Payroll in Georgia: A 2025 Guide for Business Owners

Running payroll in Georgia isn't just about issuing paychecks—it's about threading together compliance, accuracy, and smart strategy. Whether you've just hired your first employee or you're scaling a growing team, understanding Georgia's payroll requirements is essential to keeping things smooth, legal, and stress-free.

In this guide, we'll walk you through the fundamentals of doing payroll in Georgia, covering everything from employee classification and tax filings to common mistakes and when to consider outsourcing.

Why Georgia Payroll Can Be a Tangled Thread

Payroll mistakes cost time, money, and peace of mind. Between federal laws, Georgia-specific regulations, and tax deadlines, it's no wonder small businesses feel overwhelmed. Here's what you're juggling:

• Tracking time and wages
• Withholding and remitting the right taxes
• Following state and federal labor laws
• Maintaining the proper records
• Avoiding penalties and misclassification errors

But don't worry—once you have the right tools, partners, and processes in place, payroll canrun like a well-oiled (and fully compliant) machine.

Georgia Payroll Laws: What You Need to Know

📌 Federal + State Requirements

In Georgia, you're expected to comply with the Fair Labor Standards Act (FLSA) and state employment laws, which govern everything from how employees are paid to how taxes are handled and records maintained.

💵 Georgia's Minimum Wage

Georgia's state minimum wage is $5.15/hour, but most employers must follow the federal minimum wage of $7.25/hour, which takes precedence unless specific exemptions apply.

⏱️ Overtime Pay

Georgia follows federal guidelines: non-exempt employees must receive 1.5x their regular rate for all hours worked over 40 in a workweek.

🗂️ Recordkeeping

Employers must keep detailed payroll records—like hours worked, wages paid, and tax deductions—for at least three years. These must be accessible for audits and compliance checks.

Georgia's Employees vs. Independent Contractors

Misclassifying employees as contractors (especially to reduce costs) can lead to penalties, audits, and back payments.

👷 Employees

• Follow your company's rules and schedule
• Use the tools/equipment you provide
• Are covered by workers' compensation
• Require tax withholding and employer contributions

🤝 Contractors

• Work independently under a contract
• Control how and when work is performed
• Handle their own taxes and benefits
• Are not subject to wage and hour laws

If in doubt, get professional advice. Misclassification is one of the top red flags for audits.

Understanding Payroll Taxes in Georgia

Here's the high-level breakdown:

🏛️ Federal Payroll Taxes

• FICA: Withhold 6.2% for Social Security + 1.45% for Medicare (you match this amount)
• FUTA: Pay 6% on the first $7,000 of each employee's wages (usually reduced to 0.6% if you're up-to-date with state unemployment contributions)

🍑 Georgia State Taxes

• State Income Tax: Withheld based on the employee's Georgia Form G-4
• SUI (State Unemployment Insurance): Employer-paid tax, rate based on your business's experience rating

🏘️ Local Taxes

Some counties and cities in Georgia may have additional payroll requirements, especially if you operate across different municipalities.

How to Set Up Payroll in Georgia (Step-by-Step)

1. Apply for an EIN (Employer Identification Number) via the IRS
2. Register with the Georgia Department of Revenue (DOR) and the Georgia Department of Labor (GDOL)
3. Choose your payroll method: DIY, payroll software, or outsource to a trusted partner
4. Gather new hire information: W-4, G-4, I-9, Social Security Number, and direct deposit details
5. Set a pay schedule: Weekly, biweekly, semimonthly—just be consistent
6. Track time: Use a reliable system to monitor regular and overtime hours
7. Calculate and withhold taxes: Based on federal and state forms
8. Pay your team: Via checks or direct deposit
9. File your payroll taxes: Monthly, quarterly, or annually, depending on your liability

Common Payroll Pitfalls in Georgia

Here are the top issues we see from businesses managing payroll solo:

• ❌ Outdated Compliance: Rules change fast.
• ❌ Worker Misclassification: Employees wrongly labeled as 1099 contractors.
• ❌ Overtime Errors: Miscalculating hours and missing payouts.
• ❌ Improper Garnishments: Mishandling wage garnishments can lead to legal trouble.
• ❌ Incomplete Records: Missing documentation opens you up to audits and fines.

Why Outsource Payroll in Georgia?

If managing payroll feels like spinning plates, outsourcing can save you time, reduce stress, and keep your business compliant. Here's how:

💼 Save Time and Reduce Overhead

Let someone else handle the number crunching so you can focus on growing your business.

⚖️ Stay Compliant

Payroll pros stay up to date on Georgia's wage laws, tax codes, and filing deadlines so you don't have to.

🧵 Tailored Expertise

A good payroll partner understands your industry, headcount, and specific needs, and customizes accordingly.

🔐 Protect Sensitive Data

Secure systems safeguard employee information and reduce the risk of fraud or data breaches.

Final Stitch: Payroll That Works for Georgia Business Owners

Doing payroll in Georgia doesn't have to be a nightmare. Whether you're a startup hiring your first employee or a growing business with a bustling team, the key is staying organized, up-to-date, and proactive.

If you're not sure where to start or want to make sure you're doing it right, Thread is here to help. We'll walk you through your obligations, set up your systems, and even manage payroll for you.

🎯 Review Your Payroll Setup With Our Experts

Let's untangle your payroll process and stitch in some peace of mind.