Payroll Setup

What is payroll setup?

Payroll setup is the initial configuration required before running payroll for the first time or transitioning to a new payroll system. Setup includes registering for tax accounts, entering company information, configuring pay schedules, adding employees with their tax withholding elections, and establishing direct deposit. Proper setup ensures accurate paychecks and compliant tax filings from the first pay period.

Registration requirements

Before paying employees, register for an Employer Identification Number if you do not have one. Register with your state for unemployment insurance and state withholding accounts. Some states require separate registration for each. Local jurisdictions may require additional registrations. Payroll providers can often assist with registration, but confirming completion is your responsibility.

Employee information collection

Collect Form W-4 for federal withholding elections. Collect state equivalents where required. Obtain Form I-9 for employment eligibility verification. Gather direct deposit authorizations with bank information. Record pay rates, pay frequency, and any special deductions. Verify Social Security numbers against Social Security Administration records. Complete documentation before the first pay run to avoid errors.