By Tomer London.
Xero, a leading cloud-based accounting platform for small businesses and accountants and bookkeepers, is expanding its partnership with Gusto to more deeply embed a payroll solution for its U.S. customers.
Once available, Xero’s U.S. small business customers will be able to pay their teams seamlessly within the Xero platform, giving them greater visibility into their finances and operations. This means no more juggling multiple logins or switching between sites.
At Gusto, we’ve spent more than a decade processing hundreds of billions of dollars in payroll across all 50 states in the U.S. We’ve taken those years of experience and channeled the learnings into Gusto Embedded, which enables partners like Xero to provide a comprehensive, customizable, and fully compliant payroll solution.
Since launching Gusto Embedded three years ago, we’ve helped dozens of partners build payroll solutions for their own customers, including two of the top five U.S. banks, like Chase Payment Solutions. As a16z fintech partner Joe Schmidt has said, joining forces with partners of this caliber has demonstrated a “turning point in enterprise embedded fintech partnerships,” as well as a “sign” that embedded fintech has “arrived.”
To date, Gusto Embedded alone has processed $1.3 billion in payroll for our partners’ customers – marking a major step forward for the embedded finance market.
Small Businesses Benefit From Having All of Their Financial Tools in One Place
For small business owners, managing cash flow is one of their biggest sources of stress – and payroll is often their single largest expense. It’s also super complex. They need to keep up with fluctuating regulations around payroll, tax compliance, and operations in the midst of staffing challenges and new remote and hybrid work expectations.
Small businesses – including but not limited to those in key verticals such as professional services, healthcare and retail trade – need a platform that can simplify managing their operations and finances, while decreasing their stress around cash flow. With Xero’s new payroll product, small businesses will get:
- Easy-to-use payroll, powered by Gusto and built directly into the same platform they already use to run their accounting
- Automated processes to reduce manual calculations and errors, while also giving you time back
- Peace of mind that their taxes will be calculated and withheld correctly, and that their taxes will be filed with the right agencies
- Full visibility into their payroll, cash flow, and operations through Xero’s connected platform, so they can make the right financial decisions for their businesses
Employees of Xero’s small business customers will also have the opportunity to self-onboard, access pay stubs, and pull tax documents all in one secure portal.
Employees of Xero’s small business customers will also have the opportunity to self-onboard, access pay stubs, and pull tax documents all in one secure portal.
“Xero has partnered with Gusto since 2018, with both companies sharing a common goal of supporting small business owners and helping them succeed,” said Vikram Grover, EGM of Global Partnerships at Xero. “Now, we’re excited to extend our partnership with Gusto and offer its best-in-class payroll services directly to our small business customers, all through the same platform they already love and use to manage their cash flow and operations.”
Why Xero Chose Gusto Embedded For Easy, Seamless Payroll
As part of Xero’s business strategy, it’s focused on making product investment in three critical areas for small business – accounting, payroll, and payments. It already offered a full payroll solution to its Australian, New Zealand and UK customers, and wanted to quickly bring a more deeply embedded payroll experience to its U.S. customers.
Xero already offers an integration with Gusto in the US, and will now embed Gusto into the Xero experience more deeply, providing customers with customized payroll without sacrificing compliance, reliability or a delightful user experience. We’ve also helped dozens of other software partners like Lattice, Vagaro, Heard and Collective who collectively serve more than a million small businesses, while adding more and more every year.
What’s Next for Gusto Embedded
Gusto Embedded isn’t stopping with payroll. We’re continuing to explore how we can better serve small businesses through embedded technology as small businesses continue to demand better, more interconnected tech stacks.
Embedded finance as a whole is currently a $185 billion market – and by 2030, it will grow to be worth $320 billion. Small and mid-sized businesses will account for about half of that market, as they look for all-in-one platforms that simplify their operations and workflows.
In the three years since Gusto Embedded launched, we have released over 100 new features and over a dozen pre-built flows. We’ve introduced product partnerships beyond core payroll, including earned wage access, workers’ compensation, and health insurance for small businesses. And there’s more coming soon with employee timesheets and expense management tools.
We created Gusto Embedded to support partners like Xero, which are committed to helping small business owners thrive. That’s because we believe that when small business owners win, we all win.
We’re excited to continue expanding our payroll offerings – making them more accessible to small business owners through our platform, and through the partnerships we’re building.
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Tomer London is the co-founder and Chief Product Officer of Gusto. He is responsible for the development and execution of the product vision — reimagining how modern payroll, benefits, and compliance should operate.
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Tags: Payroll
