Running Payroll for the First Time: A Step-by-Step Checklist

Before You Run a Single Paycheck

There's a checklist of federal and state registrations you need to complete before you can legally pay an employee. Skip these and you'll face penalties before you've even started.

Federal Requirements

1. Get an Employer Identification Number (EIN)

Your EIN is your business's tax ID. Apply free at IRS.gov — you'll get it instantly online. You need this before you can do anything else.

2. Register for EFTPS

The Electronic Federal Tax Payment System is how you deposit federal payroll taxes. Register at eftps.gov. Allow 5–7 business days to receive your PIN by mail.

3. Determine your deposit schedule

Based on your lookback period, the IRS will classify you as a monthly or semi-weekly depositor. New employers are monthly depositors by default.

State Requirements

4. Register with your state's department of revenue

You need a state employer account number to withhold and remit state income taxes.

5. Register for state unemployment insurance (SUI)

Register with your state's workforce agency. You'll receive a SUI rate — new employers typically get a standard rate until they have enough claims history.

6. Check for local tax requirements

Some cities and counties have their own income taxes (Philadelphia, New York City, Portland, etc.). Check your municipality.

Employee Paperwork

7. Collect Form W-4

Every employee must complete a W-4 before their first paycheck. This tells you how much federal income tax to withhold.

8. Collect state withholding form

Most states have their own equivalent of the W-4.

9. Verify work authorization (Form I-9)

You must verify every employee's eligibility to work in the US within 3 business days of their start date.

10. Report new hires to your state

Federal law requires you to report new hires to your state's new hire registry within 20 days of hire.

Running Your First Payroll

11. Set your pay schedule

Choose weekly, biweekly, semimonthly, or monthly. Most states have minimum pay frequency requirements — check yours.

12. Calculate gross pay

For hourly employees: hours worked × hourly rate. For salaried employees: annual salary ÷ number of pay periods.

13. Calculate and withhold taxes

Federal income tax (per W-4 and IRS Publication 15-T), Social Security (6.2%), Medicare (1.45%), state income tax, and any local taxes.

14. Calculate employer taxes

You also owe: Social Security match (6.2%), Medicare match (1.45%), FUTA (6% on first $7,000, usually reduced to 0.6% with state credit), and SUTA.

15. Issue payment

Direct deposit is standard. Paper checks are still legal but increasingly rare.

16. Deposit taxes on time

Deposit withheld federal taxes by your deposit deadline. Don't wait until the end of the quarter.

How Ogo Ops Simplifies This

Ogo Ops handles steps 12–15 automatically on every payroll run. Enter your employees, set their pay rates and W-4 elections, and the platform calculates every withholding, generates pay stubs, and tracks YTD totals. You still handle the deposits and filings — but you always have the right numbers.