Hiring Your First Employee: Ten Things You Must Do
by Attorney Bethany K. Laurence
Start off on the right foot when you become an employer.
1. Obtain an employer identification number. When you hire employees, you must get an employer identification number (EIN) to use on tax returns and other documents you submit to the IRS. To get an EIN, you must file IRS Form SS-4. You can download the form from the IRS website at http://www.irs.gov.
2. Register with your state's labor department. Once you bring on employees, you will have to pay state unemployment compensation taxes. These payments go to your state's unemployment compensation fund, which provides short-term relief to workers who lose their jobs. Go to http://workforcesecurity.doleta.gov/map.asp for a list of state unemployment insurance tax agencies.
3. Set up a payroll system to withhold taxes. You'll need to withhold a portion of each employee's income and deposit it with the IRS, and also make Social Security and Medicare tax payments to the IRS. For more information, get IRS Publication 15, Circular E, Employer's Tax Guide from the IRS website at http://www.irs.gov. (You may also have to withhold taxes for your state. For more information, check with your state's tax agency; you can find links to each state's agency at the website of the Federation of Tax Administrators at http://www.taxadmin.org.)
4. Get worker's compensation insurance. You must have workers' comp coverage to protect workers who might suffer on-the-job injuries. For more information on workers' compensation laws, see Everyday Employment Law: The Basics, by attorneys Lisa Guerin and Amy DelPo (Nolo).
Page 1 of 4
Next Page
Copyright 2005 Nolo
