We often meet with solo practitioners who are hiring their first employee in Washington, and they ask us: How do I hire an employee in Washington? What paperwork do I need? What steps do I need to take for local and federal governments? How do I run payroll? What am I missing?
To answer these questions, we’ve created a simple checklist for hiring new employees in Washington:
- File A New Business License Application. If you’ve been operating without employees, chances are your current business license does not allow employees; so, you’ll need to file for a new one. The process is simple, and you can file online here: http://bls.dor.wa.gov/file.aspx
- Once logged in, you should see a heading that reads “Business licensing.” If not, click the white button labeled “+ Add A Service”, and add the business licensing service to your account. Then, click “Get Started.”
- If you haven’t filed online before for that business, you need to add your business to your account. Click “Add Access to an Existing Business.” Be sure to have your UBI and Letter ID handy. A Letter ID is a code found in the upper right corner of your business license renewal notice. If you do not have your Letter ID, select the box “Click here to request a Letter ID be mailed to the address on file.” Click next, and then come back once you’ve received your Letter ID.
- If you do have your Letter ID, simply follow the steps in the wizard. Be sure to select the option for hiring employees when it asks for the reason for the license.
- Once you application is processed, you will receive: (1) a letter from the Washington Department of Revenue; (2) a letter from the Washington Employment Security Department; and (3) a workers comp rate notice from the Washington Department of Labor and Industries. You’ll need these letters to set up your payroll system.
- Obtain Required Paperwork From The Employee. Two pieces of paperwork are required, and they both get saved in your files; they do not get submitted to any government agency.
- Your employee will need to provide you an IRS Form W-4. Those are available at https://www.irs.gov/pub/irs-pdf/fw4.pdf.
- Complete INS Form I-9, available here: Form I-9 (PDF, 535 KB). Be sure to review the required pieces of identification and ensure both the employee and employer sections are filled out.
- Report Your New Hire. Report your new hire to the State of Washington DSHS here: https://www.dshs.wa.gov/esa/division-child-support/new-hire-reporting.
- Set Up Your Payroll System. There are a number of great options for running payroll in Washington. We recommend:
- Gusto. Gusto is a payroll system with a simple and clean interface that makes running payroll a breeze, and it integrates with major accounting software (QuickBooks and Xero). It has all the bells and whistles, including federal filings, state filings, paid time off, and direct deposit. Try Gusto for free for one month using this affiliate link.
- Xero. Xero’s payroll feature is easy to use, and is included in your Xero subscription at no extra cost. Xero will collect and pay all of your federal taxes for you; for Washington taxes, Xero will report them, and you’ll simply write the checks to the state each pay period. Sign up for Xero through Skepsis, and receive 30% off Xero for your first 6 months. Use code XERO30/6 at checkout. Already using Xero? Switch your billing account to Skepsis, and get 10% off Xero for one year. Email us to find out how.
- QuickBooks. QuickBooks is yet another option for running your payroll. However, to get comparable functionality in QuickBooks, you’ll have to purchase upgraded subscriptions at a hefty cost; so, we typically recommend our clients opt for Gusto or Xero instead.
Want more payroll help? Let Skepsis handle it for you! And don’t forget to sign up for our newsletter for additional tips and advice: