Gusto vs Paychex: Which Payroll Service Is Right for Your Business?
Let's cut through the noise. You're comparing Gusto and Paychex because you need payroll software and don't want to overpay or pick the wrong one. Here's the real breakdown.
The quick answer: Gusto is better for small businesses under 50 employees who want transparent pricing and a clean interface. Paychex is better for companies that need more hand-holding, dedicated support reps, and the ability to scale to enterprise level.
Pricing Comparison: Gusto vs Paychex
This is where things get interesting. Gusto shows their prices. Paychex mostly doesn't.
Gusto Pricing
Gusto recently raised their prices (March 2025), so here's what you're actually looking at:
- Simple Plan: $49/month + $6/employee per month
- Plus Plan: $80/month + $12/employee per month
- Premium Plan: Custom pricing
- Contractor Only: $35/month + $6/contractor per month
For a 10-person team on the Simple plan, you're looking at $109/month ($49 base + $60 for employees). The Plus plan for the same team runs $200/month.
The good news: Gusto is month-to-month with no contracts. You can cancel anytime, and they include unlimited payroll runs at no extra charge. They don't nickel and dime you for off-cycle payrolls.
For more detail on Gusto's costs, check out our full Gusto pricing breakdown or read our Gusto reviews.
Paychex Pricing
Paychex plays the "contact us for a quote" game, which is annoying but typical for legacy payroll providers. Here's what we know:
- Paychex Flex Essentials: $39/month + $5/employee per month
- Paychex Flex Select: Custom pricing (adds learning management system)
- Paychex Flex Pro: ~$95/month + $3/employee per month
- Paychex Flex Enterprise: Custom pricing
On paper, Paychex Essentials looks cheaper than Gusto Simple. For a 10-person team: $89/month vs Gusto's $109/month. But here's the catch—Paychex's entry-level plan is more limited than Gusto's, and add-ons pile up fast.
Paychex also offers PEO services for companies that want to outsource HR entirely, which reportedly runs around $140/employee per month.
Feature Comparison
Both platforms handle the basics—payroll processing, tax filing, direct deposit, W-2s and 1099s. The differences show up in the details.
Where Gusto Wins
- Transparent pricing: What you see is what you pay. No sales call required.
- Modern interface: Gusto looks like it was built this decade. Clean, intuitive, easy to navigate.
- Employee self-service: Workers can access pay stubs, update info, and manage benefits without bugging you.
- Integrations: Connects with QuickBooks, Xero, Freshbooks, and popular time-tracking tools like TSheets and Homebase.
- Benefits administration: Built-in health insurance shopping, 401(k) setup, and workers' comp integration.
- Contractor payments: Pay contractors in 120+ countries (though international features are limited compared to dedicated EOR providers).
Where Paychex Wins
- 24/7 support: Paychex offers round-the-clock phone, chat, and email support. That's a big deal when you're running payroll at midnight.
- Dedicated account reps: Especially on higher tiers, you get a human who knows your account.
- Enterprise scalability: Paychex can handle 1,000+ employees. Gusto tops out around 200-300 before it starts feeling cramped.
- Real-time payments: Paychex is the only major provider offering instant pay to employee accounts.
- Full PEO services: If you want to co-employ your workers and outsource HR, Paychex has you covered.
- Learning management: Built-in training and development tools for employee education.
Who Should Pick Gusto
Gusto is the right choice if:
- You have fewer than 50 employees
- You want predictable, transparent pricing
- You value a modern, user-friendly interface
- You're comfortable handling most payroll tasks yourself
- You need good integrations with accounting software
- You're running a startup or small business in a single state (or a few states)
Gusto customers report saving an average of 152 hours per year on tax and compliance work after switching. The platform has a 4.5/5 star average rating and 9 out of 10 customers say they'd recommend it.
The main limitations: Gusto doesn't have international payroll capabilities (beyond contractor payments), and complex HR needs can outgrow what the platform offers.
Who Should Pick Paychex
Paychex makes sense if:
- You have 50+ employees and growing
- You need 24/7 live support (not just chat bots)
- You want retirement plans, benefits, and payroll bundled together
- You prefer having a dedicated rep handle things
- You're in a compliance-heavy industry
- You might eventually need PEO or HR outsourcing services
Paychex serves over 740,000 companies and has been in business since 1971. They're the #1 provider of 401(k) plans in the country. If you're growing fast and need a payroll provider that can scale to enterprise, Paychex has the infrastructure.
The downsides: User reviews are mixed on customer service quality (high rep turnover is a common complaint), pricing can spiral with add-ons, and the interface feels dated compared to Gusto.
The Hidden Costs to Watch
Neither platform is truly "all-inclusive." Here's what can jack up your bill:
Gusto Add-Ons
- Priority support and HR resources: $8/employee per month
- Next-day direct deposit: $15/month + $3/employee
- State tax registration (new states): Additional fees
- Health insurance broker integration: Free on Premium, $6/employee on other plans
These add-ons can turn a $49 plan into $100+ monthly once you enable multiple features.
Paychex Add-Ons
- Learning management system: Extra cost on lower tiers
- Accounting software integrations: May cost extra
- Document storage: Not always included
- Garnishment services: Add-on on some plans
Paychex's quote-based pricing makes it harder to predict total costs. Always get a detailed quote that lists every fee.
Switching Payroll Providers
If you're currently using one and thinking of switching to the other, here's what to know:
- Best time to switch: Start of a new quarter or calendar year for clean reporting
- Migration: Both platforms offer migration assistance. Gusto Premium includes full-service payroll migration; Paychex typically helps with setup as part of onboarding.
- Contract considerations: Gusto is month-to-month. Check your Paychex contract for cancellation terms and fees.
The Bottom Line
Here's the simple decision framework:
Pick Gusto if you're a small business that wants modern software, transparent pricing, and don't need enterprise features. It's the better choice for most companies under 50 employees.
Pick Paychex if you're growing fast, need 24/7 support, want everything (payroll, retirement, benefits) under one roof, or plan to scale past 100+ employees.
Both are legitimate payroll providers that will handle your taxes correctly. The question is which experience and price point fits your business.
For more payroll comparisons, check out our guides on Gusto vs ADP, Gusto vs QuickBooks Payroll, and our roundup of the best payroll software for small business.