Embedded payroll provider Salsa gains “huge strategic difference” building with Symmetry Tax Engine.
Headquartered in San Francisco, Salsa is a payroll technology company with a difference: It gives developers the building blocks and infrastructure they need to embed and launch modern payroll products inside their own platforms faster and easier.
The Challenge
As John Kramer and Juan Barroso were developing Salsa, their intention was for the software to safely, securely, and accurately provide developers the ability to manage complete payroll processing in any state in the U.S. They knew that like any fully featured payroll software system, theirs had to be able to handle:
- Tax calculations, from the federal level down to the most obscure local taxing jurisdictions
- Tax filings, to keep companies compliant with state and federal reporting requirements
- Tax payments, for companies to remit payments to the right tax authorities accurately and on time
Kramer and Barroso were confident they and their team could build the software to accurately handle tax filings and payments without pushing back the proposed launch date of Salsa. However, including tax calculations in the system was another matter. The entrepreneurs could build their own tax or find a partner whose tax engine they could quickly integrate into Salsa and offer as part of their infrastructure.
Rather than spend a year or more building the engine themselves, Salsa looked for a partner.
Also, because of their deep background in payroll software, Kramer and the Salsa team knew that going forward, all of their time (and resources) would be better spent on other areas than the often enigmatic and always- changing world of tax calculations and compliance.
"What Symmetry enabled us to do was not need to spend the first year of our company building a tax calculation engine that our customers wouldn’t have really noticed as a differentiable thing — (whether) we built it ourselves or Symmetry provided it."
The Search
While Kramer and the Salsa team debated the 'build or buy' question, the obvious question was: Buy from whom?
They needed a partner that could seamlessly integrate with the APIs in the Salsa platform and consistently deliver tax calculation expertise and updates day in and day out. The calculations had to be accurate, secure, and current in every jurisdiction where Salsa’s customers had employees.
Their partner also had to be willing to be white-labeled so it would operate behind the curtain as part of the Salsa technology. Finally, the partner’s tax calculation engine had to be easily tailored and supported to be sure Salsa would meet the needs of any of its customers.
Despite Salsa’s list of requirements, there was no formal search at the new startup for a tax calculation technology partner.
The company’s founder and team of developers had such a strong background in payroll software, and such a good sense of the market and its players, that Kramer said the name Symmetry simply rose to the top during their build-or-buy conversations.
The team was already aware of Symmetry’s reputation for accuracy and diligence as a provider of payroll technology infrastructure. Some of the Salsa team had worked with Symmetry products during their stints at the payroll platform Gusto. Others knew of Symmetry tangentially during their work at Intuit, which uses a different embedded tax engine, which the Salsa team at least discussed using.
In the end, Symmetry was the only solution the team seriously considered during its discovery process. Kramer said Symmetry’s persona and sense of genuine caring and partnership cemented the deal.
"They’re just a more human company. When we were evaluating Symmetry and were pre-product, and certainly pre-customer, we had Facetime and interaction with Symmetry’s CEO (Elizabeth Oviedo), and we thought that was pretty nice to be able to have a close relationship with somebody at the very top of the company like that."
The Solution
Aligning with Symmetry gave the Salsa team the time and resources to focus on other parts of its business in its first year, rather than being distracted by building its own tax calculation engine. Kramer said using Symmetry made a “huge strategic difference” for the startup.
The partnership also meant Salsa could be confident every tax calculation that its customers ran would be accurate according to employee and client input, such as home and work addresses, filing status, wages, and so on.
At the same time, the integration into the Salsa infrastructure didn’t happen overnight, and no one at Salsa expected it to. As Kramer put it, “You can’t merely buy Symmetry and the next day say, ‘OK, great, we have a payroll engine that can calculate in all 50 states and Canada.’”
"I think on the points where we were stuck, Symmetry was very helpful in providing us their resources — people who have done this millions of times who could tell us that we’re doing this the right way, or that there’s an easier way of doing this other thing."
There was what Kramer termed “complexity and configuration needed” so Symmetry would work seamlessly within Salsa. As Kramer explains, payroll “has a core body of knowledge. And then it has like an infinitely long tail of different cases on the edges and wild things that pop up — a worker lives here but works there.”
The Symmetry team, meanwhile, worked as if it were an extension of the startup. In the end, it was a journey the Salsa team was glad it took. The key to getting payroll right, he said, is to have “deep respect for the complexity, the compliance needs.”
The Outcome
By integrating the Symmetry Tax Engine into Salsa, the startup was able to go to market at least a year sooner than if it had built the software itself. Plus, it hit the ground running and launched in the fall of 2021 by offering its technology to developers with employers and HR software platforms in all 50 states and Canada.
If Salsa had built the tax calculation in-house, Kramer said they would have needed to dedicate employees exclusively to maintaining and updating the calculation engine. Instead, more of Salsa’s engineering team is able to devote time to challenges and solutions that are more strategic and forward-looking.
In the end, the use of Symmetry is directly responsible for at least a good chunk of Salsa’s 400%-plus growth in its customer base in its second year of business, Kramer said. And it’s all behind the scenes.
Looking ahead, Kramer expects to rely on Symmetry to ensure Salsa’s customers constantly comply with tax regulations and codes that are changing state-by-state, seemingly every day. With Symmetry, Salsa can relieve its customers from worrying about those challenges and focus instead on running their businesses.
About Salsa
Primarily focused on small businesses, employers, and software companies serving non-desk employees, Salsa’s customers range from banks to human resource information systems to staffing companies, to point-of-service systems for restaurants and hospital scheduling services.
A venture-backed startup launched in 2021, Salsa was founded by two people on parallel paths. John Kramer, Salsa co-founder and CEO, had co-founded Honeybook, a highly rated and hugely successful client management software platform for small businesses (one of the types of companies Salsa serves). Juan Barroso, Salsa co-founder and CTO, had built a 10-country payroll engine from the ground up. He scaled the company and sold it to Intuit, where he then spent six years engineering Quickbooks.
Salsa saw its customer base grow by over 400%, and in May 2023, it raised $10 million in a funding round.
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