I’d like to start by saying right away: no matter which payroll app you choose, it sure beats entering employee pay rates and schedules manually into a spreadsheet. Various payroll apps have different functionality, pricing, etc., but, ultimately, any form of payroll software will save you time, help you maintain compliance, and reduce administrative hassle.
Drawing from my own experience, here are some of the pros and cons of two popular payroll platforms, Gusto and ADP.
Payroll features
Gusto and ADP offer fundamental payroll functionalities, including:
- Direct deposit
- Tax calculations
- Tax filings
- Set it and forget it payroll
Both platforms also provide employee portals for onboarding, tracking hours, and viewing documents like paystubs and W-2s.
Both systems also provide automated payroll for salaried employees, which means you can set payroll to run automatically (assuming the payroll doesn’t change). Automated payroll minimizes manual input work—a huge plus for busy business owners. Users spend an average of just 13 minutes to run payroll, freeing up significant time for other tasks.
Peace of mind: IRS notices with ADP and Gusto
One of the significant benefits of both ADP and Gusto is that they handle any payroll-related notices you might receive from the IRS, helping to ensure that any tax-related issues are addressed promptly and correctly. Whether it’s an inquiry about payroll taxes or a notice about a filing discrepancy, both platforms take on the responsibility of managing the communication with the IRS, saving you time and reducing the stress of dealing with tax authorities.
Benefits management
Both Gusto and ADP offer services related to benefits management (including medical, dental, and vision), but they do so differently. Gusto connects you with a benefits representative, but the process may not be as seamless as ADP’s highly integrated and efficient benefits management.
Customer service and support
When it comes to customer support and personalized assistance, one-on-one service is a key benefit for businesses with complex payroll needs. With ADP, you get a dedicated account manager who can address your issues directly, which is particularly advantageous if you prefer having a direct line to support.
Gusto’s support is also decent, but can be slower due to its email-based system and general support pool. If you need immediate assistance, you might experience longer wait times.
Integration and scalability
When it comes to integration, Gusto has the edge. It allows for easy mapping of accounting software fields, which is a big advantage from an accounting perspective. The flexibility of Gusto is invaluable and saves time.
While ADP software is robust, it can be less user-friendly when integrated with systems like QuickBooks Online (QBO) or Xero. The process often requires working with ADP’s integration team, which can be time-consuming. Once set up, changes to your setup can disrupt the journal entries, necessitating additional adjustments.
Gusto vs ADP pricing
Pricing is always a critical factor when choosing a new software solution. Gusto offers straightforward and transparent pricing with a monthly fee. Click here to see Gusto’s current pricing. Its packages are typically more cost-effective for a single S-corp individual or sole proprietor.
In contrast, ADP’s pricing is more complex and customized. While ADP is competitive, the platform does charge for one-off payroll or additional pay runs within the month. For instance, if you need to process an additional payroll outside your regular schedule, ADP will charge extra.
Who should use Gusto?
Gusto is ideal for small businesses and startups that want a feature-rich, cost-effective payroll solution. It’s particularly suited for businesses looking for a platform that integrates well with accounting software and offers robust HR functionalities at an affordable price. Gusto’s user-friendly interface and strong third-party integrations make it a great choice for those who can manage some aspects of their payroll and HR functions independently.
Who should use ADP?
ADP is also recommended for small businesses, but also offers platforms for businesses that are growing or have more complex payroll. ADP can also support businesses that need a PEO, as well as payroll for household employees. It’s especially beneficial for larger companies (50 employees or more) or those needing a higher level of customer support. ADP’s scalable solutions and comprehensive benefits management make it a solid choice for businesses that require a more extensive and supported payroll system.
Gusto vs ADP Payroll: The final ledger
Like anything, choosing between Gusto and ADP Run comes down to your specific needs:
Gusto offers great value with its upfront pricing and extensive features for small to medium-sized businesses. It’s particularly well-suited for startups and small businesses looking for a straightforward, feature-rich solution.
ADP, on the other hand, may be better suited for larger businesses or those needing more extensive customer support and benefits management. It provides a more scalable and supported solution, making it a strong choice for growing companies.
At Financial Solution Advisors, we offer professional onboarding for both Gusto and ADP, ensuring your payroll is set up correctly and integrated with Xero or QuickBooks Online. We also provide training to help you efficiently manage new employees and streamline your payroll processes.
Whether you choose Gusto or ADP (or need help making that choice), we’re just happy you’ve ditched the cumbersome spreadsheet!