How to Set Up Payroll for Your First Employee

Hiring your first employee is a big milestone! But it also means you now have payroll responsibilities. Here’s how to set it up right:

Step 1: Apply for an EIN
This is your federal tax ID and required for payroll.

Step 2: Register With Your State
Set up state withholding and unemployment insurance accounts.

Step 3: Collect Employee Forms
W-4 for tax withholding and I-9 for work eligibility.

Step 4: Choose Payroll Software or Provider
Options like QuickBooks Payroll, Gusto, or a bookkeeper can simplify the process.

Step 5: Withhold and Pay Taxes
Don’t forget federal, state, and Social Security/Medicare taxes.

Step 6: Stay Compliant
File required reports on time (quarterly and annually).

Pro tip: Start with a payroll system from day one—it prevents expensive mistakes later.

✅ Need help setting up payroll for your first hire? I’ll walk you through every step or manage it for you. [Get started > tax-hub.net/new-page]