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Overview
This guide is for when Forge sets up your payroll in Gusto. We build and configure the account for your award. You send us a few details, connect your bank, sign the tax forms, and approve each payroll.
Who | Owns |
You | Sending company and team info, connecting and verifying the bank account, signing tax forms, approving each payroll |
Forge | Creating and configuring Gusto, adding your team, setting the pay schedule, timesheets in the Forge app, labor allocation to projects, reconciling payroll to your books |
Gusto | Paychecks, tax withholding, quarterly and year-end filings (W-2, 941, state) |
How setup works
Most of this is on us. The steps marked You need someone at your company, because Gusto requires the account owner or a company officer.
# | Step | Who |
1 | Enter company details and state tax info, or have Gusto register your states | You |
2 | Connect the payroll bank account and verify Gusto's two test deposits | You |
3 | Set a semi-monthly pay schedule and your first payday (we'll confirm the date with you) | You |
4 | Add your team. Each person gets an email to enter their W-4, direct deposit, and I-9 | Your team member |
5 | Sign the federal and state tax authorization forms | You (company officer) |
6 | Review the full setup and connect Gusto to QuickBooks and Forge | Forge |
7 | Approve your first payroll | You |
Gusto reviews new accounts before the first payroll, so plan on a few days between steps 8 and 10.
Your award start date and your first payday don't need to line up. Agencies such as NSF or NIH, for example, typically allows pre-award costs up to 90 days before the start date. Time worked before your first payroll still counts, as long as it's logged.
Pay schedule: we recommend semi-monthly
We recommend semi-monthly payroll: paydays on the 15th and the last day of each month. The 15th pays for the 1st to the 15th. The last day pays for the 16th to month-end.
| Semi-monthly (recommended) | Biweekly |
Paydays | 24 per year, 15th and last day | 26 per year, every other Friday |
Payrolls per month | Always 2 | 2, sometimes 3 |
Salaried paycheck | Same every time | Same, but some months cost 50% more |
Pay periods vs. months | Never cross a month end | Often split across two months |
Fit with monthly close and drawdowns | Clean | Needs splitting and accruals |
Semi-monthly keeps each month's labor cost steady and lines up with how we close your books and prepare drawdowns. A steady salary also helps with the consistency auditors look for.
State rules. Some states limit pay frequency. In Massachusetts, hourly employees must be paid weekly or biweekly, while salaried employees can be paid semi-monthly (US DOL). If your state requires biweekly, that's fine. Just tell us so we match your timesheet periods to it.
Adding employees, contractors, and owners
We recommend setting up employees as full-time or consistent part-time salaried staff whenever you can.
A steady salary makes labor costs predictable, which helps you control spending against your budget and keeps pay consistent in an audit.
It also lets us use total time accounting (see below), so you never have to adjust pay for hours.
Person | Set up in Gusto as | Notes |
Full-time employee | Salary, no overtime | Enter annual salary. Don't enter hours each payroll. |
Part-time employee | Salary, no overtime, with a standard schedule (e.g., 8 or 20 hours/week) | Set the standard hours once. Pay stays the same each period. |
Hourly employee | Hourly | Only if you truly pay by the hour. Hours entered each payroll change the check. |
Founder or owner | Employee (W-2) | Owners who work on the award should be on payroll so their time can be charged. |
Contractor | Contractor | Paid through Gusto contractor payments. Gusto files the 1099. |
Paperwork for each new hire:
Offer letter. Gusto has a built-in template during onboarding.
Form I-9. Gusto collects it during onboarding (Gusto steps).
Confidentiality and IP assignment agreement. We can share a template, but we're not lawyers, so have counsel review it.
Stock or option grant, if any. Carta works well for this.
Watch out with salaried staff. In Gusto, changing a salaried employee's default hours also changes their salary. If someone works more hours one period, leave their hours alone and run payroll as usual (Gusto: salaried pay rates). A one-time salary bump for one period looks inconsistent in an audit. If you want to reward extra effort, use a bonus under a written bonus policy you already have.
After setup
Each payday, you approve payroll. Gusto emails a reminder a few days before. Make sure the payroll account is funded before the debit date.
Your team logs time in Forge. Timesheet periods match your pay schedule.
We reconcile. Payroll flows from Gusto into QuickBooks and is matched to timesheets in Forge.
About two to three weeks after your first payroll, we walk you through how labor costs were allocated across your projects, plus a profit and loss report.
New hire or pay change? Tell us in Slack and we'll update Gusto and your charge codes.
[Salaried Employees] Hours in Gusto: don't worry about matching them exactly for salaried employees
Frequently asked questions
What if we log different hours in each payroll period?
For salaried employees, we apply total time accounting. That means we allocate each person's pay by the share of time they spent on each project, not by the raw hour count. So the hours in Gusto don't need to match what people actually worked.
Here's how it works. Say a salaried employee logs 66 hours on their Forge timesheet in a period, with 40 hours on the award and 26 on general admin. We charge 40/66, or about 61%, of that period's salary to the award. Their Gusto paycheck stays the same.
What this means for you:
Run payroll as normal. Salaried staff get the same check every period, however many hours they logged.
Don't use Gusto's time tracking. It isn't DCAA compliant and may not be on your plan. Your team logs time in the Forge app instead.
Log every hour worked in Forge, including time over 40 hours and time on non-award work. That full picture is what makes the percentages accurate.
Split roles are fine. If someone spends half their time on the award, they log that half to the project and the rest to general admin or other work. Only the award share is charged.
The one exception is hourly employees. Their hours in Gusto drive their pay, so enter what they worked.
How do we pick the first payday?
We'll suggest the first 15th or month end that gives Gusto time to review your account. Your award start date is tracked separately in Forge.
Our first period is short because the award starts midweek. Is that a problem?
No. The first paycheck can cover a partial period. Time logged in that window still counts.
Someone worked a lot more hours this period. Should I pay them more?
Not through their salary. Leave their Gusto hours and salary as they are. We allocate their cost by percentage of time. If you want to reward the extra work, pay a bonus under an existing written bonus policy.
Can I pay people before the award money arrives?
Yes, if you have the cash. Make sure the payroll account is funded before each run. For NSF awards, set up your drawdown access early so funds are ready.
Should I use Gusto's time tracking?
No. Log time in Forge. Gusto's timesheets aren't DCAA compliant.