Paying employees in Georgia is more straightforward than in more complex states like California. Like most states, employers pay state income taxes as well as employees. Understanding how to do payroll in Georgia requires knowing any unique Georgia payroll laws around workers compensation, state unemployment, and income tax brackets.
If you need help processing payroll in Georgia, consider using payroll software like Gusto. It pays and files federal, state, and local taxes, so you don’t have to. You can also pay employees via check or direct deposit at no extra cost. Sign up for a free 30-day trial.
Step-by-Step Guide to Running Payroll in Georgia
Step 1: Set up your company’s Federal Employer Identification Number (FEIN) with the Internal Revenue Service (IRS). If your company is brand-new, you may need to apply for a FEIN. This is a simple process completed entirely online via EFTPS. If your company already has one, keep the FEIN nearby as it is required to pay federal taxes.
Step 2: Register your business in Georgia. Any company that pays employees in Georgia must register with the Georgia Secretary of State. The Georgia Department of Revenue provides a comprehensive guide to help you tick all the boxes of proper registration, including how to calculate and withhold payroll taxes.
Step 3: Set up your first payroll. This isn’t where you actually start running payroll but rather begin your process of setting it up. There are many ways to calculate payroll, and it’s up to you to decide which is best for your business. You can use payroll software, a calculator, or even Excel.
Step 4: Collect employee payroll forms. Most efficiently done during onboarding, your employees need to complete various payroll and employment forms. All employees must complete I-9 verification no later than their first day on the job. You need to keep I-9s even after the employee no longer works for the company.
Every employee must also have a completed W-4 on file. Unlike some states, Georgia requires a state specific W-4, called the State of Georgia Employee’s Withholding Allowance Certificate. Employees must also provide you with direct deposit information.
Step 5: Review and approve time sheets. Companies record time in a variety of ways. Whether electronic or paper time sheets, you need to collect, review, and approve them. Georgia employers must pay employees regularly and at least twice monthly. So, you need to make sure you begin this process several days before the scheduled payday to make sure you have enough time. Having employees sign their time sheets is a good idea, whether they do so electronically or by pen on paper.
Step 6: Calculate your payroll, including taxes, and pay employees. Calculating every employee’s pay, the taxes owed by them and the company, and the deductions and withholdings required will be a huge challenge if you do it by hand, especially if you have more than a few employees. You will be able to simplify your life and reduce mistakes if you use a standard process and payroll software to calculate pay automatically.
Step 7: Pay federal and state payroll taxes. At each regular payroll run, you must pay federal and state taxes. The IRS provides instructions on paying federal taxes, and the Georgia Department of Revenue provides instructions on paying state taxes.
Step 8: Save your payroll records. This step is often overlooked but is also one of the most important. It is vital that you keep detailed payroll records showing that you have regularly and correctly paid every employee, as well as state and federal taxes. Federal law requires you to maintain these records for three to four years, and Georgia’s law aligns for all private employers.
Learn more about doing payroll yourself in our guide on how to do payroll. It even has a free checklist you can download to make sure you don’t miss any steps.
Georgia Payroll Laws, Taxes, and Regulations
Doing payroll in Georgia is very similar to doing payroll in other states. Most regulations follow federal laws, so you are less likely to get confused by conflicting rules. No municipalities or cities in Georgia charge additional taxes so this simplifies the process even more.
Georgia Payroll Taxes
Beyond federal taxes, Georgia levies state taxes on businesses and employees. Businesses must calculate and withhold the correct amount of tax from both employers and employees.
Employer Unemployment Taxes
Georgia does not have state disability insurance, but it does have State Unemployment Tax Act (SUTA) taxes. The current rate for employers ranges from 0.04% to 7.56% on a wage base of $9,500. With few exceptions, every employer in Georgia must pay SUTA.
Any Georgia employer with three or more full-time, part-time, or seasonal employees must carry workers’ compensation insurance coverage. Depending on the industry in which your business operates, your premiums will vary.
Georgia has a progressive income tax system, meaning that the more an employee makes, the more they are taxed. Georgia’s income tax has six brackets ranging from 1% to 5.75%. Make sure that you are withholding the correct amount for each of your employees, especially as their salaries change over time.
Georgia Minimum Wage
Georgia’s minimum wage is currently $7.25 per hour, aligned with the federal minimum wage. For tipped employees, the minimum wage is $2.13 per hour. The tips the employees receive make up the difference, but if an employee’s tips do not get them to the $7.25 per hour minimum wage, the employer must make up the difference.
Georgia’s overtime rate is time and a half. So, if an employee makes minimum wage, any overtime hours they work will be paid at $10.88 per hour. Georgia only requires overtime pay when an employee works over 40 hours in a single workweek.
Georgia requires that employers pay employees at least twice per month. Companies are free to run payroll more frequently. Regardless of the pay schedule your company uses, you must have regular and consistent pay days. Employers in the farming, sawmill, and turpentine industries are not subject to this requirement and may pay employees just once per month.
Georgia employers have several options for paying employees:
Check out our guide on ways to pay your employees for more guidance.
