Processing W-2 Payroll through Paychex
- Daniel Kalman
- Jul 25, 2024
- 2 min read
This task is finance-related, so Danny would prefer the manager to do it than anybody else on the team. Basically the way it works is by law. Danny is required to be a W-2 employee of the organization, which is different from a 1099 contractor.
As a W-2 employee, he is required to process official payroll and it's very complicated (basically there's a company that does everything for us). He's required to pay himself a salary from Movers and Shakers bank account to his personal bank account. It's really just moving money from one pocket to the other. It has tax implications and it's a legal requirement. That's all.
How it works
This is how the numbers work basically. The technical payment amount is ~$3000 per month. There are adjustments to that that are quite confusing. Even Danny doesn't understand them, but basically there are two adjustments for a solo 401K retirement account. And then there's an adjustment for medical insurance premium payments that are paid through the company. To make it simple, we just tell them to make all the numbers match the previous month and we’re good to go.
Call Paychex
There's one action that needs to be taken every month, and that is to call the payroll company to process the payroll payment. The company is called "Paychex". Danny has invited the manager to be a member of his Paychex account.
Around the 10th of every month, the manager should call them and say "I'd like to process payroll for the previous month". They're going to ask for the client ID, your name and supposedly that's the only security information they need. It does not have to be exactly on the 10th of each month, but try to make it within a few days.
Phone number to call: +1602-266-3660 (mountain time)
Paychex voice prompts: Select "Current Paychecks Customer", and then payroll through Paycheck Flex (press 2 and 1).
After Confirming Initiation of Payroll Processing
Inform Danny on Signal each time you complete the payroll processing. Also, make a monthly recurring event on your calendar to process this around the 10th of each month.