New Hire Payroll Setup Guide
A new hire touches payroll three times before their first cheque: the I-9, the W-4 and the state registration that may be needed if they are your first employee in that state. Miss any one and the first payslip is wrong in a way that takes months to unwind.
Before day one
- Collect the signed offer letter with the agreed pay basis and frequency.
- Send the W-4 for federal withholding and the state equivalent where one exists.
- Verify work authorization with the I-9 completed by the third day of work.
Direct deposit details can wait; tax setup cannot.
The system entries
| Entry | Why it goes wrong |
|---|---|
| Pay basis | Salary entered annually but processed monthly without conversion |
| Exempt status | Job duties misread; classification drives overtime |
| Work state | Remote hires trigger registration in a new state |
| Benefits start | Enrolment date missed so deductions begin late or early |
First employee in a new state
A remote hire in a state where you have never employed means unemployment insurance registration and new withholding accounts. That is weeks of lead time in some states - start the moment the hire signs. This is precisely the machinery a PEO absorbs for multistate employers.
Once the first run lands, check the payslip against the offer: gross, deductions, net, and the correct deduction treatment. See also what this feeds at year end.
Next
Frequently asked
How soon must the I-9 be done?
Verification must complete within three business days of the first day of work, with Section 1 finished on day one.
Can a new hire start before state payroll registration completes?
Usually yes - withhold as required and file once registered. But some states require registration before withholding obligations arise, so timing varies.
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