Payroll software enables small businesses to take payroll processing into their own hands. With a good payroll application, you’ll simplify:
- Calculating wages
- Withholding taxes
- Complying with workers’ comp regulations
- Paying employees
As of 2020, Gusto, an online payroll service, has been rising in popularity. For many businesses, it’s taken the place of payroll giants like ADP and Paychex. But is Gusto right for your small business? Are there alternatives to Gusto payroll that might be better suited to your company’s unique needs? Today’s payroll software landscape looks a lot different than it did even five years ago. Gusto alternatives serve various niches. This payroll software guide dives into:
- What payroll software is
- What you should look for in your payroll software
- What Gusto is
- Alternatives to Gusto for small business payroll software
What Is Payroll Software?
Payroll software is a SaaS (software as a service) solution that automates payroll management. However, it does much more than simply disburse employee wages on payday.
Payroll software serves as a depository for employee paperwork and information, like social security numbers and W-4s. During each pay period, payroll software calculates how much money employees are owed.
Further, payroll applications can also calculate withholding and payroll taxes, and take care of tax filing. It can even help ensure compliance with laws regarding overtime and workers’ compensation insurance.
Yes, payroll software handles payments to employees on payday. They often do this through direct deposits or by writing checks.
But a good payroll application does so much more. For small businesses, it can be indispensable as a means of automated recordkeeping for all of your business’s historic payroll data.
What to Look for in Small Business Payroll Software
There are dozens of payroll software providers on the market today. The sheer number of options may seem overwhelming. It can be difficult to discern between them, given that most payroll software companies boast about the same features.
So how do you know which payroll software is the best choice for your small business?
It’s important to go in with a “shopping list” of the features that you need so you don’t get upsold on features that you don’t.
Consider these key criteria as you choose payroll software for your small business.
Look for Gusto Alternatives That Are Built for a Business of Your Size
You want a payroll company that specializes in businesses of your size. While larger payroll software providers will try to convince you that a one-size-fits-all approach is best, that is not the case.
When a payroll software provider offers solutions for both small businesses and larger enterprises, you can bet they will be more focused on serving the needs of their more lucrative enterprise clients.
Additionally, their software will be built with human resource or accounting professionals in mind. That’s because large companies typically have in-house teams dedicated to such functions.
Small businesses need payroll software built with their needs in mind. Payroll software for small businesses is built for small business owners — they’re user-friendly and won’t require a course on payroll compliance to understand and use.
Find a Payroll Service That Is Easy to Use
Look for payroll software that is easy to learn how to use. Don’t waste your and your employees’ time on software that takes two days of onboarding tutorials to learn.
Choose a payroll software that has an intuitive user interface, so you’ll be able to make sense of it from the get-go.
Mobile Apps Are Great for Small Businesses on the Go
Payroll software that comes with a mobile app helps you, the small business owner, check and approve payroll on-the-go. You don’t have to be tied to your computer to be sure your employees and independent contractors get paid.
A mobile app also makes it easy for your employees to track their wages, pay stubs, time cards, and more. Since they don’t have a mobile app, look for alternatives to Gusto payroll if you want the ease of portable payroll.
Look for Alternatives to Gusto Payroll That Have Time Tracking Capabilities
If your company employs hourly workers, you should look for payroll software that has time tracking capabilities. Payroll software with built-in timekeeping cuts down on the time spent on wage calculations, speeding up the payroll process overall.
Yes, separate time and attendance tracking tools exist. But why add more software to the payment process? It becomes one more thing you’ll need to shop for, maintain, and teach your employees to use.
Seek a Payroll Tool with Workers’ Compensation Administration
Payroll software for small businesses needs to do more than just cut checks. Look for something that can also handle your workers’ compensation insurance, like Hourly, pictured below. That way you'll have help keeping track of records for claims.
Find a Payroll Service Solution That Fits Your Budget
It may seem obvious, but you want to find software that you can afford—and will remain affordable as your business grows.
Most software options have a base monthly rate and charge extra for each employee. They’ll also offer add ons, which can quickly add up, and obscure the price you’re really paying.
Find software with transparent pricing that fits your business’s budget.
What Is Gusto?
