Running Payroll in Georgia: A Step By Step Guide

1. Setting Up Your Business

Before registering with the state for Georgia payroll, businesses must have a federal Employer Identification Number (EIN) and an Electronic Federal Tax Payment System (EFTPS) account.

How to Apply for an Employer Identification Number (EIN)

The IRS manages the application process for an EIN. To apply digitally for GA payroll, follow the instructions below:

1. Determine Your Eligibility
   Principal businesses located in the United States or U.S. Territories are eligible to file for an EIN online through the IRS. To apply, the person must have a valid Taxpayer Identification Number (SSN, ITIN, EIN).
   
   Applicants are limited to one EIN per responsible party per day. Per the IRS, “The ‘responsible party’ is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.”
2. Complete Online Application
   Businesses must complete the IRS’s digital application to properly request an EIN. To view the application, click here.
   Applications must be completed in one session, as there is no option to save or return at a later time. Sessions that are inactive for more than 15 minutes will expire.
3. Submit Online Application
   After completing and submitting the online application, applicants will immediately receive their EIN.
   The IRS recommends businesses download, save, and print their EIN confirmation notice.

How to Enroll in the Electronic Federal Tax Payment System (EFTPS)

The IRS manages the application process for the EFTPS. To apply digitally for Georgia payroll, follow the instructions below:

1. Begin Enrollment
   To start, visit https://eftps.gov and click “Enroll.”
2. Accept the Privacy Act and Paperwork Reduction Act
   Complete the first step (“Start”) from the enrollment tab by reviewing the Privacy Act and Paperwork Reduction Act.
   After reading, check the box next to “I accept the Privacy Act and Paperwork Reduction Act.”
   Select “Business” under the “Enroll me as:” prompt to continue.
3. Complete Enrollment Form
   Note: If you used a coupon in the past two years or if your business is less than a year old, you are pre-enrolled in EFTPS (per EFTPS.gov).
   Complete the Enrollment form by filling in each section with the appropriate information – EIN, business name, location, contact information, and payment information.
   Click the “Review” button to continue.
4. Review Enrollment Form
   Prior to submitting, review the EFTPS form to ensure all information is accurate.
   Click the “Complete” button to continue.
5. Complete Enrollment Form
   On this screen, you will receive confirmation for submitting your EFTPS enrollment application. Within seven business days, you will receive your PIN in the mail.
   This PIN is used for logging in to your business’s EFTPS account.

2. Register with the Georgia Secretary of State

After receiving your EIN and EFTPS account, your business can register with the Georgia Secretary of State.  Applicants are recommended to submit their registration digitally via the state’s online portal but can also submit via U.S. postal service.

Required Information

Regardless of the submission method, Georgia businesses are required to provide the following information:

• Federal Employer Identification Number (FEIN)
• Name of business 
• Business structure (corporations, LLCs, partnerships, etc.)
• North American Industry Classification System Code (NAICS)
• Name, address, and Social Security Number (SSN) for all managing associates (owners, partners, officers, etc.)
• Email address
• Tax registration

Note: sole proprietorships can register as individuals for business-related taxes for Georgia payroll

Registering Your Business Online

To register a business in Georgia, all employers must create a Georgia Tax Center account and submit the appropriate information. Doing so is simple:

1. Visit the Georgia Tax Center.
2. Sign up for online access by completing the appropriate digital forms.
3. Receive the confirmation number via the provided email address.
4. Log on to the Georgia Tax Center.
5. Under the “I want to" section, select “Register as a ____” (sole proprietorship, LLC, corporation, partnership, etc.).
6. Follow the instructions to complete registration.

Registering Your Business by Mail

While the state of Georgia recommends online registration, employers in the state can register their businesses via mail.

Each type of company will have slightly different registration requirements outlined on the state of Georgia’s website. Regardless of the type of company, however, all forms should be sent to the following address:

Office of Secretary of State
Corporations Division
2 Martin Luther King Jr. Dr. SE
Suite 313 West Tower
Atlanta, Georgia 30334

Use the guides below to learn more about the appropriate procedures, forms, and fees that your business must complete for GA payroll.

Note: in general, businesses can expect a processing time of 15 days. By paying a premium, businesses can expedite the process to 2 days ($100), same day ($250), or within an hour ($1,000).

Registering a Domestic LLC:

1. Download and complete the Articles of Organization for LLC (CD 030) Form via the Georgia Secretary of State website. Businesses may also draft and submit their own form.
2. Download and complete the Transmittal Form — Limited Liability Companies (231) via the Georgia Secretary of State website.
3. Mail the completed Articles of Organization, Transmittal Form, and a $110 filing fee (check or cash) to the above address.

Registering a Domestic Corporation:

1. Draft an Article of Incorporation by downloading and completing the Filing Procedure – Corporation form via the Georgia Secretary of State website. 
2. Download and complete the Transmittal Form - Corporation (CD 227) via the Georgia Secretary of State website.
3. Mail the completed Articles of Incorporation, Transmittal Form, and a $110 filing fee (check or cash) to the above address.

