Gusto vs ADP for Payroll: Which Is Right for Your Business?
Gusto and ADP are leading payroll providers, but they serve different business sizes and needs. Compare pricing, features, HR tools, and ease of use to find the right fit.
Gusto and ADP are two of the most recognised payroll platforms, but they are designed for different audiences. Gusto is built for small businesses wanting a simple, all-in-one HR and payroll solution. ADP serves businesses from small to enterprise, with deep customisation and compliance tools.
Gusto vs ADP: The Definitions
Gusto is a cloud-based payroll, benefits, and HR platform built specifically for small and medium businesses. It handles payroll tax filing, direct deposit, benefits administration, and onboarding in a single, easy-to-use interface.
Formula
Gusto pricing: Simple £6/employee/mo + £40 base; Plus £9/employee/mo + £60 base; Premium: custom pricing.
Example
A business with 10 employees on Gusto Simple pays £40 + (10 × £6) = £100/month for full payroll, tax filing, and basic HR tools.
ADP (Automatic Data Processing) is a legacy payroll and HR services company serving businesses of all sizes. It offers multiple products (RUN Powered by ADP for small business, Workforce Now for mid-market, Enterprise HR for large companies) with deep compliance and reporting features.
Formula
ADP RUN pricing: custom quotes, typically £20–40 base + £4–8/employee/month. Enterprise plans are negotiated directly.
Example
A business with 10 employees on ADP RUN might pay £60–100/month depending on negotiated rate and features. Larger businesses on Workforce Now pay significantly more for the added compliance and reporting tools.
Key Differences
- 1Gusto is self-serve and designed for non-experts; ADP typically requires more setup and may involve a dedicated ADP rep
- 2Gusto pricing is transparent and published online; ADP requires a custom quote
- 3Gusto includes HR tools (onboarding, org charts, time tracking) in a unified UX; ADP HR tools vary by plan and can feel fragmented
- 4ADP has deeper compliance tools, international payroll capability, and enterprise reporting; Gusto focuses on the US SMB market
When to Use Gusto vs ADP
For small businesses under 50 employees wanting simple, self-serve payroll, Gusto wins on ease and price transparency. For larger businesses or those with complex compliance needs, ADP's depth justifies the additional cost and complexity.
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Common Mistakes to Avoid
Choosing ADP without comparing actual all-in costs, ADP's add-on fees for time tracking, HR, and reporting can significantly exceed the base price
Assuming Gusto cannot scale, it handles up to several hundred employees well, though enterprise features are limited
Not testing the migration process, switching payroll providers mid-year can create W-2 and year-end complications
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Frequently Asked Questions
Is Gusto or ADP cheaper?↓
Gusto is generally cheaper and more transparent for small businesses. ADP requires custom quotes, which makes comparison harder, and add-on fees can accumulate. For straightforward payroll under 50 employees, Gusto typically wins on cost.
Does Gusto handle payroll taxes automatically?↓
Yes. Gusto automatically calculates, files, and pays federal, state, and local payroll taxes on your behalf. It also generates W-2s and 1099s at year-end. This is one of Gusto's key selling points for small business owners without payroll expertise.
Is ADP good for small businesses?↓
ADP RUN is designed for small businesses and works well. However, many small business owners find Gusto's interface simpler and its pricing more transparent. ADP becomes a clearer winner as business complexity and size increase.
Can I switch from ADP to Gusto?↓
Yes. Gusto has an ADP migration guide and will import employee data. The best time to switch is at the start of a new calendar year to simplify W-2 processing. Gusto's onboarding team assists with the migration at no additional charge.
Which payroll software integrates better with accounting software?↓
Both Gusto and ADP integrate with major accounting platforms (QuickBooks, Xero). Gusto's integrations are generally considered smoother and more automated. ADP's integrations vary by product tier and may require manual configuration.