How to Prepare for Your First Payroll Run
Your first payroll run sets the tone for every pay run that follows. Get it right and payroll becomes a steady routine. Get it wrong and the first payday turns into a scramble. This guide explains how to prepare for your first payroll run, including the details to gather, the setup steps to finish, and the checks to run before pay goes out, so your first run is accurate and the runs after it stay that way.
Your first payroll run sets the tone for every pay run that follows. Get it right and payroll becomes a steady routine. Get it wrong and the first payday turns into a scramble of wrong numbers, late deposits, and questions you cannot answer fast. The good news is that most first run problems come from setup gaps, not from the math, and setup gaps are fixable before the run starts.
This guide explains how to prepare for your first payroll run, including the details to gather, the setup steps to finish, and the checks to run before pay goes out. If you are newer to payroll altogether, it helps to start with our guide on payroll processing basics before you set up your first run.
What a First Payroll Run Is
A first payroll run is the first time a business pays employees through a payroll process after the setup is done. It is the run where the pay rates, the deductions, the pay schedule, and the employee details all come together for the first time. Every run after it reuses the setup from the first run, so the first run is also the run that locks in the details the later runs depend on.
Because it is the first run, it is also the run where setup gaps show up. A missing pay rate, a wrong pay schedule, or a deduction without a signed authorization all surface on the first run. Preparing for the first run means finishing the setup before the run starts so the gaps do not reach payday. For a closer look at the pieces the run calculates, see our guide on gross pay versus net pay.
Details to Gather Before You Run
The first run needs details from two places, which are the business and the employees. The business details set up the payroll system, and the employee details set up each person paid in the run. The table below lays out the details to gather from each.
| Source | Details to gather |
|---|---|
| Business | Legal name, address, and payroll tax account numbers |
| Pay schedule | The pay frequency and the pay dates for the first run |
| Employee | Name, pay type, pay rate, and deductions from signed authorizations |
| Direct deposit | Bank details for each employee and the direct deposit lead time |
Gather the details before you start the run, not during it. A missing detail mid run is what turns a first run into a scramble. For more on the full set of details the run needs, see our guide on what information you need to process payroll.
Setup Steps to Finish First
The setup steps are the work that happens before the run starts. Finish them before the first pay date so the run starts from a clean setup. The steps below are the ones most first runs depend on.
- Register the payroll tax accounts the business needs, and enter the account numbers in the payroll system.
- Choose the pay schedule, and confirm the pay dates for the first run against it.
- Enter each employee with their pay type, pay rate, and deductions from signed authorizations.
- Enter the bank details for direct deposit, and confirm the lead time for the first deposit.
- Confirm the gross pay calculation for each employee, especially for hourly pay and overtime.
Quick tip. The setup takes longer the first time because you are entering every employee and confirming every detail. Plan the setup for a quiet week, not the week of the first pay date, so the run is not rushed.
Checks to Run Before Pay Goes Out
The prepay checks are the last step before the run goes out. Run them every run, but run them especially on the first run, because the first run is where setup gaps hide. The checks below are the ones that catch most first run errors.
- Confirm the pay period dates and the pay date on the run are correct.
- Confirm every employee who should be paid is in the run, and no one extra is.
- Check each employee's gross pay against their hours and pay rate or their salary.
- Confirm each employee's deductions match their signed authorizations.
- Confirm each employee's net pay equals gross pay minus the deductions.
- Confirm the total net pay matches the amount scheduled to leave the bank account.
The checks are easier when the run is summarized on one page. For more on the summary that rolls a run up, see our guide on what a payroll register is.
Example: A Retail Shop's First Run
Consider a small retail shop hiring its first three employees, all hourly, paid biweekly. The owner gathers each employee's name, pay rate, and bank details, plus the signed authorizations for the deductions. The owner registers the payroll tax accounts, sets the biweekly schedule, enters the three employees, and confirms the direct deposit lead time.
Before the first pay date, the owner runs the prepay checks. The owner confirms the pay period dates, checks that all three employees are in the run, checks each gross pay against the hours and the pay rate, confirms the deductions, and confirms the net pay for each. The owner checks the total net pay against the amount leaving the bank account. The example shows how a first run with three hourly employees stays calm when the setup is done first.
Example: A Service Firm's First Run
Take a small service firm hiring its first two employees, one salaried and one hourly, paid semimonthly. The firm gathers the details for both, noting the two pay types and the semimonthly schedule. The firm enters the salaried employee with the salary as the gross pay and the hourly employee with the pay rate and the overtime rate, and confirms the deductions for each.
Before the first pay date, the firm runs the prepay checks. The firm confirms the salaried employee's gross pay is the salary for the period, confirms the hourly employee's gross pay matches the regular and overtime hours, and checks the net pay for both. The firm confirms the total net pay against the bank account. The example shows how a first run with mixed pay types still fits one setup when the details are gathered first.
Common First Payroll Mistakes
- Starting the run before the setup is done. A first run started before the setup is finished turns into a scramble. Finish the setup before the run starts so the run starts from a clean base.
