2026 Independent Security Review
Gusto is a payroll and HR platform built specifically for small businesses, and its user experience reflects that focus. The platform uses AES-256 encryption, holds SOC 2 Type II certification, and processes payroll and tax filings for over 300,000 businesses. Gusto does not sign a HIPAA BAA, which limits its use for healthcare organizations that tie benefits administration to health plan data. For businesses that need a simple, reliable payroll provider with reasonable security, Gusto delivers.
78
out of 100
AES-256 at rest, TLS in transit; bank-level encryption for payroll and tax data
MFA available; role-based permissions for admins, managers, and employees
SOC 2 Type II; no HIPAA BAA; no ISO 27001 published
Security page exists but limited public detail; no published subprocessor list; SOC 2 report available on request
No publicly disclosed breach of Gusto payroll infrastructure
Purpose-built for small businesses; onboarding and UI are straightforward
| Category | Max Points |
|---|---|
| Encryption | 20 |
| Access Controls | 20 |
| Compliance Certifications | 20 |
| Transparency | 15 |
| Breach History | 15 |
| SMB Fit | 10 |
Gusto handles some of the most sensitive data any small business generates: Social Security numbers, bank account information, salary details, and tax filings. Despite this sensitivity, Gusto public security documentation is thinner than what you would find from comparable platforms. The SOC 2 Type II report is available on request but not publicly summarized, there is no published ISO 27001 certification, and the company does not publish a subprocessor list. For a platform processing payroll for hundreds of thousands of businesses, more transparency would be appropriate.
Gusto is well-designed for what it does, and its clean breach record is a positive signal. The security controls that exist (encryption, MFA, role-based access) are adequate for most small businesses. The transparency gap is the main concern: when your payroll provider holds every employee SSN and bank account number, you should be able to verify their security posture in more detail than Gusto currently provides.
Gusto works well for small law firms that need straightforward payroll processing without the complexity of larger HR platforms. Employee Social Security numbers, compensation data, and bank accounts are all processed through Gusto, so ensure that admin access is restricted to the managing partner or office manager and that MFA is enabled on all admin accounts. Do not use shared login credentials for the firm Gusto account.
Gusto does not sign a HIPAA BAA. If your practice administers employee health benefits through Gusto and the platform processes health plan enrollment data that includes PHI, you may have a compliance gap. For payroll processing alone, no BAA is needed because payroll data is not PHI. Evaluate whether your benefits administration workflow routes PHI through Gusto, and if so, consider a benefits platform that signs a BAA.
Gusto is adequate for payroll processing in a small contracting business that does not handle CUI in its HR systems. Payroll data itself is not CUI, but employee clearance status and position descriptions could be. Keep any clearance-related information out of Gusto system. If your CMMC scope includes HR systems, you may need a payroll provider with stronger published compliance documentation.
Enable MFA for all admin accounts. Gusto processes SSNs and bank account numbers for every employee, making the admin account a high-value target.
Review user roles quarterly. Remove access for former accountants, bookkeepers, or HR contacts who no longer need it.
Do not store employee clearance status, health conditions, or other regulated information in Gusto notes or custom fields.
Request Gusto SOC 2 Type II report and review it. Understand the scope of what was audited and whether it covers the services you use.
Use Gusto built-in document storage for tax forms rather than emailing these documents, which are often sent unencrypted.
No. Gusto does not sign a HIPAA BAA. If your benefits administration workflow routes PHI through Gusto, you may have a compliance gap. For payroll-only use, no BAA is needed.
No. There is no publicly disclosed breach of Gusto payroll infrastructure.
Gusto holds SOC 2 Type II certification. The report is available on request. Gusto does not publish ISO 27001 certification or a HIPAA BAA.
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