Add a New Employee to the Payroll

Author: Rena Pirsos, XpertHR Legal Editor

Key Points

  • When an employer hires a new employee, there are many pieces of information to obtain and consider and several steps to complete in order to promptly add the employee to the payroll before the next payday.
  • To ensure that amounts for applicable taxes and other deductions are properly withheld from an employee's first paycheck, an employer must determine under both federal (FLSA) and state law whether the employee will be considered exempt or nonexempt; the basis (i.e., salaried or hourly) and frequency (i.e., biweekly or monthly) of his or her pay; and the best method by which to pay the employee (i.e., paper check, direct deposit or paycard).
  • An employer must also determine the taxability of the value of any health care or fringe benefits in which the employee may enroll; whether the employee's pay is subject to withholding under a child support or garnishment order; and whether the employee has chosen to have any additional, voluntary deductions withheld from his or her pay (i.e., to pay off a student loan).
  • An employer is also required by law to verify and keep records of a new employee's right to work in the US and his or her Social Security or Taxpayer Identification Number; and report the employee to the appropriate state directory of new hires.

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