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Marketing & PR Agencies: Payroll Setup Guide (2026)
Setting up marketing agency payroll means the standard registrations, an EIN, state withholding and unemployment accounts, new hire reporting, plus the marketing agency specifics: pay codes for 1099 vs W-2 freelancer classification and project-based bonuses and a documented classification for account managers and copywriters. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Step 1: accounts and registrations
Every marketing agency starts with an EIN, a withholding account in each state where someone works (unless that state has no wage tax), an unemployment insurance account in each of those states, and access to each state's new hire directory. New employers deposit federal employment taxes monthly during the first calendar year because there is no lookback period yet.
Step 2: classify account managers and copywriters before the first check
A graphic designer who uses the firm's software, computer and office space and works only on assignments the firm finds is an employee under the investment factor, while a designer who buys their own software and equipment, rents space and markets services to multiple clients shows independent contractor status.
Step 3: build the marketing agency pay codes
1099 vs W-2 freelancer classification, project-based bonuses, multi-state remote teams and billable vs internal payroll allocation each become a pay code with its own taxability and overtime treatment. Building them before the first run is cheaper than correcting a quarter of 941s afterward.
The IRS decides employee versus contractor status under common law rules grouped into three categories: behavioral control, financial control and the type of relationship. There is no set number of factors and no single factor decides, and a remote worker is an employee if the business has the right to control what will be done and how. Form SS-8 can be filed for an IRS determination.
Step 4: set the records up to be kept
Advertising and Related Services (NAICS 5418) and Specialized Design Services (5414) are on OSHA's partially exempt industry list, so agencies in those codes do not keep OSHA 300 logs unless OSHA or BLS asks in writing. Fatalities, in-patient hospitalizations, amputations and eye losses must still be reported.
A company that had 10 or fewer employees at all times during the last calendar year is exempt from OSHA injury and illness recordkeeping regardless of industry, measured by peak employment across the whole company.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- A graphic designer who uses the firm's software, computer and office space and works only on assignments the firm finds is an employee under the investment factor, while a designer who buys their own software and equipment, rents space and markets services to multiple clients shows independent contractor status. [DOL Fact Sheet #13]
- The IRS decides employee versus contractor status under common law rules grouped into three categories: behavioral control, financial control and the type of relationship. There is no set number of factors and no single factor decides, and a remote worker is an employee if the business has the right to control what will be done and how. Form SS-8 can be filed for an IRS determination. [IRS Independent contractor (self-employed) or employee?]
- Advertising and Related Services (NAICS 5418) and Specialized Design Services (5414) are on OSHA's partially exempt industry list, so agencies in those codes do not keep OSHA 300 logs unless OSHA or BLS asks in writing. Fatalities, in-patient hospitalizations, amputations and eye losses must still be reported. [OSHA 29 CFR 1904 Subpart B, Appendix A]
- A company that had 10 or fewer employees at all times during the last calendar year is exempt from OSHA injury and illness recordkeeping regardless of industry, measured by peak employment across the whole company. [OSHA 29 CFR 1904.1]
Read the full guide to how to set up payroll for a new business, and the rest of the marketing agency payroll library.
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Frequently Asked Questions
What registrations does a new marketing agency need before running payroll?
An EIN, a state withholding account and a state unemployment account in every state with an employee, and new hire reporting access. State registrations are the slow step and can take weeks, so they start before the first hire date.
How are account managers and copywriters classified at setup?
A graphic designer who uses the firm's software, computer and office space and works only on assignments the firm finds is an employee under the investment factor, while a designer who buys their own software and equipment, rents space and markets services to multiple clients shows independent contractor status.
What records must a marketing agency keep from day one?
Advertising and Related Services (NAICS 5418) and Specialized Design Services (5414) are on OSHA's partially exempt industry list, so agencies in those codes do not keep OSHA 300 logs unless OSHA or BLS asks in writing. Fatalities, in-patient hospitalizations, amputations and eye losses must still be reported.
What does managed payroll cost for a marketing agency?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. 1099 vs W-2 freelancer classification, project-based bonuses and multi-state remote teams are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Marketing & PR Agencies. BEG manages payroll at $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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