How to Switch Payroll Providers

If you’re reading this chances are you recently made the considering a switch with your payroll software. Now that you know you want to switch, you need to figure out the logistics behind that switch. With so much information put into your payroll software it can be an overwhelming thought to entertain a change, but if you know what information to pull and where to pull it from it really isn’t too daunting. 

What Business Information is Required?

A few necessary documents are all you need to present to your new provider for them to begin the installation process for your payroll. The first document deals with your business tax information - this can be a federal tax deposit coupon or a copy of federal correspondence that signifies your taxpayer ID name, address, and FEIN. Next you will need a state unemployment document with your MESC account number and rate. A copy of the registration for Michigan taxes or proof of online registration works as well. Lastly, a voided check is required for the account that payroll will be drawn from. All checks and electronic fund transfers (EFT) will be done through this account. 

If you plan on utilizing special calculations, company wide checks, or court vendor checks you will need to gather a few more documents. If you will need your new payroll vendor to produce company wide checks or court vender checks you need to include the company name, address, and any other information that needs to be on the check. For special calculations such as a match or vacation accrual, a copy of your company policy is sufficient. 

What Employee Information is Required?

When you are switching to a new payroll provider you need to provide information for both active and terminated employees during the current year. You need to provide information on terminated employees in order to supply them with their year-end W-2’s. 
The following employee information is needed for payroll:

  • Name
  • Social security number
  • Address
  • Tax information
  • Salary amount per pay period, or hourly rates if applicable
  • Direct deposit information
  • Voluntary deductions
  • Friend of the court and garnishment information
  • Any information you want track (phone numbers, birth dates, hire dates, etc)

Previous Payroll Documentation

Providing your new payroll company with previous payroll documents is extremely helpful in order to cross-reference information. If available, it is a good idea to provide the most recent list stating all your company pay types (vacation, sick, commission, etc), all deductions (medical, dental, 401K, etc), and any timesheets or reports you currently receive with your payroll. This information is helpful because it allows your new payroll provider to begin setting up your company payroll without having to continuously reach out to you with questions. Any payroll information you currently have should be passed on to your new provider. 

Hopefully this gives you a better idea of what information is needed in order to execute a switch in your payroll software. Once your new provider has all the above information they can begin loading in your employees and setting you up for payroll success. 

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