How do I set up FreshBooks Payroll?

• Before You Begin
• Payroll Eligibility
• Business Information
• Business Bank Account
• Employees
• State Tax
• Sign Documents
• Deposit Verification
• Next Steps

Before You Begin

• Federal Employer Identification Number (FEIN) and FEIN Assignment Form CP-575
• Social Security Number (SSN) - Individual Taxpayer Identification Number / ITIN is not accepted
• Company addresses for all working locations including remote employees and employees who work from home
• Bank Account information - routing number and account number
• All employee information - start date, compensation details, and email address
• All employees’ completed Employment Eligibility Verification 1-9 Forms and Employee’s Withholding Certificate W-4 Forms
• All contractors and employee information - start date, compensation details, and email address
• All contractors’ completed Request for Taxpayer Identification Number and Certification W-9 Forms
• State Tax Registration details for all states you have locations in
• The Company Signatory’s information for legally e-signing all government forms

Payroll Eligibility

• Pay US-based 1099 contractor individuals and business entities while also paying at least one W-2 employee
• Pay US-based W-2 employees
• Process payroll with 4-day ACH direct deposit speed
• Run regular payroll

• Manage employee benefits including health, dental, and 401K, as well as Worker's Compensation contributions
• Manage withholding state taxes in states where the business is not registered
• Pay only US-based 1099 contractors (must also be paying at least one US-based W-2 employee)
• Pay employees who work or live in states where the business is not registered
• Print checks
• Process payroll with 2-day ACH direct deposit speed
• Run off-cycle payroll
• Track Paid Time Off (PTO)
• Use multiple regular hourly pay rates for a single employee

1. In your FreshBooks account, select the Payroll section
2. Under FreshBooks Payroll powered by Gusto, select the Get Started button
   
   
3. Complete the questions to determine if FreshBooks Payroll is right for you
   1. For the question Have you paid employees in [current year]?, if you select Yes, you will be required to add historical payroll after completing setup, and before you can start running your first payroll
      
      
4. If eligible, select Continue to Setup to agree to Gusto’s Terms of Service. Next, complete the Business Information steps below.

Business Information

• Pay Schedule - A regular cadence for tracking work and paying employees, state laws will dictate which pay schedule is right for your business
• Pay Period - The date range for which work is completed by the employees
• ACH Processing Timelines - ACH (automated clearing house) is the national standard for transferring money through US banking - there is a delay of 4 business days between when payroll is submitted and when employees will be paid
• Bank Holidays - Bank holidays are not considered business days, ensure you run payroll one business day earlier for any payroll deadlines that fall on a bank holiday
• Cutoff Time - Gusto requires payroll to be submitted by 6:30 pm ET each business day in order to begin processing payroll for that day to ensure your team members get paid on time; if payroll is submitted after this deadline, it will not be processed until the following business day

• Payroll Deadline - Your payroll deadline is 4 business days before your payday for both direct deposit and check methods, this is how long funds take to be sent from your company bank account to your employees
• First Pay Date - Your first pay date should be at least 8 business days after beginning the setup process and after your FreshBooks Payroll account is approved
  • This includes the time required to complete bank verification and tax information during setup, as well as the 4-day ACH processing for direct deposit payments to your employees
• Reset Pay Schedule - Once approved for FreshBooks Payroll, if you do not run your first payroll prior to the first pay date selected during your setup, your pay schedule will be removed and you’ll need to reach out to our Support team directly to set up a new schedule

1. In the Payroll section, next to Tell us about your business, select Continue
   
   
2. In the Business Details section, confirm your Legal Business Name which must match your federal forms including comms and capitalization, and if needed, your Doing Business As (DBA) name
   
   
   1. Next, choose your Business Structure
   2. Then choose an Industry Category that closely fits your business
   3. For Federal Filing Form, choose between 941 for quarterly, or 944 for annually
   4. Then choose Yes or No if your business is taxed as an S-Corporation
   5. Select Save and Next
3. In the Business Address section, if needed, uncheck the box next to Filing and Mailing address is the same to enter a second address
   
   
   1. Next, enter your Address, Town/City, State, Zip Code, and Business Phone Number
   2. If needed, select Add an Address if you have additional working addresses including remote employees and employees who work from home
   3. Select Save and Next
4. In the Payroll Setup section, choose a Pay Frequency
   
   
   1. Choose the First Pay Period End Date, this will be used to calculate future pay periods
   2. Next, choose the First Pay Date for a date at least 8 business days in the future for your first payroll run - this should include the time required to verify your bank account and tax information to get your account approved, and the 4-day ACH processing for direct deposit payments to your employees
   3. If Twice a month: Custom is selected, choose the First Pay Day of Month and Second Pay Day of Month
5. Then select Complete to finish setting up your business information. Next, complete the Business Bank Account steps below.

