Choosing a payroll platform feels like a binary decision, but the real choice is between two completely different philosophies about how HR software should work. Gusto believes that payroll should be simple, beautiful, and accessible to any small business owner without an HR background. Paylocity believes that growing mid-market companies need a platform that handles the full employee lifecycle, from onboarding and time tracking to engagement analytics and compliance reporting.
Both platforms run payroll accurately. Both handle tax filings and benefits administration. But they’re engineered for different stages of company growth, and picking the wrong one at the wrong stage is an expensive mistake that costs you in either overpaying for features you’ll never use, or outgrowing a system right when you need it most.
This comparison cuts through the marketing language and focuses on what actually matters at the decision point: company size, HR maturity, and what your employees actually need from a self-service platform. If you’re evaluating payroll software for a team between 50 and 500 employees, this breakdown will help you decide quickly and confidently.
⚡ Quick Verdict
- →Pick Paylocity if you’re a mid-market company (50+ employees) that needs advanced HR, employee engagement tools, and deep compliance coverage beyond basic payroll.
- →Pick Gusto if you’re a small business (under 50 employees) that wants clean, easy payroll with transparent pricing and a minimal learning curve.
📋 Table of Contents
Paylocity Overview
Paylocity is a cloud-based HR and payroll platform built specifically for mid-market companies, typically those with 50 to 1,000 employees. What sets it apart from legacy systems is its genuine investment in employee engagement: the Community social feed lets employees post updates, recognize peers, and share wins in a LinkedIn-style interface. Paylocity also includes video tools for HR communications, a mobile-first self-service app, and a learning management module for onboarding and training. For HR teams managing compliance across multiple states, Paylocity’s automated tax filings, ACA reporting, and COBRA administration save significant manual effort. If you’re looking for a platform that goes beyond payroll into full workforce management, Paylocity is one of the strongest options in the mid-market category. See how it compares in our best payroll software for growing companies roundup.
Gusto Overview
Gusto carved out its reputation by making payroll genuinely simple for small business owners, no HR background required. Its interface is clean and guided, walking you through payroll runs in minutes. The Simple plan ($46/month base + $6/employee) covers payroll, tax filings, and basic HR tools, while the Plus plan adds time tracking, next-day direct deposit, and team management features. Gusto also handles benefits administration, offering health insurance, 401(k), FSA, and HSA integrations through its own licensed brokerage. For teams under 50, it strikes the right balance between capability and affordability. Visit Gusto’s website for their current pricing and plan details.
Pricing Compared
Pricing is where these platforms diverge most visibly. Gusto publishes its pricing openly, the Simple plan starts at $46/month plus $6 per employee per month. The Plus plan runs $80/month plus $12/employee, and Premium is custom-quoted. For a 25-person team, expect to pay around $196-$380/month depending on the plan.
Paylocity doesn’t publish pricing. It’s custom-quoted based on employee count, modules selected, and contract length. Industry estimates put it at $18-$25 per employee per month when bundling core HR, payroll, time tracking, and engagement tools. For a 100-person team that’s roughly $1,800-$2,500/month, considerably more than Gusto at the same headcount, but the feature set justifies the gap for mid-market HR teams. Both platforms charge implementation fees, though Paylocity’s onboarding support is more comprehensive.
Bottom line: Gusto wins on price transparency and affordability for small teams. Paylocity offers more ROI per dollar for companies where a 2-person HR team is managing complex compliance and engagement for 100+ people. For a broader comparison of your options, check our best HR software for small to mid-size businesses guide.
Core HR + Payroll Features
Both platforms handle multi-state payroll, direct deposit, W-2/1099 filing, and benefits administration competently. Where they diverge is depth. Paylocity includes built-in time and attendance tracking with geofencing for field teams, an ATS (applicant tracking system) for hiring, and performance review workflows, all in one platform. Gusto’s payroll engine is excellent, and its benefits marketplace is genuinely useful for small teams, but for features like performance management, learning management, and engagement analytics, you’ll need third-party integrations. If your HR team needs everything in one system without stitching together five tools, Paylocity is the stronger buy.
Employee Experience & Self-Service
Paylocity’s biggest differentiator is its approach to employee experience. The Community social feed, video messaging, and Impressions peer recognition system are built into the platform, not bolted on as add-ons. Employees can access pay stubs, update direct deposit, request time off, complete onboarding tasks, and participate in company culture all from the same mobile app. This matters because employee self-service adoption directly reduces HR ticket volume. Gusto’s self-service portal covers the essentials, pay stubs, tax documents, benefits enrollment, but doesn’t attempt to be an engagement layer. For companies where culture and retention are strategic priorities, Paylocity’s depth here is a real differentiator.
Integrations + Reporting
Paylocity integrates with major HRIS systems, ERP platforms, and productivity tools including Salesforce, Microsoft Teams, Slack, and popular ATS solutions. Its reporting suite includes pre-built dashboards for headcount, turnover, compensation equity, and compliance, plus the ability to build custom reports without SQL. Gusto’s integration library is solid for small business needs, QuickBooks, Xero, time tracking tools, and benefits providers, but the reporting is more basic, designed for owners who need quick answers rather than HR analysts running workforce trends. Both platforms export payroll data cleanly for accounting purposes.
