How to Hire Your First Employee

For a small business owner, perhaps no day is more monumental than the day you hire your first employee.  Does anything say success more than this?  You have reached a point where  you can no longer keep up with the work yourself and need assistance.

Before you hire the first employee, determine whether you want to hire an independent contractor or an employee.

Independent Contractor

An independent contractor is often a freelancer you hire to help you sporadically or at less than a full-time basis.  The benefits to hiring an independent contractor is that you do not have to pay benefits such as sick days, vacation days, or health insurance.

The drawback is that you may experience turn around in the position, and you may find that your needs for the employee are greater than a part-time, temporary position.


If you hire an employee, the person can work full-time and perhaps provide you with greater assistance than an independent contractor.

However, there are many steps you have to take before hiring your first employee.  These include, but are not limited to:

1.  Getting an EIN (employer identification number)

2.  Utilizing payroll software to keep track of payment and taxes for your new employee, among other things

3.  Completing employee verification paperwork within 3 days of hiring your new employee

4.  Registering with your state’s new hire reporting program

5.  Filing taxes

6.  Remaining organized by setting up a filing system and employee record keeping, if you don’t already have these things in place

Hiring an employee can be an important step to reducing your stress as a business owner.  In addition, an employee can free up your time so you have more time to be creative and manage the business, allowing you to grow the business even more.

Carefully choose between an independent contractor and employee.  Alternatively, you could hire an independent contractor and then eventually hire that person as your employee.

No matter your decision, do not be intimidated by the hiring process.  There are plenty of resources to assist you in following all of the proper steps.  In the end, hiring an employee is probably best for your business.

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