Updated 30 March 2026
Gusto for Small Business
A focused guide for businesses under 25 employees. See exactly what a 5-person startup, a 10-person agency, and a 20-person retail business would pay, feature by feature.
$70
5 employees/month
$100
10 employees/month
$130
15 employees/month
$160
20 employees/month
All prices shown for the Simple plan ($40/mo base + $6/person). W-2 employees only, single state.
Real Cost Scenarios
Three realistic small business scenarios with exact monthly costs, including add-ons and recommendations for each.
5-Person Tech Startup
Seed-stage startup with 5 full-time engineers in one state. No contractors yet. Using the Simple plan.
$70
per month
$840
per year
5
total workers
1
state
At $70/month, Gusto Simple covers full-service payroll with automated federal and state tax filing, employee self-service for paystubs and tax documents, and basic onboarding. The 4-day direct deposit timeline is fine for monthly or biweekly pay schedules. Health insurance through Gusto's built-in brokerage costs nothing extra for the platform (you pay the insurance premiums directly). A 401(k) through Guideline would add $49/mo + $40 (5 x $8) = $89/mo if all employees participate.
Recommendation: Gusto Simple is the right choice. You do not need multi-state payroll, next-day deposit, or time tracking at this size. Save $70/mo by avoiding the Plus plan upgrade until you grow.
10-Person Marketing Agency
Digital marketing agency with 10 full-time employees across 2 states and 5 freelance contractors.
$200
per month
$2,400
per year
15
total workers
2
states
With employees in 2 states, you need the Plus plan for multi-state payroll support. Plus costs $80/mo base + $120/mo for 10 employees = $200/mo. The 5 contractors are included at no extra cost on Plus (they would add $30/mo on Simple). Plus also gives you next-day direct deposit, built-in time tracking, and advanced PTO management. The one-time state tax registration fee for the second state is $200. First-year total: $2,400 + $200 registration = $2,600.
Recommendation: Gusto Plus is necessary here for multi-state support. If all 10 employees were in one state, you could save $100/mo by using Simple ($100/mo + $30 for contractors = $130/mo). The multi-state requirement locks you into Plus.
20-Person Retail Business
Retail store with 12 full-time and 8 part-time employees, all in one state. Weekly payroll.
$160
per month
$1,920
per year
20
total workers
1
state
A 20-person retail team in one state runs efficiently on Simple at $160/mo. Weekly payroll runs are included at no extra cost (Gusto allows unlimited runs on all plans). With 8 part-time employees, time tracking becomes important. Simple does not include time tracking, so you would either use a separate tool like Homebase (free for one location) or upgrade to Plus at $320/mo for built-in tracking. If you use external time tracking, Simple saves $160/mo ($1,920/yr) compared to Plus.
Recommendation: Start on Simple at $160/mo. Add Homebase (free) for time tracking. The Plus upgrade to $320/mo only makes sense if you need next-day direct deposit or plan to expand to multiple states. For a single-location retail business, Simple with free external time tracking is the best value.
Simple vs Plus: Is the Upgrade Worth $6 Per Person?
The jump from Simple to Plus doubles your per-person cost from $6 to $12. Here is exactly what that extra $6 per person per month gets you, and whether each feature justifies the price.
| Feature | Simple | Plus | Worth Upgrading? |
|---|---|---|---|
| Monthly base fee | $40 | $80 | Plus costs $40/mo more |
| Per-employee fee | $6/person | $12/person | Plus costs $6/person more |
| 10 employees monthly total | $100 | $200 | Plus costs $100/mo more |
| 20 employees monthly total | $160 | $320 | Plus costs $160/mo more |
| Multi-state payroll | Single state only | All 50 states | Required for multi-state teams |
| Direct deposit speed | 4 business days | Next-day | Worth it for hourly teams expecting fast pay |
| Time tracking | Not included | Built-in | Saves $3 to $5/person vs buying separately |
| PTO management | Basic (manual) | Automated accrual and tracking | Saves admin time for teams over 10 |
| Contractor payments | $6/contractor/mo | Included | Plus saves money with 7+ contractors |
| Team directory | Basic | Full org chart | Cosmetic, not worth upgrading for |
| Hiring and onboarding | Basic | Offer letters, checklists, e-sign | Worth it if hiring frequently |
When to Upgrade to Plus
Upgrade to Plus when any of these conditions apply: you hire employees in a second state (multi-state is Plus only), you have more than 7 contractors (Plus includes contractors at no extra cost, saving $42+/mo), your hourly employees need next-day direct deposit, or you want to eliminate a separate time tracking subscription. For a 15-person single-state team with no contractors, Simple at $130/mo saves $130/mo compared to Plus at $260/mo. That $1,560/yr savings is significant for a small business.
