Payroll
Setting Up Payroll for Your First Employee
Hiring your first employee is a milestone — and a new set of obligations. Here's the payroll groundwork you need to get right.
01Get Your EIN and Register
You'll need a federal EIN and, in most cases, state employer registrations for withholding and unemployment. These come before the first paycheck, not after.
02Collect the Right Paperwork
Every new hire completes a W-4 for withholding and an I-9 for work eligibility. Keep these on file from day one.
03Understand What You Withhold
You withhold income tax, Social Security, and Medicare from employees, and pay the employer share of Social Security and Medicare plus unemployment taxes. The IRS employment taxes page lays out the details.
04Deposit and File on Schedule
Withheld taxes must be deposited on the IRS's schedule and reported on regular payroll filings. Missing these deadlines carries steep penalties.
05Consider a Payroll Service
Modern payroll software or a service handles calculations, deposits, and filings automatically. For most small businesses it's well worth the modest cost.
Have a question about your situation?
Book a free 30-minute consultation and we'll walk through it together.
Schedule a ConsultationThis article is general information, not individualized tax, legal, or financial advice. Every situation is different — reach out and we'll look at yours directly.