Zenefits vs Gusto: Which HR Software is the Winner?

No comments

Should you adopt Zenefits or Gusto? If you’re having difficulty selecting the best HR software for your organization, we’re here to help. Read on for a Zenefits vs Gusto comparison that will help you make a smart choice.

Compare Zenefits and Gusto Against Your Needs
Zenefits vs Gusto

Many HRIS products are too expensive, clunky or feature-heavy for small and medium organizations. It’s no surprise that a lot of SMBs favor lighter HRIS tools like Zenefits and Gusto.

However, knowing which to choose can be difficult. We’ve compiled and curated the data to make that process easier. This article will provide a clearer understanding of both products so you can select the one that best suits your organization’s unique requirements. Here’s what we’ll cover:

One thing to keep in mind as you consider these products is company size. Zenefits is ideally suitable for small and medium businesses, while Gusto is best for small businesses only.

For a deeper look at each product, you can read our detailed analysis:

How Two Leading HR Solutions Stack Up

HR Modules

Zenefits and Gusto both offer several integrated modules. However, their fit for your company depends on your requirements and the level of capabilities you’re looking for.

Zenefits provides core HR management, compensation management, payroll, benefits, time tracking and employee scheduling. This makes it a more all-in-one suite that can deliver tools for most if not all HR needs.

Zenefits Performance Review

A dashboard of annual reviews in Zenefits.

Gusto, on the other hand, only offers core HR, payroll, benefits and time tracking. The lack of compensation management and employee scheduling provide a more bare-bones system that delivers foundational HR features but nothing beyond that.

If compensation management and employee scheduling are features that you can’t do without, Zenefits is the clear choice. However, if you’re only looking for key HR modules or are willing to plug in third-party systems to obtain additional functionality, then Gusto can be a solid option.

That said, Zenefits takes the first round because of its more extensive native functionality.

Advantage
Zenefits rates better than Gusto for #HR modules offered in SelectHub’s research & analysis of the two tools.
Compare HR Software Pricing & Costs with our Pricing Guide

Payroll Processing

Are you looking for a software that can run an unlimited number of payrolls for every internal as well as external employee of your organization? You’re in luck – both Zenefits and Gusto have robust payroll capabilities.

Zenefits allows HR administrators to set automatic payment allocation for new recruits. You can add text messages to share information regarding special payments, if present. Additionally, it lets you calculate multiple payment rates, such as garnishment withholding, depending upon multiple positions.

Zenefits Payroll

The payroll engine in Zenefits.

Gusto ensures easy, accurate payroll through its integrated platform that synchronizes employee data to auto-calculate payroll for different types of employees — hourly, salaried or contractors. You can allocate multiple payment rates, depending upon the employee performance for different pay periods. Just like Zenefits, this too includes garnishment withholding.

Gusto Payroll

Running payroll in Gusto.

While both solutions have solid payroll offerings, Gusto has the slightly stronger capabilities, so it edges out the advantage here.

Looking for other payroll options? You can check out the top payroll software to help you choose a solution that fits your business’s needs.

Advantage
@GustHQ rates better than Zenefits for payroll processing in SelectHub’s research & analysis of the two tools.

Payroll Compliance

Zenefits lets you automatically calculate all taxes. And if you’re too busy or looking for help in navigating the tricky waters of corporate taxes, Zenefits can help there too, with an option to allow the software to file and pay all taxes on your company’s behalf.

Here are some other compliance services that Zenefits provides:

  • Lets you report new employees to the desired state agencies
  • Supports FLSA overtime compensation regulations for employees
  • Incorporates FICA taxes
  • Calculates COBRA payments

Similarly, Gusto enables you to automatically calculate, file and pay payroll taxes at the local, state and federal level. It automatically reports new recruits to the state government on your company’s behalf. Additional capabilities let you:

  • Adjust wages complying with FLSA Tip Credit minimum wage policies
  • Handle COBRA requirements for employees when they leave the company
  • Help restaurants claim the FICA tip credit tax incentive

Both products have similar offerings for this feature. However, Gusto earns another win, as it provides additional features.

