Gusto works great for single-state startups, but scaling across multiple states exposes its limits fast. State registration fees, slow support, and compliance gaps become real problems once you're hiring remotely. This guide compares three alternatives built for growing startups: Warp, Justworks, and Deel.
What we cover:
- Why startups outgrow Gusto (and when it happens)
- Side-by-side comparison of pricing, support, and compliance coverage
- Who pays when payroll mistakes happen
- PEO vs. standalone payroll: the real cost difference
- Which platform fits US-first vs. global-first teams
- How to switch providers without payroll disruption
Gusto works until it doesn't. If you're a founder scaling from 10 to 100 employees across multiple states, you've probably hit the wall: state tax registration fees adding up, compliance notices landing in your inbox with no clear owner, and support tickets that take days to resolve.
You're not alone. The IRS reports that 40% of small businesses face payroll tax penalties each year. Multi-state complexity makes that number worse.
This guide breaks down three Gusto alternatives built for growing startups: Warp, Justworks, and Deel. We'll cover what each does well, where they fall short, and which one actually solves the compliance headaches that come with hiring across state lines.
Why Startups Outgrow Gusto
Gusto is designed for small, single-state operations. It handles basic payroll well. Run payroll, file taxes, pay employees. Simple enough for most small businesses.
The problems start when you hire your first remote employee in California while headquartered in Texas. Or when you get a tax notice from Colorado that you didn't know you needed to respond to.
Here's what catches most founders off guard:
Compliance is outsourced. Gusto partners with third parties for state tax registrations and filings. If something goes wrong, you're the one dealing with the state agency, not them.
State registration costs add up. Gusto charges roughly $200 per state form to handle registrations for you. Hire in five new states, and you're looking at $1,000+ just in setup fees.
Support can be slow. Email-based support with 24-48 hour turnaround doesn't work when you're staring at a tax penalty notice with a 10-day deadline.
If your startup is US-first, growing fast, and hiring across multiple states, Gusto's model starts to break down. These three alternatives handle scale differently.
The 3 Best Gusto Alternatives for Growing Startups
| Feature | Warp | Justworks | Deel |
|---|---|---|---|
| Best For | US startups scaling across states | Startups wanting bundled benefits | Global-first companies |
| Pricing | $19-29/employee/month | $58-109/employee/month | $29-599/employee/month |
| Multi-State Compliance | Automatic registration + filing | Supported via PEO | Limited for US payroll |
| Support Response | 5 minute median response | 24/7 availability | Ticket-based |
| Contract Terms | Month to month | Month to month | Varies |
1. Warp: Best Payroll for US Startups Scaling Across States
Warp is the only AI-native HR & Payroll platform built for startups. Instead of clicking through clunky dashboards or .gov websites for taxes, Warp's AI agents open every state tax account, file every payroll form, and resolve every tax notice automatically.
Every company gets a dedicated Account Manager and Benefits Advisor included to guide them through payroll setup, multi-state expansion, and benefits selection. You don't have to spend hours on hold with tax agencies or worry about compliance mistakes.
With Warp, you'll never visit a government website, negotiate with tax agencies, or pay accountants $150 per filing. Just focus on building your business while Warp handles payroll, compliance, and benefits for your team across any state or country.
What makes Warp different: When you hire an employee in a new state, Warp automatically registers your business with state tax agencies. No extra fees. No waiting. If a tax notice comes in, Warp responds to it on your behalf. And if they make a mistake? They pay the penalty, not you.
Key Features
Automatic state tax registration. Hire in a new state, and Warp opens your tax accounts automatically. No $200-per-form fees.
Compliance that runs itself. From state registrations to notice resolution, AI handles the busywork. Your finance team focuses on strategy, not paperwork.
Fast human support. NYC-based support team with a 5-minute median response time. No chatbots, no offshore scripts.
Transparent pricing. Published pricing at $19-29/employee/month. No annual lock-ins, no hidden fees.
Fast migration. Most startups migrate from Gusto in under 10 minutes.
Pricing
Warp offers flat, transparent pricing per employee. No base fees that balloon as you add states. No surprise charges for "premium" compliance features. View Warp pricing.
Who It's Best For
Warp is ideal for US-first startups with distributed teams. If you're hiring across 5, 10, or 20 states and don't want to become a part-time compliance officer, Warp handles the complexity so you can focus on building.
Note for founders: If you're evaluating Warp vs. Gusto, the core difference is ownership. Gusto gives you software and guidance. Warp gives you a compliance team that actually does the work and takes responsibility when things go wrong.
2. Justworks: For Startups Wanting Bundled Benefits
Justworks is a Professional Employer Organization (PEO), which means they operate under a co-employment model. They bundle payroll, HR, compliance, and benefits administration into one package.
What makes it different: The main draw is access to enterprise-level health insurance plans at rates typically reserved for larger companies. For startups competing for talent against Google and Meta, this matters.
Key Features
Large-group health insurance. Access to competitive medical, dental, and vision plans through Justworks' group buying power.
Full PEO services. Payroll, HR tools, compliance support, and benefits administration in one platform.
Multi-state support. Handles compliance across states through the PEO structure.
24/7 support. Round-the-clock availability through multiple channels.
CPEO certified. IRS-certified PEO, which provides additional liability protections.
Pricing
Justworks offers multiple pricing tiers:
Payroll Plan: $50/month base + $8/employee/month for basic payroll and HR tools
PEO Basic: $59/employee/month for payroll, compliance, and core HR tools
PEO Plus: $109/employee/month, which adds health insurance administration, HSA/FSA accounts, and mental health benefits management
For a 50-person startup on the Plus plan, you're looking at roughly $5,450/month before benefits premiums.
