Payroll Answers

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Payroll Resources
Here are some resources for preparing to start payroll. The state links are for Georgia, if you are in a different state please email us for the links for that state.


Obtain an Employer Identification Number (EIN)

Before hiring employees, you need to get an identification number (EIN) from the IRS. The EIN is often referred to as an Employer Tax ID or as Form SS-4. The EIN is necessary for reporting taxes and other documents to the IRS. In addition, the EIN is necessary when reporting information about your employees to state agencies. You can apply for an EIN online by clicking the link below.

 
Apply for an EIN

After you receive you identification number (EIN) from the IRS you will need to sign up to pay your taxes electronically. EFTPS is a free service that allows you to process your payments electronically to the Internal Revenue Service. Have your banking information available when signing up. This would be your business account that you want the payments deducted from.

 
Sign Up for EFTPS

State Obligations

Any entity that conducts business within Georgia may be required to register for one or more tax specific identification numbers, permits, and/or licenses. Online registration is available through Georgia Tax Center (GTC). Any business that has employees must register for a withholding payroll number. This registration does not require renewal and remains in effect as long as the business has employees whose wages are subject to Georgia income tax withholding.


To register a new Georgia business and obtain your specific identification numbers. Use the following link.


Register a Georgia Business

 
Go to the bottom of the page, click the business tab then register a new Georgia business, follow the prompts.

After you receive your withholding number you will need to sign up electronically, for processing state payments and submitting quarterly tax returns. To do this click the signup tab for online access, you will need your withholding number and zip code (business location). Once that is completed you will receive a registration code by email. You will need the registration code for your first time when you login.


 
Sign Up for the State to make Electronic Payments

 
Georgia Department of Labor

This link will provide you with the application to obtain your Georgia Department of Labor account number.

 
Georgia Dept of Labor Application

Georgia New Hire

Federal and State law requires employers to report newly hired and re-hired employees in Georgia to the Georgia New Hire Reporting Program. This site will provide you with information about reporting new hires including reporting online and other reporting options. You can register and file reports online or fax them in.

 
 
Employee New Hire Forms

I-9 Form
Ga DOL Separation Notice

You must verify that each new employee is legally eligible to work in the United States. Have the employees you hire fill out the I-9 form.


Worker’s compensation is required in Georgia for three or more employees regardless of the number of hours worked by each employee. For more information check with your insurance agent.

 
Knowing the difference between contractors and employees

Independent contractors and employees are not the same, and it's important to understand the difference. Knowing this distinction will help you determine what your first hiring move will be and affect how you withhold a variety of taxes and avoid costly legal consequences.

  An Independent Contractor:

 
Operates under a business name
Has his/her own employees
Maintains a separate business checking account
Advertises his/her business' services
Invoices for work completed

Has more than one client
Has own tools and sets own hours
Keeps business records


 
An Employee:
Performs duties dictated or controlled by others
Is given training for work to be done
Works for only one employer
Misclassification of an individual as an independent contractor may have a number of costly legal consequences. If your independent contractor is discovered to meet the legal definition of an employee, you may be required to:
Reimburse them for wages you should've paid them under the Fair Labor Standards Act, including overtime and minimum wage
Pay back taxes and penalties for federal and state income taxes, Social Security, Medicare and unemployment
Pay any misclassified injured employees workers' compensation benefits
Provide employee benefits, including health insurance, retirement, etc.
There is no single test for determining if an individual is an independent contractor or an employee under the Fair Labor Standards Act. However, the following guidelines should be taken into account:

1.The extent to which the services rendered are an integral part of the principal's busines
2.The permanency of the relationship
3.The amount of the alleged contractor's investment in facilities and equipment
4.The nature and degree of control by the principal
5.The alleged contractor's opportunities for profit and loss

6.The amount of initiative, judgment, or foresight in open market competition with others that is required for the success of the claimed independent contractor
7.The degree of independent business organization and operation Whether a person is an independent contractor or an employee generally depends on the amount of control exercised by the employer over the work being done.