In today’s SaaS-driven world, offering an all-in-one solution is necessary for vertical SaaS (vSaaS) providers. Nowhere is this more critical than in the salon and spa industry, where payroll complexities—ranging from commissions to tiered payment structures—can become a serious burden for business owners. Enter Vagaro, a platform that promises to simplify payroll with a fully embedded payroll solution powered by Gusto.
In our recent webinar, The Promise of Embedded Payroll: Webinar with Vagaro, you get an inside look at how Vagaro Payroll is leading the way for vertical SaaS providers with payroll management for small businesses. Vagaro’s all-in-one approach allows salon and spa owners to focus on what truly matters—running your business smoothly.
Why Vagaro is Leading the Charge in Payroll Solutions for Vertical SaaS
One of the key takeaways from the webinar was how Vagaro’s payroll system has evolved, primarily through the insights shared by Renee Sison, Product Marketing Manager, and Alec Sakowski, Senior Director of Product. As they discussed the system’s evolution, it became evident that Vagaro had laid the groundwork for this payroll solution long before partnering with Gusto.
For years, Vagaro has been adept at managing payroll elements such as commissions, hourly wages, and rental deductions, which are crucial in the salon and spa business. However, their collaboration with Gusto introduced new capabilities—direct deposits and automatic tax calculations—that took their system to the next level. This partnership means you no longer have to switch between different software systems to handle payroll. Everything from tracking hours worked to managing employee tips and deductions are processed within the Vagaro platform, making it the go-to payroll solution for businesses in this sector.
Renee and Alec discuss how the introduction of Gusto’s embedded payroll backend enhances Vagaro’s mission of being a comprehensive, one-stop solution for business owners. By integrating payroll directly into their existing system, Vagaro is streamlining the user experience, ensuring that payroll processes are simplified and seamlessly incorporated into the business management flow.
A Streamlined Experience That Makes Payroll Hassle-Free
Alec demonstrated how effortlessly you can run payroll through Vagaro. Whether you need to execute a regular payroll run or an off-cycle one, the platform’s flexibility caters to your business needs. This is crucial for salon and spa businesses where employees may have varied payment structures—hourly, commission-based, or a mix of both.
During the demo, you could see how Vagaro simplifies the many factors involved in payroll, such as tracking hours, calculating commissions, and handling overtime and tips. Vagaro’s system manages all these variables, presenting a payroll summary that includes every detail you need—from gross wages to taxes owed—ensuring you can confidently submit payroll.
For many business owners, the most daunting part of payroll is dealing with taxes. However, Vagaro’s partnership with Gusto has made this a non-issue. The system automatically calculates tax withholdings and submits the necessary filings, removing the burden of staying compliant with ever-changing payroll tax laws. In short, Vagaro ensures you don’t have to worry about taxes; the system does it for you.
Vagaro’s integration with Gusto goes further by offering a seamless migration process. If you’re already using Gusto for payroll, switching to Vagaro couldn’t be easier. With just a few clicks, all your employee data is transferred to the Vagaro platform, ensuring that payroll continues without disruption. This ease of transition can’t be overstated for business owners—it eliminates the fear of a complicated switchover and makes adopting Vagaro Payroll an easy decision.
For those new to Gusto, onboarding may take a few more clicks, but Vagaro’s dedicated payroll team is there to support you every step of the way. No matter where you’re starting from, the Vagaro team ensures a smooth experience, making it easier than ever to integrate payroll into your daily operations.
Customer Perspective: A Seamless Payroll Journey with Vagaro
The second part of the webinar looked at the impact of Vagaro’s embedded payroll feature through the lens of a small business owner. Cassidee Banks, the founder of Golden State Strands, shared her experience using Vagaro’s platform to manage her salon, mainly focusing on the simplicity and efficiency of its payroll system.
Building Golden State Strands: From Stylist to Business Owner
Cassidee’s path to becoming a business owner started long before she opened Golden State Strands, a salon focusing on hair extensions. “I’ve been a stylist for about seven years,” she shared, explaining that her journey with Vagaro began when she was working as a receptionist at a salon that used the software.
