Your first employee in Colorado: the payroll registrations, in order
Before the first paycheck there are five registrations to make and two forms to collect. The order we do them in for new clients.
By Wes Sandoval
6 min read
Hiring your first employee turns a business into an employer, with filings that start before the first paycheck. Here is the order we follow when a client hires in Colorado.
Before the start date
Get a federal EIN if you only have a Social Security number on file. Register with the Colorado Department of Revenue for wage withholding and with the Colorado Department of Labor and Employment for unemployment insurance. Set up Colorado FAMLI premiums, which are shared between you and the employee. Arrange workers’ compensation coverage, which Colorado requires from the first employee.
On the first day
Collect Form W-4 for federal withholding and complete Form I-9 to verify the right to work. Report the new hire to the Colorado State Directory of New Hires within 20 days. If the employee works in Denver, the city’s occupational privilege tax applies as well.
Every pay period
Withhold federal and state income tax, Social Security and Medicare, deposit them on the schedule the IRS assigns you, and keep a record of every run. Late deposits are the most common payroll penalty we see.
Every quarter and year end
File Form 941 each quarter and the Colorado withholding and unemployment reports, then Form 940 and the W-2s by January 31. If that sounds like a lot to track, it is the reason payroll services exist: ours is $90 a month plus $7 per person paid.
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