Getting payroll up and running is one thing many businesses struggle with. Hourly and Gusto are two notable payroll solutions available to address this challenge for small and medium-sized businesses. Gusto offers comprehensive payroll, HR services and other features, while Hourly provides similar services except for HR features.
Given the similarities found in both payroll solutions, choosing one over the other can be tasking. This article will compare Hourly and Gusto to help businesses decide which software solution best suits their payroll needs in 2023.
- Hourly vs. Gusto: Comparison table
- Hourly vs. Gusto pricing
- Features comparison: Hourly vs. Gusto
- Hourly pros and cons
- Gusto pros and cons
- Should your organization use Hourly or Gusto?
Hourly vs. Gusto: Comparison table
|Automatic tax filing||Yes||Yes|
|International contractor payments||No||Yes|
|Multi-state payroll||Only for California-based businesses||All 50 U.S. states and 120+ international destinations|
Hourly vs. Gusto comparison pricing
Both Hourly and Gusto offer flexible pricing plans for businesses. These plans are categorized based on the features that come with each.
Hourly offers Gold and Platinum plans. The Gold plan costs $6/month per person and $40/month base. Hourly Gold plan covers many important payroll features such as automatic tax filing, unlimited payroll, next-day direct deposit and unlimited phone support. The Platinum plan costs $10/month per person and $60/month base. While this plan covers all the features under the Gold plan, it makes a great difference with same-day deposits and fully managed garnishments.
Unlike Hourly, which offers only two plans, Gusto offers four pricing tiers: Simple, Plus, Premium and Contractor Only. The Simple plan starts at $6/month per user and $40/month base and covers basic payroll and benefits integration. Gusto Plus starts at $9/month per user and $60/month base and covers comprehensive payroll, benefits and HR management. The Premium plan takes things a little further as it offers scalable payroll and benefits, expert HR and dedicated support. Contact Gusto for a quote.
The Gusto Contractor Only plan is primarily for contractors and has no base pay for six months. This plan costs $6/month per contractor.
Features comparison: Hourly vs. Gusto
Below are some of the features of Hourly and Gusto and how they compare with each other.
Both Hourly and Gusto offer direct deposit as one of the features in their payroll system. For Hourly (Figure A), the Simple plan offers next-day direct deposit, while the Platinum plan offers same-day direct deposit.
On the other hand, Gusto offers different timelines for its direct deposit option. There is next-day direct deposit, two-day direct deposit and four-day direct deposit. The next-day direct deposit option is only available to customers on Plus and Premium subscriptions.
Hourly offers a tax filing option that can automatically file tax returns for your employees and deduct benefits such as 401(k) and medical insurance from your payroll. However, the major limitation is that Hourly is limited to businesses domiciled in California.
Gusto’s tax filing is automatic and comes with broader coverage (Figure B). The software can automatically file and pay federal, state and local taxes across the U.S.
Hourly offers several employee management options, such as vacation and sick policies, which allow businesses to set time-off rules and track vacation and sick leave for their employees. The software also provides pay cards to employees, giving them immediate access to their pay via a reloadable debit card.
Gusto, on the other hand, provides more expansive employee management packages. The software offers hiring and onboarding features, including employee self-onboarding, onboarding checklists and employee background checks.
Integration with other apps
Both software solutions offer integration features that allow businesses to connect with other business applications. Hourly only integrates with QuickBooks, which limits the options to connect the software with other popular accounting software.
Gusto integration spans beyond QuickBooks and includes other accounting solutions like FreshBooks, Ignition, Xero and other tools. This level of integration will be more suitable for companies that do not use only QuickBooks to manage their accounting records.
Time-tracking and attendance
Hourly time-tracking comes as an inbuilt feature, which requires no third-party integrations. This means that employers do not need to go the extra mile to figure out other time-tracking and attendance software for their business.
Unlike Hourly, Gusto’s time-tracking also features project tracking and the capacity to synchronize with other time-tracking software, such as When I Work and Homebase, making it more robust.
Hourly pros and cons
Here is a list of some major highs and lows of Hourly Payroll software.
- Users can generate and download payroll reports in Excel and PDF formats.
- The app provides a paperless employee onboarding option.
- There is a flexible payroll schedule that allows businesses to pay their employees weekly, bi-weekly or twice a month.
- Employers have unlimited payroll payruns even in the lower plan.
- Thanks to the time tracking feature, businesses need no third-party time and attendance software.
- There is a limited payroll pricing plan.
- The availability of payroll services is limited to California.
- The integration is limited to only QuickBooks.
Gusto pros and cons
Below are some of the pros and cons of Gusto.
- Time and project tracking helps to monitor not just time but your projects.
- The payroll covers all the states in the U.S. and over 120 countries.
- Gusto makes it easier for businesses to integrate with other popular business tools.
- Gusto offers multiple payroll plans for different levels of business.
- The software offers unlimited payroll payruns.
- There is no same-day direct deposit option.
- Gusto’s pricing might be on the high side compared to other payroll alternatives.
- There is no free trial option.
In order to draw a quality comparison of both payroll platforms, we evaluated their features, pricing, reputation and review from users. Our findings indicate that while both platforms offer reliable payroll services, Hourly has limited features and is more suitable for small businesses. On the other hand, Gusto offers broader payroll features with core HR functionalities, making it ideal for growing and mid-sized organizations.
Should your organization use Hourly or Gusto?
Going for either Hourly or Gusto will depend on many factors, such as the size of your organization, your payroll needs and the location of your business. For small businesses with basic payroll needs, Hourly will be more suitable for you. So, if your business needs a payroll software that can handle basic payroll needs, such as automatic tax filing, direct deposit, paper checks, unlimited payroll, W-2s and 1099s, Hourly would be a great choice.
However, if you run a mid-sized business with employees in multiple locations, Gusto should be your choice. Gusto can handle more complex payroll needs requiring integrations with other accounting software. It also comes with other HR and benefits management packages that can help growing businesses keep their payroll up and running.
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