After transitioning from receptionist to stylist and eventually leaving that salon, she encountered a different booking system in her new workplace. It was then that she realized the simplicity and power of Vagaro. “The salon I went to didn’t use Vagaro, so I opened up my own account because I loved it,” she explained. When the time came to launch her own business, Vagaro was the obvious choice to manage her operations.
Golden State Strands is not just a salon—it’s a space for professional growth. With around 13 employees, Cassidee takes pride in fostering a positive, growth-oriented environment for her team. Her goal is to create opportunities for stylists to develop their skills, regardless of their careers. “There’s a place for everyone,” she emphasized, whether fresh out of beauty school or seasoned stylists transitioning into independent contractors.
The Payroll Evolution: From Gusto Integration to Vagaro’s Embedded Solution
Cassidee’s loyalty to Vagaro extended to every aspect of her business, including payroll. Before Vagaro introduced its embedded payroll solution, she had been using Gusto, which integrated with Vagaro but required managing data between two platforms. This setup, while functional, had its challenges. “We were using Gusto, and while it was nice that the two software spoke to each other, it just took a little bit longer,” she explained. There were instances where employee information wouldn’t sync properly, causing additional manual adjustments.
When Cassidee learned that Vagaro was launching its own embedded payroll system, her reaction was a mixture of excitement and nerves. “It’s always nice to have everything in one place,” she said, appreciating the convenience of consolidating operations into one platform. However, she admitted some apprehension, given the importance of payroll and ensuring employees get paid accurately and on time. Despite her initial concerns, she described the transition as “a really smooth journey,” quickly realizing that the new system simplified the payroll process significantly.
Cutting Payroll Time in Half: Efficiency with Vagaro’s Embedded Payroll
One of the most immediate and tangible benefits Cassidee noticed after switching to Vagaro’s payroll system was the reduced time spent managing payroll. “It honestly cuts my payroll time about in half,” she revealed. For a business owner juggling multiple responsibilities, this time-saving was invaluable.
So, where exactly is she saving time? Cassidee pointed to several factors. First, the employee onboarding process became much more straightforward. Instead of sitting down with each new hire to manually input payroll data, she sends them an onboarding invite, and they complete the process independently. “It’s just fewer steps and fewer moving pieces,” she noted, highlighting how Vagaro’s system reduces friction for her and her employees.
Beyond onboarding, Cassidee explained that the payroll process became smoother and more streamlined. Without the need to sync data between two platforms, there were fewer opportunities for mistakes, and she felt confident that the payroll numbers were accurate every time. “It’s nice just to have it all in one platform,” she said, adding that her role now mainly involves reviewing timecards and approving payroll rather than troubleshooting data transfer issues.
Facing Payroll Challenges Head-On: A Smooth Transition
While the benefits were clear, Cassidee shared some initial challenges of switching to a new payroll system. Change, she admitted, can be intimidating, especially when it involves something as critical as payroll. However, she encouraged other business owners to embrace the transition, especially if they already use Vagaro for other business aspects. “It’s so much easier to have everything in one place,” she said, reiterating that the process was simple and well worth the investment.
When asked if she had to migrate any previous payroll data from Gusto, she said the switch to Vagaro Payroll was seamless, and everything was set up without major complications. “It was really easy,” she emphasized, adding that she did not need to re-enter any data manually. Vagaro’s integration with Gusto allowed a smooth transition, reducing the headaches associated with payroll migrations.
Looking Ahead: Growth for Golden State Strands
As Golden State Strands approaches its second anniversary, Cassidee is excited about the future. Despite the challenges of balancing business ownership with raising a newborn, she’s focused on growing her salon and helping her employees thrive. “My business is still a baby,” she said, acknowledging there is much more to achieve. Her vision is to continue building a supportive environment where her stylists can grow and develop their skills, with the goal of filling every chair in the salon.
