What payroll provider should I use?

Gusto is the startup standard—easy, full-featured. Deel/Remote for international. Rippling for larger teams with complex needs. Start with Gusto typically.

What does payroll cost?

Base fee ($30-50/month) plus per-employee fee ($6-12). Benefits admin extra. Worth every penny vs doing it wrong yourself.

What about contractor payments?

Most payroll tools handle contractors too. 1099 tracking, payments, year-end forms. Separate from employee payroll but same platform.

How do taxes work with payroll?

Provider withholds from employee checks, pays employer portion, files quarterly and annual returns. You fund it, they handle the rest.

Do I need to offer benefits?

Not legally required in most cases until 50+ employees (ACA). But health insurance helps attract talent. Payroll providers offer benefits administration.

How do I set up benefits?

Payroll providers partner with benefit companies. Shop plans, set contributions, employees enroll. Open enrollment annually. Provider handles deductions.

Optional but attractive benefit. Gusto and others offer integrated 401(k). Match is optional. Admin handled by payroll integration.

How often should I run payroll?

Semi-monthly or biweekly most common. Monthly possible but employees prefer more frequent. State minimums may apply.

What about state registrations?

Need to register in states where you have employees. Payroll providers often help or handle. Unemployment insurance, withholding accounts.

How do I handle PTO and sick leave?

Set policy, track in payroll system. Many states have mandatory sick leave. Unlimited PTO popular but track it anyway.

What if I have international employees?

Deel, Remote specialize in global payroll. Handle local compliance, taxes, benefits. Or use Employer of Record. Don't DIY international payroll.

What about workers' comp insurance?

Required in most states. Payroll providers offer it or integrate with providers. Rates based on job classification. Don't skip it.

How do I handle raises and promotions?

Update salary in payroll system. Effective date specified. System handles transition. Keep records of compensation history.

What happens at year end?

Provider issues W-2s to employees, files with IRS and states. You review before sending. 1099s for contractors. Deadlines matter.

Can I run payroll myself?

Technically yes but strongly discouraged. Penalties for errors are steep. Complexity grows. Even accountants recommend providers. Not worth the risk.

Back to all problems

Solution illustration for I need to set up payroll for my first employees

Critical Priority

Best Payroll Software for Startup Founders and Small Teams

Pay your team correctly without the compliance headaches

2-4 hours

Founder, HR, Finance

About This Problem

First hire means payroll complexity—withholding, taxes, benefits, compliance. DIY is dangerous. Payroll providers handle the headaches so you can focus on building.

You might have this problem if:

✓About to hire first employee, no idea how to pay them
✓Confused about tax withholding requirements
✓Not sure what benefits to offer
✓Worried about compliance and penalties
✓Spending hours on payroll that should be automated

Success Looks Like

Payroll runs automatically on schedule
All tax filings handled by provider
Benefits enrolled and administered

Relevant For

launch stagegrowth stagescale stage

Payroll software for startups takes the complexity out of paying your first employees by automating tax calculations, deductions, filings, and direct deposits. Getting payroll wrong can lead to penalties and unhappy employees. These tools handle federal and state payroll taxes, generate pay stubs, and file quarterly reports so you can focus on growing your company.

Recommended Tools

4 tools that solve this problem

Gusto

People platform for payroll, benefits, and HR.

Finance & Accounting HR & PayrollEarly Stage

1 month free

Learn more

Deel

Hire globally, pay locally, scale faster.

HR & PayrollFree tierEarly Stage

Free for contractors

Learn more

Remote

Global employment made simple.

Finance & Accounting HR & PayrollEarly Stage

Learn more

Rippling

HR, IT, and Finance in one platform.

Finance & Accounting

Learn more

Frequently Asked Questions

15 questions answered

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About This Problem

First hire means payroll complexity—withholding, taxes, benefits, compliance. DIY is dangerous. Payroll providers handle the headaches so you can focus on building.