Registering a Domestic Limited Partnership:

1. Draft a Certificate of Limited Partnership for the limited partnership.
2. Download and complete the Transmittal Form — Limited Partnership (246) via the Georgia Secretary of State website.
3. Mail the completed Certificate of Limited Partnership, Transmittal Form, and a $110 filing fee (check or cash) to the above address.

Registering a Foreign LLC:

1. Download and complete the Application for Certificate of Authority CD 241 via the Georgia Secretary of State website. 
2. Mail the completed Application for Certificate of Authority and a $235 filing fee (check or cash) to the above address.

Registering a Foreign Corporation:

1. Download and complete the Certificate of Authority for your foreign corporation via the Georgia Secretary of State website:

• Certificate of Authority for Profit or Nonprofit Corporation (CD 236)
• Certificate of Authority for Professional Corporation (CD 238)
• Certificate of Authority for Benefit Corporation (CD 239)
  2. Mail the completed Application for Certificate of Authority and $235 filing fee (check or cash) to the address listed above.

Registering a Foreign Limited Partnership (LP/LLLP):

1. Download and complete the Certificate of Authority (CD251) via the Georgia Secretary of State website.
2. Mail the completed Application for Certificate of Authority and $235 filing fee (check or cash) to the address listed above.

Registering a Foreign Limited Partnership (LLP):

1. Download and complete the Application for Certificate of Authority (CD2000) via the Georgia Secretary of State website.
2. Mail the completed Application for Certificate of Authority and $210 filing fee (check or cash) to the address listed above.

3. Set Up Payroll

Each company will have a different payroll structurally, largely influenced by their industry and focus. The main decisions when setting up Georgia payroll are:

• Payment method (direct deposit or paper check)
• Pay periods (weekly, bi-weekly, semi-monthly, or monthly)

Learn more about managing your company’s payroll in-house or with a service.

4. Collect Employee Payroll Forms

Typically completed during the onboarding of new hires, businesses must collect the following forms for all employees to be compliant with state and federal requirements:

• W-4 – Employee’s Withholding Certificate
• I-9 – Employment Eligibility Verification
• Direct Deposit Authorization (if applicable)
• G-4 – Georgia State Employee Withholding

Note: All employees must complete their I-9 verification no later than their first day of work. I-9 forms must be stored for three years after the hire date, one year after employment ends, or whichever is later.

5. Collect, Review, and Approve Timesheets

For hourly and salary non-exempt employees, businesses must collect, review, and approve all timesheets within the appropriate time frame. Timesheets can be digital or paper.

To manage timesheets with ease, businesses can utilize time and attendance solutions such as IRIS HCM.

Combining software and concierge services, IRIS improves the employee experience and eliminates errors without adding extra stress to your operation. Led by experts on all local, state, and federal policies and regulations, IRIS helps manage every part of your payroll process, including yearly filings, time and attendance, tax credit applications, and more.

To review pay period guidelines for Georgia payroll, click here.

6. Calculate Payroll and Pay Employees

To pay employees for their timesheets, businesses must first calculate their payrolls. To calculate your company’s payroll and pay your employees, follow the six steps below:

1. Calculate Total Time Worked for Period for Each EmployeeTo manage their payroll, employers must determine how many hours their employees worked in a pay period. How businesses execute this step depends on if an employee is salaried or hourly and non-exempt or exempt. Follow the appropriate step below.Note: Employers must classify their employees correctly according to the Fair Labor Standards Act (FLSA) or risk costly compliance violations. Misclassifying employees as exempt from overtime (when they are non-exempt) is one of the most common Fair Labor Standards Act (FLSA) violations and a focal point for government enforcement.
   • For Salaried EmployeesAn employee exempt from the FLSA typically must be paid a salary above a certain level and work in an administrative, professional, executive, computer, or outside sales role. Generally, salaried employees are expected to work a minimum of 40 hours per week but are exempt from receiving overtime wages.Due to this dynamic, payroll managers can assume that pay for each period will be the same. Generally, employers do not track their salaried employees' work time.The U.S. Department of Labor’s online duties test can be used to determine the exemption eligibility of an employee.
   • For Non-Exempt Salaried EmployeesIf Georgia employees are classified as non-exempt, they are entitled to overtime pay for work that exceeds 40 hours in a work week (consecutive seven-day period). Non-exempt employees can earn a salary or hourly wage.To calculate the payroll of non-exempt salaried employees, calculate the total work hours for a single pay period, noting overtime hours. The total wages for each employee will be their salary for minimum hours worked plus any overtime wages. Overtime wages should be paid at the employee's salary, broken down into an hourly rate times one-and-one-half.
   • For Hourly EmployeesTo calculate the total time worked for a period for an hourly employee, all that is needed is simple math.Add total hours worked for a given work week using a timesheet or clocked hours.
     Regardless of payroll frequency, this should be done weekly for Georgia businesses.
   • Calculating Gross PayGross pay is an employee’s total earnings before taxes and deductions. Calculating gross pay is done by multiplying an employee’s hourly rate by their hours worked. For non-exempt employees, work beyond 40 hours in a workweek should be paid at a rate of time and one-half.
2. Total Payroll DeductionsPer federal regulations, employers must subtract payroll deductions from gross pay before determining their employees’ total pay. There are pre-tax and post-tax deductions, each with its own requirements.The most common pre-tax deductions are:
   • Retirement contributions - IRA accounts, 401(k), 403(b)
   • Insurance premiums - health, vision, dental, life
   • Wage garnishes - court-ordered deductions for employees who fail to repay debt
   • Union dues
   • Child support payments
   
