Factorial vs Gusto
Considering a switch from Gusto to a European alternative? Factorial offers full GDPR compliance and EU-only data hosting without the legal uncertainties that come with US-based services. Here's how they compare on features, pricing, and data protection.
Quick Overview
Factorial
EU- Headquarters
- Barcelona, ES
- Pricing
- From €5/mo
- Open Source
- No
Gusto
USGusto is a cloud-based payroll, benefits, and HR management platform designed for small businesses, handling payroll processing, tax filing, and employee onboarding.
The Case for Factorial
- Factorial stores all data exclusively in EU, under European jurisdiction. Unlike Gusto, which is subject to the US CLOUD Act and FISA Section 702, Factorial cannot be compelled by foreign governments to hand over your data.
- Factorial offers a Data Processing Agreement (DPA) that is fully aligned with GDPR Article 28. There is no legal ambiguity about data transfers or adequacy decisions — your data processor is European, and the law that governs it is European.
Why Switch to Factorial?
Concerns with Gusto
- US CLOUD Act jurisdiction
- Payroll and tax data stored on US servers
- SSN and financial data processed on US infrastructure
- Sensitive compensation data accessible to US authorities
Factorial Compliance
GDPRDPA
- Headquarters
- Barcelona, ES
- Data Centers
- EU
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Categories
Factorial vs Gusto — FAQ
Is Gusto GDPR compliant?
Gusto may offer GDPR compliance features and EU data residency options, but as a US-headquartered company, it remains subject to the US CLOUD Act and FISA Section 702. These laws can compel US companies to hand over data regardless of where it is stored. The EU-US Data Privacy Framework provides some safeguards, but its predecessors (Safe Harbor and Privacy Shield) were both invalidated by the European Court of Justice. Factorial, as a European company, is not subject to these US laws at all.
How does Factorial compare to Gusto in features?
Factorial offers Employee management, Time tracking, Leave management, Payroll, and 6 more features. While Gusto's ecosystem may be larger due to its market position, Factorial covers the core functionality that most teams need. The trade-off is typically between breadth of integrations (Gusto) and data sovereignty with regulatory certainty (Factorial).
Can I migrate from Gusto to Factorial?
Yes. Most European software providers, including Factorial, offer migration tools or documentation to help you transition from US-based services. Under GDPR Article 20, you have the right to data portability — meaning Gusto must provide your data in a machine-readable format. The migration process varies in complexity depending on your data volume and integrations, but for most teams it can be completed within a few days to a few weeks.