Side-by-Side Comparison Table
| Feature | Paylocity | Gusto |
|---|---|---|
| Free Trial | Demo only | 1 month free (promo) |
| Company Size Fit | 50 - 1,000 employees | 1 - 100 employees |
| Payroll | Multi-state, automated | Multi-state, guided UI |
| Benefits Admin | Full (health, 401k, FSA) | Full (own brokerage) |
| Time Tracking | Built-in (with geofencing) | Plus plan and up |
| Employee Self-Service | Full + engagement layer | Essential self-service |
| Mobile App | Yes (iOS + Android) | Yes (iOS + Android) |
| Compliance Tools | ACA, COBRA, multi-state | Basic compliance |
| Integrations | 200+ (ERP, ATS, Teams) | 100+ (QuickBooks, Xero) |
| Employee Engagement | Community, video, recognition | Not included |
| Pricing Model | Custom (~$18-25/ee/mo) | From $46 + $6/ee/mo |
Which Should You Choose?
Pick Paylocity if: Your team has 50 or more employees, you need HR features beyond basic payroll (performance management, engagement, LMS), your HR team manages multi-state compliance, or you want employees actively using a self-service platform that does more than show pay stubs.
Pick Gusto if: You have fewer than 50 employees, you’re a founder or office manager running payroll without dedicated HR staff, price transparency matters, or you want a platform that’s up and running in days without an implementation project.
🎯 Ready to See Paylocity in Action?
Get a custom demo and see how Paylocity handles payroll, compliance, and employee engagement for mid-market teams.
Request Your Free Paylocity Demo →FAQs: Paylocity vs Gusto
Is Paylocity better than Gusto for mid-size companies?
Generally yes. Paylocity is engineered for companies with 50-1,000 employees and includes features like performance management, employee engagement tools, and advanced compliance reporting that Gusto doesn’t offer. For teams under 50, Gusto is often the better fit.
Does Gusto work for companies with 100 employees?
Gusto can technically handle 100 employees, but companies at that size often find its HR feature set limiting. You’ll likely need add-ons for time tracking, performance management, and deeper compliance reporting, which is where Paylocity becomes more cost-effective.
What is Paylocity’s pricing per employee?
Paylocity doesn’t publish pricing publicly. Based on industry estimates and customer reports, expect roughly $18-$25 per employee per month when bundling payroll, HR, time tracking, and engagement modules. Contact their sales team for a custom quote.
Does Gusto handle multi-state payroll?
Yes, Gusto handles payroll in all 50 U.S. states, including multi-state scenarios. It automatically calculates and files state and local taxes. For complex multi-state compliance needs (like multiple nexus states with different regulations), Paylocity offers deeper compliance tooling.
What is Paylocity’s Community feature?
Community is Paylocity’s built-in social feed, similar to a company-internal LinkedIn. Employees can post updates, share recognition (Impressions), comment, and engage with company announcements. It’s designed to improve company culture and reduce reliance on external tools like Slack for non-work social interaction.
Can Gusto integrate with QuickBooks?
Yes, Gusto has a direct native integration with QuickBooks Online that syncs payroll data automatically. It also integrates with Xero, FreshBooks, and other popular accounting tools, making it a natural fit for small businesses already using those platforms.
Does Paylocity have an ATS for recruiting?
Yes, Paylocity includes an applicant tracking system (Recruiting module) as part of its platform. It covers job posting, candidate pipelines, interview scheduling, and offer letter generation. This means HR teams don’t need a separate ATS subscription for straightforward hiring workflows.
Which platform has better mobile apps, Paylocity or Gusto?
Both have solid mobile apps for iOS and Android. Paylocity’s app goes further with the Community social feed, time clock, and manager approvals. Gusto’s app covers employee self-service essentials like pay stubs and time-off requests. For field or distributed teams, Paylocity’s mobile experience is more complete.
Is Gusto HIPAA compliant?
Gusto is not HIPAA compliant and recommends that companies not use it to store protected health information (PHI). For healthcare employers with specific HIPAA requirements, evaluate platforms that offer BAAs (Business Associate Agreements), which Paylocity can discuss during the sales process.
Can Paylocity replace my separate time tracking tool?
For most mid-market use cases, yes. Paylocity’s time and attendance module includes clock-in/out, geofencing for field employees, schedule management, and overtime alerts. It integrates directly with payroll, eliminating the manual data transfer that standalone time tracking tools require.
Does Gusto offer HR advice or support?
Gusto’s Premium plan includes access to Gusto-certified HR advisors who can answer compliance questions and help with HR policies. Lower-tier plans have phone and chat support for payroll questions but not dedicated HR advisory. Paylocity includes a dedicated implementation team and account management at mid-market scale.
How long does Paylocity implementation take?
Implementation timelines vary by company size and modules, but most mid-market implementations take 4-8 weeks from contract signing to go-live. Paylocity assigns a dedicated implementation team. Gusto, by contrast, can often be set up in a day or two for small teams, a significant practical difference for small businesses.
Final Word
Paylocity and Gusto are both excellent platforms, they just serve different companies at different stages. If you’re managing payroll for a small, lean team and want something that just works without a learning curve or implementation project, Gusto is hard to beat at its price point. But if you’re building an HR function for a growing mid-market company and need engagement tools, compliance depth, and manager workflows that scale, Paylocity is worth the investment. For a wider view of your options across both categories, browse our best payroll software for growing companies and best HR software for small to mid-size businesses guides.