How to Set Up a Gusto Payroll Account: A Step-by-Step Guide

You are familiar with the stress that comes with using spreadsheets for your payroll management. It is super dreadful, especially because you are so good at what you do that your business grows every day. Growth means a larger team and a larger team means more accounts to work on. 
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But here's the funny thing; even with good payroll management software like Gusto, the process can still appear to be complicated. 
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Should you halt your business' growth? Absolutely not! You should get a hang of navigating payroll management without breaking a sweat. 
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Good thing you are here. In this step-by-step guide, we will demystify Gusto's payroll process to the smallest detail. After reading this, you will get to know:
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• Gusto's comprehensive features and how to navigate them.
• The costs and time it takes to process payroll. 
• How to integrate Gusto with other financial software.
• How to troubleshoot common issues. 
• How to optimize the payroll process for efficiency and compliance.
• How to run a cycle of payroll

But first, why Gusto?
 

Gusto is the ultimate payroll management system for teams of all sizes 
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Gusto's payroll services offer a software solution enabling you to manage and automate your payroll tasks efficiently. While Gusto provides a comprehensive HR platform, their payroll software can be purchased separately to address payroll needs specifically. 
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Additionally, Gusto ensures that you won't incur any charges until your system is fully set up and operational, providing flexibility and peace of mind.
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From effortless online navigation to automated tax filings and dedicated customer support,  Gusto allows you to go to rest —or rather, focus on core operations while it takes care of seamless payroll operations. And it doesn’t matter what size your business is; whether you're a small startup or a large enterprise, Gusto provides the tools and support necessary to streamline payroll management and enhance overall efficiency. 
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So, Gusto is that software that starts and grows with you. 
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Key benefits of using Gusto 
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• Easy interface: Gusto’s design and prompts simplify platform navigation for business owners, enabling them to manage payroll tasks efficiently. You get straightforward prompts at every step to enable a seamless tour of the website. 

• Autopilot Functionality: With Gusto, setting Autopilot for all your salaried employees allows you to breeze through payroll management. There is no need to log in and manually run payroll constantly. Unlike other processors, Gusto doesn’t put you at risk of forgetting login details and upsetting your entire workforce. Its automated function allows ease and speed, and your team can be assured of being paid in due time. 

• Automated Tax Filing: Dealing with taxes is a common headache in payroll management. It handles various tax forms including W-2s, Form 940, Form 941, Form 8974, and Form 1099. Additionally, Gusto's payroll services cover tax registration in all 50 US states, allowing you to expand your talent pool to remote employees or manage operations across different states seamlessly. Additionally, Gusto's payroll services cover tax registration in all 50 US states, allowing you to expand your talent pool to remote employees or manage operations across different states seamlessly.

• Time Tracking and Benefits Management: The platform simplifies time tracking by enabling employees to clock in via desktop or mobile, using geolocation if necessary. Whether your employees are at the office or on-site, Gusto makes it easy to track their time. Moreover, Gusto handles benefits deductions, saving you time and alleviating stress.

• PTO Management: Gusto makes it a breeze by allowing you to input PTO with just a few clicks and seamlessly integrating it into payroll processing. With Gusto, you can approve and process payroll in minutes, even with PTO considerations.

• Seamless Integration with Third-Party Apps: Gusto understands the importance of integrating with existing tools in your business. That's why it supports third-party app integrations including Xero, Clover, Trainual, TSheets, and QuickBooks. This flexibility ensures a smooth transition and minimizes disruption to your operations.

• Flexible Payment Options: Gusto offers multiple payment methods including direct deposit, checks, and pay cards, catering to different preferences and situations. Whether you prefer the convenience of direct deposit or need to issue checks or pay cards, Gusto has you covered.

• Comprehensive Payroll Reports: Gusto provides comprehensive payroll reports, allowing you to track payroll history and make informed decisions for the future. These reports offer valuable insights into payroll history, bank transactions, contractor payments, PTO, tax payments, and more, all conveniently accessible in one location.

