Overview of Getting Started with your Payroll Setup in AutomotoHR (for employers)

Overview of Getting Started with your Payroll Setup in AutomotoHR (for employers)

 

These are the steps you'll need to take when you're setting up your company’s AutomotoHR Payroll account. Depending on your business type and who you'll be paying, questions and steps below might vary.

1. Let us know who you plan on paying.
   • Myself
   • W-2 employees
   • 1099 contractors
   • We are not ready to pay anyone yet
2. Provide more information about your payroll, team, and business.
   • Let us know when you'd like to start processing payroll through AutomotoHR by entering your desired first pay day.
   • Select how many employees and/or contractors your company has.
   • Confirm your company’s entity and industry type.

 

After telling us a little bit about how you plan to use AutomotoHR, complete the following onboarding steps in order to start processing payroll.

1. Add your addresses. 
   • Mailing address: The location where you can receive mail from the government.
     • Street 2: Optional—add any additional instructions such as "Attention:" or "In care of" here. 
   • Filing address—location you have on file with the IRS from when you registered your business.
     • Do not include your company name or special mailing instructions here, such as "attention" or "In care of."
   • Work addresses: Locations where your employees are physically performing their work.
     • In Street 1, do not include special mailing instructions such as "Attention:" or "In care of."
     • Street 2: Optional, you can include any additional instructions such as "Attention:" or "In care of."
   • If you're registering a new business, you can find your mailing address on Form SS-4 on line 4 and your filing address on line 5. If you've run payroll previously, your filing address can be found on Form 941.
2. Add your accountant (optional).
   • You can add your accountant to AutomotoHR at any time, but we recommend adding them during setup.
3. Explore benefits.
   • Let us know if your company currently offers benefits to employees. 
     • If not, let us know if you’re interested in offering them through AutomotoHR.
     • If yes, let us know if you’re open to transferring the Broker of Record to AutomotoHR. 
     • If you do not want AutomotoHR to manage your benefits, you can manage the deductions yourself by setting up manual benefit deductions.
4. Enter your Federal tax info. 
   • We support the following filing types: 940, 941, and 944.
   • Federal Employer Identification Number (FEIN).
     • Do not use your Social Security Number. Federal returns and tax payments will be rejected if an incorrect FEIN is provided.
   • The deposit schedule will default to semi-weekly.
   • Company type—such as Sole Proprietorship or S-Corporation.
   • Legal entity name.
     • This should be your official name on record with the IRS. For sole proprietorships, this is typically your first and last name.
   • You can find your FEIN and legal entity name on form CP-575. You can find your deposit schedule on form CP-136.
5. Add your company bank account.
   • You can find your routing and account number on a check or in your online banking portal.
6. Verify your company bank account.
   • We'll ask for your online banking login credentials if you'd like to verify instantly. Otherwise, we'll send two small test deposits to verify the account.
7. Choose a AutomotoHR plan.
   • The plan you select determines the AutomotoHR features your company can use.
8. Enter your employees’ or contractors' personal info. 
   • Legal name
   • Compensation
   • Email address
   • We can collect employee specific information, like their address, SSN, etc., from them directly via online self-onboarding. We'll also have employees sign Form I-9 and Form W-4.
9. State tax account numbers (not required for contractor-only accounts).
   • These depend on the states where you have employees working and living.
   • In most cases, you'll obtain your unemployment tax account number after beginning to process payroll. 
   • If you're switching from another provider, you can find your account numbers on previously filed returns for your state. 
10. Select a pay schedule (not required for contractor-only accounts).
    • Choose to pay weekly, every other week, twice a month, or monthly—check out pay period laws in your state to make sure you set up a compliant schedule.
    • If you have hourly employees, make sure to leave at least four business days between the end of their pay period and their pay date so you have time to record their hours and process payroll.
11. Enter historical payroll information (not required for contractor-only accounts).
    • Only applicable if switching from another provider mid-year.
    • For the current quarter, gather all paystubs for every employee.
    • For previous quarters in this calendar year, gather quarterly payroll summaries for each employee.  
12. Enter any unpaid tax liabilities from the current quarter (not required for contractor-only accounts).
    • Only applicable if switching from another provider mid-year.
    • If you're switching in a new quarter, we'll only be able to pay your Federal Unemployment tax (FUTA), which is due annually. You'll need to ask your previous provider if they've paid your FUTA or if they'll be refunding the unpaid liability to you.
    • If you're switching mid-quarter, we'll be able to pay any unpaid tax liabilities from the current quarter. Check with your previous provider to see what values, if any, they'll be refunding you. 
13. Sign company forms.
    • If you'll be signing the forms enter your name, address, and SSN. If someone else will sign them, enter their name and email.
14. Set up Workers’ Compensation.
    • Worker’s Compensation insurance protects and covers your business against injuries, death, and illness that could occur as a direct result of the work done while your employees are on the job.
    • Requirements to obtain Workers' Compensation vary state by state.
    • You can either get a new Worker’s Compensation policy through AutomotoHR, or you can transfer your current policy over.