Who It's Best For
Justworks works well for startups that need enterprise-level benefits to compete for talent and want a single vendor handling HR, payroll, and compliance. It's particularly popular with funded startups in competitive hiring markets.
Where It Falls Short
Cost adds up fast. When you factor in the per-employee PEO fees plus health premiums (which can run high in states like California and New York), total cost of ownership often exceeds what you'd pay with a standalone payroll provider plus a small-group benefits broker.
Co-employment model. Under a PEO, Justworks becomes the "employer of record" for tax purposes. This works for most startups, but some investors and acquirers have concerns about PEO structures during due diligence.
Harder to leave. Unwinding a PEO relationship takes more effort than switching payroll providers. You'll need to re-establish your own tax accounts and benefits plans.
Note for founders: Run the full cost analysis before committing to a PEO. Compare Justworks' all-in cost (PEO fees + health premiums) against standalone payroll + small-group health plans. In many cases, the standalone approach is cheaper, especially if your team is young and healthy.
Looking to actually get off your PEO? Check out how to do it here in NYC.
3. Deel: For Global-First Companies
Deel is a global employment platform that specializes in hiring internationally. They offer Employer of Record (EOR) services in 150+ countries, contractor management, and, more recently, US payroll.
What makes it different: If you're building a globally distributed team from day one, Deel's infrastructure lets you hire full-time employees in other countries without setting up local entities. That's their core strength.
Key Features
Global EOR in 150+ countries. Hire employees internationally without establishing local subsidiaries.
Contractor management. Compliant contracts and payments for international freelancers at $49/contractor/month.
US Payroll. Domestic payroll starting at $29/employee/month.
Free HR tools. Basic Deel HR platform included at no cost.
Currency flexibility. Pay workers in their local currency.
Pricing
Global Payroll: $29/employee/month (for countries where you have entities)
Contractor Management: $49/contractor/month
US PEO: $89/employee/month
Employer of Record: $599/employee/month
Who It's Best For
Deel is the right choice if your core workforce is international. If you're hiring engineers in Argentina, designers in Portugal, and product managers in the Philippines, and you don't want to set up legal entities in each country, Deel handles that complexity.
Where It Falls Short
US payroll is an afterthought. Deel built their reputation on global hiring, and it shows. Users report bugs, manual workarounds, and clunky flows when using Deel for US-based W-2 employees. G2 reviews frequently mention friction with domestic payroll.
Support is ticket-based. Complex issues often require multiple back-and-forth exchanges. If you're used to getting answers in minutes, the support experience can be frustrating.
FX fees add up. Deel charges markups on foreign exchange transactions. For companies making frequent international payments, this becomes a meaningful cost.
Compliance liability stays with you. Unlike Warp, if Deel makes an error on your US filings, you're still responsible for penalties.
Note for founders: Deel wins on global EOR. But if your core team is domestic (or you have a mix of US employees and international contractors), you may be better off with a US-first platform like Warp for domestic payroll, using Deel only for international hiring where you actually need EOR services.
How to Choose the Right Gusto Alternative
Choose Warp if:
- Your team is primarily US-based
- You're hiring across multiple states
- You want someone else to handle compliance, not just give you tools
- You need fast, human support when issues arise
- You want transparent pricing without annual lock-ins
Choose Justworks if:
- Access to large-group health insurance is a top priority
- You're comfortable with the co-employment PEO model
- Your team size justifies the per-employee cost
Choose Deel if:
- Your workforce is primarily international
- You need to hire full-time employees in countries where you don't have entities
- US payroll is secondary to your international needs
The Bottom Line
Gusto is a solid entry point for early-stage startups with simple payroll needs. But as you scale, especially across state lines, its limitations become real operational pain.
For US-first startups, Warp offers the most direct solution: automated compliance, real liability coverage, and support that actually responds when you need help. You get the benefits of having a compliance team without hiring one.
Justworks makes sense if bundled benefits are your primary driver, but run the numbers. PEO costs often exceed standalone alternatives when you add everything up.
Deel is the right answer for global-first companies, but don't default to it for US payroll. Their strength is international, and their domestic offering reflects that.
Thousands of fast-growing startups trust Warp to stay compliant while they scale. Try us out and see why.
Frequently Asked Questions
What's the main difference between Warp and Gusto?
Gusto provides payroll software and guides you through compliance tasks. Warp handles compliance as a service, automatically registering you in new states, responding to tax notices, and taking liability for errors. If Gusto is DIY payroll with training wheels, Warp is done-for-you compliance with a safety net.
Is Justworks worth the cost for a small startup?
It depends on your priorities. If access to large-group health insurance is critical for recruiting, Justworks can provide value. But for startups under 50 employees, the PEO fees often exceed the savings on benefits. Run a full cost comparison before committing.
Can I use Deel for just US payroll?
You can, but it's not their strength. Deel's US payroll product exists, but users frequently report friction, including bugs, odd workflows, and slower support compared to their global offerings. If your team is primarily US-based, a domestic-focused platform will likely serve you better.
How hard is it to switch from Gusto to Warp?
Most startups complete the migration in under 10 minutes. Warp handles the data transfer and ensures your employees receive a single W-2 at year-end, even if you switch mid-year. Learn more about migrating to Warp.
Does Warp handle international contractors?
Yes. Warp supports global contractor payments in 150+ countries without the FX markups that platforms like Deel charge. For full-time international employees (where you need an EOR), you'd need to pair Warp with an EOR provider.
Ready to see how Warp handles payroll and compliance differently? See a demo and try the platform today.
