How ZenPayroll Makes Payday Personal

ZenPayroll processes nearly a billion dollars in payroll per year. A simple new feature makes getting paid feel like a party in your inbox.

A couple of years ago, Joshua Reeves started looking into payroll. His fiancée’s mother ran payroll for a company in Silicon Valley, and two of his friends from Stanford--Edward Kim and Tomer London, who would become his cofounders--had relatives who ran payroll for other businesses. The more he looked into it, Reeves could see that payroll was a headache for many. There were six million businesses in the U.S. in need of payroll, and of those, 40% still ran payroll in a very manual, analog fashion. About a third wound up being slapped with fines for payroll-related mistakes.

Reeves, Kim, and London decided they could do better. They founded ZenPayroll in late 2011, joined Y Combinator in winter of 2012, and soon thereafter raised a $6 million seed round. They were off to the races--and yet, says Reeves, they planned to take their time. Indeed, in a world where many serial entrepreneurs are looking for quick exits, Reeves and his cofounders took the opposite approach, hunkering down for the long haul. “One thing Tomer, Edward, and I connected on early on was to find something we’d have the chance to spend the rest of our lives working on.”

You probably don’t spend a ton of time thinking about payroll, but someone at your business does, or did, and it probably gave them fits. To set up payroll is to navigate a byzantine labyrinth of federal, state, and local laws. ZenPayroll does all that hard work for you--which is one reason why it’s been growing state by state, slowly, over the last few years. (That pace is quickening greatly, though, with new states being added every month, says Reeves; Arizona, Nevada, Utah, and North Carolina were just added, while Connecticut, Georgia, and Tennessee are expected soon.)

“Each state is almost like its own country in terms of rules and regulations,” says Reeves, adding that there are 15,000 tax codes across the U.S. And he believes that navigating that territory simply shouldn’t be a burden business owners have to worry about. “If you use Gmail, you don’t have to know how SMTP and IMAP work,” he says, naming two communications protocols that undergird that service. “You just send a message to someone.” He thinks payroll should have the same plug-and-play simplicity to it.

“Payroll has a lot of rules, a lot of regulations, lots of forms and documents. Software is much better at following rules than people,” he says. In 2014, human beings shouldn’t have to do this work.

The service costs, each month, $25 per company, with an extra $4 per employee for the first 10 employees, an extra $2 per employee thereafter. An interactive feature on the site makes pricing extremely easy to comprehend, and is indicative of the company’s overall focus on smooth user experience and interface.

Besides removing the headache from payroll infrastructure, ZenPayroll also has the lofty goal of making payroll “delightful,” a word Reeves immediately admits is not typically associated with something as seemingly banal as payroll. And yet he contends that payroll should be inherently “delightful”: “On one side, you’ve got people getting paid, and people love to get paid. On the other side, you’ve got employers rewarding employees for hard work.”

Reeves also aims to personalize payroll, something the company achieves in a few ways. ZenPayroll enables employees to choose where they want shares of their paycheck to go--not only to their own checking account, but perhaps directly to a retirement account, a family member’s account, or to a charity of their choosing. A recent feature, Spot Bonus, allows managers to give small bonuses along with a paycheck. And a just-launched feature allows managers to add personalized messages that come in the fortnightly ZenPayroll email announcing your paycheck deposit. It almost makes getting paid feel more like receiving an e-card inviting you to a party. Reeves says the feature “humanizes” payroll.

ZenPayroll raised $20 million in Series A funding in February. Since then, it has continued to grow. Reeves says the company processes three-quarters of a billion dollars in annual payroll right now.

But that’s nothing, suggests Reeves, harkening back to his and his cofounders feeling that they’ve begun to tackle a problem they can spend their whole lives solving. “Our goal is to serve every company in the world,” says Reeves. “It’ll be a multi-decade journey.”

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