Every Allen small-business owner who hires their first employee runs into the same question: which payroll system do you actually use? The two names you see everywhere are ADP and Gusto — and then there’s the option most comparison articles skip: handing payroll to a local firm here in North Texas. We work with small businesses in Allen, Fairview, McKinney, Plano, and Frisco, so this is our honest take, including the times a national platform is the better choice over hiring us. Here’s how ADP, Gusto, and a local Allen payroll provider compare on cost, support, and Texas compliance.
Short answer: For most small Allen businesses with employees in one state, Gusto is the simplest, most transparent option (published pricing from $49/month plus $6 per employee in 2026). ADP fits larger or multi-state operations, but it prices only by custom quote. A local Allen provider makes sense when you’d rather hand off payroll entirely and have it handled alongside your bookkeeping and taxes.
ADP: strengths and drawbacks
ADP offers payroll and HR tools for businesses of many sizes. Its broad feature set can be more than a very small Allen business needs. Its small-business product is RUN Powered by ADP, built for businesses with 1–49 employees, with four tiers (Essential, Enhanced, Complete, and HR Pro). For larger companies, roughly 50–999 employees, ADP offers Workforce Now.
Where ADP is strong
- Scale and reliability: ADP serves a very large number of employer clients, with proven tax filing and compliance across all 50 states.
- Complex or multi-state payroll: if you have employees in several states or plan to grow well past 50 employees, ADP’s systems handle it.
- Deep HR and benefits: time tracking, benefits administration, workers’ compensation, and retirement plans are available, usually as separate paid add-ons.
- Brand recognition: lenders and larger partners know the name, which some owners find reassuring.
Where ADP can be less suited to small teams
- Custom, quote-based pricing: ADP does not publish its rates. The final cost can depend on your employee count, pay frequency, the services you choose, and add-on features. Ask for a written quote that separates setup, payroll-run, year-end, and add-on charges before choosing a package.
- Add-ons priced separately: core payroll and add-ons like time tracking, benefits, and retirement are quoted separately, so the base number is rarely the full picture.
- More features than a small shop may need: the platform is built to scale, which can feel like a lot for a three-person business.
- Support model: it’s a large support operation, so you may not deal with the same person each time.
Gusto: strengths and drawbacks
Gusto is a popular choice for small, single-state teams that want transparent pricing and a clean, do-it-yourself interface. It’s payroll software rather than a service, which is exactly right for some owners and not for others.
Where Gusto is strong
- Transparent, published pricing (genuinely rare in this industry). As of 2026: Simple is $49/mo + $6 per employee; Plus is $80/mo + $12 per employee; Premium is $180/mo + $22 per employee; and a Contractor-Only plan runs $35/mo + $6 per contractor.
- Easy, modern interface that’s friendly for owners who want to run payroll themselves.
- Automatic tax filing at the federal, state, and local levels, plus unlimited payroll runs.
- Contractor and benefits support: good for 1099 payments and basic health-insurance administration, with QuickBooks and Xero integrations.
Where Gusto has limits
- Price creep: add-ons like a health-insurance broker, priority support, and time tracking add to the base price.
- Multi-state limitation: the Simple plan is designed for single-state payroll. Businesses running payroll in more than one state need the Plus plan.
- No dedicated local contact: support is helpful but general — the person you reach won’t know your business or your books.
- It’s still self-service: Gusto gives you the tool, but you remain responsible for classifying workers correctly, running payroll on time, and reviewing your own results.
Local Allen payroll provider: the strengths
A local provider isn’t payroll software — it’s a service where the same people who prepare your taxes and keep your books also run your payroll. The difference isn’t a feature list; it’s who handles the work. With ADP or Gusto, you (or your office manager) own the process. With a local firm, a local professional handles it for you.
- One point of contact who understands your whole financial picture, so payroll, bookkeeping, and taxes aren’t split across three separate apps.
- Texas-specific knowledge: Texas does not impose an individual state income tax, so employers generally do not withhold Texas individual income tax from wages. You still owe federal payroll taxes and Texas state unemployment tax, must register with the Texas Workforce Commission when you become liable, and must report new hires to the state. A local professional can handle these steps.
- Payroll aligned with tax planning: S-corporation shareholder-employees generally need reasonable compensation for the services they perform. A payroll and tax professional can help evaluate factors such as duties, time worked, experience, and comparable wages.
- Records reviewed together: reviewing payroll, bookkeeping, and tax records together can help identify classification, filing, and cash-flow issues earlier than a self-serve tool that only does what it’s told.
- Local and personal: bilingual (English/Spanish) service matters in Allen and across Collin County’s diverse small-business community.
Honest trade-off: for an owner who is comfortable with software and has one or two employees in a single state, a basic Gusto Simple plan is cheaper than a full-service local package — and that’s a reasonable choice. A local provider is worth the cost when you’d rather not handle payroll at all, when your situation is more involved, or when you want payroll, books, and taxes handled together. In every case, the business owner remains responsible for providing complete and accurate information.