Business Bank Account

1. In the Payroll section, next to Set up a bank account, select Start
   
   
2. In the Bank Account Details section, enter your Routing Number and Account Number
   
   
3. Check the box off next to I confirm this is a checking account then select Save and Next
4. Select Got It to confirm the bank account verification, verifications are made at 5 pm PT daily and can take up to 2 business days to appear in your bank account
5. Next, complete the Employees steps below.

Employees

1. In the Payroll section, next to Set up employees, select Start
   
   
2. In the Set Up Employees section, select the + New Employee button or select an existing team member in the list of employees below
   
   
   1. In the employee's Profile section, check the box next to I agree to collect and store this employee’s I-9 outside FreshBooks
      
      
   2. Add or review the employee’s First Name, Last Name, and Email Address - the employee's name must be their full legal name as written on tax documents
   3. Enter the employee’s Date of Birth and Social Security Number
   4. Add the employee’s Country, Address, City, State/District, and Zip Code
   5. Select Save and Continue
3. In the Work Location and Compensation section, choose an Office Address
   
   
   1. For Compensation Details, enter in the Job Title
   2. Then for Pay Type, choose between Salary/No overtime, Salary/Eligible for overtime, or Paid by the hour
   3. Next, specify the Start Date
   4. Then enter the Amount and choose a Per type
   5. For Payment Method, choose between Direct Deposit or Check
      1. If Direct Deposit is selected, check off the box next to I agree to collect and store Direct Deposit Authorization forms
   6. For Bank Account Details, choose either Checking or Savings
   7. Then enter the employee’s Routing Number and Account Number
   8. Select Save and Continue
4. In the Federal Tax Details section, choose the employee’s Federal Filing Status
   
   
   1. Then for Multiple Jobs (2c), choose Yes or No
   2. If needed, specify the Dependent Total, Other Income, Deductions, and Extra Withholdings
   3. Check the box next to I agree to collect and store this employee’s W4 outside of FreshBooks
   4. Select Save and Continue
5. In the State Tax section, choose the employee’s Filing Status
   1. If needed, specify the totals in the fields provided for this particular employee and their state
   2. Select Save and Continue
6. Repeat steps 2-5 until all employees have been added and set up, then select Complete
7. Then select OK. Next, complete the State Tax steps below.

State Tax

1. In the Payroll section, next to Set up state tax for your business, select Start
   
   
2. In the State Tax section, select the Continue Setup link next to the State listed
   1. Review and answer the requirements, then select Save and Continue
   2. Then review your State Tax summary and select Back
3. Repeat step 2 for each state you operate in until there are no more Continue Setup links, and then select Finish. Next, complete the Sign Documents steps below.

Sign Documents

1. In the Payroll section, next to Sign Documents, select Start
   
   
2. In the Business Controller Details section, enter your First Name, Last Name, and Job Title
   
   
   1. Enter your Home Address, or check the box next to Home address is the same as a listed business location
      1. If the box is checked off, choose a location from your list of addresses
   2. Enter your Email, Phone Number, Date of Birth, and Social Security Number
   3. Then select Save and Continue
      
3. In the Sign Company Documents section, select Review to preview the form as a PDF file
   
   
   1. Then select Sign Form next to the form when you’re ready to sign it
   2. Check the box off and select Sign
   3. If needed, select Review again to view a preview of the now-signed form in a new window
4. Repeat step 3 for each form until all forms have been signed, then select Complete.

Deposit Verification

1. In the Payroll section, next to Set up a bank account, select Verify
   
   
2. In the Verify your Bank Account section, enter the amount for Test Deposit #1 and Test Deposit #2
   
   
3. Select Validate, then select OK to finish.

Next Steps