Gusto
Xero
| Feature | Gusto | Xero |
|---|---|---|
| Pricing | From $40/mo | From $15/mo |
| Free Plan | ✗ No | ✗ No |
| Rating | 4.4 / 5 | 4.4 / 5 |
| Best For | small-businesses, startups, accountants, us-companies | small-businesses, accountants, international-companies, uk-businesses |
| Founded | 2011 | 2006 |
| Payroll | ✓ | ✗ |
| Benefits | ✓ | ✗ |
| Tax Filing | ✓ | ✗ |
| Onboarding | ✓ | ✗ |
| Time Tracking | ✓ | ✗ |
| Hiring | ✓ | ✗ |
| Compliance | ✓ | ✗ |
| Invoicing | ✗ | ✓ |
| Bank Reconciliation | ✗ | ✓ |
| Reporting | ✗ | ✓ |
| Payroll Addon | ✗ | ✓ |
| Projects | ✗ | ✓ |
| Expenses | ✗ | ✓ |
| Multi Currency | ✗ | ✓ |
✓ Gusto Pros
- Easiest payroll software to set up and run
- Automatic federal, state, and local tax filings
- Health insurance and 401(k) brokering built-in
- Excellent employee onboarding experience
✗ Gusto Cons
- US-only — no international payroll
- Gets expensive as headcount grows
- Limited HR features compared to BambooHR
✓ Xero Pros
- Beautiful, modern interface
- Unlimited users on all plans
- Strong in UK, Australia, NZ markets
- Excellent bank reconciliation
✗ Xero Cons
- Fewer integrations than QuickBooks in US
- Payroll is a paid add-on
- Inventory management is basic
The Verdict
Gusto is built for small businesses and startups, with a focus on payroll and benefits. Xero targets small businesses and accountants and leads with invoicing and bank-reconciliation.
On pricing, Xero is the clear winner for budget-conscious users — starting at $15/mo compared to $40/mo for Gusto. That $25/mo difference adds up quickly for growing teams.
Neither tool offers a free plan, so factor the subscription cost into your decision from the start.
Both tools are a solid fit for small businesses, accountants — in those cases, the decision often comes down to workflow style and how your team prefers to organize work.
This is a genuinely close comparison. If you can, sign up for both free trials (where available) and run a one-week test with your actual team tasks before deciding.