Justworks vs Gusto

These are two different categories of product, which is the main reason this comparison confuses buyers. Justworks is an IRS certified PEO offering co employment, where payroll taxes are filed under the PEO's EIN and you access a master benefits plan. Gusto is a payroll and HR platform with a licensed brokerage attached. You keep your own EIN and your own group plan.

Written for US employers with 20 to 500 employees. Every claim below is sourced to the vendor's own site, the IRS, ESAC, CMS or the federal statute and regulations themselves. Unusually for this market, both companies publish real pricing, so the numbers here are actual published rates rather than estimates.

The decision is not really Justworks versus Gusto. It is whether you want to be in a co employment arrangement at all. Once you answer that, the vendor choice mostly answers itself, because Gusto does not offer co employment and Justworks is built around it.

Side by side

	Justworks	Gusto
Model	True PEO. Co employment. Payroll taxes filed under the PEO's EIN. You join a master benefits plan.	Not a PEO. Payroll and HR software plus a licensed benefits brokerage. You keep your own EIN and sponsor your own group plan.
Pricing transparency	Published. PEO Basic $79 per employee per month, no base fee. PEO Plus $124 per employee per month, no base fee. Payroll plan $8 per employee per month plus $50 monthly base fee. EOR $599 per employee per month.	Published. Simple $49 per month plus $6 per person. Plus $80 per month plus $12 per person. Premium $180 per month plus $22 per person. Contractor Only $35 per month plus $6 per person.
IRS certified (CPEO)	Yes. Justworks Employment Group LLC effective 1/1/2017, plus Groups II, III and IV effective 7/1/2025.	Not applicable. Gusto is not a PEO and does not appear on the IRS CPEO list.
ESAC accredited	Yes. Accredited since 10/30/2019.	Not applicable. Gusto is not a PEO and does not appear in ESAC's directory.
How you get health insurance	Through the PEO master plan, plus small group, large group and ICHRA options.	Through Gusto's licensed brokers, or keep your existing broker via broker integration at $6 per eligible employee per month, which Gusto says Premium customers may have waived.
Who carries employment risk	Shared. The PEO takes on defined employer obligations including EPLI, which Justworks requires on both PEO tiers.	You do. Gusto is a software and brokerage vendor, not a co employer.
Actually good at	Offloading compliance and employer risk, and buying benefits through a pooled plan.	Low cost payroll, clean software, and keeping full control of your own benefits strategy.

Where Justworks wins

It is an actual PEO with actual credentials. Justworks Employment Group LLC has been on the IRS active CPEO list since January 1, 2017, with three more Justworks entities added effective July 1, 2025. ESAC lists Justworks as accredited since October 30, 2019. If you want federal employment tax protection, where you are not liable a second time should the provider fail to remit, and wage base continuity when joining mid year, that comes from CPEO status. Gusto is not in this category at all.

Risk transfer, not just software. Under co employment, defined employer obligations move to the PEO. Both PEO tiers include employment practices liability insurance, which Justworks does not include on its non PEO Payroll plan. For a company without in house HR or employment counsel, that transfer is the actual product.

Access to a master medical plan, plus workers compensation and unemployment administration. A company of 40 buying on its own is a small group. Inside a PEO it can participate in a much larger pooled arrangement. Whether that helps or hurts you is covered below, but the access is real and Gusto cannot offer it. Both PEO tiers also include access to workers compensation and state unemployment insurance administration. With Gusto, workers compensation is an add on, and while Gusto files your state payroll taxes, the unemployment account and its experience rating stay in your name.

Where Gusto wins

Cost, and it is not close. Gusto Plus is $80 per month plus $12 per person. For a 50 person company that is $680 per month. Justworks PEO Plus at $124 per employee per month is $6,200 per month for the same headcount. These numbers are not measuring the same thing, since the PEO fee covers benefits administration, compliance, risk transfer and workers compensation access, but the administrative gap is an order of magnitude and you should see it plainly.

You keep control of your benefits. With Gusto you sponsor your own plan and can shop the entire open market every year. Inside a PEO you are largely on the master plan and your renewal is the PEO's renewal. For an employer whose census rates well under ACA rules, keeping that control is often worth far more than anything a PEO administers.

