Pay your members accurately, step by step
Settings, tax withholding, deductions, bank accounts, pay periods, NACHA export, profit sharing, and year-end tax documents โ everything you need to run payroll.
This guide walks you through setting up payroll for your organization in FlockWorker, step by step. By the end, your members will be able to receive accurate pay, view their pay stubs, manage deductions, participate in profit sharing, and access tax documents โ all in one place. Follow the steps in order โ each one builds on the previous.
Check your readiness as you go
The Setup Readiness Check verifies the foundational pieces โ EIN and address, an organization bank account, tax withholding rates, at least one pay period, and member bank/tax info โ before you run your first payroll. Run it any time to see what's still missing.| Action | Any Member | Manager | Payroll Admin | Admin |
|---|---|---|---|---|
| View own pay stubs, tax documents, and deductions | Yes | Yes | Yes | Yes |
| Add and manage own bank accounts; verify via micro-deposits | Yes | Yes | Yes | Yes |
| View own payment history and disbursements | Yes | Yes | Yes | Yes |
| Enter SSN for tax reporting | Yes | Yes | Yes | Yes |
| View payroll history and reports | โ | Yes | Yes | Yes |
| Create/manage pay periods, run and approve payroll | โ | โ | Yes | Yes |
| Configure deductions and tax withholding rates | โ | โ | Yes | Yes |
| Create and manage profit sharing distributions | โ | โ | Yes | Yes |
| Generate W-2 / 1099 documents and W-2c corrections | โ | โ | Yes | Yes |
| Verify member bank accounts (admin verification) | โ | โ | Yes | Yes |
| Download NACHA files and manage disbursements | โ | โ | Yes | Yes |
| Configure payroll settings and org bank account | โ | โ | Yes | Yes |
| Run year-end readiness checks | โ | โ | Yes | Yes |
*Payroll Admin = members with the Accounting Management permission, which admins can grant to trusted members.
Go to Payroll โ Settings and configure your organization's payroll details:
| Frequency | Pay Periods/Year | Best For |
|---|---|---|
| Weekly | 52 | Hourly workers, seasonal businesses |
| Bi-weekly | 26 | Most common; consistent payday every two weeks |
| Semi-monthly | 24 | Salaried workers; pays on the 1st and 15th |
| Monthly | 12 | Small organizations with salaried members |
Tips
Go to Payroll โ Tax Config and configure withholding rates:
| Tax Type | Typical Rate | What It Covers |
|---|---|---|
| Federal Income Tax | Varies by member | Federal income tax withholding (based on W-4) |
| State Income Tax | Varies by state | State income tax withholding |
| Social Security (FICA) | 6.2% | Social Security contribution (capped at $168,600/year) |
| Medicare | 1.45% | Medicare contribution (no wage cap) |
Set your rates before the first run
If no tax configuration exists when you run payroll, FlockWorker falls back to generic placeholder rates (Federal 12%, State 5%, SS 6.2%, Medicare 1.45%) so the run doesn't fail โ but those are not your organization's real rates. The Run Payroll screen warns you when this happens. Always save a tax configuration first so withholding is accurate.Important notes
Go to Payroll โ Deductions, click New Deduction to create organization-wide deduction types, then set a name, category, amount or percentage, and frequency.
| Category | Tax Treatment | Examples |
|---|---|---|
| Benefits | Pre-tax | Health, dental, vision, FSA |
| Retirement | Pre-tax | 401(k), profit sharing plan |
| Post-tax | After-tax | Roth 401(k), garnishments |
| Voluntary | Optional | Union dues, charitable contributions |
| Taxes | Mandatory | Additional state/local taxes |
After creating organization-wide types, assign them to individual members with a specific amount/percentage and effective date. Members can view their own active deductions at Payroll โ My Deductions โ they can see what's deducted and why, but only payroll administrators can change amounts.
Tips
At Account โ Bank Accounts, click Add Account and enter the account holder name, 9-digit routing number (validated with the ABA checksum), account number (encrypted with AES-256-GCM โ only the last 4 digits are ever shown), account type, and optional bank name. New accounts start as Pending Verification.
Security features
Go to Payroll โ Pay Periods, click New Pay Period, and set the start date, end date, and pay date. The period is created in Draft status.
Tips
Go to Payroll โ Run Payroll, select the pay period, and follow the wizard: review members, calculate pay, review & approve, then mark as paid. Members without compensation records are excluded automatically.
How net pay is computed
Tips
On the pay period detail page, find the NACHA Export section. The system checks readiness โ organization bank account configured, eligible members with verified bank accounts, and any members who will be skipped โ then click Download NACHA File. Upload it in your bank's ACH / direct deposit portal; payments typically settle within 1โ2 business days.