As a reminder, we will not start filing any returns—including $0 returns—until the company starts reporting subject wages and taxes in a location (e.g., has a check date with subject wages in the quarter).

• Example: If you join AutomotoHR in Q3 2023, but do not process payroll wages (and related taxes) for an agency until Q4 2023, we will file the Q4 return, but not the Q3 return. You'll need to file any $0 returns directly to the agency if this is the case.  

 

AutomotoHR information requests

When you’re setting up your account, we may reach out to request additional documentation as AutomotoHR must remain compliant with banking and financial institution regulations. The additional information helps verify your identity and make sure your account is secure.

Failing to respond to the information requests on your Home page will prevent you from completing the onboarding of your company—you will not be able to process payroll until a response is received.

• Once you've responded to the information request on your Home page, our team will review the information you provide within 1 business day and follow up with any additional questions if necessary.

Common documents we might request

• Photo of company signatory’s drivers license or ID card: We need this to verify identity. You can take a photo and upload it using a smartphone or camera.
• IRS Document CP575 or Correspondence Letter 147-C: This is used to make sure your company name and FEIN match the IRS database. This is critical so we can pay taxes on your behalf. To get letter 147-C, call the IRS Business & Specialty Tax Line at (800) 829-4933. They’re open from 7am - 7pm local time, Monday - Friday. Once you connect with an operator, request a copy of your FEIN.
• IRS correspondence form 501(c)(3): This forms proves that your company has received non-profit tax exemption status from the IRS. To request this form, call the IRS Business & Specialty Tax Line at (800) 829-4933. 
• Recent bank statement or screenshot of online bank account: We’ll compare this with the bank info you used to set up your account. You can upload a screenshot of your bank info that includes all of the following details:
  • Last four digits of the bank account number
  • Company name
  • Recent transactions
  • Current date
• Articles of Incorporation / Organization: We need this to make sure your company is registered and in good standing with your state agencies. Reach out the the Secretary of State in each state your company pays taxes to get this documentation.
• Business / Contractor License: Your company must be licensed and registered with all local regulatory agencies. Reach out to those agencies directly to request documentation.
• Utility bill: We use this to verify your basic company info. Take a photo using a smartphone or camera of a utility bill addressed to the company that includes all of the following details:
  • Company name
  • Company address
  • Recent date
• Employees fully on-boarded: You must complete the onboarding process for all employees before your account will be finalized. Make sure that you or your team has finished setting up their accounts with all required information (SSN, DOB, and address).

FAQs

Q: Why am I being asked to provide my Social Security Number (SSN)?

A: We require your SSN so we can verify your company signatory and employees’ identities. We also need SSNs to prepare tax documents for your employees.

Q: Why do I have to use a checking account to run payroll?

A: You must use a checking account for the company account in AutomotoHR because savings accounts often have a limit on monthly transfers.

 

Switch to AutomotoHR from a PEO (or CPEO)

What's a PEO?

A Professional Employer Organization (PEO) is an entity that acts as an employer on your behalf. When you join a PEO, you enter a co-employment relationship, and the PEO becomes the employer of record for your employees.

PEOs typically file and pay payroll taxes using the PEO's own Employer Identification Numbers (EINs) and account numbers. When you switch from a PEO to AutomotoHR, it's always a fresh start. If your past payrolls were processed with the PEO's EIN and account numbers, you won't need to enter historical payrolls when onboarding with us.

 

What's a CPEO?

