This article covers all implementation steps required to get set up for US Payroll, whether you are running payroll for W-2 employees for the first time or transitioning from another payroll provider.

Let’s say you want to pay your employees on a Friday. With 4-day processing, you’ll want everything to be set up on Monday of that week, assuming no bank holidays. Then backward schedule from this day using the guidance above, and give yourself a few extra days if you can.

Plane's Unified Payroll supports W-2 employees; international employees (using our EOR features); and US and international contractors. You can add contractors in minutes, because no tax or filing authorizations are required. Please see the Contractor Payroll section at the end of this article for more information.

The steps to implement US payroll are shown in the flowchart below:

Please note that if you were using the original features for recurring contractor payments, you’ll transition to the new Unified Payroll experience. Any scheduled payments will continue to be processed through the original experience, but future pay periods will be visible in the new experience.

When planning for your first payroll, you probably put some thought into what pay schedule(s) you want to adopt. If you are transitioning from another payroll provider, you may decide to keep what you’ve had in place, but you may want to consider a change.

You’ll need to decide on the following:

The most common pay schedules for salaried employees are:

The compensation for salaried employees doesn’t change every period, so it is easiest to auto-approve their compensation. If nothing needs to change, payroll just runs automatically each pay period. If you need to make any changes, like adding a bonus, you just need to do that before the approval deadline.

Admins need to input hours for hourly workers each payroll period. Because you may not have the hours recorded/approved until the last day of the pay period, it is common to set up a pay schedule with a pay date in arrears, i.e., several days after the end of the pay period.

Hourly employees are often on a weekly or every-other-week pay schedule to make it easier to account for overtime hours.

Let’s say that you are using an every-other-week pay schedule and have a 4-day processing period.

On the other hand, if you moved the pay date earlier to align with the end of the period, you might have to estimate hours and/or adjust the next pay period with the actual hours. Note that this adds extra complexity and administration, which should be avoided.

It is also common to require payroll approval for hourly workers so you can explicitly review or input hours as part of the process. You can still auto-approve the payroll for hourly workers, but any hours you input would require re-approval. Hourly workers with 0 hours in the period are skipped automatically.

Use the Pay schedules page to configure your pay schedule(s). You can use one pay schedule for multiple employees and/or contractors.

You can add employees via the People page. This step should be done as soon as possible so employees can start onboarding. See the How to add and onboard a US employee article for more details.

The onboarding process collects key employee information that is required for payroll to process:

Employees are also asked to complete IRS Form W-4 for federal withholdings. They may also be asked to complete a state-specific withholding form.

When an employee provides a work location in a state that hasn’t previously been entered into Plane, you’ll need to complete the setup for that state. This involves entering payroll tax accounts and tax rates and submitting a filing authorization. This may happen when you're running payroll for the first time or just adding your first employee in a new state. It is important to complete employee onboarding as soon as possible so you can complete these tasks.

You can monitor the status of employee onboarding on the Hire/Onboarding page. You won’t be able to complete the setup for US payroll until all employees have been onboarded, but you can get started.

While employees are onboarding, you can get started on the setup for US Payroll by visiting Payroll > Settings > US Payroll setup.

Click each panel on the right to access the setup forms, such as Tax setup shown below.

Review company details and enter any missing information. This is pre-populated with everything you provided when you first registered with Plane.

Add a bank account if one hasn't already been added.

Provide your company’s EIN to complete the Federal tax setup and work on the tax setup for the states that appear in the list. Additional states may appear in the list as employees complete onboarding and work locations in new states are added.

Each state has different requirements, but generally, business accounts are required for unemployment insurance tax and state income tax. Unemployment insurance tax rates are also required. State websites usually make it easy to determine the rate that should be used for new employers if you haven’t been assigned a rate yet.

If you don’t have a specific account number, either because you haven’t registered yet or have registered and are waiting, please select “I’ve applied for but have not received it yet” for the relevant account number. You can run payroll as long as you make this selection, but you should try to complete the setup before the end of the quarter.

