Gather the company information
You will need your legal business name, federal employer identification number, business address, state tax registrations and unemployment insurance account details where they apply. If you have not registered with your state for withholding and unemployment, do that first, since agencies need to issue account numbers. Check the current registration process with each agency.
Hiring in another state? Employer registration in another state.
Choose the pay schedule and bank details
Pick weekly, biweekly, semimonthly or monthly pay. Some states have rules about the frequency required for certain workers. Connect the business bank account that will fund payroll. Understand the timing: direct deposit takes a number of days, and you must approve a payroll before its deadline for employees to be paid on time.
Add employees correctly
Invite each employee to enter their own information, including withholding forms and direct deposit details. Make sure each is classified correctly as an employee. Contractors are paid separately and receive a different tax form. Record hourly or salary rates, overtime eligibility and any required state paperwork, such as new hire reporting.
Want us to handle it?
We keep payroll records, liability accounts and year-end payroll reconciled with your books. State payroll support is confirmed for your state before we start.
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Tax filings and prior payroll
If you have already paid employees this year outside Gusto, enter that history, so quarterly and annual forms are accurate. Gusto can file and pay payroll taxes for you in many cases once authorized. Verify the filings with your account, and keep a calendar of due dates in case something requires follow-up. Ask a CPA about the right setup for owners, especially for owners of corporations and LLCs.
Run and review the first payroll
Preview the payroll before approving. Check hours, gross pay, deductions, employer taxes and total cost. After the run, review the payroll journal and compare it to your bookkeeping entries. Keep the payroll reports for your records. Set up reminders for benefit deductions, workers compensation and year-end forms.
Do not skip the post-payroll check. Compare the amount debited from the bank to the summary, and watch for the first quarterly return. A small error corrected early is far easier than one found after several pay periods.
Common first-year mistakes
Employers often forget to register with the state before the first payroll, misclassify workers, skip required postings, or fail to keep time records for hourly staff. Others forget that benefits such as health premiums have their own tax treatment. A short consultation with a CPA or payroll specialist at setup costs far less than corrections later.
Keep the signed withholding forms, the employment eligibility verification, offer letters, pay rate changes and time records for the period required by law. Check the exact retention periods with the relevant agencies or your payroll provider. Store the records securely and give access only to those who need it. A tidy employee file also speeds up responses to unemployment claims and wage inquiries.
Common questions
Can I pay myself through payroll?
It depends on your business structure. Ask a CPA how owners should be paid.
What if an employee's pay was wrong?
Contact your payroll provider quickly. Corrections may need a separate adjustment or an off-cycle payroll.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.