Setting Up Payroll
Reading time: 10 minutes
Enable payroll, add your first employee, configure tax withholdings, and run your first pay cycle. By the end of this tutorial you will have processed a complete payroll with journal entries posted to your general ledger.
Prerequisites
- An Atlas account with Admin role or above
- Company tax identification numbers (EIN for US)
- Employee information: name, address, tax forms (W-4), bank details for direct deposit
Step 1: Enable Payroll
- Navigate to Settings > Modules
- Toggle Payroll to enabled
- Configure company-level payroll settings:
- Filing jurisdiction — federal + state/province
- Pay frequency default — weekly, bi-weekly, semi-monthly, or monthly
- Payroll bank account — the account from which payroll is funded
- Click Save
Step 2: Add an Employee
- Go to Payroll > Employees
- Click New Employee
- Fill in the required sections:
| Field | Description |
|---|
| Full Name | Legal name as it appears on tax forms |
| Email | For paystub delivery and self-service portal access |
| Start Date | Employment start date |
| Department | Used for dimension-based reporting (optional) |
Tax Setup
- Filing Status — from the employee's W-4 (Single, Married Filing Jointly, etc.)
- Federal Allowances — from the W-4
- State Withholding — varies by jurisdiction
- Additional Withholding — any extra federal or state amount
Compensation
- Pay Type — Salary or Hourly
- Rate — annual salary or hourly rate
- Pay Schedule — select from the configured frequencies
Direct Deposit (Optional)
- Bank Name
- Routing Number
- Account Number
- Account Type — Checking or Savings
- Click Save Employee
- Open the employee profile
- Go to the Deductions tab
- Add applicable deductions:
| Deduction Type | Example |
|---|
| Pre-tax | 401(k) contribution, health insurance premium |
| Post-tax | Roth 401(k), garnishments, charitable donations |
| Employer-paid | Employer health insurance match, FICA |
- For each deduction, set:
- Amount or percentage per pay period
- Effective date range
- GL account for the deduction liability
- Click Save
Step 4: Run Your First Payroll
- Go to Payroll > Pay Runs
- Click New Pay Run
- Select the pay period dates and pay date
- Atlas auto-calculates for each employee:
- Gross pay (salary/hours)
- Federal and state tax withholdings
- Pre-tax and post-tax deductions
- Net pay
Review the Pay Run
| Column | Description |
|---|
| Gross Pay | Total earnings before deductions |
| Taxes | Federal, state, local, FICA |
| Deductions | Employee contributions |
| Net Pay | Take-home amount |
| Employer Costs | Employer-side taxes and benefits |
- Review each employee's calculation
- Click Approve Pay Run
- Click Process to finalize
What happens behind the scenes: Atlas creates journal entries for salary expense, tax liabilities, deduction liabilities, and the cash disbursement — all balanced in double-entry.
Step 5: Review Paystubs
After processing:
- Go to Payroll > Pay Runs and open the completed run
- Click on any employee to view their paystub
- The paystub shows:
- Earnings breakdown
- Tax withholdings
- Deductions
- Net pay
- Year-to-date totals
Employees with self-service portal access can view their paystubs at any time.
Step 6: Tax Filing Calendar
Atlas tracks your payroll tax obligations:
- Navigate to Payroll > Tax Calendar
- View upcoming deadlines:
- Federal 941 quarterly deposits
- State unemployment (SUTA)
- Year-end W-2 generation
- Atlas provides reminders before each deadline
Troubleshooting
| Issue | Solution |
|---|
| Cannot enable payroll | Ensure you have Admin role |
| Tax calculations seem wrong | Verify employee W-4 settings and filing status |
| Direct deposit not available | Check that bank details are complete |
| Pay run stuck in Draft | Click Approve, then Process |
What's Next
After your first payroll:
- Add remaining employees and set up their deductions
- Configure benefit plans for health insurance and retirement
- Set up recurring pay runs for automatic processing
- Review the Payroll Expense report in Reports