First employee onboarding checklist (2026)

Before the offer

This is a process checklist for a US founder hiring the first W-2. It is complementary to First-hire stack (what to buy) and How to choose payroll software for your first employee (which payday). First-month costs after hiring is the budget. Solopreneur to first-hire ops stack is the before-and-after kit. We are not your lawyer, and we are not your accountant.

• Entity and EIN in the name that will appear on the W-2. Payroll will not invent an EIN. IRS.gov if you are eligible to file online.
• A classification decision: W-2 vs 1099. That is counsel, not a Gusto toggle. Contractor Only is a SKU, not a legal opinion.
• Work state(s). Gusto Simple is single-state. A second state is Plus or OnPay’s included-filings story. See Is OnPay worth it.
• Workers’ compensation where your state requires it before the first day. Software will not buy the policy.
• A business-named bank account payroll can debit. Not the founder’s checking. See banking mistakes and LLC banking.
• A written offer: pay, start date, exempt/non-exempt you actually understand. We will not draft it.

The week before start

• Pick payroll and finish setup: Gusto Simple $49 + $6, Square Payroll $35 + $6 if the register is Square, OnPay $49 + $6, or QBO Workforce $50 + $7+ if the books already live in QBO. Confirm the live pages.
• Connect the business account. Run a $1 test debit if the vendor offers one. A failed Friday debit is how you bounce a first paycheck.
• Collect what the product asks for: legal name, SSN, address, start date, pay rate, work location. Do not store a Social in email.
• State new-hire reporting is usually in the payroll product. Confirm it filed. Payroll-tax mistakes is the sibling if you skip deposits.
• Open or clean the ledger. Wave often dies the week of a W-2. QBO Simple Start $38 is the usual CPA request. See when to leave spreadsheets.
• Access: email, password manager, the one CRM or POS they will use. Not five tools “to explore.”

Day one

• I-9 Section 1 by the employee. Section 2 by you within the legal window. Gusto can host; you still examine documents. We are not your I-9 counsel.
• W-4 and state withholding forms in the payroll product — not a paper pile in a drawer.
• Direct deposit. A paper check “until they set it up” is how you invent a process you will hate.
• Time source: the POS, Homebase, or a clock. A shared spreadsheet is how overtime disappears.
• A one-page “how we pay”: pay period, payday, PTO (even if “none yet”), who to email when the debit fails.
• Do not buy BambooHR, Rippling, or an ATS this morning. You have one role.

Software napkins as of September 21, 2026

Gusto Simple $49 + $6 = $55 for one person, one state. OnPay $49 + $6. Square Payroll $35 + $6. QBO Workforce $50 + $7+ plus a QBO subscription ($38 / $85 / $140). Homebase payroll $39 + $6-class. Confirm gusto.com/product/pricing, onpay.com, squareup.com/us/en/payroll/pricing, and intuit.com. Mercury / Relay / Novo / Found advertise $0 checking — confirm eligibility. Year-end payroll checklist is what you owe in January. This is not tax advice.

Skip these

• An ATS. Use email.
• A PEO unless benefits access is the actual reason. Justworks is co-employment.
• Performance management for two people.
• AI interview note-takers as a buying criterion. Aiacent.
• Paying the person as a contractor “until we figure it out.”
• Buying Premium Gusto to look like a company.