Steemit does not pay anyone anything because it is a web application that functions as an interface to the Steem blockchain. Steemit, Inc is the company that owns the website Steemit. It doesn’t pay its users, either. Then where do the rewards come from?
The Steem blockchain creates new tokens (STEEM - a liquid token, Steem Backed Dollar - a stablecoin pegged to the dollar, Vest - an illiquid influence token giving voting power) in every block once every three seconds. 65% of that token inflation is allocated to content rewards, which are further divided 50/50 into author and curator rewards.
The STEEM token has monetary value because it is traded on cryptocurrency exchanges around the world. There is demand for it because the content stored on STEEM is monetizable by the front ends by selling ad space. In order to give their users free accounts, the front ends need to buy STEEM to convert it into Vests, which are needed for all accounts to be able to transact on Steem. Another way for front ends to monetize having users transact on Steem is to have them play games that have blockchain-based digital assets in them such as Splinterlands cards.