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Run the Payroll Fee Auditor →Blog · Payroll Management · Law Firm
Law Firms: New Hire Payroll Onboarding (2026)
Setting up or managing payroll for law firms involves more steps than the basic payroll guides cover. State bar payroll requirements, attorney overtime exemptions under FLSA, IOLTA trust accounting separation applies on top of standard federal requirements.
This guide covers the specific payroll setup and management requirements for law firms.
Step 1: Get Your Employer Accounts Set Up
Before running payroll for law firms, you need an Employer Identification Number (EIN) from the IRS, a state employer withholding account in each state where you have employees, and a state unemployment insurance (SUTA) account. For law firms operating in multiple states, this means separate registrations in each state.
Step 2: Configure Pay Types for Law Firms
Law Firms have non-standard pay types that require specific configuration: billable hours tracking, partner draw vs. salary, attorney bonus structures, IOLTA compliance. Each of these must be set up as a separate pay code in your payroll system with the correct tax treatment applied.
Missing this step means your system calculates overtime incorrectly, applies the wrong withholding rate, or misses required reporting -- and you do not find out until you receive a penalty notice or employee complaint.
Step 3: Set Up Compliance Tracking
Law Firms payroll compliance requires: State bar payroll requirements, attorney overtime exemptions under FLSA, IOLTA trust accounting separation. Each of these has filing deadlines, rate requirements, or calculation rules that must be maintained current.
Set up a compliance calendar that tracks: tax deposit deadlines (semi-weekly or monthly based on your lookback period), quarterly Form 941 due dates, annual Form 940 due dates, state quarterly filings, and new hire reporting requirements.
Step 4: Run Payroll and File on Time
With accounts set up and pay types configured, run payroll on your selected frequency. For law firms, bi-weekly or semi-monthly works for most salaried staff. billable hours tracking may require different frequency or supplemental runs.
Tax deposits must be made on the IRS schedule -- either semi-weekly (if your lookback period tax liability exceeds $50,000) or monthly (if less than $50,000). Missing the deposit date triggers the IRS failure-to-deposit penalty.
The Faster Path: Managed Payroll for Law Firms
BEG managed payroll handles all of the above for law firms at $25-$45 PEPM, all-inclusive. Setup takes 3-5 business days. We configure your pay types, establish your tax accounts, and run your first payroll on schedule.
Managed Payroll, Handled.
BEG manages payroll at $25-$45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
Can you handle attorney bonus payroll?
Yes. Attorney bonuses are processed as supplemental pay runs with the correct federal and state supplemental withholding rates applied.
How do you handle partner draws vs. salary?
Partners taking guaranteed payments or draws are set up with the correct pay type. For W-2 partners, salary runs normally. For guaranteed payments outside W-2, we coordinate with your accounting team.
How do you handle attorney overtime exemptions?
Attorneys meeting the FLSA learned professional exemption are classified as exempt and not subject to overtime. We ensure exemption criteria are documented in the payroll system.
Can you process payroll across multiple office locations?
Yes. Law firms with multiple offices run on a single payroll system with state withholding and unemployment handled for each state.
What does BEG charge for law firm payroll?
Law firm payroll runs at $25-$45 per employee per month, all-inclusive. For a 20-attorney firm with 30 total staff, that is approximately $750-$1,350 per month.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Law Firms. BEG manages payroll at $25-$45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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