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Hiring Your First Employee:
First what you need to do is to apply for EIN or employee identification number. EIN is also referred to as Employer Tax ID. The easiest way is to apply online at the IRS website.
Register with your state tax authority. For example, if you are a California employer, you can register online at the EDD website.
For other states, follow this link.
Employee Eligibility Verification (Form I9). The most common documents required for I9 are driver license and a social security card. See the full list of acceptable docs on the 5th page of the form. Download I9.
You can use E-Verify (free service) to verify whether a social security number is valid. E-Verify.
Register with Your State's New Hire Reporting Program. For California employers - fill out DE34 and Mail to Employment Development department. For Other states, get information about reporting requirements here.
Have your employee fill out a W4. W4 is required to withhold correct federal income tax from your employee. Download W4. You can use the same form for state tax withholding unless employee wants to have a different filing status and the number of allowances for state taxes. States have their own "W4s". For California, it is DE4. Download DE4.
Keep your tax withholding (payroll) records for at least 4 years. This is required by IRS!
If you offer direct deposit, you will need employees permission to post a paycheck to employee's bank account. Download sample Direct Deposit Authorization form here [coming soon].
Obtain workers' compensation insurance - contact your insurance broker or get workers comp insurance through Intuit/QuickBooks.
Post Employment and Labor Law posters in your office or place of work - required by law! Download posters.
Rules of Debit and Credit
Effect of Adjusting Entries on the Financial Statements
Depreciation-Compare Different Depreciation methods
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