Switch payroll providers
Switching payroll providers means carrying over year-to-date totals, handing over tax filings and getting employees set up before the first pay date. Here's the safe order.
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Your plan so far
17things this change touches
- critical6
- high11
- moderate0
- low0
Updates as you answer. Every item will explain why it’s there.
What could break
In a typical payroll provider plan, these are the most serious things to get right.
Set up and verify the bank account that funds payroll
Critical · Banking & payments
The first pay run can't be funded on time, and employees aren't paid on payday.
Authorize the new provider with your tax agency
Critical · Government & tax
Filings are rejected or payments aren't credited to your account, which can lead to penalties and notices.
Have employees enter their own bank details in the new portal
Critical · Banking & payments
Pay fails or is delayed for anyone not set up in time, and bank details collected by email can be intercepted or spoofed to redirect pay.
Carry over year-to-date totals for every employee
Critical · Banking & payments
Taxes or contributions are calculated wrongly for the rest of the year, and year-end forms don't match what was actually paid.
Make sure the old provider stops filing and paying for you
Critical · Government & tax
Duplicate tax payments to chase back, conflicting filings, or missed payments that lead to penalties and notices.
Check the first live pay run
Critical · Banking & payments
Employees are paid late or wrongly, or payroll taxes aren't paid on time.
Choose the switch date with your accountant
High · Business operations
A rushed mid-period switch means more figures to carry over exactly, more filings that need data from both providers, and more room for mismatches.
Agree who issues year-end tax forms for the switch year
High · Government & tax
Employees receive duplicate, missing or wrong year-end forms, and corrections take time.
Download payroll records from the old provider
High · Data & files
You can't answer an employee's question about past pay, show what was filed, or respond to a tax review.
Rippling: set up pay schedules, pay rates and earning types
High · Business operations
Wrong pay dates, missed overtime, or earnings taxed the wrong way on the first run.
Before and after the change
Before you change it
- Choose the switch date with your accountant
- Agree who issues year-end tax forms for the switch year
- Download payroll records from the old provider
- Set up and verify the bank account that funds payroll
- Authorize the new provider with your tax agency
- Rippling: set up pay schedules, pay rates and earning types
- Lock down admin access and pay-run approvals
- Other payroll registrations and accounts
- Set up benefits and deductions
- Have employees enter their own bank details in the new portal
- Move employee records through a secure import
- Tell employees what's changing and when
After the change
- Carry over year-to-date totals for every employee
- Carry over vacation and leave balances
- Reconnect retirement or pension contributions
- Reconnect time tracking and scheduling
- Map payroll to your accounting software
- Run a parallel or test payroll
- Make sure the old provider stops filing and paying for you
- Check the first live pay run
- Close out ADP after its final filings
- Check the first period-end and year-end filings
Your own plan adds or removes items based on your answers, and explains why each one is there.
The safe order
Doing things in the right sequence is what keeps you from getting locked out halfway through.
Before the change
Step 1: Pick the switch date and agree who files what
Settle timing, year-end forms and responsibilities with your accountant and both providers.
- Choose the switch date with your accountant (high risk)
- Agree who issues year-end tax forms for the switch year (high risk)
Step 2: Download records from the old provider
Registers, pay stubs, filings and year-end forms, before access ends.
- Download payroll records from the old provider (high risk)
Step 3: Set up the new provider
Pay schedules, admin security, funding account, tax authorizations and deductions.
- Set up and verify the bank account that funds payroll (critical risk)
- Authorize the new provider with your tax agency (critical risk)
- Rippling: set up pay schedules, pay rates and earning types (high risk)
- Lock down admin access and pay-run approvals (high risk)
- and 2 more
Step 4: Bring employees across
Secure records import, employee bank details in the portal, and a clear message to staff.
- Have employees enter their own bank details in the new portal (critical risk)
- Move employee records through a secure import (high risk)
- Tell employees what's changing and when (high risk)
During the change
Step 5: Load year-to-date totals and balances
Every figure that tax, contributions and year-end forms depend on.