Vagaro’s embedded payroll solution has been a key part of her business’s growth, allowing her to spend less time on administrative tasks and focus more on her employees and clients. With everything in one place—from booking and payroll to onboarding and class sign-ups—Cassidee can confidently manage her business and look ahead to the next growth phase for Golden State Strands.
The Current and Future Success of Vagaro’s Embedded Payroll
Vagaro’s Journey to Embedded Payroll
Vagaro’s foray into embedded payroll was the natural evolution of their business. As Alec explained, the company’s transformation from a simple booking platform to a comprehensive business solution for the beauty, wellness, and fitness industries highlighted the need to offer payroll. Vagaro relied on third-party providers like Gusto for years, but the demand for an in-house payroll solution became increasingly evident.
The decision to integrate payroll into Vagaro’s platform stemmed from feedback and the company’s roadmap to simplify business operations. “Bringing fully embedded payroll was the right decision,” Alec noted. The integration was about more than just reducing the number of tools business owners needed. It was also a time-saving move, designed to eliminate the need for manual imports, Excel spreadsheets, and redundant data entry, giving business owners time to focus on their core passion—working with their clients.
Key Decisions and Partnerships
The company relied on Gusto’s payroll services through an integration for a long time. “We’d been using Gusto, a trusted partner, for quite a few years,” Alec explained. However, the need for embedded payroll became evident as more customers expressed the pain of switching between platforms.
The decision wasn’t just about convenience but long-term business growth and retention for us. “We saw that having everything in one place was a huge retention piece,” Alec said. “It helped build relationships with our customers and gave them the tools they needed to succeed.” Customers no longer had to juggle different platforms for scheduling, payroll, and customer management — everything was in one cohesive place.
Integrating payroll directly into Vagaro allowed the company to craft a consistent user experience without relying heavily on third parties for ongoing support and updates. This independence allowed Vagaro to respond to customer needs in real-time. The company prioritized developing core features such as commission tracking, time card management, and scheduling integration—all crucial components for beauty, wellness, and fitness businesses.
However, Alec was transparent about some challenges during the rollout. Building an in-house payroll system is no small feat, and there were considerations to consider, such as multi-location businesses and contractor payments. Nevertheless, the decision to customize the payroll user interface (UI) for every step of the process, except for the complex task of importing previous payroll history, ensured that customers had a seamless experience that matched the rest of the Vagaro platform. “We wanted that consistency,” Alec explained, “and we’re proud of the customized experience we’ve been able to offer our customers.”
The Future of Vagaro’s Embedded Payroll is Bright
Since launching its embedded payroll feature in early 2023, Vagaro has seen considerable success and learned valuable lessons—its iterative approach to building this service. The initial rollout included a “minimal sellable product” (MSP), which incorporated essential features such as employee onboarding, company sign-up, running payroll, and PTO (paid time off) management. Over time, customer feedback has driven Vagaro’s continuous service improvement.
Beta testing played a critical role in shaping the payroll service’s future. Alec gave a special shoutout to customers like Cassidee, who worked closely with the Vagaro team to provide feedback on the beta version of the payroll system. This collaborative effort helped the Vagaro team refine the user experience and ensure that the product met the unique needs of its user base.
Alec is excited about the upcoming updates to Vagaro’s integrated payroll service. The updates will include:
- A more user-friendly payroll configuration page.
- Improved handling of I-9 forms.
- The addition of benefits administration.
Future updates will prioritize off-cycle payroll processing to meet customer needs, reflecting Vagaro’s commitment. Vagaro’s commitment to customer input and collaboration with Gusto positions it to remain a frontrunner in the beauty, wellness, and fitness industries.
Customer Adoption: Identifying and Engaging Early Users
The adoption phase can be both a proving ground and a learning experience for any new software feature. Vagaro’s journey to embedding payroll with Gusto was no different. The first step in their adoption strategy focused on engaging existing Gusto users and leveraging their familiarity with the platform. As Renee explained, transitioning current Gusto users was a more natural fit, easing their migration process. “Our very first trial set of customers were the people who were already using Gusto,” she stated, emphasizing the importance of familiarity when switching payroll systems.
