- Coverage
- All fifty states
- Includes
- Registrations, filings, year end forms
- Owner payroll
- S corporation salaries set and documented
- Contractors
- 1099-NEC handled at year end
US payroll, set up in the right state
Wages calculated, tax withheld, deposits made, returns filed and year end forms issued. Including the registrations that have to exist before the first person is paid.
- Decides everything
- Where the employee physically works
- Not
- Where the company was formed
Payroll goes wrong at the beginning, not at the end.
The mechanics of paying someone are largely automated now. What is not automated is deciding which accounts the company needs, in which jurisdictions, before the first payment leaves. That decision depends on where the person physically works, which since remote hiring became normal is frequently not where the company is.
Hire somebody in Ohio while your LLC sits in Wyoming and you have probably created an Ohio withholding obligation, an Ohio unemployment obligation, and a question about whether the entity should be registered to do business in Ohio at all. None of that is difficult. All of it is expensive to fix a year later, because the liability accrues from the first payment rather than from the date you noticed.
It compounds with every state you add. Three remote employees in three states is three withholding accounts, three unemployment accounts, three sets of quarterly returns and, quite possibly, three foreign qualifications for the entity. We set these up as part of onboarding rather than sending you a list and wishing you luck.
What has to exist first.
| What it is | Who wants it | |
|---|---|---|
| Federal registration | An EIN, plus federal income tax, Social Security and Medicare withholding. | The IRS, before any wage is paid. |
| State withholding | A withholding account in every state where an employee physically works. | That state's revenue department, not the state you formed in. |
| Unemployment insurance | A state unemployment account, usually separate from withholding and separately numbered. | That state's labour or workforce agency. |
| Workers' compensation | Coverage where the state requires it, which most do once you have an employee. | The state, and in a few states a state run monopoly fund. |
| Periodic filings | Quarterly Form 941 and annual Form 940, plus each state's own returns on their own schedules. | The IRS and every state you are registered in. |
| Year end | W-2 for employees and 1099-NEC for contractors, with copies to the agencies. | The IRS, the states, and the people who worked for you. |
Common questions
If they are genuinely an employee, yes, from the first payment. There is no threshold below which withholding becomes optional. The cost of running one person properly is small. The cost of unwinding a year of unwithheld wages is not.
Only if they genuinely are contractors, which is decided by how the relationship works rather than by what the agreement calls it. Control over hours, method and tools, exclusivity, and who supplies the equipment all matter. Misclassification is one of the more expensive findings in an examination, in both countries, and it is assessed against the employer.
Enough to be reasonable for the work you do, judged against what you would pay somebody else in your industry and market. There is no safe percentage. We set it with documented reasoning at the time, which is what stands up later.
Then you likely need withholding and unemployment accounts in all three, and possibly a foreign qualification for the entity in each. Remote hiring creates state obligations that surprise people, and it is much cheaper to register before the first payroll than to correct afterwards.
No. We work in the United States only and do not register or file with the CRA or any province. If your US company hires someone physically in Canada, that creates Canadian obligations you will need a Canadian payroll provider for, and we will say so rather than improvising.
Hiring your first person?
Tell us where they will physically sit. That single answer drives every registration you need.