Payroll Disclaimer
Last updated November 3, 2026 · Version 2026-11-draft.1
Exactly what PayrollGrove does, and what your company does, when you run payroll.
PayrollGrove is software, not a payroll service
PayrollGrove calculates payroll, records it, and generates the documents and files you need. It never moves money and never files with any agency. Your company stays the employer, the payer, the tax depositor, and the filer of record. That is why our price is low and why every feature is included, and it is why you must review each payroll and act on its deadlines.
Not a bank. Not a PEO. Not a tax advisor. PayrollGrove does not hold your funds, is not a co-employer, and does not give legal, tax, or accounting advice.
Who does what
| Activity | PayrollGrove does | You do |
|---|---|---|
| Gross-to-net calculation | Calculates pay, withholding, and deductions using versioned tax tables, and runs pre-run checks | Review and approve every run |
| Paying employees | Generates a NACHA file (and optional prenotes), or a payment register for checks and bank-portal transfers | Upload the NACHA file to your bank before its cutoff, or issue the checks or transfers. You are the ACH Originator |
| Tax deposits (federal, state, local) | Tracks liabilities, calculates due dates under your deposit schedule, and sends reminders | Make every deposit (for example through EFTPS and state portals) and record the confirmation in PayrollGrove |
| Quarterly and annual returns (941, 940, Schedule B and A, state withholding and unemployment reports) | Prefills official IRS forms and produces state report data | Review and file them yourself or through your preparer |
| Contractor backup withholding | Calculates 24% backup withholding as a separate liability with Form 945 data | Deposit it separately from 941 taxes and file Form 945 |
| Forms W-2 and W-3 | Produces employee and employer copies and an SSA EFW2 file | Upload the EFW2 file to SSA Business Services Online and distribute copies |
| Electronic delivery of W-2 and 1099 | Captures each worker's consent and publishes forms in self-service; lists everyone who needs paper | Mail paper copies to workers who have not consented, by the deadline |
| Form 1099-NEC | Produces recipient copies and an IRS IRIS upload file | File through IRS IRIS and furnish copies |
| ACA reporting (1095-C, 1094-C) | Not supported. Warns you once you reach 45 full-time-equivalent employees | Use a separate vendor if you are an applicable large employer |
| New-hire reporting | Prepares report data and reminds you of state deadlines | Submit reports to each state directory |
| Garnishments | Calculates withholding within federal and state limits, produces a remittance report, and reminds you of acknowledgement and remittance dates | Acknowledge orders and send payments to the agency or disbursement unit |
| Local taxes | Applies a local rate only if you enter it yourself; otherwise blocks the run for that worker | Enter and maintain local rates, and file local returns |
| Agency registrations | Detects missing state accounts where your workers are and blocks payroll until they are added | Register with each agency and enter your account numbers and rates |
| Agency notices | Nothing | Respond to IRS, state, and local notices |
| Penalty protection | No tax penalty guarantee | Bear responsibility for deposits, filings, and any penalties |
"Mark as filed" and "Mark as paid"
Buttons in PayrollGrove say Mark as filed and Mark as paid, never "File" or "Pay". They record what you have already done so your calendar and reports stay accurate. Clicking them does not send anything to any agency or move any money.
Trust-fund taxes: please read
Income tax, Social Security, and Medicare you withhold from employees are trust-fund taxes: you hold them for the government. Late deposits incur IRS penalties of 2% to 15% under IRC §6656, plus interest. Under IRC §6672, owners, officers, and other responsible persons can be held personally liable for unpaid trust-fund taxes. Before you approve a payroll, PayrollGrove asks you to confirm that you will fund net pay and deposit the taxes shown by their due dates.
Where payroll is supported
At launch, PayrollGrove runs payroll for workers who live and work in these 17 states: Texas, Florida, Nevada, Washington, Tennessee, Illinois, Pennsylvania, North Carolina, Georgia, Colorado, Arizona, Michigan, Virginia, Ohio, California, New York, and New Jersey.
Support is at the state level. Mandatory local taxes in some of these states (for example Pennsylvania earned income and local services taxes, Ohio municipal and school district taxes, Michigan city taxes, New York City and Yonkers taxes, and Denver occupational privilege tax) are not built in at launch. You can enter a flat local rate yourself; when you do, PayrollGrove shows this notice on setup and pay stubs: "This local tax uses a rate you entered. PayrollGrove has not verified it." Without a rate, payroll for that worker is blocked. New York City and Yonkers residents cannot be paid until bracketed local tables ship.
Workers in other states can use every HR feature, but payroll for them is blocked until their state is supported.
Employers we do not support
PayrollGrove is not designed for, and must not be used for, payroll of:
- household employers filing Schedule H;
- agricultural employers filing Form 943;
- railroad employers filing Form CT-1; or
- employers or workers in Puerto Rico or other US territories.
Accuracy
We work hard to get every calculation right, including tax tables that must be verified before payroll can run for a year. But laws change and data can be wrong, so we cannot warrant that results are correct for your situation. The Terms of Service explain the limits of our responsibility. If in doubt, consult a qualified payroll or tax professional.