What you need before you start
Pulling these together before you create the account saves 30 minutes of back-and-forth.
- Federal EIN (from IRS Form SS-4 confirmation).
- Business legal name and DBA, if different.
- Business address and the state(s) where employees physically work.
- State employer tax account numbers for each state where you have employees. (You can run payroll without these; Gusto holds the deposit until you provide them.)
- Business bank account routing and account numbers.
- Each employee's W-4 and I-9 on file. Gusto can collect W-4s electronically during onboarding.
- Each contractor's W-9 if you're paying contractors.
- Decision on pay schedule: weekly, bi-weekly, semi-monthly, or monthly.
- Decision on which workers are W-2 employees vs 1099 contractors. If you're unsure, talk to your accountant before configuring Gusto.
- If you're an S-Corp owner: a reasonable-compensation number you've discussed with your accountant. See the S-Corp guide.
Step-by-step setup
Create your Gusto account
Estimated time: 5 minutes
Click my referral link, enter business name, your name, and email. Set a password. Confirm the email.
Watch out: If you go to gusto.com directly and add a code later, the bonus doesn't trigger. The link has to be the entry point.
Add your business info and bank account
Estimated time: 10 minutes
Enter EIN, business legal name, address, industry, and business structure (sole prop, LLC, S-Corp, C-Corp). Connect your business bank account; Gusto will run a small test deposit you'll need to confirm in 1 to 2 business days.
Watch out: Match the legal name on file with the IRS exactly. A mismatch surfaces later as a tax-deposit failure that takes a support ticket to fix.
Configure federal and state tax accounts
Estimated time: 15 to 30 minutes
Enter your federal EIN. For each state with employees, enter your state employer tax ID and unemployment insurance rate. Gusto provides a setup task per state with links to the right state portals if you don't have an ID yet.
Watch out: If you don't have a state employer tax ID yet, register on the state's portal first. Some states issue an ID instantly, others take 1 to 2 weeks. You can move on without it; Gusto holds the deposit until the ID is provided.
Add your employees and contractors
Estimated time: 5 minutes per worker
For each W-2 employee: name, address, SSN, W-4 info (Gusto can email the employee a self-service link to complete this), pay rate, and pay frequency. For 1099 contractors: name, address, SSN or EIN, payment terms.
Watch out: Use the self-service onboarding link option for employees. It saves you typing W-4 details and gives you a clean paper trail of what the employee submitted.
Set your pay schedule
Estimated time: 5 minutes
Pick weekly, bi-weekly, semi-monthly, or monthly. Set the first pay date and the work-period start date. Bi-weekly is the most common for small businesses.
Watch out: Direct deposits on Simple settle 4 days after submission. Submit your first payroll on a Wednesday for a Tuesday pay date, not the morning of pay day.
Run your first payroll
Estimated time: 10 to 15 minutes
Enter hours for hourly employees, confirm salaries for salaried employees, review the totals, click submit. Gusto shows you the gross-to-net breakdown and the tax deposit schedule before you confirm.
Watch out: Review the tax deposit total before submitting. If it looks unreasonably high or low compared to your gross payroll, pause and double-check the pay rates and tax setup.
Confirm tax filings are on autopilot
Estimated time: 5 minutes
After your first payroll, check the Tax Filings tab. Gusto should show federal 941, state withholding, and state unemployment as scheduled. You don't have to do anything; this is just verification.
Watch out: If a filing shows 'pending state ID' or similar, that's a flag that one of your state accounts isn't fully configured. Resolve it before the next quarterly filing deadline.
After your first payroll: what to verify in the first 90 days
Gusto runs on autopilot once it's set up, but the first three months are when small misconfigurations surface. Things to spot-check:
- Tax deposits actually withdrew. Look at your bank statement after the first pay cycle. The federal tax deposit and state withholding deposit should both have hit. If either didn't, open a support ticket immediately.
- The first quarterly 941 was filed. Gusto files this automatically about a week after the quarter ends. Check the Tax Filings tab; you should see the filed return with a confirmation number.
- State unemployment is being remitted at the right rate. New businesses often get assigned a default rate that gets revised once your account is established. Once your state mails you a revised rate, update it in Gusto under Tax Setup.
- Year-to-date wages match your bookkeeping. Pull the YTD payroll register from Gusto, compare it against your QuickBooks or Xero payroll expense category. They should match to the dollar.
FAQ
- I don't have a state tax ID yet. Can I still run payroll?
- Yes. Gusto holds the state tax deposit in escrow and remits it once you provide the ID. You'll get reminder emails. Provide the ID before the next quarterly filing deadline to avoid penalty risk.
- I'm switching from another payroll provider mid-year. What about my YTD wages?
- You enter them manually using Gusto's onboarding YTD worksheet. Pull your most recent payroll register from the previous provider, type the YTD totals in once, and Gusto handles W-2 generation correctly at year-end. Budget 30 to 45 minutes for this for a 5 to 15 employee shop.
- When is the right time to switch payroll providers?
- End of a quarter is cleanest, because the W-2 wage history transitions cleanly. End of year is fine too. Mid-quarter works but requires the YTD entry above.
- How do I add a contractor mid-month?
- Workers > Add Worker > Contractor. Enter their info, send them the W-9 collection link, and they'll appear in your next contractor payment run. Gusto only bills you for contractors in months you've actually paid them.
- What if an employee's W-4 changes?
- Send them their employee self-service link. They update the W-4 themselves. You don't have to touch anything.
- Can I run two pay schedules at once?
- Yes, Gusto supports multiple concurrent pay schedules. Add a second schedule under Pay Schedules and assign workers to whichever applies.
- What's the bonus for using your link?
- $100 or $200 Visa gift card depending on company size, paid about 30 days after first payroll. Full mechanics on the referral code page.
I run r/gustoreferral, a small subreddit for people signing up for Gusto and asking real questions before they commit.
r/gustoreferral community →Affiliate disclosure: I earn a commission if you sign up through links on this page, at no extra cost to you. I only recommend Gusto because I run it for my own business. Read the full disclosure →
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$100 or $200 bonus after your first payroll. The referral has to be applied at signup.
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