In today’s competitive business environment, managing payroll efficiently is not just an operational necessity—it’s a key part of creating a positive workplace experience for employees and ensuring compliance with government regulations. For small businesses, choosing the right payroll software can make a substantial difference in both productivity and employee satisfaction. Gusto, one of the most popular cloud-based payroll platforms, offers a comprehensive suite of tools specifically designed to meet the unique needs of small businesses.
With user-friendly interfaces, automation, compliance assistance, and a suite of HR tools, Gusto has become a go-to solution for thousands of small businesses across the United States. This article explores the best Gusto payroll features tailored for small business needs, illustrating how each feature simplifies operations, boosts efficiency, and ensures peace of mind for business owners.
Table of Contents
Understanding Gusto: A Brief Overview
Before diving into the features, it’s important to understand what Gusto is and why it stands out. Founded in 2012, Gusto (formerly known as ZenPayroll) is a cloud-based payroll and HR platform that serves more than 300,000 businesses. Gusto is specifically designed to be intuitive, affordable, and scalable, making it an ideal choice for small to medium-sized businesses. It offers a full-service payroll solution with tax filings, employee onboarding, time tracking, benefits administration, and more.
Why Small Businesses Need a Reliable Payroll System
Managing payroll is more than just issuing paychecks. It involves accurately calculating employee hours, withholding the correct taxes, staying compliant with ever-changing labor laws, and maintaining proper records. Small business owners often wear multiple hats, and manual payroll processing can be time-consuming and error-prone. This is where Gusto steps in, offering automation and simplified workflows that reduce administrative burden and allow entrepreneurs to focus on growth.
Top Gusto Payroll Features for Small Businesses
Below are the most powerful and business-friendly features of Gusto that make it a favorite among small businesses:
1. Full-Service Payroll Processing
One of Gusto’s primary offerings is its full-service payroll system. It automatically calculates, files, and pays all federal, state, and local payroll taxes on behalf of the business. This includes:
- Automatic tax filing and payment for W-2 and 1099 workers
- Automatic generation and submission of new hire reports to state agencies
- Year-end tax form delivery to employees and contractors
This feature ensures businesses stay compliant and avoid IRS penalties while saving time and reducing the risk of human error.
2. Direct Deposit and Payment Options
With Gusto, small businesses can offer multiple payment options to their employees, including:
- Two-day or next-day direct deposit
- Physical checks
- Gusto Wallet – a digital wallet that helps employees manage finances
The flexibility in payment methods ensures employees are paid on time, securely, and conveniently.
3. Automated Payroll Runs
Gusto enables automatic payroll runs, allowing you to “set it and forget it.” Once employees’ hours and salaries are configured, payroll can be processed automatically without requiring manual intervention each pay period. This feature is especially useful for salaried employees or businesses with predictable schedules, offering significant time savings.
4. Employee and Contractor Support
Unlike many payroll services that focus only on W-2 employees, Gusto supports both employees (W-2) and independent contractors (1099). Businesses can:
- Pay contractors directly
- Automatically generate and send 1099 forms
- Maintain records for compliance
This is especially useful for small businesses that rely on a flexible workforce composed of freelancers and part-time workers.
5. Time Tracking Integration
Gusto integrates seamlessly with time tracking tools, or you can use Gusto’s built-in time tracking feature. This allows employees to:
- Clock in and out digitally
- Track project hours
- Sync hours automatically to payroll
This reduces discrepancies, saves administrative time, and ensures that employees are compensated accurately based on their actual working hours.
6. Benefits Management
For small businesses aiming to retain talent, offering benefits is crucial. Gusto simplifies this process with its benefits administration tools, allowing you to offer:
- Health insurance (medical, dental, vision)
- 401(k) retirement plans
- Commuter benefits and HSAs/FSAs
- Workers’ compensation insurance
With Gusto, you can manage all of these benefits within the same platform, streamlining onboarding and ongoing employee management.
7. Employee Self-Service Portal
The Gusto employee portal allows workers to:
- Access pay stubs and W-2s
- Update personal information
- Enroll in benefits
- Download tax documents
This self-service portal empowers employees and reduces the need for HR or management to handle minor administrative tasks.
8. Compliance Support
Payroll laws can vary by state and are subject to frequent updates. Gusto offers built-in compliance assistance to help small businesses stay ahead, including:
- Automated state and federal tax filing
- Labor law alerts and updates
- New hire reporting
- Wage and hour law compliance
This gives small business owners peace of mind knowing they are compliant with current regulations.
9. Onboarding Tools
Gusto simplifies employee onboarding by automating many HR functions. New employees can:
- Digitally sign documents
- Fill out I-9 and W-4 forms online
- Access onboarding checklists
This not only enhances the onboarding experience but also keeps everything stored securely and centrally.
10. Integration with Accounting Software
Gusto integrates with popular accounting platforms like:
- QuickBooks Online
- Xero
- FreshBooks
This ensures payroll expenses are automatically synced with your general ledger, simplifying bookkeeping and tax reporting.
11. Customizable Reports
Reporting is crucial for financial planning. Gusto offers customizable payroll and HR reports, including:
- Payroll summaries
- Employee earnings
- Tax filings and liabilities
Business owners and accountants can export reports in CSV or PDF formats for deeper analysis or recordkeeping.
12. Mobile Accessibility
Gusto’s mobile-optimized interface ensures that business owners and employees can access payroll information from anywhere. Although not a full mobile app, the browser-based interface is responsive and easy to use on smartphones and tablets—ideal for businesses on the go.
13. Dedicated Customer Support
Gusto provides multi-channel support, including live chat, email, and phone support. It also has an extensive help center and knowledge base that guides users through various payroll and HR topics. Paid plans often come with priority support or access to HR professionals.
14. Affordable Pricing Tiers
Gusto offers flexible pricing plans that cater to small businesses of all sizes:
- Simple Plan – Ideal for teams with straightforward payroll needs
- Plus Plan – Offers additional tools like time tracking and HR resources
- Premium Plan – Includes advanced support and compliance tools
Gusto even offers contractor-only plans for businesses that don’t employ full-time staff but still need professional payroll services.
Real-World Impact: How Gusto Helps Small Businesses Thrive
Small businesses using Gusto consistently report:
- Fewer payroll errors
- More time saved on manual tasks
- Improved employee satisfaction
- Easier tax season navigation
A bakery owner might automate weekly payroll for their team of 10, while a freelance marketing agency uses Gusto to handle dozens of 1099 contractor payments every month—both benefit equally from Gusto’s smart automation and user-friendly tools.
Potential Drawbacks to Consider
While Gusto offers a host of powerful features, small businesses should be aware of some potential limitations:
- No international payroll support – Gusto is U.S.-based and only supports businesses with U.S.-based employees and contractors
- Limited mobile app functionality – While mobile-friendly, it lacks a full-featured native app
- Higher pricing at premium tiers – Advanced features may be costly for very small teams
However, for the vast majority of U.S. small businesses, the pros far outweigh the cons.
Conclusion: Is Gusto Right for Your Small Business?
In the ever-evolving world of small business management, having the right tools can set you up for long-term success. Gusto stands out as an all-in-one solution that combines payroll, HR, benefits, and compliance in a user-friendly platform. With automated tax filing, seamless employee onboarding, flexible payment options, and integrated time tracking, Gusto simplifies what can otherwise be a complex and stressful process.
Whether you’re just starting your small business or looking to upgrade from manual payroll processes or outdated software, Gusto is a smart, scalable solution that supports growth and frees up time to focus on what really matters—running and expanding your business.
