What's covered in this guide?
What are opening balances?
When you switch to Workforce Payroll mid-year, your employees already have year-to-date earnings, tax withholdings, and deductions from your previous payroll provider.
Opening balances are the historical payroll totals that Workforce imports so your records remain complete and accurate for the remainder of the year.
Why opening balances matter
Payroll taxes and reporting obligations are calculated on a calendar-year basis. Without accurate year-to-date data, Workforce would treat each employee as if they had zero prior earnings.
This can result in:
Incorrect tax filings — Filings need to include the full period's wages and withheld taxes
Exceeded wage base limits — Taxes like Social Security and FUTA could be over-collected
Inaccurate W-2s — Reporting would only reflect Workforce wages, not the full year
What data is included
Opening balances capture year-to-date totals for each employee, including:
Gross earnings — Regular pay, overtime, bonuses, commissions, etc.
Tax withholdings — Federal, Social Security, Medicare, and state/local taxes
Employer taxes — Employer-side Social Security, Medicare, FUTA, and state unemployment
Pre-tax deductions — 401(k), health insurance, HSA contributions, etc.
Post-tax deductions — Roth 401(k), post-tax benefits and other after-tax withholdings
Employer contributions — Amounts paid by the employer toward specific benefits plans
Time off information — Time off pay, accruals, and balances
How Workforce handles opening balances
The Workforce onboarding team manages the entire process — no manual entry required.
During onboarding, Workforce will:
Receive year-to-date payroll records from you
Import the balances into your Workforce account
Verify tax totals match IRS transcripts and state portals where available
Once imported, opening balances are automatically reflected in:
Pay stubs
Tax calculations
Year-end reporting
Impact on tax calculations and filings
Opening balances are incorporated into all ongoing tax calculations to ensure accuracy:
Wage base limits are respected — Employees who already hit limits won’t be taxed again
Filings are complete — Forms (e.g., 941 and state filings) reflect full-year totals
Important Note: Your previous provider is responsible for filings covering periods they processed. Workforce handles filings starting from your first pay run on the platform. E.g., if your first payment date is April 1st or later, your previous provider should complete Quarter 1 filings.
Impact on W-2s
At year-end, Workforce generates one consolidated W-2 that includes:
Opening balances from your previous provider
All payroll processed through Workforce
Employees receive a single W-2 for the full calendar year.
Important Note: If you transition mid-quarter, coordinate with your previous provider to ensure they do not make an incorrect filing for the incomplete period. They should also not file any W-2s.
What you need to provide
While Workforce handles the import, you may need to supply or verify:
Payroll-by-payroll information from your previous provider, including:
Wages
Hours Worked
Time Off
Deductions & Contributions
Taxes (broken out individually by tax type)
Quarterly tax filings (e.g., Form 941, state unemployment returns)
Your onboarding representative will guide you through the exact requirements.
Frequently Asked Questions
Do I need to upload opening balances myself?
No. Workforce handles the full import. You may only need to provide or verify documents.
What if I switch to Workforce on January 1?
Opening balances are typically not required since there are no year-to-date totals. Your representative will confirm.
Will employees see full year-to-date totals on pay stubs?
Yes. Pay stubs will reflect cumulative totals including prior provider data.
What if there is a discrepancy in the data?
Contact your Workforce representative immediately to determine how to fix the issue.
Will I receive two W-2s?
No. Workforce issues a single W-2 covering the entire year. Your previous provider should not issue a separate one.
Is my previous provider responsible for any filings?
Workforce is responsible for filing for the quarter of your first payment date. Your previous provider should file if all pay runs for the quarter were on their system.