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Employment
Taxes
Hiring Others

Some businesses must hire people immediately; other businesses can operate with the owners and intermittent help for a year or more. If you need to hire people immediately, this is the time in the start-up process to do it. You should have developed your systems so that you know what jobs need to be done and can hire appropriately.

Many people don't realize that "employee" does not require regular employment.

  • Someone can work for you for 20 minutes and if you are directing their work, you are an employer.
  • People who work commission-only are usually your employees.

Please see Are you an Employer? There is some paperwork, but it really isn't difficult. Once you have regular employees, you will probably want to use a payroll service, but until then, this kit has tools to help you easily do payroll taxes. You will learn more about them in the step on Getting Paid

Independent Contractors

Employees

There are other requirements for employers, but we have put them in Filling in the Gaps. In most cases, if you are in a hurry, you can get by with the forms shown above. However, if you are in a high hazard business, please review Filling in the Gaps at this time.

Paying Your Employees(and Uncle Sam)

Your first obligation is to pay your employees, and with them, Uncle Sam. You can use this tool to calculate payroll taxes and net pay.

Calculating Payroll Taxes

Remember, that when you pay the withheld taxes to the government, employers must MATCH social security and Medicare. The calculators above do not calculate tax on tips. If your employees are paid tips, please review:

Employee Tip Income

Use the following forms to pay taxes to the government (usually a monthly requirement for new businesses):

EFTPS Deposit for Federal Payroll Taxes

Paying Yourself (and Uncle Sam)

Please go to Government Requirements and under Taxes and Required Forms, select "Paying Yourself " and your business entity.

Paying Independent Contractors

Pay independent contractors using the same systems as you do for other vendors. Do not ask for time-sheets or pay them with your regular employees.

Filling in the Gaps

This section contains information on safety requirements, labor law notices and a program for working low-income parents.

  • Occupational Safety and Health
  • Earned Income Credit
  • Employee Notices to Post
  • Quarterly Requirements for Employers

    Some businesses will have an accountant or bookkeeper by this stage who will handle these responsibilities. Many businesses won't. Either way, it is helpful to understand the requirements so you can make sure stay in compliance.

    Employees.

  • Employer's Quarterly Federal Tax Return IRS 941
  • Quarterly State Unemployment and Withholding Forms
  • FUTA Payments Using Online EFTPS system

  • Filing Forms Electronically

  • Filing IRS Forms Electronically
  • Annual Requirements for Employers

    Some businesses will have an accountant or bookkeeper by this stage who will handle these responsibilities. Many businesses won't. Either way, it is helpful to understand the requirements so you can make sure stay in compliance.

    Employees.

  • W-2 Wage and Tax Statement Transmitted with IRS W-3
  • Annual Reconciliation Statement
  • IRS 940: Federal Return of Unemployment Tax
  • 50+ Employees? IRS 1095: Employer Provided Health Insurance Report

  • Independent Contractor

  • 1099 Filings for Independent Contractors
  • IRS Withholding Charts

    Some businesses will have an accountant or bookkeeper by this stage who will handle these responsibilities. Many businesses won't. Either way, it is helpful to understand the requirements so you can make sure stay in compliance.

    Employees.

  • Biweekly - single
  • Biweekly - married
  • Other payroll periods