Gusto vs Melio Comparison 2026
Gusto runs full payroll for an actual employee: tax withholding and filing, benefits, onboarding, from $49 a month plus $6 a person. Melio only moves money to people you already pay, contractors, vendors, freelancers, with no tax filing attached, free forever for one user and $25 a month once you need batch payments and approvals. Pick Gusto the day somebody becomes a W-2 employee. Pick Melio if everybody you pay is a contractor and payroll machinery is overkill.
At a glance
- Melio starts cheaper, at $25.
- Only Melio has a free tier.
Side by side
Gusto | Melio | |
|---|---|---|
| Starting price (they differ) | From $49 | From $25 |
| Pricing model (they differ) | Paid subscription | Free plan, paid tiers |
| Free tier (they differ) | No | Yes |
| Billing | Monthly or annual | Monthly or annual |
| Free trial | Not stated | 30 days |
| API | Not stated |
Gusto
Payroll for the first person you hire
Gusto is what a creator business turns to on the day an editor stops being a contractor and becomes an employee. It runs the payroll, files the taxes in the states you owe them, handles onboarding and offers benefits on top. The per-person fee is the number to watch: the base looks small and the headcount is what actually sets the bill. Contractor-only payments are cheaper than full payroll and sold separately.
Our note
Work the total at your actual headcount rather than comparing base prices, because the per-person charge doubles between Simple and Plus and that is where the real difference sits. If everyone you pay is a contractor, this is the wrong product and you are paying a payroll price for an invoicing problem.
Melio
Pay the people who work for you, free
Melio is bill payment for a business too small to have an accounts payable department and too busy to keep writing bank transfers by hand. You schedule what goes out, pay by bank transfer at no cost or by card for a fee, and the recipient gets it however they want it. The free tier is not a trial and covers one user. Batch payments and approval rules are what the paid plans are actually selling.
Why people weigh these two
- Melio instead of Gusto
- Melio pays the people who work for you free of monthly fees, which suits a contractor-only roster that does not need Gusto's full payroll and tax machinery.
- Gusto instead of Melio
- Gusto runs actual payroll, tax withholding included, for the point where a regular helper becomes an employee rather than a contractor paid by transfer.
Which one should you pick
Pick Gusto if you are hiring your first real employee rather than a contractor. Simple is $49 a month plus $6 a person and covers single-state payroll with taxes filed; the per-person fee is what actually sets the bill, so five people costs $79 a month on Simple and $140 on Plus. Nobody paying only contractors needs this machinery.
Pick Melio if everybody on the payment list is a contractor, a vendor or a freelancer being paid by bank transfer. The free plan is permanent, not a trial, and covers one user with ACH payments included. Paying $25 a month adds batch actions, accounting sync and 20 free ACH payments, and $80 removes the ACH limit and the seat count entirely. Its genuinely useful trick is paying by card when a recipient only takes bank transfers, buying about thirty days of float for a fee.
Common questions
- Is Melio cheaper than Gusto?
- For paying contractors, yes, since Melio has a genuine free plan and Gusto starts at $49 a month plus $6 a person. But Melio does not run payroll or file taxes, so it is not a substitute once somebody is an actual employee.
- Does Melio handle payroll taxes like Gusto does?
- No. Melio schedules and sends payments, by bank transfer, card or cheque, with no tax withholding or filing attached. Gusto exists specifically to file federal, state and local payroll taxes on every run.
- I only pay contractors. Do I need Gusto at all?
- Its own guidance says no: paying only contractors means buying payroll machinery you will not use. Melio, or Gusto's separate contractor-only product, fits that job for far less than the full payroll plans.
- Is Melio's free plan actually free forever?
- Yes, it is not a trial and has no time limit, though it is capped at one user. Gusto has no free plan at all: the cheapest tier is $49 a month plus $6 per person from the first employee.
Ratings are the average of reviews readers left. The facts are stated by each tool’s own listing and are not verified by CloutStack. How we make money.