IRS Form 8655 Reporting Agent Authorization must be signed and filed to authorize Check, Plane's payroll engine, to collect and file taxes on your behalf. Each state will have an equivalent form. Generally, you will not be able to sign and submit state forms until payroll accounts have been established. When that's the case, you'll come back here on Step 7.

After you've connected a bank account and it has been verified, you'll need to authorize debits for US payroll.

💡 Please note: This step is not needed for contractor or EOR payroll.

You may have state-specific requirements at the employee level. For example, in the State of Washington, you’ll need to provide information for worker's compensation for the Department of Labor & Industries. A Plane implementation specialist will assist you if this is the case.

You must register for payroll tax accounts in the states where employees work. Registration will also establish tax rates and exemptions for your organization.

Plane has partnered with Middesk to make it easier to handle state registrations using the Middesk Agent product. This product is not integrated with Plane.
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At this point, all US employees who are scheduled for your first payroll run should be onboarded. Head back over to the US Payroll setup to complete the US payroll setup as covered in Step 5.

Your payroll onboarding status should either be Complete or Needs attention. Needs attention is expected when you haven’t received all of the state payroll tax account information and have outstanding filing authorizations to complete.

If your payroll onboarding status is Blocked, Step 8 cannot be initiated. Please review Step 5 if your onboarding status is Blocked.

This step is not required if you are running payroll for the first time or transitioning to Plane at the start of the year.

If you are transitioning from another payroll provider mid-year, you’ll need to provide payroll details for each employee through the last payroll on your previous provider. This is necessary to ensure the appropriate taxes have been withheld and remitted.

All components of earnings and employee and employer taxes are required for the current tax year. The data for complete quarters can be summarized for each employee. If you are transitioning in the middle of a quarter, the details of each paycheck are required.

Let’s say you are transitioning to Plane, and your first pay period is May 1 to May 15th, with a pay date of May 15th. The first quarter has been completed, so the data can be summarized for January through March, i.e., you don’t need to provide the details by paycheck. However, you will need to provide the details of each paycheck for the month of April.

You can also provide all of the details if that is easier, and Plane will handle the rest.

You can do this by running a payroll journal report or payroll register report from your previous payroll provider. You’ll need to wait until the last payroll has been completed before submitting the data to your Plane implementation contact. It’s a good idea to familiarize yourself with the process and requirements ahead of time so there are no delays.

Please request the import template and export instructions from your Plane implementation contact after all employees have been onboarded.

If you are offering employee benefits that require employer contributions and/or employee deductions, work with your Plane implementation contact to get those set up.

Plane will submit your company for US payroll business verification. This step can be completed almost immediately if you don’t need to import historical payroll. Otherwise, analyzing your data for tax variances can take up to 2 business days. Any variances will be handled either with a quarter-end filing or via a mid-quarter collection for larger negative variances. If you overpaid taxes, that might result in a year-end refund. You’ll receive a variance report if there is anything significant to report.

Now you are ready to complete your first payroll run. Many companies start off with 4-day processing, but you may be pre-approved for 2-day processing if they show sufficient liquidity or payroll history for 2-day processing.

If you started with 4-day processing, you can request an upgrade to 2-day processing by providing 2 months of business bank statements for the account that is connected to US payroll.

After you have completed your first payroll run, it is a good time to formally end service with your previous payroll provider.

If you previously registered for one or more new states, you’ll need to revisit the state tax setup and filing authorizations once your tax accounts and rates are available. Many states take 2 or more weeks to process your registration.

Go to the US Payroll setup and click "Edit" on the US payroll setup to access the tax setup and filing authorization forms. To avoid filing errors, it is best to complete this before the end of the current quarter and definitely not later than the end of the tax year.

If you only need to add contractors to payroll, there are only a few steps:

Both employees and contractors can be assigned to the same pay schedule if needed. All payroll is managed through the same Unified Payroll experience.

You can assign contractors to a pay schedule during onboarding or via the Pay schedules page.

🔗 Related Article

How to use Unified Payroll

Questions? We’re here to help! You can find more of our guides here, reach out to us at support@plane.com, or use Plane's in-app chat.