Gusto vs Wave
A side-by-side comparison of two accounting tools for small businesses.
Bottom line
For most small businesses, Gusto edges out Wave on overall SMB fit (9/10 vs 8/10), especially for Gusto is a strong match for service businesses, retail shops, restaurants, agencies, and…. That said, weigh pricing and the feature breakdown below against your needs.
At a glance
| Attribute | Gusto | Wave |
|---|---|---|
| SMB score | 9/10 | 8/10 |
| Category | Accounting | Accounting |
| Free tier | No | Yes |
| Starting price | From $40/user/mo | — |
| Best for | Gusto is a strong match for service businesses, retail shops, restaurants, agencies, and professional practices with 1–100 employees that need payroll handled reliably without a dedicated HR hire. It particularly shines for businesses operating in multiple states where tax filing complexity multiplies quickly, and for any owner who has been doing payroll manually or through an accountant and wants to reclaim that time. Teams that already use QuickBooks or Xero benefit immediately from the accounting sync. Companies offering health benefits—or wanting to start—appreciate having payroll and benefits under one login rather than juggling separate vendors. | Wave is an excellent fit for freelancers, consultants, sole proprietors, and micro-businesses with up to roughly ten employees who need real accounting—not just a cash register—without the monthly SaaS fees most competitors charge. Service-based businesses such as designers, photographers, coaches, cleaners, and tradespeople get the most value because billing, payment collection, and basic bookkeeping are all covered under one login. Early-stage startups that want clean books before hiring an accountant, and part-time bookkeepers managing a small roster of clients, also find the multi-business structure convenient. The Pro plan's automation is compelling for any owner tired of manually sorting bank transactions every week. |
Gusto
Run payroll in minutes, file taxes automatically, and manage HR for your whole team in one place.
Picture a 12-person restaurant with hourly and salaried staff, a mix of W-2 employees and a couple of 1099 contractors, and a owner who spends every other Sunday manually calculating overtime and chasing down tax forms. That owner is exactly who Gusto was built for. Within a typi…
Key features
- Automatic federal, state, and local payroll tax filing included on every plan
- Unlimited payroll runs with no extra charge for off-cycle payments
- Employee self-onboarding portal collects W-4, I-9, and direct deposit digitally
- Integrated health, dental, and vision benefits administration with employee plan shopping
- Time tracking and PTO management synced directly into each payroll run
- Native two-way sync with QuickBooks, Xero, and other accounting tools
- Contractor payments and 1099 filing handled alongside regular W-2 payroll
- HR compliance alerts and offer letter templates to reduce legal exposure
Limitations
Gusto's pricing scales per employee per month, so costs can climb noticeably as headcount grows beyond 20–30 people. The Plus and Premium tiers, which unlock dedicated support and more advanced HR tools, carry a significantly higher base fee—verify current pricing on the vendor site before budgeting. Reporting capabilities, while adequate for most small teams, lack the custom drill-down that larger operations or multi-entity businesses may need. International payroll is not natively supported; businesses with employees outside the US will need a separate global payroll solution. Customer support response times have drawn mixed reviews during peak tax seasons.
Wave
Free accounting, invoicing, and payments built for small business owners who'd rather run their business than manage books.
Picture a freelance graphic designer juggling three clients, sending invoices from a spreadsheet, and losing track of which ones have been paid. Wave was built precisely for that situation. From a single dashboard, she can create a professional invoice, attach a payment link, and…
Key features
- Unlimited invoicing and estimates on the free Starter plan
- Automatic bank transaction import and smart auto-categorization on Pro
- Integrated payment processing so clients can pay invoices online
- Mobile receipt capture for tracking business expenses on the go
- Double-entry accounting with profit and loss and balance sheet reports
- Late payment reminders sent automatically to overdue clients
- Payroll add-on available for eligible US states and Canadian businesses
- Multi-business dashboard lets one login manage separate business accounts
Limitations
Wave's free tier is genuinely useful, but its scope has real edges. Inventory management is absent, so product-based retail businesses will hit a wall quickly. Payroll is an add-on and is only available in select US states and Canada—verify your location's eligibility before counting on it. Multi-currency invoicing exists but is limited compared to dedicated global tools; confirm current capabilities on the vendor site. Customer support on the free plan is self-serve only; live support is reserved for paying customers or those using paid add-ons. Migrating historical transaction data from another platform requires manual entry. Reporting is solid for basics but lacks the depth of QuickBooks or Xero for complex business structures.
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Frequently asked questions
- Is Gusto or Wave better for small businesses?
- For most small businesses, Gusto edges out Wave on overall SMB fit (9/10 vs 8/10), especially for Gusto is a strong match for service businesses, retail shops, restaurants, agencies, and…. That said, weigh pricing and the feature breakdown below against your needs.
- How does pricing compare between Gusto and Wave?
- Gusto offers paid plans from about $40/mo. Wave offers a free tier or trial. Always confirm current plans on each vendor's website before you commit.
- When should I choose Gusto over Wave?
- Gusto is a strong fit for Gusto is a strong match for service businesses, retail shops, restaurants, agencies, and professional practices with 1–100 employees that…. Lean toward Wave if you need Wave is an excellent fit for freelancers, consultants, sole proprietors, and micro-businesses with up to roughly ten employees who need….
Read the full profiles: Gusto · Wave · All Accounting tools