Square Payroll vs Gusto Payroll vs ADP: Choosing The Best Payroll Software

Square Payroll vs Gusto Payroll vs ADP: Choosing The Best Payroll Software

As a business owner, you need things to run like clockwork to make the most profit possible. Disruptions can throw out your entire operation and cost you countless dollars in lost time and energy.

However, as all business owners know, payroll is a pain. According to survey data, payroll takes small business owners an excess of 5 hours per pay period. Those are hours a business could have spent training new employees, getting more leads, dealing with a frivolous lawsuit, or… making money!

Statistics also show that 40% of businesses incur IRS payroll-related penalties, with the average penalty landing at $845. Ouch. Moreover, payroll errors are twice as likely to occur in homegrown payroll systems as they are with third-party solutions. 

Wouldn't it be nice if a system automatically did your payroll for you? Better yet, what if this software came with in-depth round-the-clock reporting, so you immediately find out if something is amiss?

Well, fortunately, it's 2023. Today, there are hundreds of different payroll systems available to you. There are so many that deciphering the signal from the noise and choosing the best payroll software for your business can be a big challenge; so much so that there are even services out there that offer one-on-one help, like Matchr, tailoring suggestions that will accommodate your specific needs. Suffice it to say there, are a lot of options!

That said, in this article, we will look at three of the most prominent players in the payroll solutions game. Most software will automatically calculate deductions for withholdings, such as taxes, insurance, and retirement contributions. The software also tracks payments, maintains records, and automatically runs payroll. In a nutshell, it cuts out the guesswork and the likelihood that you'll make a costly mistake.

Ready to simplify your life and get rid of all your payroll troubles? Read on!

Square Payroll

First up, let’s get our teeth into the primary features of these three payroll powerhouses. All three of these solutions offer the fundamental payroll core service. However, their capabilities differ in some of their add-on offerings and extended capabilities. 

Square Payroll is best for businesses that already employ some of their payment processing solutions (like the Square POS)


Square Payroll was released in 2015 as an addition to Square’s wide range of payment processing solutions. 

Square is mainly a solid core payroll service that will allow you to set up—and even automate—all of your employee’s salaries, as well as administer employee benefits, manage hourly and salaried employees, and track sick leave and time off.

In the background, Square Payroll automatically pays your employees once you approve the payroll, and files all federal and state taxes that you owe. 

Square Payroll is completely cloud-based, and they also have a mobile app from which you can manage the payroll process.

Employees are able to log in to Square Payroll and do tasks such as track their leave, update their details, or modify their withholding tax. 

When comparing Square Payroll to other solutions such as Gusto and ADP, one thing that stands out is that the platform and reports are simpler. This can be advantageous, especially for smaller businesses.

However, if your organization is large, then the simplicity of Square Payroll might make it inadequate, especially if you need complex analytics or HR assistance.

Best For: Businesses Already Using Square Payments

One of the handiest features of Square Payroll is its integration with other Square products. 

For example, if your employees already clock in and out with your Square POS system, this data will automatically sync with Square Payroll.

If you employ a number of contractors, this feature can potentially save you hours of wasted labor come payroll day. 

Aren’t a user of a Square POS system product? Even so, Square Payroll might still have you covered with their integrations with other time-tracking applications such as T-Sheets, Deputy, Homebase, or TimeTrack24. 

In addition to time tracking integration, Square Payroll also integrates with QuickBooks. 

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Square Payroll Pricing

Square Payroll’s pricing is one of the most competitive in the market, with a base rate of $35 dollars per month, and $6 dollars extra for each employee in your Payroll. 

If you’re only paying contractors, then they will waive the base rate, and you only pay the $6 per contractor!

One of the great benefits of Square Payroll is that you can run payroll as many times as you like per month, and you won’t get charged extra. 


Pros and Cons of Square Payroll

Here are some of the advantages and disadvantages of using Square Payroll:


  • Seamless migration from old software to Square Payroll – If you've thought about switching over to Square Payroll, but have not because you're worried the transition process will be too cumbersome, worry no more. Square Payroll's team makes it extremely easy to switch payroll providers. All you need to do is gather all of your business information, go to Square Payroll's website to get started and close your old payroll account (after saving all payroll and employee records).
  • Advanced app to manage your payroll on the go – Have you ever wanted to manage your payroll but then realized that you're far away from your computer and can't? Square Payroll lets managers conveniently process payroll on their mobile device with the Square Payroll app. Even employees and contractors can download the app to clock in/out, view their hours worked, and view their estimated pay for the week.
  • Automatic sync with Square point of sale system – If you and your business use the Square POS (Point of Sale) system, you should definitely consider switching to Square Payroll. With Square Payroll, you can automatically import tips and commissions from the Square POS.
  • Phone-based customer support (for US customers) – When it comes to payroll platforms, Square Payroll has some of the best customer service. If you run into an issue with an employee's bank account processing or performance management, you can rest assured that an agent is no more than a phone call away.
  • Good tax support for small businesses – As a small business, you will benefit a ton from Square Payroll's tax support. Not only does Square Payroll generate and file your state and federal taxes on your behalf, but it also calculates and withholds payroll taxes each time you run payroll.
  • Cheap and simple pricing model – Square Payroll has an extremely competitive pricing model. At $29 plus $5 per employee paid, it's extremely hard to beat. Bonus: there aren't a whole bunch of tiers with different offerings and different pricings (everything is very straightforward).
  • Online payroll for small businesses and contractor-only companies – Thanks to it's cheap pricing, Square Payroll is a very attractive option for small businesses and contractor-only companies (that don't have a bunch of capital to invest in payroll systems).
  • Robust automation tools – Another great thing about Square Payroll is that (if you so desire) it will automatically calculate salaries, import timecards, calculate deductions, and even run payroll for you. You'll get an email confirming what your employees will be paid and you can make changes as needed (or leave it as is if everything looks alright).


  • Lack of onboarding for new employees – Like its competitors, Square Payroll also has onboarding specialists to help you get settled in (and to help with other setup chores), but it's onboarding features for new employees may not be the best.
  • Four-day turnaround for deposits – Sometimes if you're really in a hurry, the four-day deposit time frame can be an issue with Square Payroll.
  • Better used with existing Square system – If you do have the Square POS, Square Payroll is fantastic and offers you many cool features. That being said, if you don't have the Square POS, you may find some aspects of Square Payroll a little bit lacking.
  • One plan only – Indeed, Square Payroll does have a very simple and straightforward pricing model (with one plan only), but what that means is that scaling also becomes quite difficult. For bigger businesses that are looking for more robust options with tons of offerings, Square Payroll may not be the best option.
Square Payroll

Everything You Need From Square Payroll, With No Additional Fees & None Of The Commitment. Automatically File Taxes, Run Payroll, Manage Employee Benefits, And More With Square. Offer Health Insurance. Fully Integrated Timecard. Track Employee Hours.

Gusto Payroll

Gusto payroll is very similar to Square Payroll in that it is cloud-based and offers a full feature core payroll process. (It also happens to be my payroll software of choice, and I find it works really well with QuickBooks.)

Gusto makes it extremely easy to sign up for their services on their website.


As with Square Payroll, Gusto streamlines and automates your payroll process, handles the tax side of things (both state and federal), and allows you to administer employee benefits.

Depending on your plan, employees can onboard themselves by entering their details and filling out their W-4s. 

Gusto also features a powerful range of reporting features. It can integrate with various accounting applications such as QuickBooks, Xero, and Freshbooks.

With Gusto, you can also pay hourly, salaried, and contract workers. Plus, you can have the payroll run automatically, so you don’t have to log in (unless there is overtime pay to enter).

One of the areas where Gusto’s services really shine is their HR functions and HR solutions. Depending on what package you sign up for, you can access premium HR tools and professionals, such as the employee handbook wizard, HR forms, and company culture assistance. 

Additionally, one of the nicest aspects of Gusto’s HR services is that they can be turned on and off. If your business needs help with HR, you can take out the Concierge Plan, utilize it to get your HR policies and systems in place, and then downgrade in a subsequent month if you feel that you don’t need it anymore. 

Best For: Small Businesses

I use Gusto for all my small business clients. Gusto’s capabilities, pricing, HR tools and functions make it an ideal solution for small (1-50 employees) or medium-sized (50-100 employees) businesses.

(Since I use Gusto, I made this handy setup walk-through video you can follow if you choose to go the Gusto route.)

Although HR is a crucial function, hiring an HR specialist is often not an option for a smaller business, which is why Gusto’s HR offerings can be so valuable.

Gusto Payroll Pricing

Gusto payroll’s Simple Plan price is $40 per month and $6 per employee for full-service payroll. The Plus Plan is $80 and $12 per employee. 

Lastly, if you haven’t hired any W-2 employees yet, you can enroll in their Contractor plan, which costs $6 per contractor with no monthly base cost. 

Gusto Payroll has some very reasonable pricing starting at $45/month. If you want more features, you can also check out some of their more advanced plans.

Pros and Cons of Gusto Payroll

Here are some of the advantages and disadvantages of Gusto Payroll compared to other payroll software.


