Xero To Launch All-in-One Simple Payroll

Small businesses that grapple with managing payroll will be able to streamline the process under an expanded partnership between Xero and Gusto.  

Xero, a renowned cloud-based accounting platform, announced the deal this week, a move that will provide U.S. customers with an embedded payroll solution. This will enhance financial visibility by integrating payroll functionality directly into Xero’s platform.  

Simplifying financial management for small businesses 

One of the primary benefits of this partnership is the consolidation of financial tools within a single platform. Payroll typically represents the largest and most complex expense for small business owners.  

By integrating Gusto’s payroll solution into Xero, users will be able to handle payroll processes without switching between multiple platforms. This integration offers: 

• Ease of use: Payroll powered by Gusto will be built directly into Xero’s platform, eliminating the need for separate logins and disparate systems. 
• Automation: Automated calculations and tax compliance processes reduce the risk of errors and save time for small business owners. 
• Visibility: A unified platform provides full transparency into payroll, cash flow and overall business operations, enabling informed financial decisions. 
• Employee empowerment: Employees of Xero’s small business customers can self-onboard, access pay stubs and retrieve tax documents through a secure portal. 

Vikram Grover, Xero’s EGM of Global Partnerships, emphasized the alignment between the two companies, stating, “Xero has partnered with Gusto since 2018, with both companies sharing a common goal of supporting small business owners and helping them succeed. Now, we’re excited to extend our partnership and offer its best-in-class payroll services directly to our small business customers.” 

A proven payroll solution 

Gusto, a leader in payroll and HR solutions, brings a wealth of experience to this partnership, having processed hundreds of billions of dollars in payroll across all 50 U.S. states. Through Gusto Embedded, the company has enabled partners to offer payroll solutions tailored to their unique customer bases.  

Since its launch three years ago, Gusto Embedded has processed $1.3 billion in payroll for its partners’ customers. Notable partners, including two of the top five U.S. banks, have adopted Gusto Embedded, underscoring the growing demand for embedded fintech solutions.  

This collaboration with Xero highlights Gusto’s ability to deliver a customizable and reliable payroll experience without compromising compliance or user experience. 

Users can look forward to:  

• Enhanced efficiency: Small businesses can manage payroll and accounting in one place, reducing administrative burdens. 
• Regulatory compliance: Automated tax calculations and filings ensure adherence to complex and ever-changing payroll regulations. 
• Cost and time savings: Businesses can save on software costs and streamline processes, freeing up resources for growth.  

The bigger picture: Embedded fintech’s role in business operations 

The Xero-Gusto partnership is part of a larger trend in embedded finance, a market projected to grow from $185 billion in 2023 to $320 billion by 2030. Small and mid-sized businesses are driving this growth as they seek integrated platforms to simplify their operations in managing earned wage access, workers’ compensation, and health insurance.  

These advancements illustrate the potential for embedded fintech solutions to help businesses operate and is a strategic move to address the pressing needs of small businesses in the U.S.  

By embedding Gusto’s payroll capabilities directly into Xero’s platform, the collaboration is expected to simplify financial management, enhance operational efficiency, and provide peace of mind to small business owners.