The short answer
Before the first payday: get a federal Employer Identification Number (EIN), register with the NC Department of Revenue for withholding, set up a state unemployment insurance account with the NC Division of Employment Security, and collect a Form W-4, Form NC-4 and Form I-9 from your new employee. Then complete new hire reporting with the North Carolina New Hire Directory.
Step by step
- 1.Get an EIN. Apply free with the IRS. You'll use it on payroll filings.
- 2.Register for North Carolina withholding. Use the NCDOR online business registration (or Form NC-BR) to get your withholding account number.
- 3.Set up unemployment insurance. Create an account in NCSUITS, the NC Division of Employment Security's unemployment insurance tax system.
- 4.Collect the new-hire forms.
- Form W-4 for federal withholding
- Form NC-4 (or NC-4 EZ) for North Carolina withholding
- Form I-9 to verify identity and work authorization (required for every hire)
- 5.Complete new hire reporting. Federal and state new hire reporting rules require employers to report new and rehired employees to the North Carolina New Hire Directory (ncnewhires.com).
- 6.Check workers' compensation. In general, North Carolina businesses with three or more employees must carry workers' compensation insurance. Some businesses need it with fewer, so check the NC Industrial Commission's rules for your industry.
Want this done for you? We'll set up your payroll and registrations before the first payday.
Related service: Payroll in Shelby
What happens every payday
- Withhold federal income tax, Social Security and Medicare, and North Carolina income tax
- Deposit the withheld taxes on your required schedule
- Keep records of pay, hours and withholding
Filings through the year
| Filing | When |
|---|---|
| Form 941, federal quarterly payroll return | WhenBy the last day of the month after each quarter ends |
| North Carolina withholding returns and payments | WhenOn the schedule that applies to your business |
| State unemployment insurance Quarterly Tax and Wage Report | WhenQuarterly, through NCSUITS |
| Form W-2 to employees | WhenBy January 31 (next business day if it falls on a weekend) |
Keep employment tax records for at least 4 years.
Common first-time mistakes
- Paying someone as a contractor when they should be an employee
- Missing a deposit or quarterly deadline
- Skipping new hire reporting or the I-9
- Not registering with the state before the first payroll
Official sources
- IRS, Hiring employees
- IRS, Get an employer identification number (EIN)
- IRS Publication 15
- NCDOR, Register a business
- NCDOR, Withholding tax
- NC Division of Employment Security, Employers
- NC New Hire Directory
- NC Industrial Commission, Employer information
This guide is general information, not advice for your situation. Tax rules change; check with us or the official source before acting.