   There is an extensive list of pre-tax deductions. Regardless of what you use, all deductions will reduce gross pay.
3. Calculate Total Payroll Taxes
   • Employee TaxesTo calculate the total taxes owed by each employee, employers will need to determine the percentage of income that should be withheld from local, state, and federal income using the employee’s W-4 form.Below are the types of taxes that will be withheld:
     • Federal Income Tax (See IRS Withholding Tables)
     • State Income Tax (See Georgia Withholding Tables)
     • Social Security (6.2%)
     • Medicare (1.45%)
     
     Before calculating total taxes, businesses must first account for all pre-tax deductions. Doing so is simple: subtract pre-tax deductions from total gross pay.Note: there is no local income tax for Georgia payroll.
   • Employer TaxesIn addition to calculating the withheld taxes for each employee, businesses are responsible for their own taxes.The following is a list of payroll-related taxes required for businesses in the state of Georgia:
     • Social Security (6.2%)
     • Medicare (1.45%)
     • Federal Unemployment Insurance (FUTA + 0.6%) 
     • State Unemployment Insurance Taxes (2.7%*)
     
     *Georgia’s State Unemployment Insurance Tax rate is 2.7% for new businesses. For established businesses, rates are based upon their “experience rating.” To learn more, visit the Georgia Department of Labor.
     
4. Subtract Deductions and Taxes from Gross PayTo calculate an employee’s net pay, subtract total deductions and total taxes from gross income.Net Pay = Gross Pay - (Non-Tax Deductions + Tax Deductions)

1. Distribute Employee PaychecksWhile businesses can choose their payment schedule, they still must follow state guidelines set by GA Statute 34-7-2.Per the statute, Georgia employers must pay their employees on a defined payment schedule. At a minimum, these payments must occur twice per month, otherwise known as semi-monthly; employers can implement higher pay frequencies at their discretion. Regardless of frequency, pay dates must be consistent. Paychecks can be distributed via cash, check direct deposit, or payroll card account.

7. Pay and File Payroll Taxes with Georgia and the Federal Government

To comply with state and federal regulations, all businesses must file payroll taxes using the appropriate forms. Forms can be submitted by mail or digitally. 

For more information on federal or state tax forms, click the appropriate link below:

• Georgia State Payroll Tax Forms
• Federal Payroll Tax Forms

For additional information, use the resources below.

• Depositing and Reporting Federal Employment Taxes 
• Electronic Federal Tax Payment System (EFTPS)  
• Georgia Withholding Income Tax Payment and Return Due Dates
• Depositing Georgia State Income and Unemployment Taxes
• Georgia Unemployment Taxes and Benefits

For assistance on federal forms, employers can contact the IRS at 1-800-829-1040 or https://www.irs.gov.

For assistance on Georgia state forms, employers can use the following methods:

8. Document and Store Payroll Records

Per the Fair Labor Standards Act (FLSA) and Georgia Statute 34-4-5, employers in the state of Georgia are required to record, document, and store employee records. For each employee, the following information is required to be recorded and stored:

• Employee's full name and Social Security Number
• Address, including zip code
• Birth date
• Sex and occupation
• Time and day of the week when an employee's work week begins
• Hours worked each day
• Total hours worked each workweek
• The basis on which employee's wages are paid (e.g., "$9 per hour", "$440 a week", "piecework")
• Regular hourly pay rate
• Total daily or weekly straight-time earnings
• Total overtime earnings for the workweek
• All additions to or deductions from the employee's wages
• Total wages paid each pay period, date of payment, and the pay period covered by the payment

The state of Georgia does not have designated requirements for how long private employers must maintain their payroll records. However, private employers must still keep all payroll records for at least three years and maintain records for determining wages for two years, per the FLSA.

9. Complete Year-End Payroll Tax Reports

By January 31 of each year, employers are required to issue to employees and file W-2s for the previous year as part of year-end payroll reporting. For contractors, businesses should use 1099 forms.

W-2s for each employee are typically completed via payroll software and show important information, including annual earnings, taxes withheld, and other information the employee needs to file their state and federal income tax returns.