Payroll startups run in their first year is a founder's job on the last Friday of the month, and the payroll startup founders under-cost is the one where the salary line was taken for the cost. Each hire carries the employer's share of Social Security and Medicare, the federal and state unemployment taxes, the benefits and the provider's fee, and the total is what leaves the bank and shortens the runway. A payroll provider files the taxes and pays the people; the founder decides who is hired and reads what it does to the months of cash. The free payroll for startups calculator on this site works that reading.
The loaded cost is the number the offer letter should be judged by
Take the salary, add the employer's payroll taxes as a share of it, add the benefits and the provider's fee as a share of it, and divide by twelve: that is what one hire costs the company each month. Four hires at an average salary cost four times that, and the calculator on this site prints the per-hire and the total so the next offer is judged on the loaded number rather than the salary.
The provider files, the founder decides
A payroll provider registers the company with the state, withholds and remits the taxes, pays the people on the schedule and issues the year-end forms. It does not decide who to hire or whether the cash covers them. The founder's job is the headcount plan and the runway it leaves; the provider's journal then lands in the ledger with the employer taxes and benefits as their own lines.
Every hire moves the runway, and the record should show it
Runway is cash over net burn, and net burn moves by a hire's loaded monthly cost the month they start. Pro on this site keeps each hire with their salary and start date and each hiring plan as a scenario, so the board sees the runway before and after the plan rather than a single number nobody can explain.
Questions people ask about payroll startups
Can a startup run payroll without an accountant?
Yes, through a payroll provider that withholds, remits and files; the accountant reads the provider's journal in the ledger and signs the year-end return.
What does a hire cost a startup beyond the salary?
The employer's share of Social Security and Medicare, federal and state unemployment tax, benefits and the payroll provider's fee; the calculator on this site adds them as percentages you set.
When should a startup make its first payroll hire?
When the founders stop being the only people paid; from the first employee the company needs a provider, a payroll line in the ledger and a runway reading that includes the loaded cost.