However, even with pre-existing users, the transition was challenging. One key insight that emerged was the critical role of customer consultation in ensuring a smooth migration. Vagaro’s team realized that small business owners, especially in sectors like beauty and wellness, required tailored workflows and guidance. Many were hesitant about the change, given the complexity of switching payroll systems, which typically takes several weeks.
Renee stressed the importance of pre-identified workflows and targeted marketing campaigns to nudge users along the migration journey. Vagaro’s approach included sending reminders to users who initiated the migration process but still needed to complete it. “It was a matter of just transferring over your employees and switching over,” Renee shared, underscoring how personalized marketing efforts and continuous support facilitated smoother transitions for business owners.
Marketing Strategy: Positioning Payroll as an All-in-One Solution
The second part of Vagaro’s strategy revolved around marketing its payroll feature, seamlessly integrating with its broader business management platform. Renee discussed how the team worked to highlight the simplicity and convenience of using one unified system for all business needs. Vagaro’s embedded payroll solution was framed as the natural extension of its broader mission to provide an all-in-one solution for businesses.
In the beauty, wellness, and fitness industries, many businesses juggle multiple software solutions to manage booking, scheduling, payments, and payroll. Vagaro sought to eliminate this fragmentation by building an all-encompassing platform. “The biggest value prop for us is that it’s fully an all-in-one solution,” Renee noted. She also emphasized that by embedding payroll directly within Vagaro, businesses could track commissions, manage employee hours, and process payments all within one interface.
To communicate this value to potential customers, Vagaro employed a variety of marketing tactics, including webinars, blogs, and social media campaigns—a significant part of the marketing message centered on time savings and ease of use. By showcasing real customer testimonials and success stories, including those from salon owners, Vagaro aimed to make its payroll solution feel more relatable and accessible.
One key element of Vagaro’s strategy was using real-life customer examples in marketing materials. Photos and testimonials from actual clients, like Cassidee, a salon owner, helped bridge the gap between technical features and real-world applications. This approach and data-driven insights on how long payroll setup and processing would take made Vagaro’s payroll an appealing option for small business owners looking for efficiency gains.
Future Success: The Next Phase of Embedded Payroll at Vagaro
Launched in January, the payroll system has already shown impressive traction, with Vagaro seeing growing interest from existing and new customers. However, Renee and Alec acknowledged that the true test of their success will come at the end of the year when businesses typically switch payroll systems.
The seasonality of payroll changes drives this anticipation. Alec compared the upcoming months to “Super Bowl season” for payroll providers, noting that many businesses prefer to switch payroll systems at the start of the year to avoid complications in the middle of a tax cycle. Vagaro’s preparation for this period includes ramping up marketing efforts, adding new features, and fine-tuning the user experience.
With more businesses recognizing the benefits of an integrated, all-in-one solution, Vagaro’s payroll system is poised to see substantial growth. Alec pointed to encouraging early data showing increased engagement with the payroll feature, especially among customers who had previously used the Gusto integration. “You can just see the steps up since January,” he remarked, adding that customer retention and reduced churn rates would be key metrics to monitor moving forward.
Renee reflected on how Vagaro’s marketing team has become more agile in responding to customer feedback. By addressing concerns such as data migration and technical issues head-on, Vagaro has adjusted its messaging and support efforts. “We’ve gotten a lot of great feedback, and we’re focusing on speaking to the pain points of business owners,” Renee shared. With strong adoption numbers, a clear marketing strategy, and valuable customer feedback, Vagaro is well-positioned to capitalize on the trend toward integrated business management solutions.
As the company continues to expand its payroll capabilities and integrate additional features like benefits management and off-cycle payroll, the future looks bright for Vagaro and its customers. The promise of embedded payroll for vertical SaaS is not just convenience — it’s a smarter, more efficient way to run a business.
