Payroll services for startups

For most startups payroll is the largest line in the budget and the one where mistakes compound quietly. It is also, unusually, a place where a tax credit can turn into actual cash.

Every remote hire is a state decision

Hiring one engineer in another state generally creates obligations in that state: withholding registration, unemployment insurance, and sometimes local taxes on top. It can also create income tax nexus for the company itself.

Contractor or employee is not your choice

It is determined by the working relationship — control over how and when the work is done, whether it is core to your business, exclusivity, tooling. Getting it wrong means back payroll taxes, penalties and interest, and states have become markedly more active on it.

The credit that pays your payroll tax

A qualified small business can apply the federal research credit against employer payroll tax rather than income tax, up to $500,000 a year. Applied first against the employer share of Social Security up to $250,000 per quarter, with the remainder against Medicare.

• Gross receipts under $5 million for the tax year.
• No gross receipts before the five-year period ending with this year.
• Elected on a timely-filed original return — it cannot be added later by amendment.

Our R&D credit calculator estimates the amount. Payroll has to be set up to actually take it, which is where it tends to fall down.

Equity is a payroll event

Option exercises and RSU vesting create reportable income and withholding obligations that run through payroll, not around it. Companies that treat equity as a cap-table matter discover the gap at year end when the W-2s are wrong.

What we do for startups

Payroll run properly across states, registrations kept ahead of hiring, classification reviewed before it becomes a liability, and the R&D payroll credit actually claimed rather than merely estimated.

Frequently asked questions