Best Human Resource Software 2021

Zenefits vs. Gusto

Is Zenefits or Gusto the better solution for you? This in-depth, feature-by-feature breakdown will help you decide which human resource tool is the best fit for your business.

Human resource software includes features like payroll, benefits management, and compliance assistance. It is one of the most critical software tools for small businesses, alongside other foundational software systems like document management software and accounting software.

This article will discuss the differences between two of the largest players in this space: Zenefits and Gusto. We’ll discuss the notable strengths and weaknesses of each tool, and provide recommendations for who each tool will suit best.

All of our recommendations are based on firsthand research, product demos with the software companies, and dozens of hours spent hand-testing human resource tools. More details regarding our research process can be found on our human resource category page.

Zenefits & Gusto Comparison Summary

We researched and extensively tested Zenefits and Gusto. Zenefits received a SoftwarePundit Analyst Rating of 95, while Gusto received a 92.

Zenefits was rated higher because its onboarding assistance and performance management features are stronger than those in Gusto. It also supports benefits management in 49 states as opposed to 39 in Gusto. It received the highest rating in the human resource software category. Gusto is more affordable for companies on a budget.

Here’s a breakdown of our review criteria and how Zenefits and Gusto performed in each category.

CriteriaAnalyst RatingFeaturesUsabilityPricingCustomer Support

In terms of pricing, Zenefits is less affordable than Gusto. Zenefits’ pricing starts at $10 per month per user. Gusto’s pricing starts at $6 per month per user with an additional monthly platform fee of $39.

Both solutions offer the standard features found across human resource software tools. These include payroll, benefits, time tracking, onboarding assistance, and custom reports. Zenefits’ strongest points are its onboarding assistance and performance management features. Gusto’s strongest feature is its custom report creator.

Note that both solutions do not offer job posting and distribution features like Zoho People and Sage HR.

Overall, we recommend Zenefits over Gusto if you are looking for a feature-rich human resource software solution built for small businesses. Its interface, onboarding assistance, and performance management features are all stronger than those in Gusto. However, Gusto is the better choice for businesses who want an affordable solution that excels in payroll.

Here’s a quick breakdown of who will prefer each option:

You'll prefer Zenefits if:

  • You leverage HR software for onboarding and performance management
  • You want to automate creating new software accounts for new hires
  • You want to perform background checks on new hires

Try Zenefits Today

You'll prefer Gusto if:

  • Gusto can offer benefits management in your state
  • You are in need of affordable payroll software
  • You want to easily create customizable reports

Try Gusto Today

Table of Contents

Zenefits & Gusto Price Comparison

Overall, Zenefits is less affordable than Gusto. Both applications come with payroll and benefits in their base plans.

Zenefits Pricing Details

Zenefits’ pricing starts at $10 per month per user. It is one of the more affordable human resource software systems on the market today. Payroll, advisory services, and onboarding your own broker to the platform cost an additional $6, $10, and $5 respectively.


Price per Month per UserFeatures
  • Core HR
  • Time tracking
  • Integrations
  • Everything in Essentials plan
  • Compensation management
  • Performance management
  • Everything in Growth plan
  • Well-being
  • Employee engagement surveys

Gusto Pricing Details

Gusto pricing starts at $6 per month per user. Gusto also has a platform fee that starts at $39 per month. Pricing increases depending on the number of employees added to your account.

Core Plan
  • $39 per month base price
  • $6 per month per person
Complete Plan
  • $39 per month base price
  • $12 per month per person
Concierge Plan
  • $149 per month base price
  • $12 per month per person

Zenefits & Gusto Feature Comparison

Overall, Zenefits has stronger features than Gusto. Both solutions, however, do not offer applicant tracking features such as job post distribution and applicant pipelines.

For a full analysis of each solution’s features, read our Zenefits review and Gusto review.

Job post distributionNoNo
Employee onboardingYes (stronger)Yes
Performance managementYes (stronger)Yes
Expense managementNoNo
Time TrackingYes (stronger)Yes
Compliance SupportYesYes
Custom reportsYesYes (stronger)

Employee Onboarding

Employee onboarding and offboarding is more robust in Zenefits compared to Gusto. Both applications can assist your business with onboarding your employees through their documents, payroll, and benefits. Zenefits, unlike Gusto, can perform background checks and onboarding employees onto software like Slack and Google Workspace.

Zenefits Onboarding Assistance

The basis of onboarding for both software solutions is similar. You can set offer letters, hiring agreements, or any other necessary documents to be automatically sent to your new hire. You can also set up your employee’s payroll and health benefits.

Zenefits can conduct background checks unlike Gusto. You can run Standard and Premium checks. The Premium check expands the Standard check to include all counties of residence in the past seven years.

Here are the points covered with Zenefits’ background checks: SSN National criminal records Sex offender list Address history County criminal records

Zenefits can also onboard your employees onto software solutions in your tech stack. Zenefits can automatically create accounts or send invitations for the following:

  • Gmail
  • Salesforce
  • Slack
  • Carta
  • Expensify


Both Zenefits and Gusto offer strong, unlimited payroll for full-time, part-time, and contingent employees. We recommend Gusto If your primary use case for HR software is running payroll at an affordable rate. An example of payroll in Gusto is seen below.

