Payroll software for startups is bought for one reason, so that a founder never files a payroll tax form by hand, and it should be judged on exactly that: it registers the company with the state, withholds the employees' taxes, deposits the employer's share of Social Security and Medicare and the unemployment taxes on time, pays the people on the schedule and issues the year-end forms. What it does not do is tell the founder what the team costs against the cash, which is the free payroll for startups calculator's job on this site.
The filings are the product
Federal withholding and deposits, the employer's share of Social Security and Medicare, federal unemployment tax on the first slice of each employee's wages, state registration, withholding and unemployment insurance in every state an employee works from, and the year-end forms for employees and contractors. Ask the software which states it files in and what it charges to add one; a remote hire in a new state is a new registration.
The journal has to land in the books as the loaded cost
Each payroll run should post to the accounting software as separate lines: gross salaries, employer taxes, benefits and the provider's fee. A single salary line under-reads the burn by the employer load, which on a small team is most of a hire. Check the journal mapping on the first run and again when benefits are added.
The runway is the founder's reading, not the software's
Payroll software reports what was paid; the runway is what the cash buys at that rate, and it needs the other spend, the revenue and the bank balance the software never sees. The calculator on this site takes the headcount and the average salary with the employer taxes and benefits as percentages, and prints the loaded payroll, the burn and the months of runway; Pro keeps each hiring plan as a scenario against the record.
Questions people ask about payroll software for startups
What should payroll software for a startup include?
State registration, withholding and deposits, the employer taxes, unemployment insurance in every state with an employee, year-end forms, and a journal that posts to the books with the employer costs separated.
Does payroll software calculate the startup's runway?
No. It reports what was paid; the runway needs the other spend, the revenue and the cash, which the calculator on this site takes alongside the payroll figures.
What does a remote hire in another state change?
A new state registration and unemployment insurance account, and often a different rate; ask the software what it charges per state before the offer goes out.