--- title: "Payroll Basics Before You Hire Your First Employee | MCC" description: "What to set up before the first paycheck: registrations, new-hire forms, pay schedule, payroll accounts and a provider decision." url: "https://mcc-solutionsnj.com/bookkeeping/guides/payroll-basics-before-you-hire-your-first-employee" --- Bookkeeping guide · Updated October 12, 2026 # Payroll Basics Before You Hire Your First Employee Hiring the first employee changes the business from one that only pays vendors to one that holds other people's tax money. Setting up before the first payday is far easier than repairing it afterward. This is a general overview, so confirm the current requirements with the agencies or a CPA. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** An employer generally needs a federal employer identification number and registrations with the state for withholding and unemployment insurance. Some states also have disability or family leave programs. Register before the first payday; the agencies publish the steps. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Void vs delete a transaction](/bookkeeping/guides/voiding-vs-deleting-transactions) · [NJ 1099 contractor rule (ABC test)](/bookkeeping/guides/nj-independent-contractor-rule-abc-test-2026) · [Trial balance explained](/bookkeeping/guides/trial-balance-explained) **Free tools:** [True cost of an employee](/bookkeeping/employee-cost-calculator) · [How many sales do I need to break even?](/bookkeeping/break-even-calculator) [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) ## Register before you pay An employer generally needs a federal employer identification number and registrations with the state for withholding and for unemployment insurance. Some states have extra programs such as disability or family leave contributions. The agencies publish the steps, and registration is usually done online. Gather the confirmation letters in one folder. Hiring in another state? [Employer registration in another state](/bookkeeping/out-of-state-employer-registration). Workers compensation insurance is a separate requirement in many places. Ask your insurance agent about coverage before the person starts, because gaps are costly. ## Collect new-hire paperwork Each new employee fills out a federal withholding form and a state one if your state uses it. You also have to verify eligibility to work through the federal employment eligibility form, within the time frame it sets. Keep these forms separate from the general personnel file, as they contain sensitive information. Get the employee's legal name exactly as it appears on their Social Security card. A mismatch causes year-end filing errors that take time to fix. ## Decide how you will run payroll You can run payroll yourself, use a payroll service, or have your bookkeeper or accountant process it. A service typically calculates withholding, makes tax deposits, files the quarterly and annual forms, and produces wage statements. Compare fees, support and what happens when a filing is missed. Whoever runs it, you remain responsible for the taxes. Ask providers whether they stand behind the accuracy of filings and what recourse you have, and read the answer in writing. ## Want us to handle it? We keep payroll records, liability accounts and year-end payroll reconciled with your books. State payroll support is confirmed for your state before we start. **Price:** Free review of your books first, then a written quote before any work starts. [Get a free review and quote](/bookkeeping/#interest) [Payroll and leave tracking in NJ](/bookkeeping/payroll-and-leave-tracking-nj) ## Set up the accounting side Payroll entries in the books include gross wages, employer payroll taxes, employee withholding held in liability accounts, and net pay. If your payroll provider syncs with your accounting software, check the mapping on the first run so wages land in the right accounts. Add accounts for payroll liabilities by tax type so you can reconcile what you owe at any date. A single catch-all account hides errors. ## Pick a pay schedule and write a policy Common schedules are weekly, every two weeks, twice a month and monthly. State law may limit your options. Pick a schedule you can fund reliably and communicate it in writing, along with how overtime, time off and expense reimbursements are handled. Run a test calculation for the first employee with your provider or advisor before payday. Surprises are better found on paper than on a paycheck. ## A pre-payday checklist you can print Three days before the first payday, confirm you have the registration numbers, a signed withholding form, the eligibility verification form completed, the bank details for direct deposit if used, the pay rate in writing, and workers compensation coverage in force. Then run a trial payroll and compare the net pay to your own estimate. After the first real payroll, check the tax deposit due date your provider shows, then place it on your calendar. Many first-time employers miss the first deposit simply because nothing reminded them. MCC Solutions can reconcile the first few payrolls in your books if you would like a second set of eyes. ## Common questions **Can I pay a family member without payroll?** Not automatically. Whether someone is an employee depends on the facts, and special rules apply to family. Ask a CPA before paying anyone in the business. **When do I deposit payroll taxes?** Deposit schedules depend on the amounts you owe and are set by the agencies. Your payroll provider or CPA can tell you your schedule. **Do I need payroll software for one employee?** Not required, but manual calculations leave room for errors, and many small employers find a service worth its fee. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) [### Gusto and payroll software Payroll software for New Jersey small employers: what to set up, how payroll flows into your books, and the NJ filings that follow every payroll. Payroll →](/bookkeeping/software/gusto-payroll) More guides - [Common Payroll Mistakes Small Employers Make](/bookkeeping/guides/common-payroll-mistakes-small-employers-make) - [How to Reconcile Payroll Liability Accounts](/bookkeeping/guides/reconciling-payroll-liability-accounts) - [Year-End Payroll Checklist for W-2s and Reconciliation](/bookkeeping/guides/year-end-payroll-checklist-w-2-and-reconciliation) - [Sales Tax Concepts: Nexus, Taxability and Collection](/bookkeeping/guides/sales-tax-concepts-nexus-taxability-and-collection) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach owners with employees and the people who run their payroll who read this guide: [advertise here](/advertise#employer). Do it yourself ### First Employee Bundle for New Jersey Hiring in New Jersey comes with registrations, postings, payroll filings and a strict test for who counts as a contractor. This lays it out before the first paycheck. [See what's inside ($59)](/toolkits/first-employee-bundle)14-day full refund Course: [Small Business Bookkeeping Basics](/courses/small-business-bookkeeping-basics) ($49) covers chart of accounts, reconciliations, the monthly close, payroll and 1099 basics for owners. It is training with a certificate of completion, not a credential. Excel workbook ### Solopreneur Multi-State Payroll & Tax Calendar Model One workbook for the dates you cannot miss, the payroll math behind them and the cash they will take, for a small employer or a solo owner with a few people. [See what is inside ($39)](/toolkits/payroll-tax-calendar-model) Also in the [Solopreneur Money Toolkit](/toolkits/solopreneur-money-toolkit): 4 products for $99 instead of $146 separately. ## Rather have us keep the books? Ask for a quote. [Get a Quote](/bookkeeping/#interest)[Call (908) 444-6373](tel:+19084446373)