Gusto is almost always the better choice for businesses under 50 employees. Here's why — and when ADP makes sense.
Gusto and ADP are the two names that come up most in small business payroll conversations. They are not equals. Here's an honest breakdown.
Gusto was designed from the ground up for businesses with 1-50 employees. It's clean, well-designed, and handles the full payroll workflow — calculating withholding, filing federal and state taxes, managing direct deposit, and generating year-end W-2s and 1099s — automatically.
Standout features: the onboarding flow for new employees is genuinely well-designed. Benefits administration (health insurance, 401k) is integrated. Customer support is responsive and understands small business questions.
Starting at $40/month plus $6 per employee/month, it's reasonably priced for what it does.
ADP is the market leader in payroll overall — but their small business product (ADP Run) is essentially a trimmed-down version of enterprise software. It works, and it handles complex payroll situations well, but the interface reflects its origins: it's less intuitive than Gusto, customer support can be harder to reach, and the pricing is less transparent (you typically need to request a quote).
Where ADP genuinely wins: if you have highly complex payroll needs, operate across multiple states, or are planning to grow to 50+ employees quickly, ADP's infrastructure handles scale better.
For the vast majority of small businesses — trades, restaurants, salons, retail, gyms — Gusto is the better choice. It does everything you need, at a fair price, without requiring you to navigate enterprise-grade complexity.
ADP makes sense if you're already using it and it's working, if you have a payroll specialist on staff who prefers it, or if you're running a business with genuinely complex multi-state payroll requirements.