Side-by-side cost comparison
Gusto is the most transparent and usually the cheapest option for a small single-state team. ADP prices only by custom quote. A local provider bundles payroll with bookkeeping and tax filing for a flat monthly fee.
| Option | Starting price (2026) | Pricing model | Best fit |
|---|---|---|---|
| ADP RUN | Custom quote — no public pricing | Quote-based; add-ons priced separately | Businesses with 1–49 employees wanting payroll plus HR support |
| ADP Workforce Now | Custom quote — no public pricing | Quote-based | Midsized businesses (roughly 50–999) with more complex payroll and HR |
| Gusto Simple | $49/mo + $6/employee | Published, self-service | Small single-state teams that want to run payroll themselves |
| Gusto Plus | $80/mo + $12/employee | Published, self-service | Businesses that need multi-state payroll or time tracking |
| Local Allen provider (Tax by Lonestar) | All-in-one from $189/mo (incl. payroll up to 2 employees) [verify] | Flat monthly fee, done-for-you | Owners who want payroll, books, and taxes handled in one place |
Notes: ADP does not publish rates — cost is by custom quote and varies by employee count, pay frequency, services, and add-ons; ask for an itemized written quote. Gusto prices are published 2026 rates and exclude add-ons. The local all-in-one figure reflects the bundled monthly service on our site; [verify current price and inclusions before publishing].
Which payroll option fits which Allen business?
Match the option to your size, your complexity, and how much you want to handle yourself:
- 1–2 employees, one state, comfortable with software → Gusto Simple. Transparent and inexpensive.
- You’d rather not handle payroll, or you’re an S-corp owner who wants payroll aligned with a tax plan → a local full-service provider.
- 50+ employees, multiple states, or complex benefits and HR → ADP Workforce Now (or Gusto Premium if you prefer self-service).
- You only pay 1099 contractors → Gusto’s Contractor-Only plan, or a local firm if you also want bookkeeping.
One point worth knowing: it isn’t strictly either/or. Some local firms will run payroll software such as Gusto or QuickBooks Payroll on your behalf, so you get the software plus a local contact. If that interests you, ask a provider which platforms they support and whether they can work with your existing account.
How we run payroll at Tax by Lonestar
We run full-service payroll for Allen-area businesses as part of a single system that also handles your bookkeeping and taxes, so information doesn’t get split across separate apps.
- We set up and run payroll and keep your bookkeeping in QuickBooks Online, so your payroll, books, and monthly reports stay connected.
- We handle the filings: federal deposits and returns, Texas state unemployment tax through the Texas Workforce Commission, new-hire reporting, and year-end W-2s and 1099s.
- We review your records together: because we also keep your books and prepare your taxes, we can spot issues like worker misclassification or owner-salary questions earlier.
- You get a local contact at our Allen office at Watters Creek. You remain responsible for giving us complete and accurate information; we handle the rest.
[Add a real experience proof point here — a specific client scenario or a payroll or compliance issue you helped an Allen-area business resolve. Do not fabricate; Mohsin to insert a genuine example.]
Book a free payroll consultation and we’ll give you an honest read on whether Gusto, ADP, or our done-for-you service fits your business — even if the answer is “start with Gusto.”
Frequently asked questions
Is ADP or Gusto better for a small business in Allen, TX?
For most small Allen businesses with employees in one state, Gusto is usually the better fit — its pricing is transparent (from $49/mo + $6 per employee in 2026) and its interface is easy to run yourself. ADP tends to suit larger or multi-state operations. If you’d rather not run payroll at all, it’s worth comparing a local full-service provider too.
How much does payroll cost for a small business in Texas?
In 2026, Gusto starts at $49/month plus $6 per employee. ADP uses custom, quote-based pricing, so the cost depends on your setup and selected services. A local done-for-you service like ours starts at $189/month and bundles payroll with bookkeeping and tax filing.
Do Texas businesses withhold state income tax from payroll?
No. Texas does not impose an individual state income tax, so employers generally do not withhold Texas individual income tax from employee wages. You still owe federal payroll taxes and Texas state unemployment tax, and you must report new hires to the state. Franchise, sales, and other taxes may still apply to the business.
Can a local Allen firm run Gusto or ADP for me?
Some local firms manage payroll through third-party platforms. Ask the provider which systems they support and whether they can work with your existing account.
What payroll taxes do Allen, TX employers have to pay?
Federal income tax withholding, Social Security and Medicare (FICA), and federal unemployment (FUTA), plus Texas state unemployment tax through the Texas Workforce Commission. There is no Texas individual state income tax withholding. New hires and rehires must be reported to the Texas Office of the Attorney General within 20 calendar days of the hire date.
The bottom line for Allen businesses
There’s no single “best” payroll system — only the one that fits your size, your complexity, and how hands-on you want to be. Gusto is strong on transparent, self-service pricing for small single-state teams. ADP suits larger, multi-state, or HR-heavy operations. A local Allen provider is a good fit when you want payroll, bookkeeping, and taxes handled together by someone who knows Texas rules well.
If you’re weighing your options, talk to us first. Tax by Lonestar is based at 825 Watters Creek Blvd, Building M, Suite 250, Allen, TX 75013, and we serve Allen, Fairview, McKinney, Plano, and Frisco. Call +1 469-888-8492 or book a free payroll consultation, and we’ll give you a straight answer about which option fits — even if it isn’t us.
