Running payroll in Gusto takes about five to ten minutes once your company and employees are set up. You sign in, enter hours or confirm salaries, review the totals, and hit submit. Gusto handles the tax calculations, direct deposits, and government filings from there. Here’s how each part of the process works.
Before Your First Run
Gusto can’t process payroll until your company profile, bank account, employee details, and tax accounts are connected. If you’ve already completed onboarding, your pay schedule is set and you’ll see upcoming pay periods on your dashboard. The main thing to know before you start clicking is your direct deposit speed, because it determines how far in advance you need to submit.
All payroll submissions have a hard cutoff of 4 p.m. Pacific Time. Anything submitted after that processes the next business day. Your company bank account must have enough funds to cover the full payroll and taxes by 4 p.m. PT on the debit date.
Direct Deposit Speeds and Deadlines
Gusto offers three standard deposit speeds, and your deadline depends on which one your account uses:
- 4-day direct deposit: Submit by 4 p.m. PT four business days before payday. This is the default for brand-new accounts.
- 2-day direct deposit: Submit by 4 p.m. PT two business days before payday. Funds typically arrive in the morning. You unlock this after a 15-day waiting period and one successful payroll debit on the 4-day schedule.
- Next-day direct deposit: Submit by 4 p.m. PT one business day before payday. Funds arrive the following business day, sometimes not until late afternoon or early evening.
If you miss your deadline, Gusto offers two expedited options. Same-day pay costs $90 per payroll and must be submitted between midnight and 11 a.m. PT on a weekday. Instant pay costs $100 per payroll and delivers funds within minutes, available around the clock. Both fees are added to your monthly invoice, and not every payroll qualifies.
Running a Regular Payroll Step by Step
Sign in to Gusto and navigate to the Pay section. You’ll see tiles for each upcoming pay period showing the payroll deadline and payday. Click “Run payroll” on the period you want to process.
Gusto opens a spreadsheet view listing every active employee. For hourly workers, enter their hours in decimal format (one hour and fifteen minutes is 1.25, not 1:15). For salaried employees, their pay is pre-filled. If someone holds multiple jobs or has different pay rates, click the arrow next to their name to expand each position and enter hours separately.
Once the numbers look right, click “Review summary.” Gusto flags anything unusual, like a big swing in someone’s pay compared to previous periods. You can edit or dismiss each flag. Below that, you’ll see a full breakdown split into three sections: what gets taxed and debited from your bank account, what employees worked and take home, and what your company pays in employer-side taxes and contributions. Expand each one to verify the details.
Click “Submit payroll” to finalize. If anyone is being paid by physical check, Gusto prompts you to choose your check format (Gusto check stock or blank check stock) and lets you download printable checks. On the confirmation page, you can view a full payroll summary, print checks, or export reports.
Running an Off-Cycle Payroll
Off-cycle payrolls cover anything outside your regular schedule: bonuses, commissions, expense reimbursements, a missed payment on a final check, or correcting an error from a previous run. To start one, go to Pay and look for “Run an off-cycle payroll” under the More Options area on the right side of the page.
Gusto first asks you to select the reason for the payroll. Your choice matters because it changes the default tax and deduction settings. For example, if you select “Give extra pay,” Gusto sets up the run for supplemental wages. You can then choose individual employees or select everyone, enter the pay period the payment applies to, and pick a pay date.
Before you enter dollar amounts, review the advanced settings screen. Three options deserve attention:
- Pay type: Choose between entering gross pay (hours and earnings) or a specific net pay amount (the exact take-home you want the employee to receive, with Gusto back-calculating the gross).
- Deductions and contributions: You can include or exclude benefit deductions and retirement contributions for this run.
- Tax rate: For supplemental wages like bonuses, you can apply the IRS supplemental withholding rate of 22% instead of the employee’s regular rate. To use the 22% rate, select the “extra pay” reason and edit the tax rate setting.
After adjusting settings, click “Create payroll,” enter pay details, review the summary, and submit. Off-cycle direct deposits typically arrive within two business days based on your company’s deposit speed. A few things don’t carry over to off-cycle runs: hours from Gusto’s time tracking don’t auto-populate, time off doesn’t accrue, and child support garnishments aren’t processed. If an employee has a garnishment order, check with the issuing agency before running an off-cycle payment.
Paying Contractors
You can pay 1099 contractors through Gusto alongside your W-2 employees, or on their own schedule. Contractor payments are tracked separately, and Gusto automatically generates, files, and delivers 1099-NEC forms at year-end at no extra cost. The platform also handles new hire reporting for contractors where required by the state. If you work with international contractors, Gusto supports those payments as well.
What Gusto Files Automatically
After every payroll run, Gusto calculates, withholds, and remits your federal and state payroll taxes. It also files the associated forms on your behalf. You don’t need to log into government portals or mail anything.
On the federal side, Gusto files Form 941 (the quarterly employment tax return covering Social Security and Medicare taxes), Form 940 (the annual federal unemployment tax return), and W-2s and W-3s for employees at year-end. For contractors, it files 1099-NEC and 1099-MISC forms, including both federal and state copies. If your business qualifies for the small business R&D payroll tax credit, Gusto also handles Form 8974.
At the state level, Gusto files quarterly withholding returns, unemployment contribution reports, annual reconciliation forms, and state copies of W-2s. In states and localities with additional requirements, like local income tax returns or paid family leave wage reports, Gusto covers those too. The platform files in all 50 states, though the specific forms vary. You can view everything Gusto has filed by checking the Tax Documents tab in your account, and you can confirm tax payments by running an Agency Payments report.
One important detail: Gusto only files tax forms for quarters in which you actually ran payroll through the platform. If you skip a quarter or process payments outside of Gusto, you’re responsible for those filings yourself.
Tips for a Smooth Payroll Run
Build a habit of submitting payroll a day before the deadline rather than the day of. A bank hiccup or a last-minute question from an employee can push you past the 4 p.m. PT cutoff, and expedited options cost $90 to $100 per run. Set a recurring calendar reminder tied to your deposit speed so the deadline doesn’t sneak up on you.
Double-check hours before you click “Review summary.” Gusto flags large changes, but it won’t catch a typo where you entered 8 hours instead of 80 for a biweekly employee. If you use Gusto’s built-in time tracking, approved hours flow into the payroll spreadsheet automatically, which reduces manual entry errors. After submitting, download the cash requirements report so you can confirm your bank account balance covers the debit.