For busy businesses, payroll and HR software can be just the thing to make their operations more efficient, as they’re capable of freeing up resources and simplifying other administrative processes.
Two well-known cloud-based solutions in the industry are Gusto and ADP. Both stand out from the pack for their comprehensive features and reliable service, but it goes without saying that they’re not the same.
Gusto is relatively newer, but it has proven itself to be a trustworthy provider since its inception in 2011. Put simply, it’s a go-to for many small and medium-sized businesses for a reason, and it can adapt to the needs of its clients with its contractor-only plan and higher-tiered options for growing companies. Meanwhile, ADP has been in the game for decades now, and while most will know it as a provider for large organizations, ADP Run is different in that it’s geared toward businesses with 49 employees or less.
Gusto vs ADP Run Comparison Chart
|Product Name||Gusto||ADP Run|
|Price||Check Price||Check Price|
|Starting Price||$40 a month + $6 a month per employee||Quote-based|
|Free Trial||No||3 months|
|Payroll Runs||Unlimited||Pay per payroll|
|Federal and State Tax Filing||Yes||Yes|
|W-2 and 1099 Filing||Yes||Yes|
|Multiple States||Plus and Premium plans only||Yes|
|Health Benefits||Premiums only||Premiums + fees|
|Health Insurance Coverage||37 states + D.C.||50 states|
|Workers’ Compensation||Premiums only||Premiums + fees|
Gusto is a leading provider of cloud-based payroll and HR services, catering to businesses of various sizes. With its scalable solutions, it empowers companies to streamline their payroll and HR processes efficiently. The platform offers a wide array of options to meet the diverse needs of its clients, including a dedicated contractor-only plan, which enables businesses to optimize costs while still accessing essential features.
One of its key strengths lies in its suite of features, which encompass a range of payroll and HR functionalities. From employee self-onboarding to efficient tax payments and filing, it makes complex tasks associated with managing a workforce simple. Moreover, the platform provides a suite of HR tools designed to enhance productivity and compliance.
ADP Run Overview
Founded in 1949, ADP started as a manual payroll processing business and has evolved into one of the major players in the HR software scene. ADP Run is the company’s dedicated payroll and HR solution designed for businesses with one to 49 employees.
ADP Run sets itself apart as a simple and easy-to-use payroll service. In addition, it provides features for benefits management and employee onboarding, catering to the needs of small businesses.
Gusto and ADP Run offer the basics that any payroll software worth its salt should have. First off, they calculate and file federal and state taxes. Just to be clear, that includes filing W-2s and 1099s, but ADP Run charges extra for this. Also, both provide direct deposit payrolls and unlimited payroll runs, as well as multiple pay rates and schedules. However, Gusto has the edge because of its AutoPilot feature, which as its name suggests, automates running payrolls.
Moreover, the two can do multi-state payrolls, but in this regard, Gusto only offers it in its higher-tiered plans. In the same vein, only ADP Run includes a household employer payroll, but on the flip side, Gusto provides lifetime access for employees. Last but not least, they support contractor payments, but ADP Run will have users go through a few hoops and loops (i.e., extra fees and additional requirements) to set it up.
When it comes to benefits, both offer a health savings account (HSA) and flexible savings account (FSA), as well as life and disability and commuter benefits. What sets the two apart is that Gusto includes 529 college savings, whereas ADP Run throws in a health reimbursement arrangement (HRA). Also, there’s a slight difference in their 401(k) retirement plan offering in that Gusto relies on third parties for it, while ADP Run’s is available through ADP itself.
Thing is, Gusto only requires clients to pay for the premiums for their health benefits and workers’ compensation, making for a more cost-effective solution. In its defense, ADP Run offers health coverage in all 50 states, as opposed to only 37 states + D.C. as in Gusto’s case.
