ATF or LIVE payroll— What’s the difference?

When choosing the payroll service that works best for your company, you’ll typically have two options: After-the-Fact Payroll (ATF) or Live Payroll. Each option has its own process, timing, and tax implications with quarterly reporting.

Understanding the differences between the two options can help you determine which payroll service is the best fit for your business. If you’re still unsure, we generally recommend Live Payroll for its convenience, streamlined process, and added peace of mind. However, we’re here to answer your questions and help guide you toward the payroll solution that works best for your company.

What Is After-the-Fact Payroll?

After-the-Fact (ATF) Payroll means you pay your employees first, and the payroll is recorded afterward. With this type of payroll service, the business is responsible for preparing and issuing employee checks or payments, as well as calculating the appropriate taxes and withholdings.

Once your employees have been paid, you provide us with the payroll information and reports so we can record the payroll for quarterlies and year-end reports.

Because the payroll is recorded after the payments have already been made, taxes and withholdings are not set aside in advance. You are responsible for making sure sufficient funds are available when payroll taxes are due if we are making those tax payments on your behalf. If we are paying your taxes for you, please be sure to supply the required information to do so, at a reasonable time to ensure payments are made when due to avoid penalties and interest.

ATF Payroll can also require more hands-on work from the business owner or client. This may include:

• Paying employees
• Calculating payroll taxes and employee withholdings, as well as, updating tax rates and pay frequency’s.
• Providing payroll reports and information
• Making required quarterly tax payments, unless you have opted for us to handle them on your behalf
• Monitoring tax payment deadlines and ensuring funds are available

We do provide W-2s at the end of the year, but the majority of the payroll processing responsibilities remain with the business.

After-the-Fact Payroll can work well for businesses that prefer to handle their own employee payments and maintain more control over their payroll process. However, it requires more time, involvement, and responsibility from the business owner or client compared with a traditional payroll service.

We highly recommend Live Payroll, as it helps reduce errors and streamline the payroll process.

What Is Live Payroll?

Live Payroll means your payroll is calculated and processed before your employees are paid. You provide the payroll information, and the accountant or payroll system handles the rest.

Employee paychecks can be prepared and printed, or employees can be paid through direct deposit. Taxes and employee withholdings are calculated as part of the payroll process.

The money needed for payroll taxes is set aside in advance, so the funds are ready when tax payments and quarterly payroll tax returns are due. Local taxes are handled separately.

Live Payroll can make payroll easier and more convenient by taking care of the calculations, payments, and tax-related responsibilities for you. It can also help reduce the risk of missed deadlines or unexpected tax payments.

What would the Client Need to Provide?

• Employee hours or salary information
• New hires if any: New-hire paperwork will be provided for you including W-4, Direct Deposit Form (If applicable), I-9, and an Employee Information Form
• Terminated employees if any
• Changes to pay rates
• Bonuses, commissions, or other additional pay
• Employee withholding changes
• Paid time-off (PTO) information, if applicable
• Any deductions; Health insurance, retirement, loan

Summary

After-the-Fact Payroll can be a good option for businesses that prefer to manage and issue payroll payments themselves. However, because payroll and taxes are handled after payments are made, it requires more hands-on management.

Live Payroll provides a more streamlined approach by processing payroll before payday, setting aside taxes and withholdings in advance, and offering convenient options like direct deposit. This can help simplify payroll, reduce the risk of missed tax payments, and give you greater peace of mind.

If you’re looking for a simpler, more convenient way to manage payroll, Live Payroll may be the right fit for your business and what we generally recommend.

Feature	After-the-Fact Payroll	Live Payroll
Check Issuance	Checks are prepared and printed manually by the client; accountant only logs check numbers and amounts	Accountant or system prints negotiable checks or runs direct deposit.
Timing and processing	Payroll is recorded after payments have been issued	Payroll is calculated and processed before payday
Tax Deposits and Reporting	Employer Quarterly Tax Returns (Form 941) Taxes are calculated after payroll is paid, which means funds may not be set aside in advance. This can increase the risk of late payments or unexpected penalties.	Employer Quarterly Tax Returns (Form 941) Your taxes and withholdings are calculated and set aside in advance, so the funds are ready when we process your quarterly returns. Local taxes are handled separately.