Going from working alone to having an employee changes your obligations meaningfully, and the deadlines are not flexible.
Before the first paycheck
- 01Have an EIN. Our note on EINs covers it.
- 02Collect a completed W-4 from the employee.
- 03Complete employment eligibility verification.
- 04Register with the state for unemployment tax.
- 05Confirm workers compensation requirements for your situation.
- 06Set up a payroll process before you owe anyone money, not after.
Every pay period
- Calculate gross pay, including any overtime.
- Withhold income tax, Social Security and Medicare.
- Add the employer share of Social Security and Medicare.
- Deposit withheld amounts on the required schedule — this is the part with real penalties attached.
- Keep records of everything.
Quarterly and annually
- Quarterly employment tax returns.
- State unemployment reporting.
- W-2 forms to employees and to the Social Security Administration after year end.
- 1099 forms to any contractors you paid.
Withheld payroll tax is not your money. It is the employee's money held in trust, and the penalties for failing to deposit it on time are among the most serious in tax administration. Do not use it as working capital.
We run payroll
Payroll is one of our six services, and it is exactly the kind of recurring obligation worth handing off. Call (432) 257-7547 or come by 700 C Andrews Hwy in Midland. We work in English and Spanish.
Related services