A CPEO is a certified professional employer organization—being certified by the IRS means that wages can carry over when you switch to another provider.

At this time, because the IRS handles CPEOs differently than PEOs, Gusto only supports switchers at the beginning of the year.

Before you switch to AutomotoHR

Register for your own EIN and state tax accounts if you don't already have these in place. If you were a registered employer prior to joining the PEO, you may need to contact the state and/or local agencies to reactivate your old EINs. You'll need these account numbers to complete the setup in AutomotoHR.

When to switch

If the PEO used their own EIN and state tax account numbers to process your payroll, you can switch over to AutomotoHR at any time (this can vary depending on the requirements of the states in which you have payroll).

The smoothest transition is typically at the beginning of a new quarter or new year, after you've obtained your own EIN and state tax accounts needed for payroll. 

Heads up: If the PEO used some, or all of your company's own tax EINs for payroll, you can only switch over to AutomotoHR at the beginning of a new quarter. This will prevent two quarterly filings from being submitted to tax agencies on behalf of your business (one from the PEO and one from AutomotoHR), which is not allowed by the IRS and most state and local agencies.

 

Set up a contractor only AutomotoHR account

While we support domestic contractor payments for all our payroll customers, we also support businesses that only need to pay domestic contractors.

A contractor payments account can be used to pay 1099 contractors without adding W-2 employees.

These accounts include:

• Unlimited domestic contractor payments
• 4-day ACH direct deposit
• 1099-NECs at the end of the year
• Contractor self-onboarding
• New hire reporting (if required in your state) 

These accounts do not include: 

• Back-up withholding or other contractor withholding required by state agencies

Set up a contractor-payments only account

Create your contractor payments account here.

Keep in mind: You cannot use AutomotoHR for contractor payments if you're using any other payroll service.

• When you sign up for contractor payments through AutomotoHR, you'll be asked to sign Form 8655, which gives AutomotoHR the authorization to file returns on your behalf. You can only have one Form 8655 active at a given time, so you wouldn't be able to have another payroll company or accountant filing forms for you.

Compliance checklist

When setting up payroll for your business, there are a few federal and state requirements you'll need to take care of.

1. Fill out employee onboarding forms

When you hire a new employee, you’ll need to gather some info. First, they’ll need to fill out a W-4 form to tell you how much income tax they want to be withheld from their paychecks. Next, they’ll need to fill out the I-9 form to prove they are allowed to work in the U.S. With the I-9 form you’ll also need to check their passport or other ID, as outlined in the instructions on the form. Once these are complete, make sure to keep them in your records. If you are using AutomotoHR, we will automatically store these forms electronically for you.

2. Report your new hires to the state

When you hire a new employee you must report some info to the state where they will be working. The state uses this information to find people who owe government-mandated debts, like child support. This report should be filed by the due date required in your state (often within 20 days of hire). If you are using AutomotoHR, you can choose to have us file this report for you.

3. Get Workers’ Compensation insurance

Almost every state requires employers to have Workers’ Compensation insurance. Depending on your state rules, you can get this insurance through either a commercial carrier or through your state’s workers' compensation insurance program. Workers' comp provides benefits to your employees and covers your business in case of employee illness or injuries that occur while your employees are on the job.

4. Get workplace posters

There are certain posters that you must post in your offices depending on the city, county, and state where your business is located. Check out this Department of Labor’s Poster Advisor tool to find the required posters for your location and get printable versions of them.

5. Follow employment and labor law requirements

It is a good idea to familiarize yourself with labor laws that may apply to you, such as minimum wage, wage garnishments, termination issues, and contractors classification. A great resource for this info is the Department of Labor’s Employer Guide. We also recommend checking out the U.S. Small Business Administrations' 10 Steps to Starting a Business. The information they provide discusses everything from writing a business plan to applying for licenses and permits.

6. Health Insurance

If you’d like to offer health insurance to your team, make sure that you meet ACA regulations. If you have benefits managed by AutomotoHR, we’ll help keep you compliant with ACA regulations by managing your pre-tax payroll deductions, offering a 1095-C to applicable companies, providing your newly hired employees with the ACA Marketplace Notice, housing the section 125 document in your account, and keeping you aligned with your current policies and insurance carrier.
 

Disclaimer:
This article is not to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult a lawyer or HR expert for specific guidance.