business owner looking at computer while on phone

How do I Switch Payroll Providers?

If you’re thinking about switching payroll providers, first decide when you want to make the change. Generally, the best time to switch providers is at the beginning of the year or quarter. This will make it easier to transfer your financial records and year-to-date information.

You can, however, switch payroll providers at any time. If you change in the middle of a quarter, your new provider can help you input your previous payroll information to make sure your year-to-date information and tax forms are accurate.

After you’ve decided when you want to switch, follow these steps to make the process as easy as possible.

download how to switch payroll providers

1. Determine why you’re changing

You might want to switch because your current provider is too expensive, doesn’t give you the customer support you need, or doesn’t offer the features you need. Make a list of reasons for leaving your current provider, so you know what to look for in potential new programs.

Read also: 5 Reasons Your Small Business Needs Payroll Software

2. Select a new provider

Once you know why you’re leaving your current provider, start looking for a new one. Find software that fits your budget and offers the features you need. Ask potential providers for product demos and trials to get hands-on experience and find the solution that works best for your small business.

Start your free trial of Workful today!

3. Gather everything you need for the new provider

Gather everything you’ll need for the new system, so you have it all in one place and can make the change quickly and easily. You’ll need information like:

  • employees’ names, birthdays, addresses, and social security numbers
  • employees’ bank information (if you pay by direct deposit), salaries and wages, withholdings, and deductions
  • Federal, state, and local tax identification numbers
  • year-to-date and quarter-to-date numbers for each worker

Read also: How to Get an Employer Identification Number

4. Enter everything into the new system

Now that you have everything you need, enter it all in your new payroll program. Don’t be afraid to ask questions during this step to ensure you’re setting everything up correctly. It’s important to get it right the first time, so you don’t have to correct mistakes later.

5. Close your account with your previous provider

Ask for copies of your payroll register reports and tax forms, then close your account with your last payroll company. You want to make sure you’re not getting charged for something you’re not using.

6. Run your first payroll

If you’re switching providers at the beginning of the year or the quarter, go ahead and run your last round of paychecks of the previous year or quarter with your current provider. Then, run your first payroll of the new year or quarter with your new system to get a fresh start.