Payroll management software can be an invaluable tool for businesses of all sizes, but the right payroll software for your business will depend on your specific needs and budget.
TO SEE: Checklist payroll processing (Tech Republic Premium)
Gusto and ADP are leading payroll solutions that offer several features to help you manage payroll, taxes, benefits, onboarding, and time off requests in one place. We’ve created this guide to help you understand how their functions and features compare so you can find the best solution for your business.
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What is ADP?
ADP is an HR software and services company that has been in the industry since 1949. ADP is a full-service cloud-based human capital management company serving more than 1 million clients worldwide.
They provide online payroll and HR solutions, as well as tax, talent, time, compliance, and benefits administration for businesses of all sizes. ADP provides payroll services to many industries, including retail, hospitality, construction, and manufacturing.
What is Gusto?
enthusiasm is an all-in-one online HR and payroll service explicitly designed to make it easier and less expensive for small businesses to manage their employees. Gusto helps small businesses simplify the time-consuming and complicated process of managing payroll.
Gusto automates some aspects of the payroll processing process, such as calculating pay stubs, filing taxes, sending W-2s to employees, and issuing 1099 forms to contractors. The company also offers a suite of HR tools for time tracking, employee onboarding portals, leave management, and performance reviews.
ADP vs Gusto: Feature Comparison Table
| Functions | ADP | enthusiasm |
|---|---|---|
| Tax Return (W-2s and 1099) | Yes | Yes |
| Employee health benefits | Available in all 50 states | Available in 37 states |
| 24/7 customer support | Yes | no |
| Automated direct deposit | Yes | Yes |
| Mobile phone application | Yes | Yes |
| Reporting of new employees | Yes | Yes |
| HR tools | Yes | Yes |
ADP vs. Gusto: feature comparison
Tax return
One of the most important aspects of your business is making sure you stay current and file taxes accurately. Both ADP and Gusto calculate, file, and pay federal, state, and local taxes on behalf of their clients.
However, there are some differences in what they offer. W-2s and 1099s are included in all Gusto plans, while ADP charges additional fees for these forms. Entrepreneurs with self-employed persons or temporary workers can save more with Gusto due to this difference.
Employee health benefits
It is essential to have a payroll system that can manage employee benefits such as health insurance. If your company offers a benefits package to its employees, the payroll system you use should be able to track who is enrolled in which plan and send invoices accordingly. When looking for a new payroll system, consider how it handles benefits management.
ADP offers national coverage through the Automatic Data Processing Insurance Agency, which includes medical, dental, visual, short- and long-term disability, contributory plans, and life insurance.
Meanwhile, Gusto offers several health benefits, including medical, dental, vision, health savings accounts, disability insurance, flexible spending accounts, life insurance, and dependent care FSAs.
However, Gusto currently covers 37 states plus DC, excluding Alabama, Alaska, Hawaii, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming. By comparison, ADP covers all 50 states plus Washington, DC
Customer service
One of the most important things to consider when evaluating payroll systems is customer support. The last thing you want as an entrepreneur is for a problem to arise and you can’t get help.
ADP has 24/7 live customer service representatives who can assist with payroll tax filing issues, direct deposit setup, and other system-related questions. ADP offers email and 24/7 phone support, as well as access to HR advisors. ADP is also BBB accredited with an A+ rating, meaning customers are more likely to find answers about the company’s products and services online.
Gusto offers email, chat, and phone support five days a week, Monday through Friday, 7 a.m. to 6 p.m. MST, as well as access to HR advisors. Unlike ADP, Gusto is not accredited by the BBB.
Mobile phone application
Today’s workforce is mobile, so having a robust mobile app is essential to keep up. Gusto offers a mobile wallet app that allows employees to track, store and access their funds. However, non-domestic contractors cannot use the Gusto Wallet mobile app to track their time.
ADP allows you to view your pay stubs and tax information using their mobile app. It also syncs with the payroll system so you can easily access your data when you’re on the go. Compared to the Gusto Wallet mobile app, the ADP mobile app is more robust in terms of what it can do while still being easy to use.
Prices for ADP and Gusto
Pricing is essential when purchasing a payroll system for your organization. To make the best decision, you need to understand what each company has to offer and how it compares to other payroll solutions.
What are the costs of ADP?
ADP appears to offer four pricing plans; however, they are not transparent with their rates. Prospective clients should contact the ADP sales team to get a personalized quote for their business.
What does Gusto cost?
Gusto offers three pricing plans with different service levels. They contain:
- Simple Plan: Starts at $40 per month, plus $6 per month per employee
- Plus Plan: Starts at $60 per month, plus $9 per month per employee
- Premium Subscription: Pricing information for this subscription is available upon request
Choose between ADP and Gusto
An ADP vs. Gusto comparison can be a challenging decision, but it’s essential to weigh the pros and cons of both systems to figure out which system is right for your business. To help you decide, we’ve broken down the key points below.
- Gusto is best for companies with contractors only, while ADP is best for complex companies with full-time employees and contractors.
- Small to medium businesses will find that Gusto offers more customized solutions at a better price than ADP, which favors larger enterprises.
- Gusto is intuitive and easy to use compared to ADP where navigating the interface can take some getting used to.
Ultimately, the decision on the best payroll service for your business depends on what services are needed for your payroll processing workflow and what your budget can handle.
If you are just starting out and only have a few employees, Gusto might be a good option for you as they offer simplified payroll features at an affordable price. But suppose your company has more than 600 employees. In that case, ADP may be a better option as they have extensive benefits packages and multiple levels of support depending on the size of your business.
Read more: Best payroll software for small businesses (TechRepublic)
