Gusto (formerly called "ZenPayroll") has a plan to reap more customers, while eliminating the administrative stresses that businesses often experience.

On Thursday, the San Francisco-based payroll software company announced its plans to tackle corporate health benefits. Gusto's two new services--health benefits and workers' compensation--combined with its existing service would allow both employers and employees to onboard and manage all forms of compensation in "one modern product."

A new workers' compensation platform is now available nationwide, with health benefits available to California clients. The move puts the upstart in direct competition with Zenefits, a similar, if more cemented, business that provides free software for companies to manage worker benefits.

Zenefits has been using Gusto's payroll-processing technology but is now rumored to be brewing up an algorithm of its own.

"We believe that providers in the market do not do a good job for the customer," says Gusto co-founder and CEO Josh Reeves. "People today think of health insurance as this big chore. You have all of these different carrier relationships and insurance types.... We take on all of that complexity and simplify it." That includes filling out associated government or tax forms online, for example.

Gusto currently has over 20,000 businesses using its payroll system. The pricing structure for the core service is simple: $29 per month for a business, and $6 per employee per month. Presently, Reeves says, Gusto processes more than $6 billion annually in payroll, though he declined to discuss revenues.

Significantly, he says the company has been planning to expand into managing health benefits since the business first launched in December 2012. Reeves hints that related offerings -- a 401(k) tool, for example -- could soon be in the works.

"Every single category in this market doesn't make sense to us," he tells me. "We're excited to go help the customer with all things connected to compensation."

Of course, "all things" is an ambitious undertaking for any upstart, and building out the technology to manage it is difficult. Payroll processing alone involves "about 15,000 different tax codes," Reeves explains, which are made more complex by the various local regulations, depending on where the client has set up shop.

Luckily, since Gusto already houses the majority of users' administrative information--e.g., worker age, salary, and dependents--it will be relatively easy for it to migrate this information over to the benefits tool.

At least one small-business owner is happy with the new service. Tom Sheahan is the founder and CEO of Red Oxygen, an enterprise text messaging company based in San Francisco. He participated in Gusto's pilot program. Red Oxygen has 15 total employees who are spread across the U.S. and Australia, where the business first launched in 2001.

"In Australia, we have a single payer system. Health care benefits just wasn't an issue," Sheahan tells Inc. So when the company set up a presence in the U.S., Sheahan recalls being blown away by the associated costs and complications--including a $1,500 administration fee per employee per year.

Gusto, he says, has simplified matters significantly. "This platform is going to allow small businesses to offer affordable health care," he says.

Financially speaking, Gusto pales in comparison to its (now) competitor, Zenefits, which has raised more than $580 million, for a "unicorn" valuation of $4.5 billion. 

Still, with 275 total employees--which is nearly quadruple what it counted in January of this year--and a hefty $86.1 million in venture capital funding, Gusto has plenty of wind behind its sails.

Reeves even decided it deserved a more powerful name. 

"The word 'Zen' is only half of what we do," he says of the rebranding. "There's passion involved. We were really inspired by our customers, and all of the courage that a business owner has to go start something."