Gusto vs. Paylocity: HR software comparison for 2025

As your business grows, managing payroll, benefits, and HR tasks can become increasingly complex and time-consuming. That's where HR software comes in—to streamline processes, reduce errors, and give you more time to focus on what matters most: your people and your business. 

Two popular options in the market are Gusto and Paylocity, but how do they stack up against each other? And is there a better alternative out there? In this guide, we'll dive deep into the features, capabilities, and limitations of both platforms.

What is Gusto?

Founded in 2011, Gusto is a cloud-based HR and payroll software geared toward small to medium-sized businesses. The platform offers standard HR features for businesses without dedicated HR teams.

Key features 

• Payroll management: Gusto payroll services help with running payroll. It automatically calculates taxes, handles deductions, and processes employee payments. Other features include direct deposit, payroll on autopilot, and employee self-service.
• Employee benefits administration: Gusto benefits administration connects to payroll, allowing employees to enroll in health insurance, 401(k) plans, and other perks.
• Onboarding and hiring: Gusto also provides onboarding tools for new hires including sending offer letters, collecting tax forms, and setting up direct deposit.
• HR experts and compliance support: Gusto provides access to HR professionals who can answer questions and provide guidance. They also monitor regulatory requirements for compliance updates.
• Time and attendance tracking: With Gusto time and attendance features, employees can clock in and out, request time off, and view their schedules through the app. Managers can review and approve timesheets, track PTO balances, and monitor overtime. 
• Employee self-service: Gusto also provides an employee portal where employees can view their paystubs, update their personal information, request time off,  and access their benefits information.

What is Paylocity?

Paylocity is a cloud-based payroll and HR software provider geared toward medium to large businesses. Founded in 1997, Paylocity features a suite of tools for the employee lifecycle, from recruitment and onboarding to performance management and offboarding.

Key features 

• Payroll automation: Paylocity handles payroll processing with features like auto-calculations, tax filing, and multi-state support. It can process garnishments, deductions, and other payment calculations.
• Employee engagement tools: Paylocity also includes tools for employee engagement. The community feature provides a social collaboration hub where employees can connect. Managers can use the performance management module to set goals, provide feedback, and conduct reviews.
• Time and labor management: Paylocity's time and labor management solution allows for tracking employee hours, managing schedules, and controlling labor costs. Other features include real-time data collection, geofencing, and biometric authentication.
• Talent management: Paylocity also provides talent management systems. Features include applicant tracking, onboarding, performance management, succession planning, and learning management. 
• Mobile app and self-service: Paylocity's mobile app allows employees to access their HR information and complete certain functions. They can view paystubs, update personal information, request time off, and clock in and out from their mobile devices. The self-service portal provides access to employee HR information.
• Compliance tools: Paylocity offers a range of tools to help with compliance. The platform automates tasks like EEO reporting and ACA compliance tracking, and provides real-time alerts.

Paylocity vs. Gusto: Feature comparison

Now that we've covered the basics of each platform, let's see how they compare side by side. Here's a quick overview of key features:

As you can see, both Gusto and Paylocity cover standard HR and payroll functions. However, Paylocity offers more features geared towards larger businesses, such as learning management, succession planning, and compensation management. It also provides a more complete HRIS (human resource information system) to serve as a central hub for all employee data.

Gusto vs. Paylocity: Use cases

Let’s look at some typical implementations:

Gusto

Gusto serves:

• Small businesses with standard payroll and basic HR needs
• Organizations seeking affordability
• Companies implementing their first HR software

Paylocity

In contrast, Paylocity serves:

• Midsize to large businesses with more complex multi-state payroll needs
• Businesses that want help with the employee lifecycle
• Enterprises that need HR analytics and reporting

Gusto vs. Paylocity: Customer service

When implementing a new HR software, having reliable customer support can make all the difference. Both Gusto and Paylocity offer various support channels, but there are some key differences to note.

Gusto provides email, chat, and phone support during extended business hours (6am - 6pm Mountain Time). While they don't offer 24/7 support, they do have a library of self-serve resources, including help articles, video tutorials, and guides. Gusto assigns a support rep to each account, but the level of support varies depending on your plan.

