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A Startup's Guide to Setting Up Payroll
For many founders, setting up payroll is a milestone moment in starting up a company - it means you’re coalescing a team around your common mission to solve a problem.
Step 1: Determine Your Compensation Structure
How you decide to pay your team is the key first question to answer when getting started. Traditionally, startups pay their employees in a mix of salary and equity. For businesses operating onchain tokens might also be part of a compensation package. Depending on the types of workers you bring on there are other types of payments you may wish to support like:
Tips
Timesheets for hourly workers
Commissions
Bonuses
Step 2: Classify Your Employees
Properly classifying your employees is crucial for payroll and tax purposes. Determine whether your employees are full-time, part-time, salaried, or hourly. Additionally, classify your employees as either:
Exempt from overtime pay
Non-exempt from overtime pay According to the Fair Labor Standards Act (FLSA).
Step 3: Get Your Corporate Info In Order
The bare minimum needed to get started with employing workers is to have:
An incorporated entity
An Employer Identification Number (EIN)
Step 4: Choose a Payroll System
Most payroll platforms transport you back to the 1990s with how outdated their interfaces are. Large payroll platforms also saddle the burden of payroll administration to their users - things like applying for workers compensation insurance, corporate registrations to employ people in different states, etc.
Founders no longer need to be tethered to antiquated, slow, and expensive solutions. Solutions like our own at Franklin are tailor-made for founders looking for a complete, modern solution.
Setting Up A Franklin Account
You can set up your account with Franklin and start using it on the same day. In the sign up process, we collect the following information:
Company Vital data like address, EIN, phone number
Beneficial Ownership of the business - for compliance checks
Administrator Information - who is going to be running payroll
Business Bank Account
Business Wallet (if using crypto to make payments)
Hiring and Payment Process
From there you’ll be able to start hiring your team members and making payments. To learn more about how to accurately hire workers, check out our knowledge center article on worker classification.
Seeking Further Guidance
If you’re unsure about any aspect of payroll management, don’t hesitate to seek professional advice. Our team at Franklin is always available for chat as well to help guide you in the right direction. Feel free to reach out anytime.