• Top-notch Customer Support: Payroll management is both time-sensitive and emotionally charged. Your employees rely on being paid accurately and on time. The Gusto support team understands this urgency and springs into action when needed.
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Curious? Check out Gusto’s features here.  
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Now, let’s move on to the steps you need to take to set up your payroll account. 
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Setting Up Your Gusto Payroll Account:
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You need to gather the following documents before creating your account: 
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1. Addresses: Your company’s address as well as the physical address of all your employees (including remote workers). 
2. Employee information: You will provide:

       a) the name 
       b) date of hire
       c) manager's name
       d) work address
        e) employee email address
        f) compensation details for every employee. 
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Here’s the good thing: if you don’t have any of this information, you can always prompt employees to input their information themselves. 
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3. Federal tax information: Your business's federal Employer Identification Number (EIN), company classification, and legal entity name.
4. State tax information: Registration and compliance details for each state where employees are based for work. 
5. Bank details: Routing number and account number for your business checking account. 
6. Pay schedule: Information regarding your company's pay period, including the initial pay date and the duration covered in each pay cycle
7. Signatory details: The signatory's name, title, social security number, birthdate, phone number, and home address will be required. 
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Step 1: Create Your Gusto Account: 
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Visit the Gusto website and click on the “Get Started” button to begin. Follow all prompts to answer questions revolving around:

1. Your payroll process in the current calendar year
2. How do you currently run payroll?
3. Describe your business setting
4. What type of workers do you need to pay?
5. Interested in offering health benefits to your team?
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All questions will come with options and prompts; pick options that apply to your business to create an account. 
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Verify your email address and get a link to setting up your profile. Here, you have to provide information about your team (who are you paying? What number of employees are you paying? )
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Step 2: Adding Your Business Details:

Here, you will get a prompt to add your company’s legal name, industry, address, EIN, contact details, and bank account details for payroll processing. 
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Note: If you have an accountant or bookkeeper, you will be prompted to add their details (name, email address, and phone number). The accountant gets a prompt email to log in to the account and create their login. 
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Step 3: Employee Information and Compensation Details: 
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1. Input information about your employees, such as their names, email addresses, tax withholding information, job titles, and employment type. 
2. Input compensation details such as salary amount and frequency, additional earnings like bonuses or commissions, etc. 
3. Set up any employee benefits, such as health insurance or retirement plans, and deductions like 401(k) contributions or garnishments.
4. Gusto will help you onboard your employees by sending them invitations to complete their personal information and tax forms online. 
5. Additionally, you can add contract-based staff if there are any available
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Step 4: Add Tax and Bank Details
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1. Provide your Federal EIN. If you do not have one before this, there is an option to get one on the screen. 
2. Add your business’ state registration details 
3. Add your bank details. Note that tax, wages, and other monthly fees will be deducted directly from your account ONLY when you complete your first payroll. 
4. Add your company bank account, from where salaries will be paid, into the employees’ account. 
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Step 5: Configuring Your Payroll Settings: 
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1. Enter your company's payroll details, including pay schedule (weekly, bi-weekly, monthly), the pay rate for each employee, and any additional compensation or deductions.  
2. Confirm that state tax information and pay schedule are entered already, and proceed to append your signature on company payroll documents.  
3. Add all workers’ compensation details
4. Verify all bank account details

Step 6: Pick a plan for your business.
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The system has automated options and allows you to pick options that represent your business without typing it all out yourself. 
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Note: Payroll setup needs to be done only once. Following this initial setup, we advise that a routine should be established for managing weekly and monthly payroll responsibilities, along with preparing quarterly and year-end tax filing and reporting.
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Step 7: Processing and confirming payroll
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1. Select the “run payroll” option to go to different payroll options. 
2. Click on “run regular payroll” to review the earnings of your employees and necessary taxes. You have imputed these details earlier, but now is the time to review and update them in case of any changes. You will also be able to add PTO options and other charges and salary increases that weren’t included earlier. 
3. Click “submit payroll” after reviewing and confirming payments. 
4. You can get a summary of recent payrolls and print out a report if you want. 

