Payroll is a massive feature that we do not plan on building.
We recommend Surepayroll.com for your payroll, we personally use them as well. They're a great company with amazing support...like us!
Once you've signed up with Surepayroll or another payroll provider they'll make withdrawals from your account when you approve payroll from them. This expense will enter LessAccounting as one large withdrawal. We advise you to categorize that expense as "wages". All your employee tax reports will live inside of your payroll provider's software.
If you decide against using a payroll provider, just simply cut checks like you normally would then manually pay your various taxes. You'll simply categorize those expenses to taxes or wages and assign the wages expenses to a contact or contractor.