Bring your own broker, and no co employment entanglement. Gusto can, in most cases, integrate your existing broker and eligible plans at $6 per eligible employee per month, which Gusto says Premium customers may have waived, so you do not have to replace a benefits advisor you trust to get clean payroll software. Entering a PEO, by contrast, changes your employer of record relationship and exiting one is a genuine project. For companies expecting acquisition, rapid change or an eventual move to a self funded plan, that simplicity has value.

What neither will tell you

This is the part that actually decides the outcome, and it is the reason a straight feature comparison of these two is close to useless.

Under the Affordable Care Act, a carrier in the individual and small group markets may vary premium on only four factors: age, within a 3:1 band for adults, tobacco use, within a 1.5:1 band, family size, and geography. The rule itself is section 2701 of the Public Health Service Act, and both 42 U.S.C. 300gg(a)(1) and 45 CFR 147.102(a) close the list: the rate must not vary by any other factor. That is what rules out health status, claims experience, gender, industry and occupation. Federally, small group means 1 to 50 employees under the PACE Act. California, New York and Vermont extend it to 100. Colorado moved back to 50 starting in 2026.

That rule covers small groups only: 1 to 50 employees in most states, and up to 100 in California, New York and Vermont. Above that line the math changes. A large group carrier can rate your group on its own claims experience, so a healthy large group already gets credit for being healthy, and a PEO pool has to beat an experience rated quote rather than a community rated one. For those employers the case for a PEO rests more on administration, compliance, workers compensation and multi state payroll than on the health premium.

In this specific comparison: if you stay on Gusto you sponsor your own plan, and if you are inside the small group definition in your state, the law forbids your carrier from rating you on how sick your people actually are. If you move to Justworks PEO, Justworks says it offers small group, large group and ICHRA coverage, so which of those you are placed in decides whether that same four factor rule still protects you.

Which means: where a PEO places you in a pooled or large group plan rather than a small group one, that plan is a discount for groups whose real claims risk is worse than their age, geography, family mix and tobacco status imply, and a tax for groups whose real risk is better than those factors imply. A young, healthy team in a small group state is already rated favorably by statute. Moving into a pooled plan can hand that away, and the $124 per employee per month administrative fee is often the smaller part of what it costs. A group with a rough claims history may find the pool genuinely protective. Neither company is compensated to tell you which case you are.

The second thing worth knowing is who buys PEO at all. NAPEO's October 2025 research, which is industry funded and should be read with that in mind, reports that 85 percent of PEO clients have fewer than 50 employees: 16 percent at 1 to 4, 19 percent at 5 to 9, 24 percent at 10 to 19 and 26 percent at 20 to 49. Only 9 percent are at 50 to 99 and 6 percent at 100 to 499. A 150 person employer is well outside the size profile the master plan was priced around.

How to actually decide

Do not start with the software demo. Start with the census.

Build the census. Ages, home zip codes, enrollment tier per employee, and tobacco status. Those four items are exactly what an ACA compliant small group rate is built from.
Get a real open market quote, then a real PEO quote. Price an actual medical number for the Gusto path, then the Justworks PEO medical quote. Compare those two figures first. They usually dwarf the administrative fee difference.
Pull your claims experience if you can. Above roughly 50 enrolled, many carriers will release a claims summary or large claimant report. This tells you whether your real risk is better or worse than your census profile implies, which is the whole question.
Confirm your state's small group threshold. A 75 person company in New York is small group and cannot be rated on health status. The same company in Texas, where large employer starts at 51, is large group and can be.
Price the risk transfer honestly. With no HR function and no employment counsel, the compliance and EPLI component of a PEO is worth something real. With a capable HR director, you may be paying for coverage you already have.
Add up the Gusto total, and think about the exit before the entry. Broker integration at $6 per eligible employee per month, which Gusto says Premium customers may have waived, the $200 annual service charge covering HSA, FSA, dependent care FSA and commuter accounts, workers compensation premiums and any time tracking add on all sit on top of the plan fee. Separately, leaving a PEO means unwinding co employment, restarting wage bases if you move mid year, and replacing the benefits plan, while leaving Gusto means exporting your data.