- Carry over year-to-date totals for every employee (critical risk)
- Carry over vacation and leave balances (moderate risk)
Step 6: Reconnect time tracking, retirement and accounting
Point each connected system at the new provider and away from the old one.
- Reconnect retirement or pension contributions (high risk)
- Reconnect time tracking and scheduling (high risk)
- Map payroll to your accounting software (moderate risk)
Step 7: Run a parallel payroll
Compare every employee's figures before the first live run.
- Run a parallel or test payroll (high risk)
Step 8: Hand over tax filings
Make sure exactly one provider files and pays for each period.
- Make sure the old provider stops filing and paying for you (critical risk)
Verify
Step 9: Check the first live pay run
Confirm everyone was paid correctly and taxes went out.
- Check the first live pay run (critical risk)
Clean up
Step 10: Close out the old provider
After its final filings, cancel and revoke its access to your bank and tax accounts.
- Close out ADP after its final filings (high risk)
Later
Step 11: Check the first period-end and year-end
Compare agency records with both providers' records.
- Check the first period-end and year-end filings (high risk)
Why this change needs a plan
Payroll is the one system where a mistake reaches every employee's bank account. Switching providers means moving more than names and pay rates: year-to-date totals, tax filing responsibilities, benefit deductions, leave balances and the authorizations that let a provider act for you with tax agencies.
The riskiest moments are the hand-offs: who files which period, who issues year-end forms, and whether every employee's bank details are in place before the first pay date.
The safe approach is to switch on a date your accountant agrees, run a test payroll and compare it line by line, and keep the old provider's records and final filings in hand before you cancel.
Why it matters
Employees expect to be paid correctly and on time, and payroll taxes carry penalties when they're late or wrong. A provider switch touches both.
What makes it risky
Risk is highest when you switch partway through a quarter or year, when your provider files and pays payroll taxes for you, and when employees' bank details have to be re-entered.
Common mistakes
- Collecting employees' new bank details by email instead of through the provider's secure portal.
- Switching mid-quarter without carrying over exact year-to-date totals for every employee.
- Assuming the old provider will stop filing, or will issue year-end forms, without confirming in writing.
- Not verifying the funding bank account early, so the first pay run can't be debited on time.
- Cancelling the old provider before downloading pay stubs, registers and tax filings.
Frequently asked questions
When is the best time to switch payroll providers?
Many businesses switch at the start of a year or quarter because there are fewer year-to-date figures to carry over and filings are simpler, but the rules vary by country. Ask your accountant and both providers which date works best for you.
Do employees need to re-enter their bank details?
Often, yes. Direct deposit details usually can't be exported between providers. Invite employees to enter them in the new provider's secure portal, and never collect bank details by email.
Who files payroll taxes for the quarter I switch?
It depends on the providers and where you operate. Get written confirmation of which provider files and pays for each period, and make sure the old provider's authorizations end after its final filing.
Who sends year-end tax forms after a mid-year switch?
That varies by country and provider. Ask both providers in writing before you switch, and check with your accountant or the tax agency.
Should I run a parallel payroll?
Yes, if you can. Run the new provider's calculation for a recent period and compare gross pay, deductions, taxes and net pay for every employee before the first live run.
Regional notes
General information, not legal advice. Check the official source where you live.
- Canada
- Businesses that provide payroll services can register with the CRA's Represent a Client service, and you can authorize them as your representative. Confirm which provider handles remittances for each period.
- United States
- The IRS says employers remain responsible for federal tax deposits even when a payroll provider makes them, and recommends enrolling in EFTPS to check payments. Providers commonly act under a reporting agent authorization (Form 8655).
- United Kingdom
- GOV.UK guidance says that if new payroll software can't keep your employees' existing payroll IDs, you should set the 'Payroll ID changed indicator' in your Full Payment Submission so your PAYE bill isn't calculated incorrectly.
- Australia
- The ATO says that if you change payroll solutions during the financial year and your BMS ID changes, you need to notify the ATO and transfer year-to-date amounts, or finalize STP reporting from each solution.