Step 8: Handling Post-Payroll Tasks
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Gusto streamlines tax filing and record-keeping processes for you. Once your account is set up and active, you can automate the calculation and deduction of various taxes, including federal, state, and local payroll taxes, from employee paychecks. 
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The platform handles the timely submission of tax payments to relevant authorities, ensuring compliance with tax regulations. 

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Additionally, Gusto takes care of filing essential tax forms such as W-2s for employees and 1099s for contractors, simplifying year-end tax reporting.

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In terms of record-keeping, Gusto maintains detailed records of payroll transactions, tax filings, and employee information securely within its platform. Once you complete the last step, it automatically generates records and gives you easy access to payroll reports, tax filings, and employee data, facilitating efficient management and oversight. This feature enables you to easily retrieve historical payroll data and reports for auditing or compliance purposes. 

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Overall, Gusto's integrated tax filing and record-keeping capabilities help businesses maintain accurate financial records, streamline tax-related processes, and stay compliant with regulatory requirements

Step 9: Understanding Payroll Costs

Gusto provides three distinct plans tailored to companies seeking comprehensive payroll management solutions for both full-time employees and contractors.
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1. Simple:  At $40/month (and $6/month per person), the "Simple" plan caters to startups and small businesses operating within a single state, offering basic HR functionalities to cover essential needs efficiently.

Features include:

• Full assistance provided.
• Employee profiles and self-service options are available.
• Basic tools for hiring and onboarding included.
• Gusto facilitates health insurance administration.
• Employee financial benefits managed.
• Access to payroll and time-off reports.
• Customizable administrative permissions.
• Seamless integrations with accounting, time tracking, expense management, and other software solutions.

2. Plus: At $80/month (and $12/month per person) for businesses spanning multiple U.S. states, the "Plus" package delivers dedicated support and enhanced HR management capabilities, making it an excellent choice to navigate complexities effectively.

Features include all Simple plans plus:

• Full-service multi-state payroll capabilities.
• Customizable onboarding templates.
• Next-day direct deposit functionality.
• Organization charts and directories for enhanced management.
• Comprehensive PTO (Paid Time Off) management tools.
• Time tracking features to monitor employee hours efficiently

3. Premium: Gusto's "Premium" tier stands out as the ultimate option, offering extensive support and automation features designed to streamline HR operations for small to midsize businesses (SMBs). It’s an exclusive pricing feature, and you have to contact the sales team for details. 

Features include all Plus plans plus

• Dedicated customer support for personalized assistance.
• Access to HR experts for on-demand consultations.
• Performance review tools to streamline employee evaluations.
• Automated compliance alerts for proactive risk management.
• White-glove service for seamless payroll migration and account setup.

For those solely managing contractors, Gusto offers a specialized "Contractor" plan at a rate of $6 per month per person, ensuring tailored support for this specific workforce. Regardless of the plan selected, Gusto provides the flexibility to switch between plans or cancel at any time, ensuring adaptability to evolving business needs.

Step 10:Regular Updates and Maintenance

As automated as Gusto is, it only works with real data put into it by you. Your review of accurate information should not stop at the stage of setting up an account. You have to ensure a monthly check and update of all details as your business progresses.
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Employees may quit and be replaced. You may have new hires. Current employees could get a salary increase, request a loan, or perform any action that affects their fixed data on the platform. 
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Here’s why you need to provide accurate tax information for employee profiles:
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1. Tax Withholding Accuracy: Gusto uses the information provided to calculate the correct amount of federal, state, and local taxes to withhold from employee paychecks. Incorrect details may result in under or over-withholding, potentially leading to financial issues for both employees and the business.
2. Tax Reporting: Gusto relies on accurate employee information to generate tax forms such as W-2s and 1099s. These forms are crucial for both employees and the IRS to report income and taxes withheld accurately. Inaccurate details could lead to errors on these forms, resulting in compliance issues and potential penalties.
3. Compliance with Regulations: Gusto helps ensure compliance with various tax regulations by utilizing accurate employee data. Tax authorities require businesses to report correct information about their employees, and Gusto facilitates this process. Inaccurate details could result in non-compliance and potential legal consequences.
4. Employee Benefits and Deductions: Incorrect information could lead to mistakes in benefit enrollment, contributions, or deductions, affecting both employee satisfaction and legal compliance.
5. Data Integrity: Accurate employee information ensures data integrity within the Gusto platform. To avoid confusion, inefficiencies, and potential errors in payroll processing and reporting, ensure that you give correct information and do constant checks on it. 

