Guide
A Founder’s Guide to Payroll for Startups
US payroll
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In this guide
This comprehensive guide provides insights into:
1. Defining your growth strategy
- When to hire employees vs. independent contractors
- Payroll options for paying yourself as a founder
- Understanding the payroll tax implications of your business structure
2. Paying employees under owned entities
- Payroll setup and compliance for US employees
- Managing local payroll taxes and federal state and local regulations
- Health insurance and benefits administration considerations
3. Managing payroll across multiple states
- State and local tax requirements for payroll
- Differences in payroll tax rates and compliance rules
- Payroll services to help manage multi-state employees
4. Hiring and paying employees without a legal entity
- Employer of Record (EOR) solutions for hiring globally
- Tax compliance and payroll system benefits
5. Paying independent contractors
- How to classify workers correctly to reduce misclassification risks
- Software for startups to automate contractor payroll
6. Paying yourself as a founder
- Salary vs. owner’s draw vs. equity compensation
- Tax implications and payroll tax obligations
The essential payroll guide for startup founders
Setting up and managing payroll for a startup can be overwhelming. From complying with federal, state, and local tax regulations to choosing the right payroll setup for employees and contractors, founders face numerous challenges.
Our expert guide walks you through payroll processes, tax compliance, and payroll services tailored for early-stage companies.
Why payroll matters for startups
Managing payroll correctly is crucial to:
- Pay your team on time — whether full-time, part-time, or contract workers
- Ensure tax compliance — including payroll tax and state and local taxes
- Attract and retain top talent — with competitive compensation and benefits administration
- Streamline payroll processes — with the right payroll system or software for startups
Simplify payroll with Deel
An all-in-one payroll solution like Deel helps startups run payroll seamlessly while ensuring compliance. With Deel, you can:
- Pay full-time and part-time employees, contractors, and EOR workers
- Automate tax filings and payments at the federal, state, and local levels
- Access benefits administration and health insurance options
- Get expert customer support to navigate complex payroll processes
- Scale with an all-in-one payroll and HR platform
Download the guide now to take the guesswork out of payroll and focus on scaling your startup.
FAQs
How do I set up payroll for a startup?
To set up payroll for your startup, you need to:
- Register for an Employer Identification Number (EIN) with the IRS.
- Set up state and local tax accounts based on where you operate.
- Classify workers as employees or independent contractors.
- Choose a payroll system to automate calculations, tax withholdings, and payments.
- Comply with federal, state, and local tax requirements.
Deel simplifies payroll setup with automated compliance tools, tax processing, and payroll services designed for startups.
How do small business owners do payroll?
Small business owners handle payroll by:
- Manually calculating wages and payroll tax deductions
- Using payroll software for startups to automate payments
- Outsourcing to payroll services for full compliance support
Deel provides an all-in-one payroll solution to streamline payroll processes, tax filings, and benefits administration.
What is the best payroll program for small businesses?
The best payroll program for small businesses depends on your needs. A good payroll system should offer:
- Automated tax compliance (federal, state, and local taxes)
- Payroll options for employees and contractors
- Time tracking and payroll tax management
- Benefits administration
Deel offers a global payroll platform with comprehensive payroll services for startups of all sizes.
Can I do my own payroll for free?
While it’s possible to do payroll manually, it can be time-consuming and prone to errors. Free payroll options exist but often lack essential features like:
- Automated tax calculations
- Payroll tax filings
- Compliance monitoring
Deel’s payroll services handle all aspects of payroll, ensuring you stay compliant and efficient.
How does payroll work for an LLC?
If you operate as an LLC, payroll depends on your business structure:
- Single-member LLCs: Owners typically take an owner’s draw rather than a salary.
- Multi-member LLCs: Members receive distributions, not wages.
- LLCs taxed as corporations: The business runs payroll and pays payroll taxes for employee-owners.
Learn more: Startup Founder Salary: How to Pay Yourself as a Startup CEO
Does Deel offer payroll for startups?
Yes! Deel provides payroll services tailored for startups, including:
- Global payroll for employees and contractors
- Tax compliance solutions for federal, state, and local taxes
- Benefits administration and health insurance support
- Full customer support to simplify payroll processes
Get started with Deel today and streamline your startup’s payroll.
