Why Does Gusto Embed Payroll in Other Software?

Tomer London says Gusto embeds payroll in other software because only 9% of small businesses use Gusto today, leaving 91% still to reach, and many small businesses want payroll inside software they already use to run the shop.

Gusto serves under 10% of the market. Offering the technology through other products lets small businesses use Gusto without coming in only through Gusto. Small businesses differ in how they run the back office. Vertical software is still a strong way to run a business. Bakery software can be custom tailored to bakers and include a payroll button to pay the bakers, the cashier, and the employees. For a spa or salon, Vagaro is one example, and the payroll tab there uses Gusto. A business in a box still needs payroll in the box, and Gusto is what goes in the box.

The piece placed in partner software is Gusto embedded payroll. Gusto also covers compliance for running a business, HR compliance, benefits, time tracking, timesheets, cashflow, and tax credits. A business can run the back office through a partner or through Gusto. When Gusto started 15 years ago, ADP and Paychex were the biggest payroll companies. They still exist and are still doing really well, and the market is very large, with room for a lot of products.