Salsa is Transforming Payroll

Author avatar
May 23, 2024
9 mins
Our embedded payroll infrastructure is shaping the future of work

Payroll has not evolved in years. If anything, it’s gone backwards.

In the 19th century, payroll was simple: workers would go to work, get paid in cash, and that was it. But ever since the US implemented income tax withholding in the 1940s, payroll has become a huge administrative hassle for business owners. Today payroll is so complicated for business owners to manage that workers get paid far less often and payroll itself has ballooned into a ubiquitous time investment and expense for all businesses. It’s an industry we love to hate. 

Businesses need payroll to function, and the market is massive—estimated at about $100 billion in 2023. But existing payroll products are hard to use, and they take all the delight out of payday:  customer satisfaction scores are abysmal.

It’s time to replace those old, outdated payroll systems with something new: Embedded payroll.

Our mission works in two ways: 

  1. Modern business software tools can now launch their own payroll feature - relatively quickly. This lets them unlock a substantial amount of new revenue—and make their customers a lot  happier.
  2. Everyday businesses (and their employees) can finally have payroll that really works, and they won’t have to pay a separate, clunky solution to do so.

At Salsa, we build great embedded payroll products. We do it to accomplish the future described above: a rebuild of the most stagnant piece of our business stack. We’re building a world in which everyone, from business to employees, can enjoy better payroll that simply works.

Most other business tools have been improving

Over the past decade, most of the pain points of running a business have been automated away. Nearly every part of the business technology stack has gotten better: booking & scheduling, payments, staff management, accounting, legal, financial planning, and more.

That’s because software markets have largely recognized an important truth: Products should be connected to the data they need. 

Expense reports are a perfect example. People used to spend money in one system, then report it in a different system—and everything people hated about expense reports was fundamentally about humans needing to reconcile between the two: their credit card and an accounting solution. The solution, for a while, was task our accountants to chase us down for our missing receipts.

Now everyone knows there’s a better way: making the spending system and the record keeping system the same system. Modern corporate cards take away all the busywork of expense reports—and all the pain.

People hate modern payroll for the exact same reason they used to hate expense reports. Luckily, we can fix it with the same playbook.

Why hasn’t payroll evolved? 

It’s standalone. Payroll today is dominated by point solutions — software that only does payroll and is otherwise disconnected from our systems that track worker data. It’s hard to run payroll in a system that knows nothing about what workers did during the pay period. The hours worked, the tips, the bonus, the employee who quit or joined—payroll software doesn’t know any of that, so something has to sync our payroll system to our workforce. 

Guess how that gets done today? Humans have to manually enter it. Every. Single. Time.  

It’s horizontal. Existing payroll software is horizontal, meaning that the same interface is supposed to serve every business, whether it’s a consulting company, a restaurant, or a doctor’s office. These businesses have different needs and different ways of paying their staff. Existing software is a one-size-fits-none solution: it’s unintuitive and hard to use, and it doesn’t capture common edge cases for each industry.

We have a different, better vision for payroll

Payroll doesn’t have to be this way. The world needs modern, tailored, and connected payroll products—which means not just building the right product, but putting it in the right home, too.

Every modern business already runs on a software platform. We believe that those platforms should also be where workers get paid.

If payroll is embedded into existing software platforms, all the relevant data is already in the system—so all those hours of manual work for the business owner disappear. Embedded payroll products can also be customized for different verticals, making them much easier to use.

But payroll has been a product offering very few have managed to build. Building a payroll engine requires a major investment of time and resources, and most companies can’t justify a multi-year, multi-million dollar journey to build it.

That’s why we created Salsa. 

We’ve built infrastructure to make it easy for developers to build their own payroll products. Salsa has all the building blocks, APIs, and web components you need to get a payroll system up and running—without spending multiple years, or millions of dollars.

How we’re approaching the problem

Our mission at Salsa is to make it fast and easy to build embedded payroll products.

When we first came into the market, we observed that companies were spending more than a year building and launching embedded payroll products. The process was messy and expensive.

We built our infrastructure with a clear vision: With Salsa, partners are able to launch in one month, with one engineer. 

Our team has been building payroll services that serve millions of workers for decades. So our architecture reflects our intentional vision to provide infrastructure that can power the largest payroll product needs.

Higher conversion rates

Launching a product is the easy part. We help platform customers with the hard part: optimizing conversion and profitability. Salsa helps platforms design the right product for its customer base, position it, and get customers through onboarding. Businesses are delighted by an intuitive, easy product experience and platforms are delighted by the profitability that comes with high conversion rates. 

Modern APIs

When we meet prospective customers in the sales process the first thing they tend to notice is our API design - developers find Salsa to be both simple and powerful. Salsa’s easy-to-use APIs enable developers and designers to build their own experiences. Salsa’s architecture is built from the ground up to enable highly scalable integration.

Our job is to make building a payroll product easy to approach while ensuring our infrastructure is powerful and flexible to support any number of product use cases. It’s a careful balance we’ve spent years working on! 

Flexible UI components

Salsa provides highly configurable UI components to make it easy to jumpstart new payroll products without compromising branding and design. While other providers offer starter UI, ours are the most customizable payroll components—with Salsa’s UI experiences, your product will look and feel more like your product than anyone else's. What’s the impact? A better customer experience, higher adoption and a faster time to market. 

Operational support

Our expertise really shines in supporting our partners in every leg of the journey. We provide tailored integration plans, and work hand in hand with your product team to develop the best product for your customers. Then, we support your payroll sales cycle, giving you hands on resources, a proven playbook and tools to drive maximum adoption.

