Define the payroll defaults in
> Setup > App Setup > Develop > Custom Settings
Click on Manage for Payroll Settings
Create Default Organization Level Value (in the top part of the screen):

The most important entries are
- 
Payroll Code (default)
 - 
Overtime Min Week (regular work week in hours)
 
This screen also allows you to automatically close periods and determines what information is passed to the payroll system:
- 
Project
 - 
Project Phase
 - 
Project Line
 - 
Activity Type
 - 
Rework (Activity Type)