New Employee Setup Checklist

The payroll and compliance steps for hiring your first employee.

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Before Day One

Get an EIN if you don't already have one
Register for state unemployment insurance
Decide on pay frequency (weekly, biweekly, monthly)
Choose a payroll provider or process

Paperwork

Have the employee complete Form W-4
Have the employee complete Form I-9 (verify ID within 3 days)
Collect direct deposit information
Report the new hire to your state new-hire registry

Pay & Benefits

Confirm minimum wage and overtime rules for your state
Set up any benefits you're offering
Decide on a PTO/sick leave policy

Ongoing

Withhold and remit payroll taxes on schedule
File quarterly payroll tax returns (Form 941)
Issue a W-2 at year-end

Frequently Asked Questions

How quickly do I need to complete Form I-9?

Within 3 business days of the employee's start date — this is a firm federal deadline, not a suggestion.

Do I need a payroll provider, or can I run payroll myself?

You can run payroll manually, but most small businesses find a payroll provider worthwhile once they have even one employee — it handles tax withholding, remittance, and filing deadlines automatically.

What happens if I miss a payroll tax deadline?

The IRS charges penalties and interest on late payroll tax deposits, and they escalate the longer the delay continues — this is one area where staying on schedule matters a lot.

Is this checklist different if I'm in Canada?

Yes — see the Canada version of this checklist, which covers TD1 forms, CPP/EI remittances, and T4 filing instead.

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