Gusto Payroll Example

Both Zenefits and Gusto handle federal and state taxes for your payroll. You can calculate, remit, and file the following taxes:

  • W-2
  • 1099
  • 940
  • 941

You can also run a number of off-cycle payments in both Zenefits and Gusto. Here are some common off-cycle payments you might run for your employees:

  • Contractor pay
  • Vendor pay
  • Bonuses
  • Commissions
  • Severance


Benefits are easy to set up in both Zenefits and Gusto. If your primary interest in HR software is affordable benefits management, the determining factor between Zenefits and Gusto will be whether your state is supported or not. Gusto is more affordable than Zenefits but only supports 39 states as opposed to 49 in Zenefits.

Zenefits offers benefits in every state except Hawaii. Gusto does not support the following states:

  • Alabama
  • Alaska
  • Hawaii
  • Mississippi
  • Montana
  • Nebraska
  • North Dakota
  • Rhode Island
  • West Virginia
  • Wisconsin
  • Wyoming

Consider Justworks if your state is not supported by both Zenefits and Gusto.

Gusto Benefits Guidance

An example of selecting benefits in Gusto is seen above. Selecting benefits in Gusto is more user-friendly than in Zenefits. You are provided with mandatory and optional plans with average costs for each. This is particularly advantageous for newer businesses who have little to no experience with choosing benefit plans for their employees.

We still find that benefits management in both Zenefits and Gusto is user-friendly. Both software solutions support common medical, dental, and vision plans. You can also offer employees health care FSAs, HSAs, 401(k)s, and commuter benefits.

Zenefits Benefits Overview

Time Tracking

Time tracking in Zenefits and Gusto works well for both salaried and hourly employees. This is because both applications, unlike Justworks, support self-service time clocking. Zenefits does, however, offer a more curated experience in creating paid-time-off (PTO) policies. This is helpful for new businesses who are beginners to PTO policies and their requirements.

Gusto Time Tracking Clock

Seen above is an example of clocking in with Gusto. In both Zenefits and Gusto, you can clock in through their respective desktop or mobile applications. This is advantageous for workers who need to clock-in outside of an office environment such as field service management employees.

Zenefits makes it easier for new businesses to create PTO policies. This is because Zenefits offers a general summary of pre-made PTO policies you can apply to your company. An example is seen below.

Zenefits Paid Time Off Policy Assistance

You can create as many PTO policies as you require in both Zenefits and Gusto. Common policies include:

  • Sick days
  • Vacation
  • Bereavement
  • Jury duty
  • Floating holidays

Once you've created your new PTO policy, you can define entitlement, accrual methods, applicability, and restrictions in both software solutions.

Compliance Assistance

Zenefits and Gusto both offer basic compliance assistance features. Both Zenefits and Gusto come with respective checklists to remind your company of missing compliance tasks. You can also store important employee forms including I-9s, W-2s, and electronic signatures. We recommend considering Justworks if compliance assistance features such as free training courses are a priority for you.

Gusto Compliance Checklist

Seen above is Gusto’s compliance dashboard. You can visualize important legal steps your company must handle in both Zenefits and Gusto.

Gusto and Zenefits also automate several compliance tasks for your company. These tasks include:

  • Calculating, remitting, and filing taxes
  • Creating and formatting W-2s and 1099s
  • Tracking changing tax laws
  • Tracking time for lunches and breaks for hourly employees

Performance Management

Zenefits comes with stronger performance management features than Gusto. You can only track employee insights and happiness in Gusto. Zenefits, conversely, allows you to create your own performance review templates and visualize progress on one-on-one meetings.

Zenefits Performance Review Overview

Zenefits comes with a number of industry-standard performance review templates. These include:

  • Coaching session
  • General review
  • Manager review
  • Peer review
  • Quarterly review

Creating internal surveys in Zenefits is also more flexible than in Gusto. This is because surveys are premade and cannot be customized in Gusto.


The reports in Gusto are more feature-rich than in Zenefits. Both applications come with a number of helpful reports to access for high level views of your company and employees. However, Gusto’s custom report creator is more user-friendly and comes with live previews.

Gusto Report Creator

Both come with a number of pre-made reports, including:

  • Headcount
  • Bank transactions
  • Benefits usage
  • Payroll
  • 1099 report
  • PTO balances


Zenefits and Gusto both offer a number of popular integrations found in standard human resource software. Both solutions primarily integrate with accounting, field service management, document management, and integration software. Here are some of the most popular native integrations both solutions offer:

Software SolutionIntegrations

Bottom Line

Overall, we recommend Zenefits over Gusto if you are looking for a feature-rich human resource software solution built for small businesses. Its interface, onboarding assistance, and performance management features are all stronger than those in Gusto. However, Gusto is the better choice for businesses who want an affordable solution that excels in payroll.

If you’re interested, visit Zenefits or Gusto today to get started.

Yousef Fatehpour

Yousef Fatehpour is a Junior Research Analyst at SoftwarePundit. He graduated from University of California, San Diego, where he studied Human Centered Design and Communications. His work at UCSD's Design Lab emphasized UX research and product management.

Yousef's primary areas of interest are software design, user journeys, and how user experience is handled across software markets. Yousef also has experience in product design and multimedia content production. You can connect with Yousef on LinkedIn.

Yousef is an expert in several software categories including:

  • SMS marketing software
  • Document management software
  • Human resource software
  • Applicant tracking software
  • Design software

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