Single-state payroll, straightforward benefits, no complex compliance situations
• You want flexibility: Gusto's modular approach lets you add features as needed
• You're just paying contractors: The $35/month Contractor Only plan is cheap and effective

Gusto works best for small businesses under 50 employees who want modern, easy-to-use payroll software without the cost and complexity of a PEO relationship.

When to Choose Justworks

Choose Justworks if:

• You want better health insurance rates: Large-group purchasing power can save significant money
• Compliance keeps you up at night: The co-employment model shares liability
• You have multi-state employees: Justworks handles state registrations and varying compliance requirements automatically
• You don't have HR staff: The PEO model outsources HR administration
• You're a funded startup: The higher cost is justified when you need to offer competitive benefits to attract talent

Justworks makes sense for companies with 5+ employees who value the outsourced HR model and can afford the premium pricing. Tech startups and distributed teams particularly benefit from their compliance support.

What Each Platform Gets Wrong

Gusto Weaknesses

• Limited customization: Reporting options are basic; you might need integrations for advanced analytics
• Support can be slow: Standard support is weekdays only; priority support costs extra
• Add-ons add up: Features like next-day direct deposit, advanced time tracking, and state tax registrations cost extra
• Not a PEO: You're still responsible for employment compliance

Justworks Weaknesses

• Expensive: $590/month for 10 employees on Basic vs. $200/month for Gusto Plus
• Limited HRIS functionality: The platform looks nice but lacks deep onboarding and reporting features
• Support structure: Your account reps are sales/service people, not payroll or compliance experts. Getting specialized help can be frustrating
• Overkill for simple needs: If you just need payroll, you're paying for services you don't use

Alternatives to Consider

If neither quite fits:

• ADP Run: Traditional payroll with enterprise-level scalability. Quote-based pricing. See our Gusto vs ADP comparison.
• Paychex: Another established player with PEO options. Read our Gusto vs Paychex breakdown.
• Rippling: Unifies HR, payroll, IT, and finance. More complex but powerful. Check out Gusto vs Rippling.
• QuickBooks Payroll: Great if you're already in the QuickBooks ecosystem. See Gusto vs QuickBooks Payroll.

For more options, browse our best payroll software for small business guide.

The Bottom Line

Gusto and Justworks serve different needs despite both handling payroll.

Gusto is affordable, user-friendly payroll software. You run it yourself, you maintain compliance yourself, and you save a lot of money doing it. For most small businesses with straightforward needs, Gusto is the right choice.

Justworks is a PEO that takes HR off your plate. You pay significantly more, but you get co-employment benefits, large-group insurance rates, and shared compliance liability. It's worth the premium for funded startups, multi-state companies, and businesses that genuinely need outsourced HR.

If cost is your primary driver, start with Gusto. If you need the PEO services and can justify the expense, Justworks delivers real value.