Balancivo · Payroll and taxes
Set up payroll and add an employee
Agree to the payroll terms, check your unemployment tax settings, and add each employee from their Form W-4.
Who can do this: Owners.
Read the transcript
Before your first payroll, read these four points and check each one. Then click I understand and agree. Next, click Summary and scroll to Payroll settings. Churches and other charities check the FUTA exemption. A business like this one leaves it off. Enter your state unemployment rate and wage base, and click Save settings. Now click People, then Add a person. Enter their name, how they're paid, their rate, and how often you pay them. Copy the answers from their W-4. The Step 3 helper counts dependents for you. Pick the state where they work. Texas has no state income tax, so nothing is withheld for it. Then click Add person. Sam is on your People list, ready for the first pay run.
Balancivo records payroll and suggests each paycheck for you to check. You still pay your people and deposit and file payroll taxes yourself, or through a payroll service like Gusto or ADP. Setting up takes three parts: the terms, your payroll settings, and the people you pay.
Before you start
- Have each person's Form W-4 handy; you'll copy a few lines from it.
- Payroll is included in the Standard plan (up to 10 people) and the Plus plan (up to 50). The Starter plan doesn't include payroll.
Steps
- Go to Payroll. It's under Money in and out in the menu.
- Read Before you run payroll. Check each of the four statements, then click I understand and agree.
- Check your Payroll settings. Click Summary and scroll to Payroll settings. For a church, Exempt from federal unemployment tax (FUTA) is already checked. Check it if you're another 501(c)(3) charity. Enter your State unemployment rate (%) and Wage base (per person, per year), then click Save settings.
- Add a person. Click People, then Add a person. Enter the Name, and the Job title (optional) and Email (optional). Leave Kind set to Employee.
- Fill in Pay. Under Paid by, choose Salary (a yearly amount) or The hour, then enter the Yearly salary or Hourly rate. Pick How often they're paid. Change the Wage category only if their wages belong somewhere other than Wages and salaries.
- Copy the Federal Form W-4. Choose the Step 1(c) filing status. For Step 3 dependents total ($), use the Step 3 helper to count children under 17 and other dependents. Fill in Step 4(a), 4(b) and 4(c) if they're on the form, and check Step 2 box is checked if it is.
- Pick the State where they work. Enter the State withholding rate (%) unless the state has no income tax.
- Click Add person.
Good to know
- You can add people and draft pay runs before agreeing to the terms, but nothing posts until an owner agrees.
- If someone never gave you a W-4, use Single or married filing separately and leave the rest blank.
- Step 3 is a dollar amount, not a number of people. The helper works it out for you.
- State tax is a flat percentage you enter. Local taxes, garnishments, benefits and pre-tax deductions aren't calculated.
- Leave Exempt from Social Security and Medicare unchecked unless you're sure it applies. It's rare.
- In Texas, new employers usually start at 2.7% state unemployment on the first $9,000. Many churches are exempt; enter 0 if you are.
- When someone leaves, click Deactivate on the People tab. Their past paychecks stay in your records and year-end totals.
- Payroll details are visible to owners only. Bookkeepers see posted pay runs as journal entries in the books.
- For a pastor or other minister, see Pay a minister with a housing allowance.