  • Unlimited payroll runs – Have tons of employees with differing pay schedules? Do you want to keep using Gusto Payroll and stick with it for a while? With Gusto Payroll, you don't need to worry about running out of Payroll runs (because you have unlimited). Unlike some other payroll services where you prepay for a set amount, you can run your payroll as many times as you want with Gusto.
  • Paid time off (PTO) tracking available – Gusto has automated time tools that make it extremely easy to manage all of your team's hours, time off, holidays, and more. All your team has to do is log their hours with the click of a button (either on their computer or through Gusto's mobile app). The coolest thing is that with Gusto, you can even customize your options for paid time off policies and sync up payments with payroll. Gusto even calculates and alerts you of any PTO liabilities to simplify your accounting.
  • Affordable – Gusto's pricing is extremely simple, affordable, and transparent. No longer do you need to drop hundreds of dollars on payroll services. With Gusto, you get unlimited pay runs, benefits administration, and in-class support all for less than $50 a month.
  • Available in all states – Regardless of whether you live in California or Alaska, Gusto Payroll has you covered. Gusto Payroll not only offers payroll in all 50 states, but it's also the same price whether you run payroll in 1 or 50 states.
  • All tiers include basic reports – Another great thing about Gusto Payroll is that it doesn't matter if you have five employees and are running on the Core plan, or if you have five hundred employees running on the Select plan, you'll have access to the basic reporting functions that make your payroll processes that much simpler.


  • The cheapest plan doesn't include all features – One drawback of Gusto Payroll is that if you do happen to run a small business and don't have the capital to upgrade to plans beyond Core, you might lose out on some features (that you might need). For example, with just the Core plan, you won't have access to next-day direct deposit, project tracking, and onboarding tools (all things that might come in handy).
  • Hard to integrate with sales apps – If your business runs on a sales application like WooCommerce or Insightly CRM, you might be disappointed to find out that Gusto Payroll has a hard time integrating with almost any sales app.
  • Lacking dashboard – Unlike certain other payroll applications, Gusto Payroll does not have an activity dashboard where you can easily view and manage your insights. That being said, they do offer basic reports at every tier (as mentioned above in the pros section).
  • Dedicated support not available to lower plans – One point of improvement that has repeatedly been brought up in various reviews is that Gusto Payroll could definitely improve their customer support. For all of their ease of use, Gusto Payroll will still have some confusing parts that you'll want to ask questions about. When this happens, you don't want to be searching through help topics online but rather talking with an actual support agent (usually hard to reach unless you have the Concierge plan).

ADP Payroll

Just like Square Payroll and Gusto payroll, ADP is cloud-based—and similar to Square Pay, it also has an app. 

ADP Payroll has tons of useful offerings that larger businesses might be able to take advantage of. Their pricing is not available online and you'll need to contact them to get a quote.


Its core payroll functions of salaries, benefits, and payroll taxes are just as good as both Square Payroll and Gusto payroll.

The basic plan gives you access to over 15 report types, as well as new-hire reporting. The interface allows for exporting to other applications such as QuickBooks, Xero, and Wave. 

Unlike Square and Gusto, it has a wider variety of more complex payroll options. These are available with certain plans for larger and international companies in the ADP Vantage HCM software.

Similar to Gusto, ADP also has a range of HR-related tools and services, such as an employee handbook wizard, up to 5 free background checks, human resources forms, and more.

Finally, as an additional benefit, ADP also has a great time and attendance (clock in/out, hours worked) feature that syncs to payroll, as well as scheduling, performance, and productivity tools. 

Best For: Large businesses with more complex payroll

If you have a larger business (100 employees or more), you may prefer ADP’s additional functions. ADP offers enhanced analytics that covers payroll, taxes, employee benefits, and garnishment payments.

It also has a custom reporting option that may be useful for companies that want to do data analytics in Excel or export data to other software.

The main drawback to ADP is its pricing…it’s expensive! My experience is that it’s more than double the cost of Gusto, and more than many of the other competing available options. I have also found that the web interface is not as user-friendly as Gusto or Square.

ADP Pricing

ADP does not advertise prices on its website, as it charges a customized rate depending on your needs. But in my experience, it’s much more expensive than both Gusto and Square.

Pros and Cons of ADP

Here are some of the advantages and disadvantages of using ADP as your payroll software of choice.


