Your First 90 Days on S Corp Payroll: A Clean Setup Checklist

Week one: accounts and registrations

You already have a federal EIN if you formed an LLC. That same EIN carries through the S corp election. What you do not have yet is a state withholding account, a state unemployment insurance account, and (in some states) a separate local payroll tax account.

Register for all three in week one. The state withholding number typically arrives within 48 hours online. SUI account numbers take 5 to 10 business days in most states. Until you have the SUI number, no payroll provider can run a compliant first check, so this is the bottleneck to attack first.

Week two: choosing a provider

For a single-owner S corp, the right payroll provider is whichever one files your 941, 940, W-2, and state returns automatically, costs less than $60 per month, and supports a monthly pay frequency (not just biweekly).

Gusto, OnPay, and ADP RUN all meet that bar. Avoid full-service bookkeeping bundles that lock payroll behind a $300+ monthly retainer. The payroll work for a one-employee S corp is straightforward and does not justify that price.

The four numbers you have to get right

Annual gross wage: anchored to your reasonable compensation memo. Divide by 12 for monthly, or 24 for semi-monthly.

Federal withholding: completed on Form W-4. Most owner-employees file as single with no allowances and adjust via the extra withholding line so quarterly estimates can shrink.

State withholding: state-equivalent of W-4. Some states (CA, NY) require separate forms; others piggyback on the federal W-4.

Employer match accruals: even with just an owner-employee, the employer-side FICA (7.65%) and FUTA/SUI must be funded each pay run. Set up an automatic transfer from operating to a payroll-tax holding account so the cash is there on tax deposit day.