Your first US employee: registrations and payroll before the first salary

Checked against the sources on 14 November 2026.

Hiring the first person in the United States changes what the company files. Until then it has an income tax return and a state report once a year. From the first payday it has tax deposits every month and returns every quarter. These are the steps in the order they come.

Before the offer

• The federal number. Payroll returns and tax payments need the company’s employer identification number (EIN).¹
• The state. The company registers in the state where the person will work. In Texas, an employer registers with the Texas Workforce Commission within ten days of paying an employee wage.²

Each state has its own unemployment tax and its own rules on withholding. The state where the person works decides what else is needed.

In the first days

• Form W-4 from the employee, which sets the federal income tax to withhold.¹
• Form I-9. The employer examines the employee’s documents and completes Section 2 within three business days of the date employment begins.³
• A report of the new hire to the state registry.¹ In Texas it is due within 20 days of the hire date.⁴

Each payday

The company withholds federal income tax, social security tax and Medicare tax from the wages, and pays its own share of the last two. Social security tax is 6.2% from each side, on wages up to $184,500 in 2026. Medicare tax is 1.45% from each side, with no ceiling.¹

Deposits

The tax withheld and the company’s share are deposited with the IRS by electronic funds transfer. A new employer deposits monthly for its first calendar year, by the 15th of the month after the wages were paid.¹

One rule overrides the schedule. If $100,000 or more of tax builds up on any day, it is deposited by the next business day.¹

Returns

• Form 941 every quarter, by 30 April, 31 July, 31 October and 31 January.⁵
• Form 940, the federal unemployment tax return, by 31 January. The tax is 6.0% of the first $7,000 of each employee’s wages. A credit of up to 5.4% for state unemployment tax brings it down to 0.6% where the full credit applies.^{5, 1}
• Form W-2 for each employee, by 31 January.⁵

What an employee does to state tax

A person working in a state can bring the company within that state’s income tax. In California, payroll above $75,707 in 2025 meant the company was doing business there.⁶ Our note on which US states can tax your company covers this.

What this note leaves out

State income tax withholding, workers’ compensation insurance and local taxes differ from state to state and are not covered here. Check them for the state where the person will work.

We register companies for payroll taxes and prepare Forms 940 and 941. The rest of a US company’s year is on our United States page.

Sources

1. Internal Revenue Service, Publication 15 (2026), Employer’s Tax Guide.
2. Texas Workforce Commission, Responsibilities of a liable employer.
3. US Citizenship and Immigration Services, Handbook for Employers M-274, section 4.0: completing Section 2.
4. Texas Workforce Commission, New hire reporting.
5. Internal Revenue Service, Employment tax due dates.
6. California Franchise Tax Board, Doing business in California. Page updated 7 November 2025.