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Gusto 401(k): cost, setup, and the credits that pay for it

Gusto bought Guideline, so a 401(k) now lives inside Gusto. What it costs, how setup works, and why a small business can often run one for close to nothing in the first three years.

Shanin Drucquer

Shanin DrucquerGusto user since 2024 · Updated October 2026

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Short answer

Gusto’s 401(k) starts at $49 a month plus $6 per participant and sets up in about 20 minutes. With 50 or fewer employees, a federal tax credit usually covers that cost for the first three years.

$49/mo

Starting base fee, plus $6 per participant

$5,000

Most a startup tax credit can cover each year, for 3 years

$500

Extra credit a year for automatic enrollment

$24,500

What an employee can contribute in 2026

Have these ready

  • Your EIN and legal business name
  • Who should be eligible, and after how long
  • Whether you’ll match, and the formula
  • Admin access to Gusto’s Benefits tab

  1. Step 1 of 6 · 2 min

    Open 401(k) in Benefits

    In Gusto, open Benefits, find the 401(k) tile, and choose Explore plans. Everything after this happens inside Gusto; there’s no separate provider account to set up.

  2. Step 2 of 6 · 5 min

    Pick a plan

    Gusto offers three plans, starting at $49 a month plus $6 per participant. The higher plans open up more plan designs, such as employer matching, profit sharing, and safe harbor.

    Not sure you’ll match yet? Choose a design without required employer contributions. You can add a match later.

  3. Step 3 of 6 · 5 min

    Set eligibility and matching

    Choose who can join and when, for example everyone 21 or older after a set amount of service, and set your match formula if your plan includes one.

    Safe harbor plans require a set employer contribution, but they skip most of the annual nondiscrimination tests that can force refunds to owners and higher earners.

  4. Step 4 of 6 · 2 min

    Turn on automatic enrollment

    Employees start contributing a set percentage unless they opt out. Most new 401(k) plans must auto-enroll under SECURE 2.0; businesses with 10 or fewer employees, or less than 3 years old, are exempt. Turning it on earns an extra $500 tax credit a year for three years either way.

  5. Step 5 of 6 · 3 min

    Review and launch

    Review the plan documents and launch. Gusto then invites eligible employees, walks them through choosing a contribution, and offers a recommended portfolio that rebalances on its own.

  6. Step 6 of 6 · 3 min

    Let payroll handle contributions

    Each payroll now withholds employee contributions, adds your match, and sends both to the plan. Gusto keeps the records, runs compliance testing, and files the plan’s annual IRS return.

    Watch out

    If you ever run 401(k) deductions outside Gusto, deposit employee contributions within 7 business days. That’s the Department of Labor’s safe harbor for plans under 100 participants.

What it costs, after the tax credit

Gusto’s plans start at $49 a month plus $6 per participating employee, paid by the business. Employees pay an account fee of 0.15% to 0.35% of their balance a year for investment management.

For a business with 50 or fewer employees, the startup credit covers 100% of those employer fees for the first three years, up to the greater of $500 or $250 per eligible non-highly-paid employee, capped at $5,000. For most small teams, that’s the whole bill.

ParticipantsEmployer fees a yearStartup credit (up to)Your cost, years 1–3
3$804$750$54
5$948$1,250$0
10$1,308$2,500$0
20$2,028$5,000$0

Fees at Gusto’s $49 + $6 per participant starting price. Credit assumes every participant is a non-highly-paid employee and the business has tax to offset; it’s claimed on IRS Form 8881. Check with your accountant.

“Gusto files my payroll taxes, and both times a tax notice showed up, they sorted it.”
Shanin Drucquer, Iconic Landscaping

The three tax credits, in plain English

SECURE 2.0 made starting a retirement plan unusually cheap for small businesses. Three separate federal credits stack, and all three are claimed on Form 8881.

$5,000

Startup costs

100% of plan fees a year for three years with 50 or fewer employees (50% for 51–100), up to this cap.

$500

Automatic enrollment

A flat credit a year for three years when the plan auto-enrolls employees.

$1,000

Employer contributions

Per employee earning $100,000 or less: 100% in years one and two, then 75%, 50%, and 25%.

Do you have to offer a retirement plan?

Not under federal law. But California, Illinois, Oregon, Colorado, and a growing list of other states require employers either to offer a plan or to enroll employees in the state’s own retirement program.

Offering your own 401(k), including one through Gusto, satisfies those mandates. It also lets employees save far more: $24,500 in 2026, plus catch-up contributions from age 50, against the much lower IRA limits most state programs use.

Already have a 401(k) somewhere else?

You don’t have to switch. Gusto syncs payroll deductions with providers including Fidelity, Empower, and Ascensus, or you can set up the deductions by hand.

If you do want to move an existing plan into Gusto’s 401(k), ask Gusto about transfer terms first; some transfer offers require a specific payroll plan.

Common questions

Does Gusto offer a 401(k)?

Yes. Gusto acquired Guideline in 2025, and its 401(k) is now built in as Gusto 401(k) powered by Guideline. You set it up from the Benefits tab, and contributions run through payroll automatically.

How much does a Gusto 401(k) cost?

Plans start at $49 a month plus $6 per participating employee, paid by the business. Employees pay an account fee of 0.15% to 0.35% of their balance, with no transaction fees.

Can the tax credit really cover the whole cost?

For most businesses with 50 or fewer employees, yes, for the first three years. The startup credit covers 100% of plan fees up to the greater of $500 or $250 per eligible non-highly-paid employee, capped at $5,000 a year.

What’s the 401(k) contribution limit for 2026?

Employees can contribute up to $24,500 in 2026. Those 50 and older can add catch-up contributions on top.

Can I keep my current 401(k) provider and use Gusto?

Yes. Gusto syncs deductions with providers including Fidelity, Empower, and Ascensus, or you can enter 401(k) deductions manually.

Is there a Gusto 401(k) for business owners with no employees?

Yes, Gusto offers a solo 401(k) for owners without employees, starting at $49 a month plus a 0.15% asset fee.

Does Gusto handle 401(k) compliance?

Yes. Gusto’s 401(k) includes recordkeeping, compliance testing, and the plan’s annual IRS filing, alongside employee onboarding and education.

Sources: Gusto 401(k) powered by Guideline, Gusto: choosing a small business 401(k) provider, IRS: 2026 401(k) limit, IRS: retirement plan startup credit.

Set it up from your Gusto account

If you already run payroll on Gusto, the 401(k) is a tab away. If you don’t, sign up through my link: Gusto sends you a $100 Visa gift card after your first payroll.

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