Pay Stub Laws
Georgia has no requirement for businesses to provide pay stubs to employees. Your business may choose to do so and, if you use a payroll software, it may create one automatically.
If you’d like a template to make creating your own pay statements easier, then download one of our free paystub templates. They’re already formatted, so you can print and use them today.
Georgia Paycheck Deductions
Georgia does not specify what deductions can be taken out of an employee’s pay, aside from taxes. Because of this ambiguity, employers may be able to deduct the following, provided that it does not take the employee’s hourly pay below the minimum wage:
- Cash register shortage
- Damage or loss of employer property
- Uniform fee
- Tool or equipment fee
- Other items necessary for employment
Terminated Employee’s Final Paychecks
Georgia has no specific law or regulation detailing when or how an employer pays wages to a recently resigned, laid off, or terminated employee. To be safe, we recommend that you follow normal payroll practices and simply pay them their final paycheck during the next regular run; this aligns with federal regulations as well.
Georgia HR Laws That Affect Payroll
Many of Georgia’s HR and employment laws align with federal regulations. However, there are some additional employment laws and regulations you need to be aware of to make sure your company remains compliant.
Georgia New Hire Reporting
Employers are required by law to report all new hires to the Georgia New Hire Reporting Center. You must do this within 10 days of the employee’s start date. You must report new hires, re-hires, and temporary employees. No business is exempt from this law.
Georgia does not require employers to provide breaks, paid or unpaid, to employees. Businesses in the state are still required to follow federal law and may choose to provide paid breaks beyond that. So, at a minimum, companies in Georgia must pay employees for small breaks, around five to 20 minutes.
Georgia Child Labor Laws
Georgia does not restrict workers 16 and over from working. Employees under 16, however, are restricted from working more than:
- Four hours on a school day
- Eight hours on a non-school day
- 40 hours during a non-school week
In addition, workers under 16 cannot start work before 6 a.m. or finish work after 9 p.m. No workers under 16 can work during school hours.
Time Off and Leave Requirements
Georgia doesn’t regulate paid time off (neither does the federal government). However, you will need to pay attention during voting season, as you are required to allow employees time off to cast their ballots.
Paid Time Off
Georgia does not have a law requiring employers to offer employees paid time off. Employers are free to create paid time off policies as they see fit for their business.
Paid Sick Leave
Georgia has no law requiring private employers to give employees paid sick leave. Employers are able to do so on their own. Public employees in Georgia do get paid sick leave at a rate of 10 hours of sick leave per month worked.
Georgia law does not require employers pay employees when taking time to vote, but companies may choose to do so. What Georgia does require, however, is that employers provide employees with at least two hours of leave to vote if the employee has given reasonable notice and the polls are not open for at least two hours before or after the employee’s shift begins.
Georgia Family Leave
Georgia follows the Family Medical Leave Act (FMLA). The FMLA provides for up to 12 weeks of unpaid leave for employees when they give birth or adopt a child. During these 12 weeks, their job is secure and they may take any paid time off benefits provided by their employer.
Payroll forms can vary from state to state. Fortunately, the only state-specific form your employees need to worry about is the Georgia W-4. There are three forms that are applicable to Georgia employers (you’ll likely qualify for two of them):
- G-7: Required for businesses submitting quarterly tax returns and may be filed electronically
- DOL-4A: Only required if you’re a household employer, meaning you’re paying nannies, caregivers, and other staff who work at your home; you’ll use it to report quarterly tax and wage reports
- DOL-4N: This form is used to submit quarterly employee wages, tax information, and account changes
Federal Payroll Forms
Here is a complete list and location of all the federal payroll forms you should need:
- W-4 Form: Provides information on employee withholdings so you can properly calculate and withhold federal and state income taxes
- W-2 Form: Used to report total annual wages for each employee
- W-3 Form: Used to report total annual wages for all employees
- Form 940: To calculate and report unemployment taxes due to the IRS
- Form 941: Used to file quarterly income tax
- Form 944: Used to file annual income tax
- 1099 Forms: Provides information for non-employee contract work
For a more detailed discussion of federal forms, check out our guide on federal payroll forms you may need.
Georgia Payroll Tax Resources
- Georgia Department of Revenue provides many forms, information on the latest laws and regulations, and other employer specific information.
- Tax withholdings may be confusing, and reviewing Georgia’s Employer’s Tax Guide may help you.
- For extensive information on how to get workers’ compensation coverage, Georgia’s Department of Labor offers guidance.
Learning how to do payroll in Georgia can seem complicated at first glance. However, the state follows federal regulations fairly closely, and you only need to concern yourself with less than a handful of state-specific forms. Once you make sure your business has the proper registrations, completing regular payroll runs becomes routine. By keeping up with ever-changing employment laws and regulations, you can make sure you get your Georgia payroll right every time.
To help ensure you don’t make any mistakes, consider using a payroll software like Gusto that you can rely on to keep you updated on new laws and help you cover each step of the payroll process. Gusto helps you file accurately and on time, pays employees with direct deposit for free, and offers health insurance benefits. It will even foot the bill if its reps are ever wrong and you end up facing penalties. Try it free for 30 days.