Two ways to pay: NACHA export vs. automated ACH
Watch for skipped members and ACH returns
At Payroll โ Profit Sharing โ Formula, choose how each member's share is calculated:
| Method | How Shares Are Calculated | Best For |
|---|---|---|
| Hours Worked | Proportional to hours contributed during the period | Organizations where contribution varies significantly |
| Equal Share | Equal distribution to all eligible members | Small cooperatives emphasizing equality |
| Tenure-Based | Higher share for longer-tenured members | Organizations that reward loyalty |
| Hybrid | Custom formula combining multiple factors | Complex distribution needs |
How a distribution is calculated and shared out
The total pool you enter is divided among eligible members according to the selected method. With Hours Worked, each member receives pool ร (their hours รท all members' hours); with Equal Share, the pool is split evenly; tenure and hybrid methods weight shares by length of service or your custom factors. Preview the per-member shares before submitting โ the amounts then appear on member pay stubs once approved.Create a distribution at Payroll โ Profit Sharing โ New Distribution: set the period, total pool, and method, preview the shares, and submit for approval. If your bylaws require a membership vote, create a governance proposal first.
Tips
Members enter their own SSN at Account โ Tax Info. It's encrypted with AES-256-GCM, stored separately from the member profile, and never displayed in full after entry (only a masked version like ***-**-1234). Access is logged in the sensitive data access audit trail.
Before generating tax documents, run the year-end check at Payroll โ Year-End โ Readiness. Each check shows a green checkmark or a red flag with instructions, and all must pass before you can generate documents:
| Check | What It Verifies |
|---|---|
| Pay Periods Paid | All pay periods for the tax year are marked paid |
| Tax Withholding Configured | Federal and state tax rates are set up |
| EIN Present | Your organization's EIN is on file |
| Address Configured | Your organization's legal address is entered |
| SSN Collection Complete | All active members have provided their SSN |
Tips
At Payroll โ Tax Documents โ Admin, generate W-2s individually or in bulk (members who already have a W-2 for the year are skipped). The system aggregates each member's pay stubs for the year and calculates the W-2 box values (wages, federal/state withholding, Social Security, Medicare). Generate 1099-NEC for contractor payments by entering the year's total.
Where each document is filed
FlockWorker routes filings to the right agency automatically: W-2 / W-3 e-filing goes to the SSA (Social Security Administration's Business Services Online), while 1099-NEC, 1099-MISC, 1095-C, 1094-C, and W-2c corrections route to Tax1099. You don't choose the destination โ generating and submitting the document sends it to the correct service. Acceptance and rejection status from the IRS / SSA surface on the Year-End Readiness page.Corrections (W-2c)
| Document | Delivered to Members By | Filed with IRS/SSA By |
|---|---|---|
| W-2 | January 31 | January 31 (electronic) |
| 1099-NEC | January 31 | January 31 (electronic) |
Work state drives state withholding
Manage work locations & reciprocity in one place
| Feature | Base Payroll | Payroll Complete |
|---|---|---|
| Pay periods, pay stubs, deductions, profit sharing | Yes | Yes |
| NACHA file export | Yes | Yes |
| W-2 / 1099 generation and W-2c corrections | Yes | Yes |
| Manual bank account verification | Yes | Yes |
| Micro-deposit bank verification | โ | Yes |
| Automated ACH payments via API | โ | Yes |
| IRS e-filing integration | โ | Yes |
Pricing is $29/month base + $2/member/month (e.g., 15 members = $59/month). Enable it from Payroll โ Settings or the subscription management page; premium features become available immediately. When it's not enabled, premium features show an upgrade prompt.
Manage Subscription| Activity | How Often |
|---|---|
| Review and approve time entries | Before each payroll run |
| Run payroll | Per your pay frequency (weekly, bi-weekly, etc.) |
| Download and upload NACHA files | After each payroll run |
| Confirm payment disbursements | After the bank processes the ACH batch |
| Review and reconcile payroll totals | Monthly |
| Update tax withholding rates | Annually (or when rates change) |
| Run year-end readiness check | Early January |
| Generate and distribute W-2s | January (before January 31) |
| Create profit sharing distributions | Per your distribution schedule |
Work more efficiently
| Step | What to Do | Why This Order |
|---|---|---|
| 1 | Configure payroll settings (EIN, address, pay frequency) | Foundation โ tax docs and NACHA files need this |
| 2 | Configure tax withholding rates | Determines how much is deducted from each paycheck |
| 3 | Set up deductions (benefits, retirement, etc.) | Defines non-tax withholdings before the first run |
| 4 | Have members add bank accounts; verify them | Enables direct deposit payments |
| 5 | Create your first pay period | Defines the date range and pay date |
| 6 | Run payroll for the first time | Calculates pay and generates pay stubs |
| 7 | Download the NACHA file and submit to your bank | Issues direct deposit payments |
| 8 | Set up the profit sharing formula and settings | Prepares for surplus distributions |
| 9 | Collect member SSNs and run year-end readiness | Required before generating tax documents |
| 10 | Generate and distribute W-2s and 1099s | Meets IRS reporting requirements |