Context

Switching payroll companies mid-year takes a lot of work. It must be performed with precision to ensure that future quarterly reports and annual W2s are filed correctly with State and Federal agencies. And so that your accounting software matches your payroll software.

Note: If you are on contract with your payroll company, you might have a contract breaking fee in order to join Gusto. Make sure you are comfortable with this before joining Collective.

Your Onboarding Accountant will handle this process for you before marking your onboarding complete.

If your S Corp ran payroll this year before joining Collective, please follow these directions. It is very important to follow both sets of directions.

  1. Ask For Documents

  2. Tell them what to do with Payroll Taxes they may or may not have collected and may or may not have yet sent to state and federal payroll tax agencies.

Directions for Documents

Please supply the following documents to your Onboarding Accountant during your zoom call. Please ask for them from your payroll company well before your call so they are ready to go. Please share the exact following language with your payroll company:

  1. Detailed Payroll Journal Report - Year to Date. The detailed report shows the breakdown of employer taxes and employee taxes for each employee for each paycheck.

  2. 941 Quarterly Report for each quarter that has passed. Not needed if still within the first quarter.

  3. Agency Payment Report or Proof of Tax Payments

Directions for Payroll Taxes

Please tell your payroll company to submit tax liability payments to agencies for the payrolls you have already run. Below are some nuances for different payroll companies.


ADP

How They Work

For each payroll run, they withdraw all of the payroll taxes from your business checking, and send that money directly to the various payroll agencies.

What You Need To Tell Them

Ask them for to supply you a "Agency Payment Report"


Paychex

How They Work

For each payroll run, they withdraw money from your business checking account and hold it for a period of time before sending those payments to the tax agencies

What You Need To Tell Them

Tell them "Please do not give me a refund of payroll taxes collected. Please send them to the tax agencies."


QuickBooks Payroll

How They Work

For each payroll, they withdraw the net pay from your business checking account. Depending on your setup, they either:

  1. deducts no payroll taxes from your business checking and wants you to make the payments or

  2. deducts the payroll taxes from your business checking account at the end of the quarter and submits that money to the tax agencies

What You Need To Tell them

Tell them "Please do not give me a refund of payroll taxes collected. Please send them to the tax agencies."

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