Becoming an Employer

Part 1 in an eight-part series on Becoming an Employer.

 Part 1: Becoming an Employer
 Part 2: Apply for an Employer Identification Number (EIN)
 Part 3: Get Insurance: Business and Workers’ Compensation
 Part 4: Choose How to Handle Your Payroll
 Part 5: Start Hiring Employees
 Part 6: Complete Required Paperwork for New Hire
 Part 7: Make Payroll Tax Deposits
 Part 8: File Quarterly and Annual Reports and Returns

describe the imageCongratulations! As a small business owner, you’ve joined the ranks of a vital part of the U.S. economy. Small businesses:

  • Represent 99.7 percent of all employer firms.
  • Employ over half of all private sector employees.
  • Pay 44 percent of total U.S. private payroll.
  • Have generated 64 percent of net new jobs over the past 15 years.


If you’re ready to hire employees to help your small business grow, this 8-part series will help you through the process of becoming an employer.

There are many links to our own articles and government sites within these articles. Check these sites frequently, as content often changes. Also, any tax rates used in examples are subject to change.

Do your homework for your state and local area.

State Requirements
Every state has its own requirements for businesses. Depending on your state and the type of business you have, you may have different requirements than another business. Use the Small Business Association’s tool for researching licenses, registrations, and permits.

Your business also may be required to register for unemployment insurance tax as well as disability insurance (in California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island.) Once you register, you will receive details on your starting rate for state unemployment tax (SUTA); this rate is based on several factors, including your industry, and may be subject to change depending on your company’s experience. To research your state’s requirements, see New Business Information for Each State.

Local Requirements
Your city or locality may require employer registration, and you may be required to withhold local taxes from your employees. Call your local government office for more information, so that you can be legal from the start.

Additional Resources

We hope that this series will help you reach your goal of growing your business. In addition to our 8-part series, you will find valuable information on these websites:

While this is a general overview of the steps most small businesses will take in the process of becoming an employer, Patriot Software DOES NOT provide any legal advice. Users/recipients should consult with their own lawyer for legal advice.


We provide fast, simple, and affordable accounting and payroll software. After a rough start-up experience, we know first hand what small businesses need in order to breakthrough and achieve success. So we created a software service to help you keep the two things you don’t have enough of… time and money.

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