Paylocity provides phone and email support during business hours (Monday through Friday, 6:00AM - 7:30PM Central Time). Each client gets an account manager and service team as their main points of contact. Like Gusto, Paylocity maintains a knowledge base (called PEAK) with how-to articles, training modules, and product guides for self-service support.

Gusto vs. Paylocity: Integrations

Another important factor to consider is how well the HR software integrates with your existing tools and systems. You don't want to end up with data silos or manual data entry.

Gusto offers integrations with popular accounting software like QuickBooks and Xero, time tracking tools like 7Shifts and When I Work, and expense management apps like Expensify and Receipt Bank. They also have an API that allows developers to build custom integrations. However, Gusto's overall integration ecosystem is somewhat limited compared to Paylocity.

Paylocity, on the other hand, has a slightly wider marketplace of pre-built integrations with popular business tools across various categories, including:

• Applicant tracking systems like iCIMS and Greenhouse
• Accounting providers like Concur and Intuit QuickBooks Online
• Learning management systems like EasyLlama and Wisetail
• Performance management tools like ClearCompany and 15Five
• SSO software like Okta and OneLogin
• Point-of-sale systems like Lightspeed and Square

Paylocity also offers an open API and developer tools to support custom integrations and data exchanges with other systems.

Gusto vs. Paylocity: Pros and cons

Now let's summarize the key advantages and disadvantages of each platform:

Gusto pros and cons

Gusto pros:

• Intuitive interface and easier setup
• Standard payroll and benefits features
• Compliance support
• Useful customer service

Gusto cons:

• Lacks advanced HR features like compensation management
• Limited customization options for larger businesses
• Fewer integrations compared to Paylocity
• Potential challenges scaling HR support as the business grows

Paylocity pros and cons

Paylocity pros:

• Multiple HR tools for the employee lifecycle
• Additional features for performance, compensation, and learning
• More configurable than Gusto
• Compliance and tax filing capabilities

Paylocity cons:

• Higher learning curve due to feature complexity
• May be overkill for small businesses with basic HR needs
• Implementation can be time-consuming

Rippling: The better alternative to Gusto and Paylocity

Gusto and Paylocity handle the basics of HR and payroll well enough. But for businesses wanting more, Rippling reimagines what workforce management can be. By unifying HR, payroll, benefits, and IT in one intuitive system, it offers capabilities that traditional platforms simply can't match.

What sets Rippling apart? Here are some key differentiators:

• All-in-one platform: With Rippling, you don't have to juggle multiple systems for HR, payroll, and IT. Everything is connected in one place, saving you time and reducing errors.
• Automation and workflows: Rippling takes automation to the next level. You can set up complex workflows to handle everything from onboarding new hires to offboarding, performance reviews to promotions. Rippling makes sure the right things happen at the right time.
• Extensive integrations: Rippling seamlessly connects with over 600 business apps, from accounting software to productivity tools. This means your HR data flows automatically to all your essential business systems.
• IT management: Unlike Gusto and Paylocity, Rippling includes a full IT management suite. You can easily provision apps, manage devices, and enforce security policies across your entire workforce. No more manual IT tasks or security risks.
• Scalability and flexibility: Rippling is designed to grow with your business, from startup to enterprise. The platform is highly modular, so you can pick and choose the features you need and add more as your needs evolve. This also makes Rippling more cost-effective.
• Global workforce management: If you have employees or contractors across the world, Rippling has you covered. It supports international payroll, benefits, and compliance in multiple countries. You can manage your entire global workforce from a single dashboard.
• Robust reporting and analytics: Rippling's intuitive reporting tools let you analyze data across your organization. With point-and-click report building, multiple visualization options, pivot tables, and customizable templates, you can easily track workforce metrics and create actionable insights.

While Gusto and Paylocity are good HR and payroll providers, Rippling offers a truly unified and automated platform that can take your workforce management to the next level. With its flexibility, scalability, and innovation, Rippling is the clear choice for businesses that want to streamline operations, boost productivity, and make data-driven people decisions.

This blog is based on information available to Rippling as of January 9, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.