Suggested schedule for regular payroll reviews.

Regular payroll reviews are essential for ensuring accuracy, compliance, and efficiency in your payroll processes. Ideally, we advise that this review be conducted after every round of payments and the records have been generated. 

However, for larger companies (20 employees and above), we advise that you review weekly or monthly to manage the larger volume of transactions and ensure timely detection and resolution of any issue. 

For contractors or businesses with less than 10 employees, we advise a quarterly or annual review. 

• Weekly:

1. Verify the total number of work hours by employees for the previous week, especially if it’s a remote team and you pay hourly. 
2. Review any overtime hours and ensure they are accurately recorded and compensated. You don’t want to lose your business’ integrity mindlessly. 
3. Confirm that all employee deductions, such as taxes and benefits, are processed correctly.

• Monthly:

1. Review payroll summaries for the previous month, comparing them to budgeted amounts.
2. Reconcile payroll expenses with general ledger accounts to ensure accuracy in financial records.
3. Verify compliance with any applicable wage laws and regulations.
4. Review employee benefits deductions and contributions for accuracy.
5. Address any discrepancies or errors promptly to prevent issues from recurring in future pay periods.

• Quarterly:

1. Review and reconcile payroll tax filings, including federal, state, and local taxes.
2. Ensure compliance with quarterly tax deposit requirements.
3. Review any changes in tax laws or regulations that may impact payroll processing.
4. Conduct an overall assessment of payroll processes and identify areas for improvement or optimization.

• Annually:

1. Conduct a comprehensive year-end payroll review.
2. Prepare and distribute W-2 forms to employees and file them with the Social Security Administration.
3. Review and reconcile payroll data for the entire year to ensure accuracy in financial reporting.
4. Assess the effectiveness of payroll procedures and implement any necessary updates or improvements for the upcoming year

Gusto's Support Resources

Gusto has a support center where all possible questions already have answers and steps to follow in addressing them. 
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You can find all the help you need on any of its features here. 
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In case you still want to go ahead and speak with a customer care representative, you just need to sign in and talk to support via email. 

Is Gusto flawless?
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Is Gusto all perfect and flawless? No. There are a few cons of Gusto we observed

• Entering all employees’ details can be quite tasking and time-consuming. Although it is the only non-automated process, it can be a tedious task for you
• Its features are limited to only employees in the US, which may be a major concern for remote employers who are looking to hire globally. The only non-US-based kind of employees it could work for are contractors. 
• Users across different forums have recorded limited mobile functionality. 
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Conclusion
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Despite its cons, Gusto’s simple interface and ease of navigation make it the top choice for employers and HR professionals. Its transparent pricing and automatic tax filing feature also make it stand out among other payroll systems in the US. 
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Do we recommend it? Yes. 
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But we would like to hear from you if you have used it. Drop your reviews in the comment section. 
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Frequently Asked Questions
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How long does Gusto payroll take to process?

Gusto enables next-day payroll, 2-day payroll, and the standard 4-day.
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How to cancel Gusto's payroll?

Simply sign in to your Gusto account, click the Settings tab, click the Plan & Billing tab, and click Cancel Account under your plan
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How does Gusto payroll integrate with accounting software?

Gusto has a dedicated page on its website where you can streamline your operations by connecting Gusto payroll with your accounting software. Syncing Gusto payroll with your accounting system saves time, minimizes errors, and provides instant access to up-to-date information.
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To see other frequently asked questions, visit Gusto’s FAQ page for questions across different categories and their answers. 
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Note: Our content is for general information purposes only. Levy does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.