SurePayroll By Paychex · First Hire Guide · 2026
How to hire your first employee in 2026
Audits, IRS fees, and missed deadlines are avoidable. Here's your expert, plain-language guide to making your first hire without stress.
On this page (Free, no email needed)
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A plain-English step-by-step guide to your first hire
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A real-cost hiring calculator with wages, taxes, & workers' comp
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Every federal form linked to its official source
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Your state's free hiring checklist — what you're required to do in your state
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Key federal date alerts for your first year as an employer
SurePayroll Customer Research · Dec 2025–Mar 2026
42%
said time spent on payroll was their biggest stressor before switching
38%
feared making a payroll mistake
29%
worried most about IRS fines and penalties
The stakes are real.
Here's what to watch for.
Tax deadlines hit hard
The IRS won't care that it was your first missed deadline. Penalties start at 2% and compound. Sign up below and we'll send you the key dates ahead of each one.
WORKER MISCLASSIFICATION COSTS
Calling an employee a contractor to avoid payroll taxes can be a very expensive mistake.
WORKERS' COMP IS NOT OPTIONAL
Most states require workers' comp before you write the first paycheck. Cost depends on your industry. Use the calculator below to estimate your real number.
BEFORE YOU WRITE
THAT FIRST PAYROLL CHECK
Here's what you'll need to do, step by step.
The W-4 tells you how much federal income tax to withhold. The I-9 verifies they're legally allowed to work in the US. Both are required before or on the first day, not after. Keep the I-9 on file for 3 years.
Every state requires new hire reporting within a set window. Usually 20 days. It's a short form, filed with your state's labor or revenue department. Skipping this step creates compliance exposure.
Most states require workers' compensation insurance before you pay a single paycheck. Cost depends on your industry — a desk job runs about 0.3% of wages, a roofer can run 15%+. Use the calculator below to estimate your number.
Every paycheck, you're required to withhold federal income tax, Social Security, and Medicare (FICA at 7.65% of wages). You'll also file quarterly returns (Form 941) and an annual unemployment return (Form 940). Some payroll software can handle all of this automatically.
Hourly employees: track hours and apply overtime rules as needed. Salaried and non-exempt employees: confirm overtime eligibility before calculating pay.
Using the employee’s W-4, calculate federal income tax withholding and the employee’s share of FICA taxes, including Social Security and Medicare. Then double-check these calculations, because you’re liable for any mistakes.
You owe matching FICA taxes on wages you pay: 6.2% Social Security, up to the annual wage base limit for that year, and 1.45% Medicare on all covered wages. For 2026, the Social Security wage base is $184,500. Medicare has no wage cap. This is your cost, not the employee’s.
Most new employers deposit monthly, by the 15th of the following month. If your tax liability exceeds $50,000/year you switch to semi-weekly deposits. Missing a deposit triggers a 2–15% penalty. You deposit via EFTPS, the IRS's free electronic system.
FUTA is generally 6% on the first $7,000 of wages, though the federal rate can be reduced by state unemployment tax credits. Credit-reduction states pay more.
Due April 30, July 31, October 31, and January 31. Reports total wages, tips, federal income tax withheld, and both employer and employee Social Security and Medicare taxes. One mistake requires an amended return.
Most states require their own income tax withholding using a state-specific table. State unemployment insurance (SUTA) rates vary by employer and claims history. Each state has its own deposit schedule and forms.
You must produce a W-2 for every employee — reporting total wages, tips, and all taxes withheld for the year. File copies with the Social Security Administration by the same deadline. Errors require corrected W-2c forms.
WHAT WILL THIS HIRE
ACTUALLY COST?
Wages are only one part of the financial picture when you hire your first employee. You'll also be responsible for employer taxes, workers' comp, and other costs. Here, you can estimate your true annual cost before you commit.
Wages + employer FICA (7.65%) + FUTA (0.6% on first $7,000) + workers' comp estimate + payroll software. Workers' comp rates vary by state, industry, and insurer.
Note: SUI/SUTA is not included; rates vary by state, industry, and employer history.
Get your state's free hiring checklist. Plus key federal date alerts all year.
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FEDERAL DEADLINES
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EVERY FORM YOU NEED.
LINKED, CURRENT, AND FREE.
Federal forms are the same in every state. Here are direct links to official government sources.
Apply for your Employer ID Number. Free, instant, online. Do this before anything else.
Quarterly payroll tax return. Due the last day of the month after each quarter. Filed automatically by your payroll software.
Annual federal unemployment return (FUTA). Due January 31. One page, about 10 minutes, once a year
Annual wage statement for each employee. Must be postmarked by January 31. Generated automatically by your payroll software.
YOUR FIRST YEAR AS
A BUSINESS OWNER
Here are the big federal deadlines you'll face as a new employer. (Want a heads up for these dates? We've got you. Sign up for alerts below.)
Legal disclaimer: The information on this page is provided for general educational purposes only and does not constitute legal, tax, financial, or professional advice. Tax rates, deadlines, and requirements change and vary by jurisdiction. SurePayroll By Paychex makes no representation that the information on this page is current, complete, or applicable to your specific situation. Always consult a qualified attorney, accountant, or tax professional before making decisions about your business structure, payroll obligations, or tax filings. Calculator results are estimates only and should not be relied upon for financial planning purposes. Workers' compensation rates are illustrative and will vary significantly by state, industry, classification code, and insurer. Email communications are sent on a best-effort basis; delivery is not guaranteed and SurePayroll By Paychex is not responsible for missed deadlines arising from undelivered or unopened messages.