Frequently asked questions

Is Gusto a PEO?

No. Gusto is a payroll and HR platform with a licensed benefits brokerage attached. There is no co employment: you keep your own EIN, file payroll taxes under it, and sponsor your own group health plan, with Gusto's licensed brokers or your existing broker placing the coverage. Gusto does not appear on the IRS CPEO list or in ESAC's directory because it is not a PEO.

Is Justworks a PEO?

Yes. Justworks is a true PEO operating under co employment, and it is IRS certified. Justworks Employment Group LLC has been on the IRS active CPEO list effective January 1, 2017, with Justworks Employment Group II, III and IV LLC added effective July 1, 2025. ESAC lists Justworks as accredited since October 30, 2019.

How much do Justworks and Gusto cost?

Both publish rates, which is rare in this market. Justworks PEO Basic is $79 per employee per month and PEO Plus is $124 per employee per month, both with no base fee. Justworks also sells a standalone Payroll plan at $8 per employee per month plus a $50 monthly base fee. Gusto Simple is $49 per month plus $6 per person, Plus is $80 per month plus $12 per person, and Premium is $180 per month plus $22 per person. Medical premiums are separate from all of these figures.

Why is Justworks so much more expensive than Gusto?

Because it is a different product. The Justworks PEO fee covers benefits administration, compliance support, 24/7 support, access to workers compensation and state unemployment administration, employment practices liability insurance on both PEO tiers, and a share of employer risk under co employment. Gusto's fee covers software and payroll processing.

How does Justworks vs Gusto vs Rippling compare?

Justworks is a certified PEO with published pricing. Gusto is not a PEO and publishes pricing. Rippling is a workforce platform where PEO is one purchasable module, it publishes no pricing, and we could not find a Rippling entity on the IRS active CPEO list or in ESAC's directory. Of the three, only Justworks offers credentialed co employment with a known rate.

Can I keep my current benefits broker with either one?

With Gusto, yes, through broker integration at $6 per eligible employee per month, which Gusto says Premium customers may have waived. With a PEO such as Justworks, you are joining the PEO's master plan arrangement, which changes the broker relationship a great deal.

Next steps

If you want the PEO path and the open market path priced against each other on the same census and the same model, we can run that comparison. If you would rather understand the process first, start with the PEO broker overview.

Book a call

Sources

Justworks pricing: PEO Basic $79, PEO Plus $124, Payroll $8 plus $50 base fee, EOR $599.
Justworks PEO platform page: IRS certified and ESAC accredited, and small group, large group and ICHRA coverage models.
Justworks help centre on EPLI: required for all customers and bundled into the administrative fee.
Gusto pricing: Simple, Plus, Premium and Contractor Only rates, broker integration at $6 per eligible employee per month, which Gusto says Premium customers may have waived, and the $200 annual service charge for HSA, FSA, dependent care FSA and commuter accounts.
Gusto payroll tax management: Gusto files state and federal payroll tax forms each quarter.
IRS active CPEO list and the IRS CPEO public listings page: Justworks present, Gusto and Rippling absent.
26 U.S.C. 3511: a CPEO is treated as the employer for federal employment taxes, and successor employer status carries the wage bases.
ESAC verification, Justworks, accredited since 10/30/2019, and the ESAC verification portal, which returns no accreditation for Gusto or Rippling.
CMS market rating reforms: the four permitted factors and the 3:1 and 1.5:1 bands.
42 U.S.C. 300gg(a)(1) and 45 CFR 147.102(a): the rate must not vary by any factor outside that list.
42 U.S.C. 300gg-91(e)(4) and 45 CFR 144.103: small employer is 1 to 50, and a state may substitute 100. Enacted by the PACE Act, Public Law 114-60.
State thresholds: California Health and Safety Code 1357.500, New York Insurance Law 3231(a), 33 V.S.A. 1811(a)(3), Colorado Division of Insurance on SB24-073, and Texas Insurance Code 1501.002.
NAPEO, "PEO Clients: Who They Are, Where They Are, and What They Do," McBassi & Company, October 2025: client size distribution, Table 1.
Rippling pricing: custom quote only, no published rates.