Employee Setup

Overview

Use the Employee Setup screen to add new employees or modify existing employee information in ProPay. This screen contains all essential employee data including personal information, pay rates, tax withholding details, and special employee designations.

Accessing Employee Setup

From the Payroll Main Menu, click Employees.
Choose Add Employee to create a new record, or Change Employee to modify an existing one.
If changing, select the employee from the list.

> Important: If a company uses ProClock, employees cannot be added through ProPay. They must be entered from ProClock first. Existing employees can still be edited in ProPay.

Basic Employee Information

Name entry

First Name, Last Name

Enter the employee's first and last name when adding a new employee. Employee numbers are assigned automatically by the system.

If you have two employees with the same name, add a middle name or initial to one or both for visual identification. The system allows duplicate names, but distinguishing them improves clarity.

Start date

Enter the employee's exact start date if provided by the client. This date is used for calculating service time and benefit accruals.

Email address

Enter the employee's email address if known. ProPay uses this address to:

Email pay stubs
Send W-2 forms
Deliver other payroll-related documents

Web password

This field is left blank by default. When blank, ProPay uses the employee number as the default password.

The web password enables employees to:

Access their earnings history online
View pay stubs
Retrieve encrypted emailed pay stubs and W-2 forms

You can change the password for additional security if needed.

Pay Information

Pay rate

Enter the dollar amount the employee earns:

Hourly employees: Rate per hour
Salaried employees: Salary amount per pay period

Pay Period

Select the employee's pay frequency:

(W)eekly - Every week
(B)iweekly - Every two weeks
(S)emimonthly - Twice per month
(M)onthly - Once per month
(T)erminated - Employee no longer active

Note: If your company has multiple pay schedules, choose the most frequent pay period for the majority of employees.

Note icon Important: Terminated employees are purged at the end of the year. Only active employees transfer to the new year.

Pay type

Select the employee's pay classification:

(H)ourly - Paid by the hour
(S)alary - Paid a fixed amount per pay period

Additional pay rates

Rate 2 through Rate 7

Enter secondary pay rates (Rate 2-7) if applicable to this employee. You can customize the descriptions for these rates in Employer > Deductions Setup.

Other pay

Enter an additional pay rate if needed. The description for this pay type can be changed for each individual paycheck.

Department

Enter the department number if your company uses departmental tracking. This option must be configured first in Employer Setup. Leave blank if not used.

Tax Information

W-4 Form (2020 Redesign and Later)

Employee has filed the redesigned W-4

Check this box if the employee submitted a W-4 form dated 2020 or later.

If checked: Federal withholding is calculated using deductions from the redesigned W-4 form
If unchecked: Federal withholding is calculated using the number of exemptions per IRS Publication 15 (for employees still on a pre-2020 W-4)

W-4 Steps (Redesigned Form)

If the employee filed a 2020 or later W-4, enter information from these steps:

Step 1 - Employee marital status

Enter the marital status as claimed by the employee on their W-4 form.

Step 2 - Multiple jobs or working spouse

Check this box if the employee indicated they have multiple jobs or a working spouse. When checked, federal withholding is calculated based on tax rates specified in IRS Publication 15.

Step 3 - Dependents annual deduction amount

Enter the amount claimed by the employee on their W-4 form for dependents.

Step 4a - Other annual income taxable

Enter the amount of other annual taxable income as claimed on the W-4 form.

Step 4b - Deductions amount other than standard

Enter the amount of additional deductions claimed on the W-4 form.

Exemptions (Pre-2020 W-4 Only)

Important: Enter exemptions ONLY if the employee has not submitted a 2020 or later W-4 form.

Enter the number of withholding exemptions claimed on the employee's pre-2020 W-4 form.

Low-income exemption: If the employee wants to be exempt because they don't earn enough to owe taxes, enter "99" for exemptions. Do NOT exempt them under Tax Status/Exempt unless they are a 1099 contractor.

Note: Check your state website for state W-4 changes. Some states are updating their W-4 forms in accordance with federal tax law changes.

Additional tax

Enter any additional withholding tax amount indicated on the employee's W-4 form. This amount is withheld from each paycheck in addition to standard calculated withholding.

Percent of gross

When a percentage is entered for federal or state withholding, ProPay ignores the tax tables and calculates the tax as a percentage of taxable gross pay.

Special Employee Types

Statutory employee

Check this box if the employee is classified as a statutory employee—someone who is treated like an independent contractor but is exempt from all taxes except FICA tax. Examples include milk delivery workers and insurance agents.

A W-2 form must be issued at year-end. Checking this box marks the employee as "Statutory employee" on the W-2 form.

Important: This designation does NOT automatically exclude the employee from any taxes. You must manually configure tax exemptions using Employee > Tax Status/Exempt.

Tipped employee

Check this box if the employee receives tips as part of their compensation. This information is used to calculate tip allocation at the end of the year.

W-2 retirement plan

Check this box only if the employee participates in a deferred compensation plan. This information appears on the employee's W-2 form for tax reporting purposes.

W-2 3rd party sick pay

Check this box only if your company is a third-party sick pay payer, such as an insurance company that pays employees on behalf of other employers.

Termination

Termination date

The termination date is normally entered automatically from the Enter New Payroll screen. When an employee has no pay for a pay period, ProPay asks whether to terminate the employee.

You can also manually enter the termination date on this screen if needed.

Important notes:

Note icon Note: The termination date is for informational purposes only. To actually terminate an employee in the system, you must set the pay period to (T)erminated.

Terminated employees are purged at year-end and do not transfer to the new year