How to Set Up Payroll Tax Systems for Small Businesses

Registering for payroll

Obtain or confirm your EIN. Register for state withholding and unemployment. Some cities require local registrations.

Evaluate full‑service payroll with automated tax deposits and filings, new‑hire reporting, and benefits integrations.

Set consistent pay frequencies that comply with state rules. Document PTO, overtime, and reimbursements.

Configure deposit frequencies, lookback rules, and alerts. Use dedicated payroll bank accounts to segregate liabilities.

Each pay period, reconcile payroll registers to GL; quarterly, tie out returns to liability and expense accounts; annually, verify W‑2 totals.