Payroll & Contractor Payments

Startup payroll rarely stays simple for long. A team that starts as a handful of local employees often becomes a mix of W-2 staff spread across states, U.S. contractors, and international contractors paid through Deel or Remote — sometimes all within the first year. We handle payroll (or work alongside the provider you already use) with that reality built in, not bolted on after a compliance notice arrives.

This is also one of the areas where getting it wrong carries real risk, not just accounting inconvenience — worker misclassification and unregistered multi-state payroll tax obligations are legal exposure, not just clean-up items.

Multi-State Payroll as Your Team Goes Remote

The moment you hire an employee in a new state, you typically owe state payroll tax registration and withholding there — a requirement that's easy to miss when a hire happens quickly and nobody's tracking it against a compliance checklist. We register and file in each state where you have W-2 employees, and flag the requirement before the hire is finalized, not after the first missed filing.

W-2 vs. 1099 Classification

Startups lean on contractors early, often correctly, but classification tests (IRS common-law factors, and stricter state-level tests like California's ABC test) don't care how the relationship started — they look at how much control you exercise over the work. Misclassifying an employee as a contractor is a real liability, not just a bookkeeping error, and it tends to surface at the worst possible time: during due diligence. We review your contractor relationships against the relevant tests and flag anything that looks like it's drifted into employee territory.

International Contractors

For teams hiring outside the U.S., we work alongside platforms like Deel and Remote to make sure international contractor payments are recorded correctly, currency conversion is handled consistently, and the resulting expense hits the right functional category (engineering, sales, and so on) in your books — not lumped into a generic 'contractor expense' account that tells you nothing about where the spend is going.

Equity-Related Payroll Items

When employees exercise stock options, or when you have early exercises with 83(b) elections, those events sometimes hit payroll (for non-qualified stock options, for example) and need to be recorded correctly — both for the employee's W-2 and for your own books. We coordinate with whoever administers your cap table (Carta or similar) to make sure these events flow through payroll and the general ledger accurately, since this is a common spot for errors that surface during diligence or at year-end.

Payroll and Your Monthly Financials

Payroll data feeds directly into your monthly financials, split correctly by function (R&D, sales and marketing, G&A) so your burn rate and functional expense reporting stay accurate without a manual reallocation step every month.

Working With Your Existing Payroll Provider

If you're already committed to Gusto, Rippling, or another provider, we work alongside them — pulling payroll data into your books correctly, reviewing multi-state registration status, and flagging classification risk — rather than requiring you to switch providers to work with us.

Payroll Around a Fundraise

Payroll tends to change quickly right after a round closes — new hires ramping up faster than usual, sometimes a founder moving from deferred or reduced salary back to a market-rate one. We make sure these transitions are reflected correctly and promptly, since a founder's own comp is one of the first things a diligence team or a new board member will ask about.

Benefits and Contractor Boundaries

Offering benefits to a worker classified as a contractor is one of the clearest signals, in an audit or a classification dispute, that the relationship functions like employment. We flag this specifically when reviewing contractor relationships, since it's an easy line to cross without realizing it — especially for an early hire who started as a contractor and gradually took on a full-time role.