SequiPay | Setting Up W-2 Payroll

Use this guide when you need to:

The first step captures basic details about your business.

Navigate to the W-2 payroll setup section in your Sequifi admin settings.

You'll see a form asking for company information.

Fill in your company details, paying special attention to Company Type.

This field is critical. Your selection must match exactly what's on file with the IRS for your company's EIN. Options include:

Why this matters: S-Corps and other entity types have specific tax consequences. Selecting the wrong type can cause tax reporting issues.

If you're unsure of your company type, check your EIN registration documents or consult with your accountant before proceeding.

Click Save to move to the next step.

For each state where you have employees or operate, you'll need to provide state tax information.

Click Edit next to the state you want to configure.

You'll see a form with several tax-related fields.

Gather the following information before you start:

You'll need your state tax documents handy. Specifically, look for your annual SUTA rate change form that your state sends each year.

Fill in these required fields:

Important: The Tax Account Number and SUTA Account Number are different values. They may look similar, but they're separate numbers.

If you don't have these documents:

Click Save when you're done with this state.

Repeat for each state where you have employees or work locations.

Some states like New York have location-based taxes that will appear automatically based on the address you enter.

This step verifies company ownership for compliance purposes.

Upload a government-issued photo ID for each company owner with 20% or more ownership.

You'll need:

Acceptable forms of ID include driver's licenses and passports.

If you have multiple owners with 20% or more ownership, contact support after uploading the first owner's ID. We'll help you submit additional owner information.

Why this step is required: This is for OFAC compliance (Office of Foreign Assets Control). It protects everyone involved by ensuring no owners are on restricted lists.

Click Continue once your ID is uploaded.

This step collects the account you'll use to fund payroll.

Enter your bank account and routing number for the account that will be used to pay employees.

This is the account funds will be pulled from when you process payroll.

Double-check your account and routing numbers before saving. Incorrect banking information will delay payments.

Click Save to continue.

This configures how often you'll run payroll.

Select your pay frequency from the dropdown. Options include:

You can add multiple frequencies if you have different employee groups with different pay schedules.

Set your holiday payment preference: Choose what happens if payday falls on a holiday (pay before or pay after).

Important timing note: W-2 employees must be paid according to their set frequency. This is a legal requirement in most states, so choose a schedule you can consistently maintain.

Click Save when finished.

These policies track paid time off for your employees.

Only sick time policy is required to run payroll. Other policies (like PTO) are optional.

If you offer paid time off:

Click Add Policy and configure:

If you don't offer paid time off:

You still need to create a policy, but you can set it to zero accrual:

This creates a policy that exists in the system but doesn't give employees any accrued time off.

Important: "Do Not Track Balances" means unlimited PTO, not zero PTO. This has legal implications:

Zero accrual means employees cannot take paid time off.

If you have both W-2 and 1099 workers:

Create separate policies and name them clearly:

Set 1099 policies to zero accrual, and assign the appropriate policy to each position.

State requirements: Some states (like California) require sick time policies regardless of your company's preferences. If you have remote employees in those states, the requirement applies even if your company is based elsewhere.

Click Save when your policies are configured.

This configures how the system calculates overtime.

If your employees don't clock in/out and you enter hours manually, you can use the default settings and skip detailed customization.

If your employees track time:

The default work week is:

Only create custom work weeks if you have employees with non-standard schedules (like medical field workers with Wednesday-to-Wednesday weeks).

Employees automatically go into the default work week unless you assign them to a custom one.

Click Save to continue.

This determines how time sheets are managed and approved.

Fill in the following fields:

Understanding "Who Files Time Sheets":

Most companies should select "Client" because you don't want employees modifying time sheets without oversight.

Click Save when finished.

Once your setup is complete, here's how payment processing works.

Funding Methods:

Important timing notes:

Making changes after submission:

Changes must be made before payroll is finalized. Once payroll is sent to the bank, stopping payments requires support intervention, and there usually isn't enough time to stop processing.

Best practice: Review everything carefully before finalizing payroll. Use the approval screen to catch issues before submission.

SUTA rates vary by company:

Two companies in the same state can have different SUTA rates. Always use your company's specific rate from your annual SUTA rate change form.

Don't assume SUTA exemption:

There's no simple rule for determining exemption. Only check "exempt from SUTA" if you have confirmed documentation proving your exemption. When in doubt, leave it unchecked.

Tax Account Number vs SUTA Account Number:

These are two different numbers. They may look similar, but they serve different purposes. Make sure you're entering the correct number in each field.

Don't manually add payments outside of payroll:

This causes tax reporting problems. If you need to correct a payment error:

PTO vs unlimited PTO:

"Track and Accrue" with zero accrual means no paid time off. "Do Not Track Balances" means unlimited PTO and requires a written policy.

Company Type must be accurate:

Double-check that your Company Type selection matches your IRS registration. This affects tax reporting and compliance.

Review before finalizing:

Once you submit payroll, you can't easily stop or modify it. Always review the approval screen carefully before clicking finalize.

Now that your W-2 payroll is set up, you might want to:

If you need help with W-2 payroll setup or run into any issues, reach out to our support team. We're here to help you get payroll running smoothly.