Payroll for regular (non-union) workers, start to finish

1. Before your first payday

Do these once. After that, payday takes a couple of minutes.

1. 1Apply for a federal EIN at irs.gov (free, about ten minutes online). You cannot pay anyone legally without one.
2. 2Register with your state for withholding and unemployment tax — search your state's name plus "employer registration".
3. 3Have each worker fill out Form W-4 (employees) or Form W-9 (contractors), plus Form I-9. All of them are on the Payroll page under the IRS forms tab.
4. 4Open Payroll and click New worker. Enter the name, how they are paid (hourly, salary, day rate or contract) and the rate.
5. 5On the same worker card, fill in the W-4 details: filing status, the dependants amount and any extra dollars they want held back. Those three change the federal tax figure on every paycheck.
6. 6Add the worker's state of work and, if you carry the insurance, their workers' comp class code — those feed your unemployment tax and your insurance audit.
7. 7Open the Tax rates tab and check the Social Security, Medicare, unemployment rates and wage bases. The defaults are the current federal figures; add your state rate.

Contractors are not employees. If you hire a contractor you do not withhold tax — you issue a 1099-NEC in January instead.

2. Setting up deductions and benefits (do this once per worker)

Anything that comes out of a paycheck every time — or that you pay on top — is saved on the worker so you never re-type it.

1. 1On the worker card, use Pay items to add health or dental insurance, retirement or 401(k), union dues, a garnishment, or anything else you take out.
2. 2For each one choose a set dollar amount or a percentage of pay, and whether it is pre-tax (lowers the wages that get taxed) or after-tax (comes out of take-home pay).
3. 3Mark employer-paid items as such — those cost you money but do not come out of the worker's check, and they show separately on your reports.
4. 4Give an item a start date, a stop date, or a yearly limit when it should not run forever.
5. 5Court-ordered garnishments have their own setup: the agency, the case number, the amount or percent, and where to mail it. The amount owed shows on the compliance list each period, with a mark-as-paid box.

The order is always the same: gross pay, minus pre-tax items, then tax is figured, then after-tax items come out, and what is left is the paycheck.

3. Running a payday

1. 1On Payroll click Run pay.
2. 2Pick the worker. Their pay type, rate, saved pay items and W-4 details fill in automatically.
3. 3Enter the pay period dates and the hours, days or units worked.
4. 4If you have a paper or written time card, use Read a time card — take a photo or use the scan button and it reads the worker, the dates and the hours for you. Nothing is saved until you look it over.
5. 5Hours entered day by day get split for you: regular, time-and-a-half past the daily limit, double time past the second limit, and weekly overtime past 40 — using the limits saved on that worker.
6. 6Add a bonus, a one-off extra payment or a one-off deduction in the boxes provided. A bonus is taxed like wages.
7. 7Approved paid time off for that period comes in automatically and is paid at the worker's rate.
8. 8Check the withholding boxes — federal, state, Social Security and Medicare are filled in for you. Change any of them if you need to.
9. 9Choose how you are paying: check, cash, direct deposit or transfer, then click Save.

4. Paying the worker

1. 1Paying by check: click the check icon on the pay record, then Print. The check number comes from your checkbook automatically.
2. 2Paying by direct deposit: enter the worker's bank details once using the bank icon on the Workers tab, then click Bank file to create the file your bank uploads. Nothing leaves your account until you approve and send it.
3. 3Paying cash: nothing more to do — the record is your proof.
4. 4Click the printer icon on any pay record to print that worker's pay stub. It shows every deduction by name, the employer-paid benefits, and time-off balances.

5. Paying the tax you withheld

The money you withheld is not yours — it belongs to the IRS and your state. Set it aside every payday.

1. 1Open the Tax due tab on Payroll. Every government payment you owe is listed with the exact amount, who it goes to and the real due date.
2. 2Click Pay now beside a line to open EFTPS.gov (federal) or your state's site, then pay the amount shown.
3. 3Come back and click Mark paid. The payment is logged so nothing is counted twice.
4. 4Anything due within the next seven days shows in red on At a Glance, and you can email yourself the list.
5. 5File Form 941 each quarter — the IRS forms tab lays your numbers out line by line, with a checklist you can print and tick off.
6. 6In January, file Form 940 and give every employee a W-2 — the W-2s tab has each one filled in, plus the W-3 summary, as a printable packet.

EZMunny never moves money out of your bank for taxes — you pay it yourself, so nobody but you can touch the account.