Gusto is a cloud-based payroll and HR platform designed for small businesses, and getting started involves setting up your company profile, adding employees or contractors, connecting your bank account, and running your first payroll. Once configured, the platform handles tax calculations, filings, and payments automatically. Here’s how to use each core feature.
What You Need Before You Start
Before you can run payroll through Gusto, you’ll need a few pieces of information ready. At the company level, you need your federal Employer Identification Number (EIN) from the IRS. Some states and localities also require separate tax ID numbers for payroll processing, so check whether your state has its own registration requirement.
You’ll also need a business bank account connected to Gusto. This is the account payroll funds are debited from, and it must have enough money to cover both net pay and taxes by 4 pm PT on the debit date each pay period.
For each person you hire, whether employee or contractor, gather their full name, Social Security number (or EIN for business contractors), date of birth, current address, and compensation details. Employees need to complete a W-4 for tax withholding and a Form I-9 to verify work eligibility. Independent contractors fill out a W-9 instead.
Setting Up Your Account
When you create a Gusto account, the platform walks you through a guided setup. You’ll enter your company’s legal name, EIN, business address, and bank account details. Gusto verifies your bank connection with small test deposits, which typically takes one to two business days.
Next, you’ll choose your pay schedule (weekly, biweekly, semimonthly, or monthly) and set your first check date. If you’re switching from another payroll provider mid-year, you’ll need to upload year-to-date payroll reports and documentation of tax payments already made. This is critical because Gusto will file quarterly tax returns starting with the quarter of your first check date, and only one provider can file for any given quarter. If both your old provider and Gusto file for the same quarter, the duplicate filing gets rejected and can trigger penalties.
Adding Employees and Contractors
To add someone, go to the People section and click “Add person.” For employees, you’ll enter their name, email, work address, job title, department, and compensation. You can then invite them to self-onboard, which means they’ll enter their own tax information, banking details for direct deposit, and personal info through their own Gusto login. This saves you from collecting sensitive data manually.
For contractors, the process is similar but includes a few extra choices. You’ll select whether they’re an individual contractor or a business contractor (a registered company you’ve hired for project work). You pick their pay type, either hourly or a fixed amount per project. You can also attach a contractor agreement and run a background check during onboarding. Like employees, contractors can be invited to self-onboard and enter their own details.
Running Payroll
To run a standard payroll, sign in and go to the Pay section, then click “Run payroll.” You’ll see a list of your employees with fields for hours worked, salary amounts, bonuses, and any other pay categories you’ve set up. For salaried employees, the amounts are pre-filled based on their compensation. For hourly employees, you enter hours manually or import them from a time-tracking integration.
If you need to make the same change for several people at once, Gusto has a bulk edit feature. Check the boxes next to the employees you want to update, click “Bulk edit,” select the action from a dropdown, and fill in the details. On a mobile device, tap the three dots, choose “Select team members,” check the relevant names, and use the Actions button.
Once you’ve entered everything, review the payroll summary to confirm totals, then submit. The key deadline: submit by 4 pm PT on your run-by date (which Gusto displays on your dashboard) to hit your intended check date. Payrolls submitted after that cutoff process the next business day, which can push back when employees receive their pay.
Paying Contractors
Contractor payments work separately from regular employee payroll. Go to the Pay section and under “More options,” click “Pay a US contractor.” For hourly contractors, enter the number of hours worked. For fixed-rate contractors, enter the payment amount. You can also add bonuses, reimbursements, invoice numbers, and tips.
If you have many contractors to pay at once, use the CSV upload option. Click “Import” on the payment page, download the pre-filled CSV template (which already lists your active contractors), fill in the payment amounts, and upload the file. Review the imported data and click “Import” to confirm.
At year end, Gusto automatically generates and files 1099-NEC forms for eligible contractors, which report all non-employee compensation paid during the tax year. One thing to note: if you enter historical payments from before you used Gusto, those payments only trigger a 1099 filing if your account is considered active for that tax year.
What Gusto Handles for Taxes
One of the biggest advantages of Gusto is automated tax compliance. Once you run payroll through the platform, Gusto calculates, withholds, deposits, and files federal, state, and local payroll taxes on your behalf. This includes quarterly tax returns, FUTA (federal unemployment tax), and SUTA (state unemployment tax) deposits. At the end of the year, Gusto generates and distributes W-2s for employees and 1099-NECs for contractors.
Your main responsibility is making sure Gusto has accurate information to work with. That means entering correct employee details, keeping pay records current, and ensuring your bank account is funded on time. If you switched to Gusto from another provider mid-year, coordinate carefully so your previous provider doesn’t also file W-2s or annual returns. Only one provider should handle year-end forms, and Gusto will issue them as long as you’ve provided complete year-to-date data from the prior provider.
Setting Up Employee Benefits
Gusto can manage health insurance, retirement plans, and other employee benefits alongside payroll, so deductions are calculated and applied automatically each pay period.
If you already have benefits through an insurance broker, you can connect those existing plans to Gusto through a broker integration. Go to the Benefits section, click “See your options,” and follow the prompts to select which lines of coverage to integrate. Gusto supports medical, dental, vision, life, and disability insurance, plus tax-advantaged accounts like HSAs, FSAs, and commuter benefits. You’ll enter your broker’s contact information, sign authorization documents, and Gusto sends the broker an invitation to upload plan details and rate information.
You can also add your broker as a collaborator with specific permissions by going to People, clicking “Add collaborator,” and selecting “Broker” as their relationship to your organization. This gives them access to manage benefits without seeing unrelated company data.
The broker integration on the Plus plan costs $6 per eligible employee per month. Tax-advantaged accounts carry a $200 annual service charge that covers HSA, FSA, and commuter benefits, plus per-participant monthly fees: $2.50 for HSAs, $4 for FSAs (with a $20 monthly minimum), and $4 for commuter benefits (also with a $20 minimum). If you need ACA compliance filing, that’s $1,250 per year, and COBRA administration runs $30 per company per month.
One timing detail matters if you’re integrating existing benefits: if your plan renewal is less than 45 days away, you’ll need to run open enrollment outside of Gusto and then integrate the renewal plans afterward. If renewal is 45 to 90 days out, you can integrate the renewal policies and run open enrollment directly through Gusto.
Day-to-Day Platform Navigation
Gusto organizes everything around a few main sections. The Pay section is where you run payroll, pay contractors, and view payment history. The People section is where you add, edit, or offboard team members. The Benefits section manages insurance and retirement plans. A dashboard shows upcoming payroll deadlines, action items like unsigned documents, and alerts when something needs your attention.
Employees and contractors get their own Gusto logins where they can view pay stubs, download tax forms, update their banking information, and manage benefits elections. This self-service access reduces the back-and-forth you’d otherwise handle manually, especially during tax season when people need copies of their W-2s or 1099s.