Advantage
@GustoHQ rates better than Zenefits for payroll compliance in SelectHub’s research & analysis of the two tools.

Compare Zenefits and Gusto Pricing Against Your Needs

Charitable Contributions

Your employees may want to contribute to charitable organizations. One of the benefits of charitable contributions is that taxpayers who contribute towards approved charitable organizations get to deduct the contribution amount from their total income when computing tax liability.

If you use Gusto, your employees can make all charitable contributions straight from their paychecks, including automatic deductions. Zenefits, on the other hand, does not have this capability.

Gusto is the easy choice for this feature.

Advantage
@GustoHQ rates better than Zenefits for charitable contributions in SelectHub’s research & analysis of the two tools.

Paycheck Loan

If you want to give your employees the option to request paycheck loans, Zenefits isn’t the best option, as it does not allow cashout from paychecks.

However, your employees can use their Zenefits card at all checkout counters while they make a purchase. The restriction is that if the spending exceeds an employee’s current balance for FSA, HSA, HRA or Commuter Benefits, the transaction gets declined. In such a scenario, the employee can submit a reimbursement claim.

On the flip side, Gusto lets employees borrow money between their paydays, depending on their estimated earnings. Moreover, the paycheck loan is repaid automatically by the software at zero additional interest. Only salaried and W-2 hourly employees are allowed to use the cashout feature.

Although Zenefits offers a card, it’s not as good of an option as Gusto’s paycheck lending. Comparing Gusto vs Zenefits on loan options, Gusto has the clear upper hand.

Advantage
@GustoHQ rates better than Zenefits for paycheck loans in SelectHub’s research & analysis of the two tools.

Time and Attendance

Time tracking is one of the most effective ways to establish accountability among employees. It provides a clear record of which employee completed a certain task, when it was completed and how much time they took to do so.

Gusto automatically calculates and takes into account team hours, holidays and time off, incorporating the data into payroll for streamlined tracking. Employees can clock in and out from their dashboard in real time, allowing them to add or edit at a later date. Upon manager approval, Gusto enables administrators to click and synchronize all timesheets within the organization to payroll. Another smart feature of the software is that it automatically calculates all stored wage records and overtimes.

Gusto Time Tracking

A team-level view of time and attendance in Gusto.

The time and scheduling tools in Zenefits can automatically sync the number of hours worked, time off information and employee breaks to the payroll engine. It lets employees clock in and out via mobile and desktop apps. Additionally, administrators have the option to choose to record the employee’s clock-in location, and when employees clock in, the software can capture their image, providing fraud detection.

Gusto generally provides stronger capabilities across the most common HR modules, including time tracking. Consider Gusto the winner here.

Advantage
@GustoHQ rates better than Zenefits for time & attendance capabilities in SelectHub’s research & analysis of the two tools.

Time Off Tracking

Sticking with the time tracking theme, let’s quickly discuss time off policies.

Zenefits enables you to choose and implement customized time off policies for employees, which can be synced with employee payroll and scheduling to ensure accuracy. It also lets workers submit requests for approval or rejection. You can also automatically calculate PTO balances using a calculator and set dates for time off blackouts to prevent employees from being absent on critical business days.

Zenefits Time Off Tracker

A view of employee PTO balances in Zenefits.

Gusto lets you implement custom-made time off policies as well. Employees can submit time off requests that managers can approve or disapprove. Gusto automatically tracks leave balances and accruals. Lastly, you can synchronize time off with the system’s calendar feature and payroll module.

Gusto Time Off Tracker

An employee’s personal view of their PTO in Gusto.

While Zenefits and Gusto offer similar features that support time off, once again we declared Gusto the winner for the deep functionality in its time tracking module.

Advantage
@GustoHQ rates better than Zenefits for tracking time off in SelectHub’s research & analysis of the two tools.