Your First Week on Gusto: Setup Checklist
Everything you need to do in your first 5 business days to go from signup to your first successful payroll run.
Day 1: Account Setup
- Create your Gusto account and verify your business EIN
- Connect your business bank account for payroll debits (takes 2 to 3 business days to verify micro-deposits)
- Enter your company address and state tax IDs (Gusto will help you get these if you do not have them)
- Set your pay schedule (biweekly is most common, weekly for hourly/retail teams)
Day 2: Employee Setup
- Add employees by name and email. Gusto sends them self-service invitations
- Employees complete their own W-4, I-9, and direct deposit information through Gusto
- Enter salary or hourly rate for each employee
- Set up PTO policies (accrual rate, carry-over limits, blackout dates)
Day 3: Tax Configuration
- Confirm federal tax deposit schedule (most small businesses are monthly depositors)
- Verify state tax withholding rates are correctly calculated
- If switching from another provider, enter year-to-date payroll totals for each employee
- Set up workers compensation insurance through Gusto's partner (pay-as-you-go billing)
Day 4: Benefits Setup
- Browse health insurance plans through Gusto's built-in brokerage (no extra platform fee)
- Set up any pre-tax deductions (health insurance, HSA, FSA, commuter benefits)
- Configure 401(k) through Guideline if offering retirement benefits ($49/mo + $8/participant/mo)
- Set up any post-tax deductions (garnishments, Roth 401k contributions)
Day 5: First Payroll
- Run a preview payroll to verify all calculations before your first real run
- Check that gross pay, tax withholdings, deductions, and net pay look correct for each employee
- Submit your first payroll. On Simple, submit 4 business days before payday. On Plus, next-day deposit is available.
- Verify direct deposits land correctly in employee bank accounts
Features That Matter Most Under 25 Employees
Automated Tax Filing
Gusto calculates, files, and pays federal, state, and local payroll taxes automatically on all plans. For a small business owner, this alone saves 2 to 4 hours per pay period compared to manual filing. Gusto also handles W-2 distribution in January and 1099-NEC filing for contractors. There are no per-filing fees.
New Hire Onboarding
Employees receive an invitation link and complete W-4, I-9 (with electronic signature), direct deposit setup, and benefits enrollment on their own. This eliminates the paper-heavy first-day experience. On the Plus plan, you also get customizable onboarding checklists and electronic offer letter templates.
Direct Deposit Speed
Simple plan: submit payroll 4 business days before payday. Plus plan: next-day direct deposit (submit by 4 PM PT one business day before payday). For salaried employees paid biweekly, 4-day lead time is manageable. For hourly employees wanting the fastest pay, the next-day deposit on Plus is a quality-of-life upgrade that reduces turnover.
Gusto Wallet (Employee Cash Out)
Employees can access up to $500 of earned wages before payday through the Gusto Wallet app at no cost to the employer or employee. This feature reduces requests for salary advances and is especially valued by hourly workers. Gusto Wallet also includes a fee-free checking account and savings tools for employees.
Common Mistakes Small Businesses Make on Gusto
Starting on Plus when Simple would work
Many businesses default to Plus for the time tracking and PTO features. But if you are a single-state company under 15 employees, you save $90 to $130/mo by using Simple with a free time tracking tool like Homebase or Clockify. That is $1,080 to $1,560/yr.
Not using the benefits brokerage
Gusto's built-in health insurance brokerage costs nothing to use (Gusto earns from the carrier, not from you). Small businesses that shop for insurance separately through a traditional broker are missing a free service that is already integrated into their payroll platform.
Paying for contractors on Simple when Plus would be cheaper
On Simple, each contractor costs $6/mo. With 7+ contractors, that is $42+/mo in contractor fees. Plus includes unlimited contractors for free. At 7 contractors, the contractor savings alone ($42) offset a chunk of the $40/mo base fee increase from Simple to Plus.
Not entering year-to-date payroll data when switching mid-year
If you switch to Gusto from another provider mid-year, you must enter year-to-date payroll totals for each employee. Skipping this step causes incorrect W-2s at year end. Gusto prompts you during setup, but many businesses rush through this screen. Take the time to enter accurate YTD data from your previous provider.
Bottom Line for Small Businesses
Gusto is one of the best payroll platforms for businesses under 25 employees. Start on the Simple plan at $40/mo + $6/person unless you need multi-state payroll or next-day direct deposit. For a 10-person company, that is $100/mo for full-service payroll with automated tax filing, employee onboarding, and health insurance brokerage. Use the free benefits brokerage, skip the Plus upgrade until you actually need multi-state or time tracking, and set up your account during a first-month-free promotion to save an extra $70 to $160.