- Missing the direct deposit lead time. Direct deposit needs lead time, and the first deposit can need more. Confirm the lead time before the first pay date so the net pay lands on time.
- Entering deductions without signed authorizations. Every deduction needs a signed authorization. Enter deductions only from a signed form, because a deduction without one is a problem on the first run and every run after.
- Not checking the gross pay for hourly employees. Hourly gross pay depends on hours and the pay rate, and overtime adds a second rate. Check the gross pay for each hourly employee before the run goes out.
- Skipping the prepay checks. The prepay checks catch most first run errors. Skipping them sends the errors to payday, where they are harder to fix. Run the checks every run, and especially the first.
- Not keeping the records for the first run. The first run sets the records the later runs build on. Keep the pay details, the deductions, and the register for the first run on file from the start.
First Payroll Run Preparation Checklist
Use this checklist to prepare for your first payroll run. Work through it before the first pay date so the run starts from a clean setup and the prepay checks pass.
Printable first payroll run preparation checklist
- 1Gather the business details, including the legal name, address, and payroll tax account numbers.
- 2Register the payroll tax accounts the business needs, and enter the account numbers in the payroll system.
- 3Choose the pay schedule, and confirm the pay dates for the first run against it.
- 4Gather each employee's name, pay type, pay rate, and signed deduction authorizations.
- 5Enter each employee in the payroll system with their pay type and pay rate.
- 6Enter the deductions for each employee from their signed authorizations.
- 7Gather the bank details for direct deposit for each employee.
- 8Confirm the direct deposit lead time for the first deposit with your bank or payroll system.
- 9Confirm the gross pay calculation for each hourly employee, including the overtime rate.
- 10Confirm the gross pay calculation for each salaried employee as the salary for the period.
- 11Run the prepay checks, including the pay dates, the gross pay, the deductions, and the net pay.
- 12Confirm the total net pay matches the amount scheduled to leave the bank account.
- 13Save the pay details, the deductions, and the payroll register for the first run to your records.
Getting Started
Preparing for your first payroll run comes down to gathering the details, finishing the setup, and running the prepay checks. When the setup is done before the run starts and the checks pass before pay goes out, the first run is accurate and the runs after it stay that way.
Want help with your first payroll run? Explore our payroll services to see how we help you gather the details, finish the setup, and run the prepay checks so your first run is accurate. We handle bookkeeping and payroll. We do not prepare income tax returns, offer tax planning, or perform audits, but we keep your payroll accurate and your records organized so your tax preparer can do their part efficiently.
Frequently Asked Questions
What is a first payroll run?
A first payroll run is the first time a business pays employees through a payroll process after setup. It is the run where the pay rates, the deductions, the pay schedule, and the employee details all come together for the first time. Because it is the first run, it is also the run where setup gaps show up, so preparing for it means finishing the setup before the run starts.
How do I prepare for my first payroll run?
Start by gathering the details the run needs, which are the employee details, the pay rates, the pay schedule, the deductions, and the bank details for direct deposit. Then finish the setup steps, which are registering your payroll tax accounts, choosing a pay schedule, entering each employee, and confirming the deductions. Finally, run the checks before pay goes out, which are confirming the pay dates, the gross pay, the deductions, and the net pay for each employee.
What details do I need before I run payroll the first time?
You need each employee's name, the pay type such as hourly or salaried, the pay rate, the pay schedule, the deductions from signed authorizations, and the bank details for direct deposit. You also need the business details the payroll system asks for, which are the legal name, the address, and the payroll tax account numbers. For more on the full set of details, see our guide on what information you need to process payroll.
How long before payday should I set up my first payroll run?
Leave enough time to finish the setup and to clear the direct deposit lead time. The setup takes longer the first time because you are entering every employee and confirming every detail. The direct deposit lead time is the number of days your bank or payroll system needs to send the net pay, and it is often longer for a first deposit. Plan to finish the setup several days before the pay date so the first run is not rushed.
Does preparing for a first payroll run mean I am preparing income tax returns?
No. Preparing for a first payroll run is part of running payroll, which is the work of figuring out wages, withholdings, and net pay and keeping the payroll records organized. Income tax return preparation is a separate service. Chess Bookkeeping & Payroll does not prepare income tax returns, offer tax planning, or perform audits, but we keep your payroll and bookkeeping records accurate and organized so your tax preparer can do their part efficiently.
What if I make a mistake on my first payroll run?
A mistake on a first run is common because the setup is new. The fix depends on what went wrong. A wrong pay rate is fixed by correcting the rate and rerunning the affected employee. A wrong deduction is fixed by correcting the authorization and adjusting the next run. A late direct deposit is fixed by working with your bank or payroll system. Catching the mistake before pay goes out is easier than fixing it after, which is why the prepay checks matter.
Can Chess Bookkeeping & Payroll help me prepare for my first payroll run?
Yes. We handle bookkeeping and payroll, including helping you set up your first payroll run, gathering the details, entering your employees, and running the prepay checks so the first run is accurate. We do not prepare income tax returns, offer tax planning, or perform audits, but we keep your payroll accurate and your records organized so every run after the first one starts from the right numbers.
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