Compare Zenefits and Gusto Against Your Needs

Employee Scheduling

Need tools to efficiently organize and manage your workforce? Zenefits has you covered. It lets you create, edit and approve employee shifts based on times or roles. It even allows you to block out specific dates so you can work around an individual employee’s schedules and notify employees about a new schedule. Additionally, it offers real-time activity tracking and integrates with payroll so you don’t have to manually calculate compensation.

Zenefits Scheduling

The employee scheduling screen in Zenefits.

Although Gusto doesn’t provide employee scheduling, it enables you to integrate with major employee scheduling solutions like Deputy, which can help you meet your scheduling requirements.

Given that Zenefits provides employee scheduling natively while Gusto requires a third-party integration, Zenefits is the winner for this feature.

Advantage
Zenefits rates better than Gusto for employee scheduling in SelectHub’s research & analysis of the two tools.

Employee Surveys

Employee wellness and engagement play a central role in today’s business world. Organizations have started to realize the integral place that employee wellbeing and engagement have in improving overall productivity and innovation. Employee surveys are a significant factor that contributes to this goal. If you’re looking for a software that can help you carry out employee engagement surveys, then both Zenefits and Gusto would suit your needs.

Zenefits provides employee survey templates for free so you can keep track of employee engagement and satisfaction, as well as more readily identify rising concerns within the workplace. Using the templates requires Microsoft Excel.

On the other hand, Gusto enables employees to send monthly surveys anonymously. Such surveys can include pointed questions that help employers get a pulse on the health of the workforce. This provides regular, actionable feedback that managers and executives can leverage to drive better results in the short and long term.

All in all, while Zenefits provides just free survey templates, Gusto helps in executing these surveys every month. Therefore, Gusto is the winner for this feature.

Advantage
@GustoHQ rates better than Zenefits for employee surveys in SelectHub’s research & analysis of the two tools.

Employee Handbooks Builder

Creating a compelling and informative employee handbook from square one can be a daunting task. However, it’s hard to neglect the importance of having an up-to-date and comprehensive employee handbook.

Gusto provides a library with a range of off-the-shelf templates designed by industry experts, helping employers manage performance evaluations, labor law policies and more.

With Zenefits, you can easily create, upload and send multiple handbooks to your employees at the time of onboarding or on request. It also lets you store multiple versions and decide which version you’d prefer to use.

Handbooks are pretty standard, and both products get the job done. Gusto, however, earns the win here thanks to involving HR experts and providing premade templates to simplify the task of creating handbooks.

Advantage
@GustoHQ rates better than Zenefits for an employee handbooks builder in SelectHub’s research & analysis of the two tools.

Compare Zenefits and Gusto Against Your Needs

Benefits Administration

Zenefits offers organizations flexibility when it comes to providing healthcare plans for their employees. Working with certified broker partners, it helps employees choose from a number of options, including:

  • Medical, vision and dental plans
  • Life and disability insurance
  • FSA and HSA accounts
  • Commuter benefits
  • 401k
  • Supplemental benefits

Existing employees and new hires can self-enroll from their account on the platform. Employees can also use the mobile application to access claims, plans and account balances.
With Gusto, once the payroll system is set up, you can view all recommended benefits such as:

  • 529 college savings plans
  • Life and disability insurance
  • 401k
  • Commuter benefits
  • FSA and HSA health plans
  • Vision, dental and medical plans

Gusto Benefits

The benefits choices in Gusto.

You also have the option to switch qualifying existing benefits plans to your Gusto account. Its licensed brokers are available to answer queries and questions so that you can choose a suitable package, depending upon your unique requirements and budget. Employees have the option to add dependents, self-enroll in benefits and review their plan.

Although Gusto and Zenefits are evenly matched in many respects, we again give the edge to Gusto for its strength in essential HR functions.

Advantage
@GustoHQ rates better than Zenefits for #BenefitsAdministration in SelectHub’s research & analysis of the two tools.

Benefits Broker

Does your organization need the services of a benefits broker? If so, you have two solid choices.

