Gusto vs. Square Payroll: Which payroll software should you choose?
Gusto is a full payroll and benefits platform with published pricing. Square Payroll is built for businesses already running Square — timecards, tips, and POS data flow straight into payroll.
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- You want the deeper payroll, HR, and benefits platform
- You offer health insurance or a 401(k)
- You pay salaried staff or run S-corp owner payroll
- You aren't tied to Square's ecosystem
- You already run Square POS
- You need tips and timecards to flow into payroll automatically
- You're a restaurant, café, or retail shop on Square hardware
- You want the simplest possible setup inside a tool you already use
If you run Square POS, Square Payroll is hard to argue against — the tip and timecard integration removes the most error-prone part of restaurant payroll. If you don't, Gusto is the stronger standalone platform on benefits, HR, and multi-state payroll.
Gusto vs. Square Payroll at a glance
A scannable summary. Always confirm current pricing and features directly with each provider before buying.
GustoModern small businesses
SquareSquare POS shops, restaurants, retail
GustoPublished
SquarePublished
GustoSimple: $49/mo + $6/person
Square$35/mo + $6/person paid
Gusto$35/mo regular base, per-contractor fee (promotional $0 base often available)
Square$0 base, per-contractor fee
GustoIncluded
SquareIncluded
GustoSupported
SquareImported directly from Square POS
GustoTime tracking on Plus
SquareNative from Square timecards
GustoBuilt in, supported states
SquareNot a benefits platform — plan on outside partners
GustoIncluded on Plus
SquareSupported, but not built for complex multi-state employers
GustoHR basics included
SquareMinimal
Gusto vs. Square Payroll: Quick winners
Different businesses weigh trade-offs differently. Here's where each platform tends to come out ahead.
Pricing
Both publish pricing, which is a welcome change from the quote-based providers. Gusto's Simple plan is $49/month plus $6 per person per month; Plus is $80/month plus $12 per person and adds multi-state payroll, time tracking, and next-day direct deposit.
Square Payroll is $35/month plus $6 per person paid for full-service employee payroll, and its contractor-only plan has no base fee at $6 per person paid. Pricing verified August 2026.
Square offers a contractor-only path with no monthly base, which is genuinely useful if you pay a handful of 1099 workers and have no employees yet. Gusto's contractor plan is $35/month plus $6 per contractor, with promotional $0-base pricing often available.
Square is cheaper on sticker price at $35/mo + $6 per person paid versus Gusto Simple at $49/mo + $6 per person.
Pricing verified August 2026
Payroll
Both run full-service payroll with federal, state, and local tax filings, W-2s, and 1099s. Gusto's platform goes further on employee self-onboarding, documents, and payroll options for mixed salaried and hourly teams.
Square's advantage is specific and important for food and retail: tips recorded at the POS and hours from Square timecards land in payroll without a manual step. Manual tip entry is where small restaurants make payroll mistakes, so eliminating it has real compliance value.
Gusto is broader; Square is better wired for POS-driven pay data.
Benefits and HR
Gusto brokers health benefits in supported states, integrates 401(k) providers, and includes HR basics like offer letters and document storage. If you want to offer benefits without a separate broker relationship, that matters.
Square Payroll is deliberately narrower — it's payroll attached to a commerce platform, not an HR suite. Square is not a benefits platform, so if health insurance and retirement are part of what you're buying, plan on outside partners and confirm what's available in your state before you switch.
Benefits and HR breadth clearly favor Gusto.
If you've narrowed your choice, check current pricing and details directly with each provider.
Ease of use
For a Square merchant, Square Payroll is the easier product because the employee and hours data is already in the system — there's less to set up and less to reconcile. For everyone else, Gusto is the easier product, with a setup flow designed for businesses running payroll for the first time.
Whichever one already has your data is the easier one.
Scalability
Gusto grows with you through multi-state hiring, benefits, and mixed workforce types. Square Payroll grows fine within a Square-centric business, but if you add locations in new states, offer richer benefits, or move off Square hardware, the tie-in becomes a constraint rather than a feature.
Gusto has more room to grow outside a single ecosystem.
Gusto pros and cons
- Published pricing
- Built-in benefits and 401(k) integrations
- Multi-state payroll on Plus
- HR basics included
- Low-cost contractor-only plan ($35/mo + $6 per contractor)
- No native Square POS tip or timecard import
- Time tracking requires the Plus plan
- Costs more than a bare-bones payroll tool
Square Payroll pros and cons
- Tips and timecards flow in from Square POS
- Published pricing
- $0-base contractor-only plan
- Very little setup for existing Square merchants
- Much less HR and benefits depth
- Value drops sharply if you don't use Square
- Narrower fit for salaried, multi-state, or benefits-heavy employers
Which businesses should choose Gusto?
- Businesses offering health insurance or a 401(k)
- Employers with salaried staff or S-corp owner payroll
- Multi-state employers
- Businesses not committed to Square
Which businesses should choose Square Payroll?
- Restaurants and cafés on Square POS
- Retail shops using Square hardware and timecards
- Tip-heavy businesses that want automatic tip import
- Square merchants paying only contractors
Gusto vs. Square by business type
Final verdict: Gusto vs. Square Payroll
Square Payroll wins for Square merchants, especially tip-heavy restaurants and cafés. The POS integration removes the manual data entry where payroll errors usually start.
Gusto wins for everyone else, and for Square merchants who need real benefits administration, multi-state payroll, or HR tooling.
The deciding question is simple: is your hours and tips data already in Square? If yes, lean Square. If no, Gusto is the stronger platform.
Square Payroll for Square merchants; Gusto for everyone else
Pick your provider and check current pricing
Visit each provider directly to confirm current pricing, packages, and features for your business.
Frequently asked questions
Is Square Payroll only for Square users?+
No, but most of its advantage comes from the Square ecosystem. If you don't use Square POS or timecards, you lose the tip and hours integration that makes it compelling.
How much does Gusto cost?+
Gusto's Simple plan is $49/month plus $6 per person per month, and Plus is $80/month plus $12 per person and adds multi-state payroll, time tracking, and next-day direct deposit.
Can either pay contractors only?+
Yes. Square Payroll offers a contractor-only option with no monthly base fee. Gusto's contractor plan is $35/month plus $6 per contractor, with promotional $0-base pricing often available.
Which handles tips better?+
Square Payroll, because tips recorded at the Square POS import directly into the pay run rather than being entered by hand.
Which is better if I offer health insurance?+
Gusto. It brokers health benefits in supported states and integrates 401(k) providers, which is deeper benefits support than Square Payroll offers.
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