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Add an employee (with their W-4 and state withholding)

One form covers pay setup, the federal W-4, and state withholding; SSN and bank details go in an encrypted section right after you save.

1. Open EmployeesIn Books & Payroll, click Employees in the left rail, then "Add Employee." To change someone already there, click the Employees tab on that screen and the pencil at the end of their row.
2. Name, role, and classificationEnter the name and an optional Role / title. Leave Classification on "W-2 employee" for a regular payroll employee. A "1099 contractor" fills out a W-9 instead of a W-4, so leave the W-4 boxes alone for them.
3. Work statePick the state they work in (North Carolina, Virginia, Texas, Florida, South Dakota and Michigan). It decides which state's income-tax withholding and unemployment tax apply to their paychecks. Texas, Florida and South Dakota do not tax wages, so the state boxes go away for them.
4. Pay type and rateChoose hourly or salary. Fill in Hourly rate ($/hr) or Annual salary ($/yr). Type dollar amounts as plain numbers like 25.00 — the form handles the cents. There's also a "Commission rate ($)" box if you pay commission on top; leave it blank if not.
5. Pay frequencySet Pay frequency to how often you actually run payroll: Weekly (52/yr), Every 2 weeks (26/yr), Twice a month (24/yr), or Monthly (12/yr).
6. Federal W-4: filing status and Step 2Under "Federal W-4," copy the Filing status from the W-4 the employee handed you. Check "W-4 Step 2 box checked" only if they checked that box on their form.
7. Federal W-4: the dollar boxesDependent credit ($/yr) is the dollar amount from Step 3 of their W-4. Other income ($/yr) is Step 4a and Deductions ($/yr) is Step 4b: copy those lines if filled. Extra withholding ($/period) is Step 4c, any extra flat amount they asked to have withheld each check. If they left a line blank, leave the matching box blank here too.
8. State withholdingSet the state Filing status and enter Allowances from the employee's state withholding form. Virginia employees also get an Additional exemptions (VA) field from the VA-4. Michigan employees get one box, Exemptions claimed, from the MI-W4; Michigan city income taxes are not withheld yet.
9. Save the basicsClick "Save employee." The form stays open, and a "Sensitive data" section appears under it.
10. SSN and bank detailsIn the "Sensitive data" section, enter the SSN, Date of birth, and — for direct deposit — Bank routing #, Bank account #, and Account type, then click "Save sensitive data." These are encrypted at rest; afterward only the last 4 digits ever show.
11. Overtime exemption, hire date, PTOOn a farm, check "Agricultural OT exemption" for farm workers exempt from federal overtime (FLSA §13(b)(12)). Fill in Hire date and, if you offer paid time off, "PTO hours / pay period."