How to switch payroll providers mid-year
You can switch payroll at any point in the year. Doing it cleanly comes down to timing and moving the right records over.
1. Pick your start date
The cleanest switch date is the first payroll of a new quarter. Your old provider files that quarter's returns, and the new one starts fresh. Switching mid-quarter works too; it just means more data to move.
2. Gather your records first
- Federal EIN and your state tax and unemployment account numbers
- Year-to-date pay and tax totals for every employee
- Employee details: W-4s, state withholding forms, direct deposit information
- Deductions such as benefits, retirement contributions and garnishments
- Contractor payments made so far this year, for 1099s
3. Load year-to-date totals
This is the step that protects your W-2s. If the new provider has your year-to-date figures, it can issue one correct W-2 per employee at year end. Ask whether they import these for you or whether you enter them.
4. Run a test payroll
Before your first live run, compare one pay period side by side: gross pay, taxes and net pay should match what your old provider calculated.
5. Tell your team, then close the old account
Let employees know where to find pay stubs going forward. Keep the old account open until its final quarterly filings are confirmed, and download your payroll history before you cancel.
If you have employees in several states or complex benefits, ask your accountant to check the year-to-date figures before your first payroll with the new provider.
Comparing providers? See our payroll comparison and cost calculator.