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GDPR Compliance Risk

Gusto is a US-based service subject to the CLOUD Act. EU organizations using this service risk non-compliance with GDPR data transfer requirements.

Gusto logo

GDPR-Compliant Alternative to Gusto

🇺🇸Gusto · US-based · Subject to CLOUD Act

Gusto offers a comprehensive payroll and benefits management platform tailored for SMBs. Based in the US, it simplifies HR tasks with automated payroll processing, benefits administration, and compliance support. A standout feature is its user-friendly interface that integrates seamlessly with various accounting software.

Why You Need a GDPR-Compliant Alternative to Gusto

Since the landmark Schrems II ruling in 2020, transferring personal data to US-based services like Gusto has become a significant legal risk for EU organizations. The US CLOUD Act gives American authorities the power to access data held by US companies, regardless of where that data is physically stored — even if it's in an EU data center.

While the EU-US Data Privacy Framework (DPF) adopted in 2023 provides a new legal basis for transfers, privacy experts and legal scholars have raised concerns about its long-term viability. The framework could face the same fate as its predecessors (Safe Harbor and Privacy Shield), both of which were struck down by the Court of Justice of the EU.

For organizations that want to eliminate compliance risk entirely, switching to a European-based hr & recruitment is the most straightforward solution. Below are the best GDPR-compliant alternatives to Gusto, all headquartered in Europe with data stored in EU data centers.

CLOUD Act Exposure

US authorities can access your data stored by Gusto, even if servers are located in Europe.

GDPR Fine Risk

Non-compliant data transfers can result in fines up to 4% of annual global revenue under GDPR Article 83.

EU Alternative Available

1 GDPR-compliant European alternative available with full EU data residency.

1 GDPR-Compliant Alternative to Gusto

European services with full GDPR compliance and EU data residency

Tellent logo

Tellent

🇳🇱

by Tellent

Tellent is a People Decision Platform that combines a flexible ATS, HRIS, and performance management solutions to support HR teams in making better people decisions and enhancing organizational performance.

EU-Based
freemiumMigration:●●●2-4 hours

Why switch?

  • AI-driven candidate screening saves time in hiring.
  • Tellent's EU servers ensure GDPR compliance.
  • Open-source framework allows for custom features.

Consider

  • Migration from Gusto may require data reformatting.
  • Lacks automated payroll processing like Gusto.
View DetailsCompareSwitch Guide
Visit Tellent

Quick GDPR Compliance Comparison

ServiceHQ LocationGDPR NativeEU Data CentersCLOUD Act FreePricing
🇺🇸Gusto
United StatesNoPartialNo-
🇳🇱TellentNLYesYesYesfreemium

Frequently Asked Questions

Is Gusto GDPR compliant?

Gusto is a US-based service operated by Gusto. While it may have some GDPR compliance measures, as a US company it is subject to the CLOUD Act, which allows US authorities to access data stored by US companies regardless of where the data is physically located. This creates a fundamental conflict with GDPR requirements for data protection.

What are the GDPR risks of using Gusto?

The main GDPR risks include: (1) Data transfers to the US may lack adequate protection since the Schrems II ruling invalidated Privacy Shield, (2) US authorities can demand access under the CLOUD Act, (3) Your organization may face GDPR fines up to 4% of annual revenue for non-compliant data transfers, and (4) User consent may not be sufficient to legitimize transfers given the systematic access by US authorities.

What are the best GDPR-compliant alternatives to Gusto?

The top GDPR-compliant alternatives to Gusto include Tellent. These European services store your data in EU data centers and are fully subject to GDPR protections.

How do I migrate from Gusto to a GDPR-compliant alternative?

Most migrations involve three steps: (1) Export your data from Gusto using their data export tools, (2) Create an account with your chosen EU alternative, and (3) Import your data into the new service. We provide detailed migration guides for each alternative to make the switch as smooth as possible.

Can EU companies legally use Gusto?

Since the Schrems II ruling (2020), EU organizations face significant legal risk when using US cloud services like Gusto. While the EU-US Data Privacy Framework (2023) provides a new legal basis, its long-term stability is uncertain. Many EU data protection authorities recommend using EU-based alternatives to avoid compliance risks entirely.

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Last updated: March 18, 2026