Employment taxes: the moment you hire someone

The day you bring on your first employee, a new layer shows up — payroll taxes. You withhold income and Social Security/Medicare from their pay, match part of it, and send it in on a schedule. It's very doable, but it isn't optional and the deadlines have teeth. Most owners hand this to payroll software or a pro — and they should.

Do this

1. Get an EIN (free from the IRS) before you hire — it's your business's tax ID for payroll.
2. Know the difference between an employee and a contractor. Misclassifying is a costly mistake.
3. For employees: withhold income + Social Security/Medicare, match the employer share, and file the payroll forms (941/940, W-2s).
4. For contractors you pay $600+ in a year: send a 1099-NEC. Use payroll software or a pro so nothing files late.

Before you run your first payroll

• Apply for a free EIN at irs.gov (search 'EIN online')
• Decide (correctly) whether each worker is an employee or a contractor
• Have each employee complete a W-4; collect a W-9 from each contractor
• Pick payroll software or a payroll service — don't hand-calculate this
• Calendar the deposit and filing dates; late payroll taxes are penalized hard