Payroll software vs PEO

Gusto vs Justworks for a first US hire

Gusto and Justworks both help with US payroll, but they are strongest in different buying moments. Gusto is usually the cleaner payroll-software path. Justworks becomes more interesting when the company wants bundled HR support, compliance workflows, benefits administration, or a PEO model.

Last updated June 16, 2026. Verify plan pricing and coverage directly before buying.

Pick Gusto when You want direct-employer payroll software and can own HR decisions.

Pick Justworks when You want payroll plus HR support, benefits access, and a PEO path.

Cost lens Model Gusto as payroll admin; model Justworks PEO as a broader service layer.

Next check Ask who handles state registrations, workers comp, and benefits setup.

FactorGustoJustworks

Best fitSmall teams needing payroll, tax filings, benefits admin, and workers comp integrations.Teams wanting payroll plus HR tools, expert support, compliance help, benefits access, or PEO.

Pricing signalSimple is listed at $49/month plus $6/person; Plus and Premium add more HR and support depth.Payroll is listed at $8/employee/month plus a $50/month base fee; PEO tiers are listed per employee with no base fee.

Employer modelYou remain the direct employer and own more HR decisions.Payroll-only is available; PEO tiers use a broader outsourced/co-employment model.

Watch before buyingMulti-state support, benefits broker fit, add-ons, support tier, and state registration pricing.PEO contract terms, benefits pricing, workers comp handling, service fees, and exit process.

Use Gusto if the problem is payroll execution

Gusto is the better first stop when the company needs to pay W-2 employees, file payroll taxes, manage basic benefits workflows, and avoid unnecessary service complexity.

Check Gusto

Use Justworks if the problem is HR load

Justworks is worth comparing when payroll is only part of the need: HR support, compliance workflows, benefits administration, and potential PEO coverage.

Check Justworks

Decision rule

Start with Gusto if your EmployerCost estimate only needs a payroll admin line item. Compare Justworks if the estimate assumes a PEO or HR platform cost, if benefits access is a major reason to buy, or if multi-state compliance support is more valuable than minimizing software fees.

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Pricing sources

Gusto pricing Justworks pricing

Commercial links may be affiliate or referral links. This comparison is informational and is not payroll, tax, legal, insurance, or HR compliance advice.