Hiring your first employee is a big step, and a little setup up front saves a lot of headaches later. Here's the short version of what to have in place.
Before the first paycheck
- Get your federal EIN if you don't have one
- Register for state withholding and unemployment accounts
- Set up workers' compensation coverage where required
- Choose a payroll system that files your taxes for you
Paperwork from your new hire
- A completed Form W-4 for federal withholding
- A Form I-9 to verify work eligibility
- State withholding forms where they apply
Get the classification right
Employee or contractor is not a preference, it's a legal test. Misclassifying a worker is one of the most common and costly mistakes small businesses make.
Do the setup once, correctly, and payroll becomes a non-event every two weeks.
Then keep it running
Once you're set up, the work is mostly staying on schedule and letting the system handle filings. If you'd rather not think about it at all, that's what our full-service payroll is for, tax filings and compliance included.