Payroll & Compliance
Payroll from gross to net, the 941 cycle, employee versus contractor classification, 1099 season, sales tax basics, and the filing calendar — the part of bookkeeping where mistakes carry penalties.
Start here
7 piecesNo background assumed — the pieces that build the foundation.
Guide · Intro · 8 min
From gross to net: the anatomy of one paycheck
What happens between a $2,000 gross paycheck and the smaller number that hits the employee's bank account — pretax deductions, employee taxes, employer-side costs, the journal entries, and the deposit obligations that follow.
Brief · Intro · 3 min
Workers' comp for bookkeepers: premiums, the audit, and the true-up entry
How workers' compensation premiums are priced off payroll by class code, why the annual audit produces a bill or a refund, and how to book the adjustment.
Brief · Intro · 2 min
Why the W-2 doesn't match the final paystub
The W-2's Box 1 is not gross pay — pretax deductions pull the boxes apart in predictable ways. How to reconcile them and explain the difference to an employee.
Brief · Intro · 2 min
The contractor file: four documents that make January easy
W-9, signed agreement, invoices, and certificate of insurance — the vendor file to build at onboarding so 1099 season and every audit becomes a report you run.
Brief · Intro · 2 min
Household help is not business payroll: the nanny-tax boundary
Why a nanny, housekeeper, or in-home caregiver must never run through the business's payroll or books — and what the household employment rules require instead.
Brief · Intro · 3 min
The small-business compliance calendar: a year of deadlines
A month-by-month map of the recurring federal payroll and filing deadlines — 941s, W-2s and 1099s on January 31, deposits, and the state items you must slot in yourself.
Brief · Intro · 3 min
Payroll provider or DIY: what you're actually buying
What a payroll service really does — calculations, deposits, filings — what it cannot take off your plate, and how to think about the risk math for a small employer.
The working layer
11 piecesThe day-to-day rules, mechanics, and habits.
Guide · Working · 7 min
The 1099 season playbook: from W-9 to January 31
A year-round system for 1099 compliance: collecting W-9s before first payment, deciding who gets a form, the $600 versus $2,000 thresholds carefully dated, NEC versus MISC, filing mechanics, and fixing errors after the fact.
Guide · Working · 7 min
Employee or contractor? The classification question with teeth
How the IRS common-law factors and state ABC tests sort workers into employees and independent contractors, what misclassification actually costs, and the different bookkeeping and forms each path requires.
Brief · Working · 3 min
Reading a payroll penalty notice before you pay it
How to decode an IRS payroll penalty notice, the failure-to-deposit tiers in concept, the abatement paths worth trying, and when to hand the file to a professional.
Brief · Working · 3 min
Tips in the payroll system: employee reporting, employer obligations
How employee-reported tips flow through withholding, the 941, and the W-2 — and what the employer does and does not owe on tip income.
Brief · Working · 2 min
The sales tax filing workflow: cadence, reconciliation, rounding
A repeatable monthly-to-quarterly routine for filing sales tax returns: match the return to the liability account, clear the payment, and handle the pennies of rounding honestly.
Brief · Working · 2 min
Sales tax nexus: when a state can make you collect
Physical presence and economic nexus in concept — what creates a collection obligation, why registration must precede collection, and how to monitor thresholds.
Brief · Working · 3 min
New state, new registrations: payroll accounts before the first paycheck
Hiring in a new state means registering for withholding and unemployment accounts before payday — what triggers the obligation, what to set up, and how remote work changed the map.
Brief · Working · 2 min
Paying the S corp owner: why payroll is not optional
Why an S corporation shareholder-employee must take a real paycheck before distributions, and how to set up and book owner payroll correctly.
Brief · Working · 2 min
Payroll journal entries: the complete set
The four entries every payroll run produces — gross wages and withholdings, employer taxes, tax deposits, and benefit remittances — with balanced examples of each.
Brief · Working · 2 min
Payroll deposit schedules: monthly, semiweekly, and the $100k rule
How the IRS lookback period assigns you a monthly or semiweekly deposit schedule, what each schedule requires, and the next-day rule that overrides both.
Brief · Working · 2 min
Form 941 basics: the quarterly payroll cycle
What Form 941 reports, when each quarter's return is due, and how to tie it to your payroll records before you file.
Pro details
2 piecesThe edge cases and judgment calls.
Brief · Pro · 3 min
Taxable fringe benefits: the non-cash wages hiding in your ledger
Personal use of a company car, gift cards to staff, and other common taxable fringes — how their value flows into payroll and the W-2, and the entries that make it work.
Brief · Pro · 2 min
Fixing a filed payroll quarter: 941-X versus adjusting forward
When a payroll error requires amending a filed Form 941 with Form 941-X, when it can be absorbed in the current quarter, and how the interest-free correction rules work in concept.