How does the Gusto Payroll app work?

Gusto (formerly ZenPayroll) is a separate paid app that integrates with FreshBooks to bring you payroll, W-2s, 1099s, payroll runs and direct deposits. The Gusto app allows you to automatically import payroll runs as categorized expenses and manage your payroll runs from within your FreshBooks account.
Gusto is available for businesses based in the US and can be set up by the business owner only.

Import Payroll Expenses

Gusto can import every payroll run you complete into FreshBooks as expenses with your preferred expense categories selected for you. Business owners can set this up using the below steps:
  1. Go directly to Payroll here, or select the Settings section
  2. Under Connections and Integrations, select Payroll
  3. If you already have a Gusto account, select the Import Expenses button
  4. If you’ve never set up Gusto before, select Create a Trial Account to get started with a free 2-month trial
    1. You’ll be taken to Gusto’s signup page, enter your signup details and select Get Started
    2. Add your Password and any extra details, then select Create My Account
  5. After your Gusto account is set up, inside Gusto, select the App Directory tab
  6. In the Find an app search bar, enter in FreshBooks and select the result
  7. Select the Connect button
  8. Then choose the at option

    Connect to FreshBooks button.

  9. Enter your FreshBooks login credentials if prompted to, and select Allow to authorize Gusto to access your FreshBooks account
  10. If you have multiple businesses, choose the specific business that you’d like Gusto to connect to and select Connect to FreshBooks
  11. Once connected, select the edit button to customize your account mappings to determine which expense categories you'd like Gusto to use when importing expenses into your FreshBooks account (parent categories can only be selected)
  12. In your Gusto account, select Settings while inside the FreshBooks app

    Gusto app with integration settings for FreshBooks.

  13. For Auto-Sync, ensure Auto sync is selected so payroll runs are automatically imported into FreshBooks for you
  14. If needed, under Grouped mapping, choose Department from the dropdown to enable Department Account Mapping if needed
  15. For Entry Date, choose between Check Date, Debit Date, or End of Pay Period for the date of the expense when it’s created in FreshBooks. Once you’ve reviewed your settings, your app is all set up.
Note: If you’re using Bank Reconciliation as well, we recommend working with your Accountant on the mapping of your Gusto payroll expenses.

Import Payroll Information

To access your Gusto payroll runs in your FreshBooks account, use these steps:
  1. Go directly to Payroll here, or select the Settings section
  2. Under Connections and Integrations, select Payroll
  3. If you haven’t connected your Gusto account for payroll information yet, select Import Payroll Info, then select Continue to proceed to Gusto
  4. Select Authorize
  5. Choose which Gusto Company to import payroll runs from if you have multiple companies, then choose Select. Your Gusto account will be connected and you can begin payroll runs.

Run Payroll

Once connected to your Gusto account, you can run payroll and review payroll information:

Payroll area with payroll details.
  • Run Payroll in Gusto - This opens your Gusto account so you can run a payroll cycle for your team
  • More Actions - Select Payroll Settings to manage your integration with Gusto
  • Payroll Information - Your Last Payroll Run, Last Payroll Total, Next Payroll Period and Next Payroll Run are displayed with the date and time of your last sync listed
  • View Payroll Reports - Select the View Reports in Gusto button to run or export your various reports from within your Gusto account
  • Last Payroll Runs - Each payroll run is listed with its Period, Payroll Date, Amount and a quick link to view it inside your Gusto account

  • When you’ve completed a payroll run, refresh your FreshBooks account to have the run appear in your Last Payroll Runs
  • If you cancel your payroll run inside Gusto, all imported expenses in your FreshBooks account by Gusto will be removed automatically

Manage Payroll Settings

Access your Gusto settings with these steps: 
  1. Go directly to Payroll here, or select the Settings section
  2. Under Connections and Integrations, select Payroll.
From here you can:
  • Run Payroll in Gusto - This opens your Gusto account so you can run a payroll cycle for your team
  • Manage Gusto Integration Settings
    • Automatically Import Expenses to FreshBooks
      • Manage Gusto Account - Select to manage your app with FreshBooks in your Gusto account
      • Import Expenses / Disconnect Expenses Info - Select to start or stop importing payroll runs as expenses in your FreshBooks account
    • Import Payroll Information to FreshBooks
      • Import / Disconnect Payroll Info - Select to start or stop syncing payroll runs from Gusto into FreshBooks, if you use Bank Connections or Bank Reconciliation, leave this deactivated to avoid duplicate expenses
      • Switch Company - Select to switch between multiple companies in your Gusto account to view different payroll information in your FreshBooks account


What happens to my expenses if I have both the Gusto app connected and an active Bank Connection?
If you have Gusto integrated, your payroll runs are automatically imported as expenses. If you also have a bank account connected via Bank Connection / Bank Reconciliation that is also the same account you use for payroll runs, you will also view the same payroll runs automatically imported as expenses too. 
To stop duplicate expenses from being created, use the steps in Manage Payroll Settings and go to Disconnect Expenses Info to stop importing payroll runs as expenses in your FreshBooks account. Your Bank Connection / Bank Reconciliation will continue to create expenses every time you run Payroll. 

How can I match my Gusto payroll transactions in Bank Reconciliation?
To reconcile Gusto entries, refer to the Payroll App steps here. Gusto will import specific expenses into your FreshBooks account, which will also appear in your Bank Rec under FreshBooks Entries:
  • Gross Wages - Depending on your setup in Gusto, this may also be imported with more details into different expense categories - by default, this is assigned the subcategory of Wages, under the category of Other Expenses
  • Employer Taxes
  • Payments to contractors (if applicable)
  • Reimbursements to employees (if applicable)
When your payroll is withdrawn from your bank account, these entries appear in your Bank Rec under Unreconciled Bank Transactions:
  • Total employer and employee taxes - Both state and federal are combined into one entry
  • Net pay for employees
  • Payment to contractors (if applicable)
  • Reimbursements to employees (if applicable)
  • Payments for child support benefits to employees (if applicable)
  • The Gusto app does not withdraw from your bank account for employee benefits but it still imports into your FreshBooks account as expenses - work with your Accountant to record a journal entry for the liability related to the benefits in FreshBooks
  • Any payments made for child support garnishments are already recognized by Gusto as an expense and are withdrawn from your bank account as a separate transaction