Checklist
What paperwork do I need to hire my first employee?
Short answer: before or on your helper’s first day you need an EIN, a completed Form I-9 and Form W-4, state withholding and unemployment tax accounts, workers’ comp (in most states), and a new-hire report to your state within 20 days or sooner. Here is the order that keeps it simple.
Key takeaways
- Federal paperwork is the same everywhere: EIN, I-9, W-4, and new-hire reporting.
- State paperwork varies: withholding account, unemployment account, workers’ comp, posters, and sometimes local taxes.
- Keep I-9s separately from personnel files and keep payroll records for at least four years.
On this page
1. Get an EIN from the IRS
The IRS EIN page says you need an Employer Identification Number if you have employees. It is free and available online directly from the IRS, so you never need to pay a service for one. If you plan to form an LLC or corporation, the IRS says to register the entity with your state first, then apply for the EIN. Publication 15 adds that you shouldn’t use your Social Security number in place of an EIN on employment filings.
2. Register with your state
Most states require two accounts once you have an employee: a withholding account with the state revenue department (if the state has income tax) and an unemployment insurance account with the state workforce agency. The state then sends a new-employer unemployment tax rate. Some cities and counties have their own payroll taxes too. The SBA hire and manage employees guide links to state requirements, and the DOL state unemployment insurance laws help you find your state’s unemployment agency.
3. Line up workers’ compensation
In most states you need coverage before the employee starts work. The rules are state-specific; see do I need workers’ comp for my first employee.
4. On the first day: Form I-9 and Form W-4
Form I-9 verifies identity and work authorization. Per USCIS Form I-9, the employee completes Section 1 no later than the first day of work, and you complete Section 2, after examining their documents, within three business days of the start date. You keep the form; you don’t file it with the government. E-Verify is optional for most private employers but required in some states and for some federal contracts.
Form W-4 tells you how much federal income tax to withhold (IRS Form W-4). Ask for the current-year version. Many states have their own withholding certificate as well.
Also collect the employee’s legal name, address, Social Security number as shown on their card, and the payment details you need for direct deposit if you offer it.
5. Report the new hire
Federal law requires employers to report each new or rehired employee to the state where they work within 20 days of hire, and some states require it sooner (ACF new-hire reporting). Many states accept a copy of the W-4 with employer information added, or an online form. This reporting helps states enforce child support orders.
6. Set up payroll and post notices
Decide how often you’ll pay (your state may set a minimum frequency), set up deposits for federal and state taxes, and track hours, especially for overtime. Display required federal and state workplace posters; the DOL’s DOL workplace posters page tells you which federal ones apply.
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A worked example
Say you’re a solo electrician and you plan to start a helper on a Monday. A workable timeline looks like this: two weeks out, get the EIN online and register state withholding and unemployment accounts; one week out, bind a workers’ comp policy and set up payroll; on Monday, have the helper complete I-9 Section 1 and a W-4; by Wednesday (the third business day), finish I-9 Section 2; within the next couple of weeks, file the new-hire report before your state’s deadline. Then run the first payroll and make your first tax deposit on schedule.
Records to keep
The IRS says to keep employment tax records for at least four years. Keep I-9s for three years after the hire date or one year after employment ends, whichever is later. For the full list in order, see our first employee checklist, and use the true-cost calculator to budget the cost before you hire.
Budget before you hire Estimate wages, taxes, and insurance for your state.
Open the calculatorFrequently asked questions
What forms does a new employee fill out?
At minimum, Form I-9 (Section 1 by the first day of work) and Form W-4 for federal income tax withholding. Many states also have a state withholding form, and you will need payment details for payroll.
How soon do I have to report a new hire?
Federal law requires reporting to your state new-hire registry within 20 days of hire. Some states require it sooner, so check your state's registry.
Do I need an EIN to hire an employee?
Yes. The IRS says you need an EIN if you have employees. It is free from the IRS online. If you are forming an LLC or corporation, register it with your state before you apply.
Federal figures were checked against 2026 IRS Publication 15 and the linked official pages in November 2026. Rows marked hypothetical are examples only. State rules and rates vary; confirm with your state agencies, an insurance agent, and your accountant before you hire.