Xero in on Xero; Making the Switch to Gusto Payroll

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Congrats on choosing Gusto as your new payroll and benefits provider! In general, any kind of change can feel overwhelming and switching your payroll company is no exception. Are you all prepped for the switch now that you’ve chosen Gusto? I’d like to give you an accounting professionals point of view in making a smooth and stress-free transition. Here are the 4 steps in switching to Gusto. But before we start...

If you are a visual learner like I am, AdvisorFi had the privilege of filming a few AskGusto videos that speak to choosing the right payroll provider and making the switch stress-free:

[Video] How to Choose the Right Payroll Provider for Your Business: https://youtu.be/pNWCIGbWVvE

[Video] How To Switch Payroll Providers: https://youtu.be/JEt_izL31Aw

Step 1: Find the best time to switch to Gusto

Before your company runs a payroll cycle in the new year, the first month of the new year is the obvious choice. It makes doing the cutover of your payroll data clear and precise. You don’t have to be concerned with your former payroll provider submitting payroll documents at the same time as Gusto. Although Gusto understands that it will be responsible for filing year-end reports once a switch-over has been completed, former payroll companies have a tendency of filing year-end reports even though the new provider has taken over. The second best choice to switch to Gusto is the start of a new calendar year quarter (January, April, July and October) as shown below.

But, if neither the first month of the new year or the start of a new quarter works for you Gusto can get you up and running at any time of the year. Just make sure to contact their support team to help with your specific situation if you need a little guidance. To contact Gusto support click here.

Step 2: Let your current payroll provider know that you are switching

Most payroll companies require a 30-day written (email) notice when switching to a new payroll provider. Review your contracts or subscription agreement and ensure that you provide the required amount of notice to your current provider. However, if you are using a cloud-based (online) payroll solution, you might be able to cancel your subscription right away. In either case, letting your current payroll provider know that you are switching is an easy way to ensure your payroll data isn’t duplicated for your payroll year. If you are switching to Gusto from a PEO, here is some information (click here) you’ll need to consider when making that switch.

Step 3: Gather all the information you’ll need and enter it into Gusto

After you have notified your current payroll provider that you are switching, most providers keep your accounts open for you access prior payroll history. This information comes in two parts (1) your company information and (2) your payroll information.

For your company you’ll need;

Locations: Your company’s mailing address and payroll filing address (many times the filing address is the same as the mailing address),

Federal Tax Setup: Your company’s Federal Employer Identification Number (EIN), tax type like S-Corp or Partnership, and the frequency of payroll tax deposits (monthly vs. bi-weekly),

State Tax Setup: Your company’s state-assigned employer account number and unemployment insurance tax rates,

Bank Information: Your company’s routing number, account number and account type of the bank account you’d like to use in Gusto for all things payroll,

For your employee payroll information you’ll need;

Basic Information: Your employee’s full legal name, legal ID information and other details found on their Form W-4,

Compensation: Your employee’s work title, work type such as hourly vs salary, and compensation per year or hour,

Previous Payroll Data: Your employee’s year-to-date (YTD) paystub information from each prior quarter for active and dismissed employees paid during the year and YTD paystub information from the current quarter for active and dismissed employees,

Step 4: Double check the information entered into Gusto and close your old payroll provider

Once you’ve double checked all the information entered into Gusto and you are ready to run your first Gusto payroll, close your old payroll provider account. As a self-check before running your first Gusto payroll, an overview of the Gusto onboarding process described in Step 3 can be seen here.

That’s it! You are ready to start your amazing journey using Gusto payroll and benefits.

Author Bio: Will Lopez is Founder of AdvisorFi.com, an online accounting firm for the next generation of business owners. We provide accounting and consulting services that help unify the entrepreneurial endeavor and empower that endeavor to be universally accessible and useful. We also release entertaining YouTube videos on a regular basis to provide business owners learn tough ideas in a fun way. Twitter Handle: @advisorfi