Table of Contents

Set up employees and process your first payroll

After configuring payroll settings, add your employees and process a test payroll run to confirm that everything works correctly.

Create departments and work locations

Before adding employees, set up the organizational structure they belong to.

To create departments:

  1. Search for Departments.
  2. Add your departments with codes, descriptions, and optional parent departments for hierarchy.

To create work locations (US localization):

  1. Search for Work Locations.
  2. Add work locations with addresses and state assignments for tax purposes.
Tip

Departments and work locations are specific to your organization and must be created manually. The setup data generation doesn't include them.

For more information, see Departments and work locations.

Create employees

Add your employees to OnePayroll. Each employee must be assigned a pay group and employee type to be included in payroll processing.

To create an employee:

  1. Search for Employees.
  2. Select New.
  3. Enter the employee number and name.
  4. On the OnePayroll tab:
    • Assign a Pay Group (for example, BIWKLY).
    • Select the Employee Type, which determines the employee's pay unit and compensation method (Regular or Work-Based).
    • Set the Employment Date.

Required payroll information:

  • Pay group assignment
  • Employee type
  • Tax withholding information (US localization)
  • Payment method details (if applicable)
  • Any garnishments or special deductions

For more information, see Set up employees.

Set up payment methods

Configure how employees are paid.

For direct deposit:

  1. Open the Employee Card and select the Payment Methods action.
  2. Create a new employee payment method.
  3. Set the Allocation Type (Primary, Fixed Amount, or Percentage).
  4. Fill in Bank Account No. and Bank Identifier Code in the Transfer group.
  5. Select a Business Central Payment Method code.

For check payment:

  1. Open the Employee Card and select the Payment Methods action.
  2. Create a new employee payment method with a Payment Method code.
  3. When running Create Payroll Payments, select Computer Check as the payment type.
  4. Print checks through the standard Business Central check-printing process.

For more information, see Set up payment methods and Set up direct deposit.

Configure tax withholding (US localization)

If you're using the US localization, configure tax withholding for each employee.

To configure employee tax settings:

  1. Open the Employee Card.
  2. Configure federal and state income tax withholding.
  3. Verify that the employee's work location is set correctly for state tax purposes.
Note

Tax configuration is part of the US country-specific extension. Other localizations may have different tax setup requirements.

For more information, see Set up tax calculations and Income tax setup.

Process your first payroll

With employees and payment methods configured, process a test payroll run to verify your setup.

To create a payroll run:

  1. Search for Payroll Runs.
  2. Select New.
  3. Set the Pay Group (for example, BIWEEKLY).
  4. Set the Start Date for the pay period.
  5. Select OK. OnePayroll creates the payroll run and calculates all amounts automatically. Status is set to Open.
  6. Review the Payroll Entries for accuracy.
  7. If your setup requires approvals, select Approve to approve the payroll run.
  8. Select Post to post entries to the general ledger. Status changes to Posted.

Verify the results

Review the calculation results carefully before posting. Check that:

  • All expected employees appear in the payroll run
  • Gross pay is calculated correctly
  • Tax withholdings are appropriate
  • All deductions are present
  • GL account mapping is correct
Tip

Process a test payroll run for a small group of employees first. This helps you identify and fix configuration issues before running payroll for your entire organization.

For more information, see Process payroll runs.

What's next

Now that you've completed the initial setup and verified your first payroll:

  • Process regular payroll — Create payroll runs on your established schedule
  • Manage special scenarios — Handle bonuses, off-cycle pays, and corrections
  • Review reports — Use built-in payroll reports for analysis
  • Prepare tax documents — Generate year-end tax forms (US localization)
  • Explore advanced features — Use validation rules and other advanced capabilities

See also

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