As a freelance writer who loves technology, I’m on a never-ending quest to find the best tools that support my business. Since there isn’t a perfect all-in-one tool for freelancers, I use multiple services to achieve my goals. Let me be your canary in the coal mine, testing freelance tools to figure out if they’re right for you. Today, I look at Gusto, the all-in-one people platform.

What does Gusto do?

When setting up a freelance business, there are all sorts of legal methods and entity types — Sole Proprietorship, LLC, S-Corp, Corporation. Each of them has different rules and tax implications when paying yourself. Owners of an S-Corp, for example, must receive wages as a W2 employee and not just as a shareholder distribution. These complicated rules and requirements mean certain freelance businesses need a detailed HR team to maintain compliance and elevate the tax burden. Enter Gusto!

Gusto is outsourced HR for your business. It provides full-service payroll for W2 employees and 1099 contractors, manages benefits, files employment taxes, and more. Gusto understands the intricate details for every state, so you don’t have to (note: I don’t know about Gusto’s international capabilities). They prepare paperwork, send direct deposit payments, and file taxes on your behalf.

Gusto also has employee benefits options that include retirement and health insurance. Whether using the Gusto integrated options or providing these benefits on your own, Gusto calculates the tax implications and adjusts payroll accordingly. At tax time, Gusto prepares 1099s and W2s for everyone. It’s quick and painless.

How do I use Gusto?

My freelance business is an LLC, filing taxes as an S-Corp. While I’m the only ‘employee,’ I must take a W2 salary to comply with federal requirements. I set up Gusto to manage my company’s payroll (just me).

The setup process was a little complicated, mainly because I needed to create new business accounts for taxes and unemployment insurance with the Department of Revenue. Thankfully, Gusto had a step-by-step guide for my state and a phone support line to walk me through everything.

Once set up, I digitally signed a few things, and Gusto took care of the rest. Now, they know what tax filings are due each quarter and file on my behalf. Gusto takes out the appropriate taxes and pays them for me when I run payroll. While it’d be nice to just send money from my business bank account to my personal, Gusto ensures I pay myself legally every time.

One of my clients uses Gusto for all their contractors. For them, I’m a 1099 contractor and receive payment from Gusto’s direct deposit. It’s great, efficient, and onboarding as a contractor took all of three minutes.

Is Gusto right for you?

Before answering this question, you need to understand your business’s legal and tax ramifications. Only a tax professional can truly answer that question for you. That said, if you need to process payroll and deal with employment taxes, then Gusto is undoubtedly for you. They are truly the best option in the freelance HR space.

Wave has a payroll option similar to Gusto — their pricing is even in line. I began using Gusto before discovering Wave; otherwise, I might have gone with Wave initially. However, I haven’t switched from Gusto because the service is top-notch. Phone support (when necessary) is a great option, and they handle any tax form or letter I receive — I scan it and email it to them, and they either provide context or take care of the issue.


Gusto calls itself the all-in-one people platform, and it really lives up to that name. The service takes something complicated with a ton of legal requirements and boils it down to something simple and understandable. If you’re a freelancer that requires a W2 salary or you manage contractors, Gusto is the right choice for you.

Sign up for Gusto and receive $100 after running your first payroll!

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