Hire and manage employees
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Hire and manage employees | U.S. Small Business Administration Skip to main content Official websites use .gov A .gov website belongs to an official government organization in the United States. Secure .gov websites use HTTPS A lock ( Lock Locked padlock ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites. Hire and manage employees Establish a basic payroll structure to help you hire employees. Then, manage employees properly with a general understanding of state and federal labor laws. Content Hire and pay employees Before finding the right person for the job, you’ll need to create a plan for paying employees. Follow these steps to set up payroll: Get an Employer Identification Number (EIN) Find out whether you need state or local tax IDs Decide if you want an independent contractor or an employee Ensure new employees return a completed W-4 form Schedule pay periods to coordinate tax withholding for IRS Create a compensation plan for holiday, vacation and leave Choose an in-house or external service for administering payroll Decide who will manage your payroll system Know which records must stay on file and for how long Report payroll taxes as needed on quarterly and annual basis The IRS maintains the Employer’s Tax Guide , which provides guidance on all federal tax filing requirements that could apply to the obligations for your small business. Check with your state tax agency for employer filing stipulations. File taxes with employees or independent contractors Distinguishing between employees and independent contractors can impact your bottom line, or your total revenue once expenses have been deducted. Your bottom line ultimately impacts how you withhold taxes and helps you stay legally compliant during tax season. Learn the differences before hiring your first employee . An independent contractor operates under a separate business name from your company and invoices for the work they’ve completed. Independent contractors can sometimes qualify as employees in a legal sense. The Equal Employment Opportunity Commission guide breaks things down so you can make a more informed decision. If your contractor is discovered to meet the legal definition of employee, you may need to pay back taxes and penalties, provide benefits, and reimburse for wages stipulated under the Fair Labor Standards Act . Employees Independent contractors Plan to offer employee benefits Healthcare and other benefits play a significant role in hiring and retaining employees. Some employee benefits are required by law, but others are optional. Required employee benefits Social Security taxes: Employers must pay Social Security taxes at the same rate as their employees. Workers’ Compensation: Required through a commercial carrier, self-insured basis, or state Workers’ Compensation Program . Disability Insurance: Disability pay is required &nbs
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