B2B Payments

Gusto Diverges From Bi-Weekly Payroll Tradition

Payroll and human resources solutions firm Gusto is adding customization capabilities for employers looking for something other than the two-week payroll schedule.

Reports in HR Technologist on Friday (June 22) said Gusto has rolled out Flexible Pay, enabling employees to choose when they want to receive compensation.

“The two-week pay schedule should no longer exist in today’s world,” said Gusto co-founder and CEO Josh Reeves in a statement. “It’s a relic of calculating payroll taxes manually and was instituted in the U.S. almost 90 years ago.

“With modern technology, employees shouldn’t have to wait weeks to get paid,” he continued. “Flexible Pay lets employees decide when they want to get paid for the work they’ve already done, without additional cost to employers — it’s the way we believe everyone will get paid in the future.”

The solution also aims to address the pain points associated with payday loans for employees that cannot wait until bi-weekly paydays to pay their bills and make necessary purchases. Employers can support Flexible Pay without changing their existing pay and debiting schedules, the company noted. Gusto automates tax calculation, filing and payment.

Last year it was reported that Mike Dinsdale, CFO of DoorDash, left the company to join Gusto, formerly known as ZenPayroll.

Capital One also announced last year a collaboration via its Spark Business unit to work with Gusto, as well as business payments firm Bill.com. The partnership is part of Capital One’s initiative to support small businesses’ adoption of FinTech.

“A lot of what we’re working towards is simplifying the explanation and understanding, of securing those partnerships, to make it clear what the value proposition is,” Greg McAllister, VP of product and business development at Capital One, told PYMNTS at the time. “I think it’s about awareness, time to educate and the time to sort through all the options and find the best solution for themselves.”

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