Employer information
- Employer name and EIN.
- Business and employee work locations.
- Pay frequency, workweek, period dates, and pay date.
- Client contact and final payroll approver.
- Existing payroll-tax or wage-reporting provider relationships.
Employee setup
- Employee name and identifying information needed by the employer.
- Employee-versus-contractor status.
- Pay basis and rate.
- Work location.
- Current federal, state, and local withholding setup.
- Authorized recurring deductions or benefits.
- Opening YTD balances if the workflow starts midyear.
A payroll preparer should not casually decide worker classification because the client called someone a contractor. The IRS evaluates the facts and circumstances of control and independence.
Current pay-period inputs
- Approved hours.
- Overtime hours or other premium-pay inputs.
- Bonuses, commissions, tips, differentials, or other earnings.
- Reimbursements or net additions.
- One-time deductions.
- Rate or salary changes and their effective date.
- New hires, terminations, leave, or other status changes.
Prior-period support
The client should provide the last completed payroll record or reliable YTD source when continuity is needed. Do not use an old draft merely because it is easier to find. If the prior period was corrected, the corrected completed version should become the carry-forward source.
Approvals and exceptions
Agree in advance on how the client will approve unusual items: large bonuses, retroactive pay, off-cycle adjustments, missing time, or manual deductions. A clear exception process prevents the preparer from making business decisions that belong to the employer.
Information the client should not casually send
Avoid collecting passwords, banking credentials, full identity documents, or sensitive data that the payroll-preparation scope does not require. Use the minimum information necessary for the task and an appropriate secure channel when sensitive information is required.
Quick FAQ
Can the client just send total gross pay?
Sometimes for a limited record task, but a payroll-preparation workflow usually needs the underlying employee inputs so the preparer can review how the result was reached.
What if time sheets are late?
Use a documented cutoff and escalation process. Do not guess hours or silently carry forward a prior period.
Who approves the payroll?
The engagement should name the approver. For many small businesses that is the owner or an authorized manager, even when a bookkeeper prepares the calculations and records.
LeoFolio pathway
Working with recurring small-business clients? Explore LeoFolio for Bookkeepers and the Pay Run workflow for reviewed payroll records and structured handoff files.
Source notes for editorial verification
- IRS Topic 753 — Form W-4, Employee’s Withholding Certificate
- USCIS — Form I-9 instructions
- IRS — Independent contractor (self-employed) or employee?
- IRS — Outsourcing payroll and third-party payers
- U.S. Department of Labor Fact Sheet #21 — FLSA recordkeeping