Gusto, formerly known as Zenpayroll, is a payroll software that’s become popular in the world of tech because it’s reached unicorn status (valued at over $1 billion).
One-size-fits-all payroll providers like ADP and Paychex were once the most popular options. But now, Gusto has disrupted the industry and made companies rethink their payroll providers.
Gusto’s payroll solution is ideal for S-corporations (a limited liability business corporation with pass-through taxation) and sole proprietors in white-collar industries. While it does have time tracking capabilities, Gusto lacks a mobile app. That means employees need to go to Gusto’s website to start the clock — not the most convenient solution.
Top Alternatives to Gusto Payroll for Small Businesses
Gusto has disrupted the outdated payroll processing industry.
But is it the right software for your small business?
The answer depends on your industry. Gusto’s lack of a mobile app makes it unfriendly for entrepreneurs and employees who are always on the go. Modern business owners want to be able to run their company without being glued to a computer.
Here are the best Gusto alternatives for small business payroll software.
1. Best Alternative to Gusto: Hourly
Newcomer Hourly has made a name for itself by specializing in industries that have mobile workforces, like restaurants and construction. Its mobile app and time tracking capabilities make it one of the best alternatives to Gusto payroll for blue-collar businesses.
The software also boasts the ability to save its customers $10K+ annually on workers’ compensation insurance. According to user reviews from Capterra, Hourly’s payroll management software is top-rated for ease of use.
If you’re looking for alternatives to Gusto, you may want to consider Zenefits.
Zenefits is an all-in-one human resources software solution and talent management tool that has an added payroll feature. It offers its customers a mobile app, time tracking, and workers’ compensation insurance through Embroker.
However, because payroll is just one part of what Zenefits does, those features may not keep up with the non-payroll features of the product. Additionally, payroll is an add-on to the cost of the tool, rather than included in the core package.
Sources: Capterra, Zenefits
3. QuickBooks Payroll
QuickBooks Payroll is offered by Intuit, the company that created QuickBooks, the ubiquitous accounting software. Again, this software doesn’t specialize in payroll, which means its payroll features may be lacking, compared to the rest of Quickbooks' capabilities.
You can get time tracking and workers’ comp features with QuickBooks Payroll. Unfortunately, they are add-ons and don’t come standard.
This software is best for self-employed business owners who are already using QuickBooks for their bookkeeping and accounting.
Sources: Capterra, QuickBooks
4. RUN Powered by ADP
The giant in the game may not be the best alternative to Gusto for small businesses, but ADP is certainly an option lots of companies choose.
ADP has a variety of cloud-based software options to accommodate your payroll needs. If you’re looking for a complete payroll and HR solution, WorkforceNow from ADP offers a lot of useful functionality.
However, the abundance of features can be overwhelming, unnecessary, and expensive for smaller businesses.
RUN is their streamlined solution for small businesses. Unfortunately, it is still relatively pricey. Additionally, their customer service is still tied to their large organization, so you’re unlikely to get a personal touch when you run into issues.
Sources: Capterra, ADP
5. Paychex Flex
Paychex Flex is the small business targeted payroll solution from Paychex. Like ADP, Paychex offers an abundance of features. However, their pricing is based on the number and type of features your business needs.
Despite this, on average, Paychex is still relatively expensive, even compared to ADP. That said, it ranks the lowest on this list for ease of use.
Paychex offers a pared-down package called Paychex Go for small businesses looking for a basic solution. However, features like their mobile solutions, employee portal, and automated employment verifications are not included. According to reviews, their customer service leaves their clients with a lot to be desired.
Sources: Capterra, Paychex
Final Thoughts: Best Alternatives to Gusto Payroll for Small Businesses
There are many payroll software options on the market today. Some are ideal for small businesses, while others are built for enterprises—but market to small businesses as an afterthought.
As you shop for a payroll solution, consider the key features necessary to meet your company’s needs. Gusto alternatives that come with an easy-to-use interface, a convenient mobile app, time tracking features, and workers’ compensation administration are ideal for small businesses with employees who are on the go.
If you have a mobile workforce, Hourly may be the perfect payroll software for you. Sign up for a two-week free trial with Hourly.