  • Full range of features – ADP Payroll offers all that almost any business would need to run payroll. They have systems in place to take care of payroll taxes, payroll data, and other tax forms as well.
  • Lots of guidance on the software – For all of its features, ADP payroll still makes it extremely easy for you to learn the ropes with their software. There are tons of video tutorials available for guidance on setting up the software and using it (including instructions on how to use all sorts of features).
  • Fully optimized ADP mobile app – Similar to Square Payroll, ADP Payroll also has a mobile app that is extremely easy to use and optimized for both iPhone and Android devices.
  • Free trial for three months – If you're scared of paying for a payroll service upfront and then being unhappy with it, you'll love ADP. ADP Payroll constantly has promotional offers where you can sign up for their payroll services and get three months free!
  • Full employee access – Running a business is hard, and it's even harder when you have to upload all of your employees' information yourself. With ADP Payroll, you don't need to worry about this. Employees have full access to the system so they can check and update their records and information (making sure that everything is up to date and correct).
  • Impressive automation – ADP Payroll provides you with a full suite of HR functions and gives you the option to automate a lot of the boring, tedious work involved with HR processes.
  • Early tax forms – Not only will ADP Payroll make your life easier, but it will also be more convenient for your employees. One huge bonus is that employees will get their tax forms way earlier than by mail (allowing them to get started on filing taxes earlier too).
  • Expanded benefits section – The expanded benefits section is another plus for employees. They'll have access to extra tools that will even allow them to plan and look forward to retirement.
  • User friendly – When working with payroll, you want your processes to be as smooth as possible. For all of its offerings, ADP payroll is also extremely user-friendly, enabling you to accurately keep track of your paychecks in digital form.


  • No prices online – If you're someone who loves to be cut-and-dry, you might be a little disappointed that ADP does not have any prices online. To find out what you'll pay, you need to provide your email address and wait for them to email you a personalized price (aka, you'll need to enter their sales funnel).
  • Issues with time-off policies – Some users have reported issues when trying to work with the time-off policies that ADP offers. (One of the issues with having so many features is that there is a higher probability that one of them won't work).
  • A lot of HR features are additional – The base plan and base price only covers so many features. Some of them (especially the human resources ones) are extremely helpful but will cost you more money.
  • Tough integration with accounting software – If you have Quickbooks payroll or any kind of accounting software, you might find that the integrating process with ADP is a little frustrating.
  • Fee on every payroll – With ADP payroll, a lot of the costs are hidden. One (very important) cost that you don't find out about is that on every single payroll, you need to pay a fee (which can really add up over time).
  • Additional cost with many features – ADP Payroll does indeed offer a whole bunch of features, but they come to you at a cost. Out of all the payroll software systems, ADP definitely has one of the most expensive pricing models.
ADP Payroll

ADP offers industry-leading online payroll and HR solutions, plus tax, compliance, benefits administration, and more.

The Best Payroll Software: Recap

In this day and age, time is money. Every single hour you waste is another hour that you could have spent on invaluable life experiences, networking and making connections, or straight up just making money.

That's why it's so important to make sure that all aspects of your business are optimized for time (so that you can do the things that really matter).

This includes making sure that your health insurance processing is efficient, checking that employee information is up to date (so you don't waste time refiling documents), and (of course) making sure that your payroll processing is smooth.

In fact, while all other aspects of your business can and should be looked at, getting your payroll systems streamlined is one of the most effective ways to save yourself time. Surveys have shown that small businesses spend an average of five hours per pay period on payroll. If your pay period is bi-weekly, that time is equivalent to:

  • 5 hours every two weeks
  • 10.8 hours every month
  • 260 hours every year!

Even if you're just earning minimum wage (which you likely aren't if you're reading an article about payroll software), 260 hours translates to over $2000 in lost earnings!

One way to save time with payroll is to look into using payroll software to help. When it comes to the best payroll software on the market, it really boils down to three companies:

  • Gusto Payroll
  • Square Payroll
  • ADP Payroll

This post has run through exactly what each one is, what features are offered with each one, and what kind of business each one suits. As a quick rundown:

  • Gusto Payroll: is cloud-based and offers a full suite of payroll processing features to its users. (It also happens to be my payroll software of choice). Gusto Payroll is relatively cheap when it comes to payroll software pricing and is best for small businesses with 1 – 100 employees.
  • Square Payroll: was released in 2015 as an addition to Square’s wide range of payment processing solutions (including the Square POS). It is the cheapest out of the three (with plans starting at $34/month) and is best for small businesses that already use some of Square's payment processing solutions.
  • ADP Payroll: is a payroll software that has core offerings as good as Gusto and Square Payroll, but also offers more complex payroll options. The pricing for ADP Payroll is not available online, although it is known that ADP is more pricey than Gusto and Square. ADP is best for larger businesses with a more complex payroll process.

When it comes to Square Payroll vs Gusto vs ADP and which to choose, the best solution will be the one that fits your business needs, size, and finances. At the end of the day, as long as it is saving you time (and money), any payroll solution is better than none. 

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Joe DiSanto is the founder of Play Louder! He has built multi-million dollar businesses, produced critically acclaimed documentaries and an Emmy-winning TV show, invested millions in real estate, and semi-retired at age 43. Now, Joe serves as a Fractional CFO for several creative firms and is sharing a lifetime of fiscal know-how via Play Louder, an invaluable resource that helps individuals and business owners increase their net worth and plan better for their future.