“What do I have to do to hire my first employee?” More than one form, but less than it looks once you put it in order. Most of it happens once, before or during the first week; a few things repeat every payday, every quarter and every January. Here is the order, with the rule behind each step and where it comes from.
One question comes before all of them: is this person an employee at all? If you were hoping to pay a helper on a 1099, read 1099 or W-2 first. The rest of this assumes an employee.
Before the first day
1. Get an EIN
IRS Publication 15, the employer’s tax guide, says you need an employer identification number if you are required to report employment taxes, and adds: “Don’t use an SSN in place of an EIN.” You can apply online at IRS.gov/EIN. If your business already has one, use it.
2. Open your state accounts
The SBA’s hiring guide says state employment taxes “vary by state, but often include workers’ compensation insurance, unemployment insurance taxes, and temporary disability insurance,” and tells you to find out whether you need state or local tax IDs. In practice that usually means an account with your state’s unemployment insurance agency and, if your state taxes wages, one with its revenue department for withholding. Publication 15 puts it in one line: “Contact your state or local tax department to determine their rules.”
Paying the state unemployment tax in full and on time also earns a credit against the federal one (FUTA); the rates and the credit are in Your Real Hourly Cost.
3. Settle workers’ compensation
Whether one employee triggers a workers’ comp requirement depends on your state and trade; our workers’ comp article covers the thresholds and how class codes set the price. If you need a policy, have it in place before the first shift, not after.
4. Put up the posters
The Department of Labor’s poster page sets out who posts what. The federal minimum wage poster goes up at every employer with employees covered by the Fair Labor Standards Act. The OSHA “Job Safety and Health” poster applies to private employers in a business affecting commerce, and a covered employer that fails to post it “may be subject to citation and penalty.” The Employee Polygraph Protection Act poster applies to any employer engaged in or affecting commerce, governments aside. The FMLA poster is only for employers with 50 or more employees in 20 or more workweeks. The EEOC’s “Know Your Rights” poster is free on its site for employers covered by the laws it enforces. The DOL’s posters are free to download, and its online Poster Advisor walks you through the federal list; it covers federal posters only, so get the state ones from your state labor department.
The first day and the first week
5. Form W-4
“Ask each new employee to complete the 2026 Form W-4,” Publication 15 says. If a new employee does not give you one, you withhold as if they checked Single or Married filing separately and made no other entries. The same section says to record each new employee’s name and Social Security number from their card if it is available. If your state taxes wages, ask its revenue department which withholding form it uses.
6. Form I-9
USCIS sets two deadlines. The employee completes Section 1 “no later than their first day of employment.” You complete Section 2 within three business days of the day employment begins, by examining the documents the employee chooses from the form’s lists: “if an employee begins employment on Monday, you must review the employee’s documentation and complete Section 2 on or before Thursday of that week.” For a job of less than three business days, Section 2 is due on the first day. You may not tell the employee which documents to bring. Publication 15 adds that E-Verify is available to confirm eligibility.
Then file it away for the right length of time: USCIS says to keep each I-9 for three years after the date of hire, or one year after employment ends, whichever is later.
7. The new-hire report
The federal Office of Child Support Enforcement says employers must report new and rehired employees “within 20 days of hire to the state where the new employees work,” and that “some states require it sooner.” Seven items are required: the employee’s name, address, Social Security number and date of hire, and your name, address and EIN. Publication 15 notes that many states accept a copy of the W-4 with your employer information added, and that a rehire counts as new if they were gone at least 60 consecutive days.
8. Start the time records
The Wage and Hour Division’s recordkeeping fact sheet says every covered employer keeps records for each non-exempt worker, including the hours worked each day and the total for each workweek. Payroll records are kept at least three years, and time cards two. No particular method is required, as long as it is complete and accurate. A notebook in the truck can do the job. What counts as hours worked is its own subject: see whether drive time is paid and overtime on a day rate.
Every payday, and the first deposit
On each payday you withhold federal income tax using the W-4 and the tables in Publication 15-T, and the employee’s share of Social Security and Medicare. For 2026, Publication 15 sets Social Security at 6.2% each for employee and employer, on wages up to $184,500, and Medicare at 1.45% each, with no wage limit. You pay the matching employer share.
Say you pay a helper $800 a week and have four paydays in March. That is $3,200 in wages. Social Security is $198.40 from the helper and $198.40 from you; Medicare is $46.40 each. So $489.60, plus whatever federal income tax the W-4 calls for, is owed for March.
When is it due? Publication 15 says a new employer filing Form 941 is a monthly schedule depositor for its first calendar year, and a monthly depositor pays a month’s taxes “by the 15th day of the following month.” So March’s taxes are deposited by April 15. Deposits must be made electronically, through EFTPS, IRS Direct Pay or your IRS business tax account.
Every quarter and every January
| When | What |
|---|---|
| April 30, July 31, October 31, January 31 | Form 941 for the quarter just ended (10 more days if every deposit was on time) |
| January 31 | Form W-2 to each employee, and Forms W-2 with Form W-3 to the Social Security Administration |
| January 31 | Form 940, the annual federal unemployment return |
| Ongoing | Keep employment tax records at least four years |
The IRS due-dates page sets the quarterly and January dates; the four-year record rule is in Publication 15. A date that lands on a weekend or legal holiday moves to the next business day.
The one-page checklist
- Employee or contractor decided.
- EIN in hand.
- State unemployment and withholding accounts open.
- Workers’ comp in place if your state requires it.
- Federal and state posters up.
- W-4 signed; name and SSN recorded.
- I-9 Section 1 by day one, Section 2 by day three.
- New-hire report filed within your state’s deadline.
- Daily time records started.
- Deposits on the calendar for the 15th of each month.
Then price the hire into your jobs: wages are only part of what an employee costs, and working out labor burden shows the rest. If you have not posted the job yet, check whether your state requires a pay range in the ad, and if the new hire is under 18, read what teens can and cannot do on your jobs first.
General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.