One of the best parts of your shiny new S-corp is that you’ll be running payroll for yourself and receiving a salary from your business. But before you can send yourself a paycheck (and hit the mall for an Orange Julius), you have to get yourself set up as a employer in the state of California and as an employee in Gusto, your payroll processing software.
Getting Setup as an Employer in California
In the state of California, before you can start running payroll you need to register for an employer payroll account with the Employment Development Department (EDD). This is the first step on your payroll journey.
Before you begin you will need to have the following information on hand. You can find all of this information in your Hyke dashboard:
- Type of Organization
- Responsible Party Names and Identification Numbers (Owner, Officer, Partner, CFO, etc.).
- Federal Employer Identification Number (FEIN)
- Business mailing address and any physical locations.
- Business Name (Legal and/or Doing Business As)
- Date ownership began
- Secretary of State ID number (if applicable)
- Information regarding any business registered with the EDD in which you are/were an owner (if applicable)
To register go to this link and click the Enroll button.
You will then be prompted to create a new account with the EDD.
Once you’ve created your account, you will login and select New Employer.
On the next screen, click on the link that says Click here to register for Employer Payroll Tax Account Number.
Now you will finally register for your employer number! You gotta love government websites. Anyway, on the next screen select the reason for your registration. In your case it will be New Business.
On the next page, for Employer Type select Commercial. For organization type choose Limited Liability Corporation.
On the next screen you will choose the first quarter that your wages have exceeded $100. Choose Current Quarter.
On the next screen, answer Yes for the question “Do you have employees working in California?”.
Next you will complete the information for the primary responsible party. Select Officer and then select your title and enter your details.
Next you will enter the date that you formed your business. This information will be on your formation documents that are located in your Hyke dashboard. You will also need to disclose if you have registered with the EDD in the past. Select Yes or No.
Then you will enter in your Industry info, including the type of industry you’re in and a brief description of what you do.
Now you will input the legal name of your business. Next, you will select Yes for the question “Are you Registered with California SOS”. Enter your Secretary of State ID No. Answer Yes and enter you FEIN.
Next enter in your location details.
Enter in your business contact information.
In the Taxpayer Representative Contact Information section, enter in your personal details. This will allow you to call the EDD and check in on your account.
Next, answer No for the question “Are you an authorized Payroll Agent?” and answer No for the question “Does this business use professional assistance (bookkeeping, accounting, etc.) for payroll reporting?”. Even though you’ll be using Gusto for your payroll processing, you want to ensure that all your important EDD tax documents are sent to your address.
Whew! You are finally at the end of this epically long registration form! The final step is to declare that your information is correct and press Submit!
Once you have submitted your registration, you will be taken to a confirmation page. You request can take up to three days to process, but most requests only take a few minutes to process and you’ll get your number almost immediately. To check the status of your request, log back into your account.
You will also receive a notification via mail with your account information within 10 days of registering. Before you can proceed with running payroll, you must have your employer account number.
Setting Up Gusto as an Employer
The next thing you’ll have to do before you can run payroll is setup Gusto. Don’t worry- setting up Gusto is about a million time easier than going through the EDD registration process. Check out this video that walks you through how to setup Gusto.
Employer rate for unemployment tax: 3.4%
Employer training tax: 0.1%
Setting Yourself Up in Gusto as an Employee
- In the employee invitation that you receive from Gusto, click Get Started.
- Enter in a password to create an employee account with Gusto.
- Enter your personal details.
- Enter your tax details. Andrew will tell you your Federal Withholdings Allowance and if you need to have Additional Tax Withholdings.
- Enter your Direct Deposit details. Remember, this should be your personal bank account information.
- Digitally sign your documents