Gusto offers in-house benefits brokering plans via its insurance services, providing companies with access to expert advice and insurance products in every state and Washington D.C. The company receives commissions on every sale of an insurance product for which it has acted as an ongoing broker.

Zenefits doesn’t take the in-house approach, instead partnering with several certified brokers who can help customers choose suitable benefits plans for themselves. It also enables users to continue partnership with current brokers, supporting those benefits plans in the system.

In this portion of the Gusto vs Zenefits battle, Gusto claims the win.

Advantage
@GustoHQ rates better than Zenefits for partnerships with benefits brokers in SelectHub’s research & analysis of the two tools.

Contractor Payments

Zenefits allows you to make contractor payments through direct deposit. However, if your organization fills 1099’s for your employees, including offline payments, then you’re required to update the information at year end. Zenefits charges a fee of $2 for every contractor payment.

Organizations using Gusto can also pay independent contractors. And, unlike Zenefits, it automatically files as well as emails all 1099s at year end at no additional charge.

Gusto is the clear winner for this feature.

Advantage
@GustoHQ rates better than Zenefits for contractor payments in SelectHub’s research & analysis of the two tools.

Reporting

The business intelligence reporting feature of Zenefits includes interactive visual charts, making it easy to digest data. These charts provide multiple ways to view, filter and manage data to facilitate analysis for necessary HR metrics such as headcount, tax information, compensation, PTO, turnover and more.

Zenefits BI

A dashboard providing visualization of HR metrics in Zenefits.

Gusto offers multiple prebuilt reports for team, taxes, payroll and more. Customization allows for greater flexibility, and you can download reports as a PDF or a CSV file.

Zenefits wins for the reporting function thanks to its BI app, which offers more powerful tools than you can get with Gusto.

Advantage
Zenefits rates better than Gusto for HR reporting functionality in SelectHub’s research & analysis of the two tools.

Native Mobile App

Mobility is a critical part of today’s work environment, especially if you have a dispersed or mobile workforce. Let’s see how our products measure up in this department.

If a native HR mobile app is crucial to you, Gusto may not be the best choice. The only way to access the platform from a mobile device is through an internet-connected browser.

Zenefits, by contrast, has apps for Android and iOS devices. Employees can use their app to update benefits info, ask for PTO, clock in or out, see the status of their performance reviews and access insurance cards.

Given the native mobile capability, Zenefits wins.

Advantage
Zenefits rates better than Gusto for native mobile apps in SelectHub’s research & analysis of the two tools.

Compare Zenefits and Gusto Against Your Needs

Declaring a Winner

Both products have a lot to offer, but at the end of the day, Gusto earns the victor spot in our comparison. It won in 11 of the 15 features we looked at. However, it’s important to note that Zenefits still has many advantages over Gusto. Zenefits provides an API that enables developers to create custom integration among third-party apps and its platform, while Gusto lacks this feature. And unlike Gusto, it provides compensation management.

We hope this Zenefits vs Gusto article has given you better clarity and are in a position to decide what’s best for your business. For further analysis of these and other SMB solutions, grab our free HR software comparison report to filter products based on your exact requirements.

Which features do you find the most significant for your business? Based on our Zenefits vs Gusto evaluation, which product better fits your needs? Let us know in the comments below!

Top Competitors for Zenefits and Gusto

Kronos Logo
Kronos Workforce Central
Starting at $5,000
Workday Logo
Workday HCM
Starting at $400
Oracle HCM Cloud
Oracle HCM Cloud
Starting at $13 per user per month for global HR
Dayforce
Dayforce
Starting at $11.50 per user per month for payroll and benefits
UltiPro
UltiPro
Starting at $600 for 5 users per year
ADP WorkForce Now
ADP Workforce Now
Starting at $62 per month
SAP Success Factors
SAP Success Factors
Starting at $895 per 5 users per year
BambooHR
BambooHR
Starting at $6 per user per month
Aditi PariharZenefits vs Gusto: Which HR Software is the Winner?

Leave a Reply

Your email address will not be published. Required fields are marked *