Colorado New Employer Information
Federal and State Tax Accounts
Federal Tax Accounts:
- Obtain an Employer Identification Number, (also known as an EIN or FEIN), for your business if you do not already have one. The simplest way is to apply for an EIN with the IRS online. There is no cost to apply for an EIN.
- To learn more about applying for an EIN, read our help article, “Your Step-by-step Guide on How to Apply for EIN”.
- Although it is not required, we recommend you enroll in the Electronic Federal Tax Payment System (EFTPS). You can register online for the EFTPS.
- To find out more about EFTPS, please read our article, “What Is EFTPS?”
State of Colorado Tax Accounts:
- As a Colorado new employer, you will need to register on the Colorado Business Express for new employer accounts for:
- Department of Revenue for state income taxes (SIT), also known as wage withholding account number
- Department of Labor and Employment for state unemployment taxes (SUI)
- You will also need to register for the Colorado FAMLI for paid family leave. You can register for Colorado FAMLI on the state website.
- The Colorado new employer SUTA tax rate is 1.7% for 2023 for the non-construction industry. If you are in the construction or trades industry, your rate will be higher. Please visit the CDLE -Beginning Rates for more information.
- The Colorado Department of Labor and Employment will assign your business a new SUTA tax rate every year. This is based on your type of business.
- To learn more about SUTA please read our article, “What Is SUTA Tax?”
- Colorado does have some localities with income taxes. You will also need to register with your local government if your business is affiliated in any of these localities: Aurora, Denver, Glendale, Greenwood Village, and Sheridan.
Setting Up Your New Employee:
- Have your employees fill out the required Form I-9. This is a two-part form. The first part is filled out by the employee, and the second part is filled out by the employer.
- You will need to keep each employee’s completed Form I-9 as long as the individual works for you. For more information, please read “What Should Be in an Employee File?”
- For more information about the I-9, please read “Form I-9 In a Nutshell.”
- Have your new employee fill out Form W-4, Employee’s Withholding Certificate. This will be used for both Federal and Colorado income taxes.
- For more information, read our help article, “Updates to the Income Tax Withholding Tables and What You Need to Know”
- Have your new employee fill out the form DR 0004 for state income taxes (SIT).
- Employers in Colorado are required by law to report new employees with the Colorado State Directory of New Hires within 20 days from the date of hire or rehire. This is an online process, and as a new employer you will need to register to use the system first.
- For more information, please visit the SDNH.
- Colorado’s minimum wage is $13.65, or $10.63 for tipped employees, effective January 1, 2023. If you live in a locality with a more stringent minimum wage law, you must pay employees according to that law. Check with local governments for more information.
- You need to display the Colorado minimum wage poster for your employees where they can read it.
Once you have all the necessary information, you will be able to set up payroll for your business. You need to keep employee payroll records for at least three years. For more information, please read our help article, “What Employers Should Know About Employee Payroll Records”
Please note, this is not an all-inclusive list for new employers, and there may be other requirements that are not included here. Please visit the Colorado.gov website for more details.
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