Switching payroll platforms can feel like a big lift, but it doesn’t have to be. With the right preparation, you can make a clean and confident switch that improves your workflow instead of disrupting it.
The key is timing. Make the move between pay cycles, carry over year-to-date data accurately, and update your banking and state tax information in advance. Whichever payroll system you choose, make sure you understand its onboarding process and setup timeline so you are not caught off guard.
Let’s walk through what to expect and how to get it right.
How can I make sure no one misses a paycheck?
Payroll runs on a strict schedule. And nothing shakes team trust faster than a late or missing payment. Switching systems at the wrong moment can easily cause delays or confusion.
To avoid that, aim to switch right after you finish a pay period but before you start processing the next one. That gives you a clean break without overlapping deadlines or data. Give yourself a buffer when planning the transition: extra time helps account for setup issues, import delays, or unexpected troubleshooting.
Here is how to handle it:
- Complete your final payroll in the old system
Double-check hours, pay rates, bonuses, deductions, and tax withholdings. Once everything is accurate and submitted, close it out. - Tell your team what to expect
Let employees know when the switch is happening and who they can contact if questions come up. Clear communication builds trust and prevents last-minute stress. - Make sure employee data is ready to go
Before your first run in the new platform, confirm all employee details are entered and verified:- Bank account info for direct deposit
- Tax withholding elections (W-4s or state equivalents)
- Pay rates, schedules, and any recurring deductions
- Year-to-date earnings and tax data, if needed for reporting continuity
- Start fresh in the new system
Begin with a clean pay cycle. Do not try to split one pay period between two platforms. That is where errors and duplicate payments usually happen.
Plan your timing, keep people informed, and follow each step carefully. That is the best way to make sure every paycheck lands right on time.
Why Year-to-Date Payroll Data Matters
Year-to-date data includes everything your business has paid each employee since January 1: wages, taxes, deductions, and benefits. Your new payroll system needs that history to stay accurate. Without it, things can go sideways fast.
Here is what can happen if this step is missed or done wrong:
- W-2s might be incorrect, leading to tax-time headaches
- Taxes could be overpaid or underpaid
- Benefits, deductions, and garnishments might not carry over correctly
To stay on track, gather this information for each employee:
- Gross wages paid so far this year
- All federal, state, and local taxes withheld
- Deductions for benefits, retirement plans, and wage garnishments
- Accrued paid time off or sick leave
- Any off-cycle payments or manual corrections
Some of this can be imported directly, but unusual items, like garnishments or specific state deductions, may need manual input. Once everything is in, double-check your totals. It is worth the time to make sure everything adds up before you move forward.
Double-Checking with State Accounts and Bank Links
If you run payroll in more than one state, take a moment to confirm that your registrations are current. Your new system will need to know exactly where you withhold taxes and which state account numbers to use. If those numbers are off or missing, you could end up with penalty letters or late fees.
Also, be aware that some states make you formally authorize your new payroll provider. That might mean filling out forms, logging into state portals, or submitting a power of attorney. None of these are things you want to scramble through the day before payday.
On the banking side, confirm that your business accounts are properly linked. Direct deposits and tax payments rely on verified connections, and that verification can take a few days.
Finally, if you’ve changed addresses, updated state IDs, or opened or closed any local tax accounts, be sure those changes are reflected in the new system.
Common Mistakes
Even with a solid plan, small details can sneak past you during a payroll switch. These are the ones that catch business owners off guard most often:
- Ongoing wage garnishments or child support orders
- One-time or off-cycle payments
- Unusual deductions, like commuter benefits or wellness stipends
- Retroactive pay corrections or manual adjustments
- State and federal filings that fall during the transition, especially if you’re switching mid-quarter
One way to catch these early is to run a test cycle in both systems. Use your real data, but only process payroll through the old platform. Then compare the two line by line. You’ll spot errors before anything hits your employees’ bank accounts.
And if your payroll system is connected to benefits, retirement plans, or HR tools, make sure those links still work. Better to confirm now than during open enrollment.
The Bottom Line
Switching payroll systems is a big decision, but with the right preparation, you can move forward confidently. Walk through your checklist:
- Did you time the switch after your last pay run and before the next one?
- Did you gather and review all year-to-date numbers?
- Are your state payroll accounts and bank connections fully set up?
- Did you test the new system by running a parallel payroll?
If you’re answering yes, you’re likely ready. If anything feels off, bring in your accountant or payroll provider. That extra set of eyes can help if you work across multiple states, offer unique benefits, or have a complicated team setup.
Need a quick gut check before you move forward? Schedule a call with DiMercurio Advisors. We’ll help you walk through each step and make sure nothing gets missed.