Once your payroll product is up and running, our team can manage customer onboarding from the sidelines or on the front lines. As your product matures, we guide you through the operations and support needs that come with running a payroll product. We’ve developed robust content and training materials to help your team ramp up and be able to take on customer support in-house—or, for some partners we handle all payroll-specific customer support under your brand.  

Other reasons you’ll love Salsa

Conceptual simplicity. Our payroll elements are uniquely designed to be easy to understand, learn and adopt. This lowers both the engineering lift of building and maintaining the product, and it makes it easier to support. Sophisticated buyers find Salsa’s APIs to be easier to work with and faster to build with. 

Expertise. We’ve been in the payroll business for a long time and we’re the same people who built many of the market leading payroll products you’ve used before. So when you work with us, you’re working with a team that knows payroll inside and out—which is useful not just for getting set up, but for problem-solving and adding functionality in the long run. We can bring your product visions to life because we know what’s possible. 

Smaller surface area. Salsa allows you to leave more of the payroll complexity on our side of the fence. Let’s take an example: sending earnings data to Salsa. Other payroll APIs require you to know a lot of payroll context around pay periods, pay groups, tax classifications. Salsa does a better job of taking your data in the format you have it, and handling the payroll elements ourselves. This allows platforms to have an easier integration and a better experience. 

Who is Salsa for?

Vertical SaaS platforms…

…that collect worker data

The best candidates for embedded payroll are software platforms that have some context on the work being performed. Leading the way are platforms who know who the workers are, when they work, and how much they earn. These platforms typically already have a payroll report that businesses are using to feed straight into their payroll provider.  But you don’t need to track every hour or even have a dedicated interface for your employer’s workers to have a right to play in payroll: some worker or compensation data goes a long way.

If you’re already capturing data that can be used for payroll inputs, why make business owners export that data, and let an external payroll provider earn the revenue? Offering payroll in-house allows platforms to earn more revenue and capture an additional opportunity to delight customers by solving one of their biggest pain points.

…that serve industries with complex payroll needs

With Salsa, you can create embedded payroll products tailored to any vertical. If you work with employers with straightforward payroll needs, creating a product to suit them will be a straightforward task. But those aren’t the companies that need embedded payroll the most.

Salsa is a great fit for vertical SaaS platforms that serve industries with non-desk-based workers, like food and beverage, beauty and wellness, fitness, auto repair, or home and field services. These small businesses usually have additional complexity in their payroll. For example, at a spa, the same worker might get paid five different ways in the same business day:

  1. An hourly rate while assigned to a client
  2. A different hourly rate while working the reception desk
  3. Product commissions
  4. Service commissions
  5. Tips

Today, all of that complexity falls on the business owner. Automating it away will be a huge weight off of your customers’ shoulders—and give your platform an advantage over competitors.

…that have high conviction in payroll

Salsa makes building embedded payroll products much faster and easier—but it’s still a commitment. That’s why we’re looking for partners that have high conviction in payroll. That means dedicated people working on the payroll product, strong executive sponsorship, and willingness to invest time and resources into building a payroll business.

Payroll-first companies

Salsa is also a great fit for companies whose primary product is a payroll tool. We meet many payroll first companies that have a unique product vision or distribution angle, and our infrastructure brings these products to market faster.  

Previously, payroll-first companies had to build their payroll products from scratch. That took years, since it required building a calculation engine, a filing engine, and a whole mess of other tech.

Salsa shaves years - and millions - off of that process.

Our customers share a competitive advantage: they are tuned into the exact needs of their particular customer base, and they’re well positioned to grow and distribute their payroll product. But they want to invest their runway and engineering resources on product, not on building payroll infrastructure. That’s why they partner with us. 

By launching on Salsa customers can go live this quarter and immediately apply their early learnings to fuel rapid growth. If they built a payroll product another way this would become a multi-year journey. 

What the Salsa-enabled future of payroll looks like

Offering payroll paves the way for much more. Today, platforms that launch payroll increase revenue, retention, and customer satisfaction. Tomorrow, having a payroll product will make it easy to branch out into other HR product offerings.

A gateway to new consumer products

Adding a payroll product increases the time your customers spend on your platform, and deepens relationships with the workers who are the end users of the platform. The first step to building trust with those workers is delivering them a high quality, tailored payroll experience they can rely on. Down the line, that trust will make it easier to leverage the payroll product as a distribution channel for other products. 

It’s easy to imagine worker bank accounts offering faster access to earnings, but that’s only the tip of the iceberg. Embedded payroll will usher in a new generation of linked consumer financial products. This will open up a whole new market for vertical SaaS operators—you’ll be able to serve not just the business base, but the entire workforce.

The entire HR stack—on your platform

Customers already depend on SaaS platforms to manage the operations for their businesses—so why not also help them with HR management, and be the complete one stop shop for their needs? In the long term, Salsa aims to be not just embedded payroll, but embed HR capabilities, too. Businesses need the entire HR stack, and HR software will provide far more value when it’s fully embedded. We believe that eventually HR point solutions will be replaced by connected, integrated features that live inside the platforms businesses already use for everything else. 

That’s why Salsa is arming platforms with the tools they need to more quickly and easily offer quality tailored products. The result will be a world where workers can get more reliable paychecks, better insurance rates, better benefits, and better workforce management.

Transforming payroll

We believe a new generation of payroll applications will change how workers get paid. By putting building blocks into the hands of developers in all different industries, we can transform the types of payroll people can offer, and we’re excited to see innovators deciding what payroll should look like.

Embedded payroll is the future, and we’re not the only ones who see it. At Salsa, we’re working to accelerate that future, for the good of workers and business owners alike.

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