Both have plenty of HR tools, but the way they offer these features are different. For starters, time tracking, team directory and org chart and time-off requests are available only on Gusto’s higher-level plans, while ADP Run simply charges extra for them. On the other hand, custom employee handbooks, job description and policy templates and access to certified HR experts are add-ons in Gusto’s plans and are restricted to higher-tiered plans in ADP Run’s offerings. In short, the two have a pretty comprehensive suite of HR tools, but finding a suitable set of features for your business requires some planning on your end.
That said, ADP Run is more apt for larger businesses despite it being ideal for employees of 49 or less. That’s because it comes with a lot of tools for marketing, training and even background checks, among other things.
Gusto shines in third-party software integrations, offering more than 180 apps across 15 categories (e.g., expense management, accounting, hiring and onboarding, legal and compliance and more). Notably, the list includes QuickBooks, FreshBooks and Xero, as well as time trackers such as When I Work and 7Shifts.
ADP Run doesn’t exactly lag behind here. Similarly, it supports When I Work and 7Shifts too, and it plays nicely with QuickBooks and Xero, though FreshBooks isn’t in the picture.
Other noteworthy apps that both are integrated with are Breezy HR, Microsoft 365 (limited features in ADP Run), Salesforce, Slack and Zoom. Long story short, the two are neck and neck in terms of integrations, and choosing between the two here depends on which apps are most important to you.
In total, Gusto has three main plans and one plan specifically designed for contractors. First off, Simple is $40 per month and an additional $6 per month for each payee. Next is Plus that costs $80 a month plus $12 a month per employee. Then there’s the top-of-the-line Premium subscription whose pricing is available only upon request. Lastly, the contractor-only plan starts at $0 per month plus $6 a month for every worker for the first six months, which is a promotional price point at the time of writing. This is especially useful for businesses looking to save some money and primarily hire 1099 contractors, as opposed to W-2 employees.
In contrast, the cost of ADP Run’s offerings aren’t as clear-cut in that there isn’t any pricing that’s explicitly stated. There are four plans available: Essential, Enhanced, Complete and HR Pro. You’ll have to get in touch with the company to get a quote of how much each one will cost, and it depends on many factors such as what your needs are, the size of your business and what type of business you’re running.
It’s worth mentioning that ADP Run has a free trial of three months, which is something that Gusto doesn’t offer.
What are the benefits of using payroll and HR software?
Streamlined Efficiency: Payroll and HR software automates manual tasks, saving time and effort. It simplifies processes like wage calculations, tax deductions and generating pay stubs, allowing HR teams to focus on strategic activities.
Accurate and Compliant: By automating payroll and HR processes, software minimizes errors and ensures compliance with tax laws and regulations. It keeps up-to-date with changes, reducing the risk of mistakes and potential penalties.
Cost Savings: Payroll and HR software reduces administrative costs by minimizing manual data entry and paperwork. With accurate calculations and compliance measures, businesses avoid costly errors and legal issues.
Empowering Employee Self-Service: Many software solutions offer employee self-service portals, enabling staff to access payroll information, update personal details, view pay stubs, request time off and enroll in benefits. This makes administrative tasks easier and enhances employee satisfaction.
Insightful Reporting and Analytics: Payroll and HR software provides robust reporting and analytics capabilities. Businesses can generate reports on payroll, benefits and employee demographics, gaining valuable insights for strategic decision-making and workforce analysis.
Scalable and Flexible: Payroll and HR software adapts to businesses of different sizes and scales as the organization grows. It accommodates changes in workforce size, multiple locations and evolving payroll processes.
Arguably, Gusto has better payroll features and more cost-effective employee benefits since clients will only have to pay premiums. Moreover, it has an extensive selection of third-party integrations, and two of its core plans have transparent pricing so that it’s easier to plan ahead of things.
On the other hand, ADP Run is better equipped for larger businesses, owing to its comprehensive set of HR tools and features. Also, it supports most commonly used third-party integrations, and it has a wider health insurance coverage, offering it in all 50 states. However, customers will have to get a quote first before they can avail any of its plans, which may be inconvenient for some.