Hiring a new employee requires a lot of upfront work, but it’s a smart investment in your business’s growth. If you’re a small business owner in Georgia preparing to hire your first employee, our comprehensive hiring guide will cover the key information you need to know. Keep reading for six practical steps to hiring employees in Georgia:
Step 1: Take care of logistics
Before you begin the hiring process in Georgia, you have to handle a few administrative tasks, namely registering with federal and state departments. Follow these guidelines:
Apply for a federal employer identification number (EIN) on the IRS website
If you’re registered as a partnership, multi-member limited liability company (LLC), C corporation, or S corporation, you likely already have an EIN, also known as your federal tax ID. However, if you run a sole proprietorship or single-member LLC and haven’t yet obtained an EIN, you need to get one before hiring employees.
You can apply for an EIN on the IRS website by completing an application.
Register with the Georgia Department of Revenue
If you haven’t done so already, you need to register your business entity with the Georgia Department of Revenue (GDOR) to obtain a tax ID and pay state withholding taxes. You can register online using the Georgia Tax Center (GTC).
Register with the Georgia Department of Labor
To hire employees in Georgia, you also need to register with the Georgia Department of Labor (GDOL). The state of Georgia requires employers to contribute to the state’s unemployment insurance (UI) fund if they have:
- At least one worker in 20 different calendar weeks during a calendar year or;
- A payroll of at least $1,500 in any calendar quarter.
Apply for an unemployment insurance tax account online with the Georgia DOL. For more information on unemployment insurance, including conditions that apply to non-profit organizations and agricultural businesses, read GDOL’s guide to unemployment insurance tax reporting and liability information for employers, or check out these FAQs.
Get workers’ compensation insurance
The Georgia State Board of Workers’ Compensation (SBWC) requires all employers with three or more part-time or full-time employees to obtain workers’ compensation insurance. Workers’ compensation coverage protects the employer from financial losses, while also giving employees medical and wage-loss benefits in the event of an illness or injury.
You can get workers’ compensation in Georgia by applying to become self-insured or by purchasing insurance through a private carrier. Read the SBWC’s FAQs to learn more about workers’ compensation coverage options.
Step 2: Understand your hiring costs and tax liability
Hiring employees can be expensive, so it’s crucial to know the costs upfront. Paying Medicare and Social Security taxes is just one component; you’ll also pay state taxes and will likely incur a few general hiring costs, like job site subscriptions and background check services.
Here are the employer taxes to know about as a business owner in Georgia:
- Under the Federal Insurance Contributions Act (FICA), the Social Security tax rate is 6.2% for an employer and 6.2% for an employee. The rate for Medicare taxes is 1.45% for an employer and 1.45% for an employee.
- The 2023 annual state unemployment insurance (SUI) tax rate for new employers in Georgia is 2.7% on a wage base of $9,500.
- The Federal Unemployment Tax Act (FUTA) works alongside state unemployment insurance programs. The FUTA tax rate is 6% on the first $7,000 of employee wages. However, if you pay SUI taxes on time and in full, you can get a credit on FUTA taxes of up to 5.4%, potentially dropping your FUTA tax liability to 0.6%.
- When you have employees in Georgia, you have to pay state withholding tax. Learn more about Georgia withholding amounts and how to calculate them using the Georgia Department of Revenue’s 2023 Employer’s Tax Guide.
Do you have enough money to hire an employee in Georgia? Use this calculator to find out.
Step 3: Check Georgia labor laws and employment practices
Every state has different employment laws, so make sure you review both federal law and Georgia state laws regarding labor. In addition to minimum wage requirements and overtime laws, it’s helpful to understand pay transparency laws, equity laws, and classification differences between employees and independent contractors.
- The minimum wage for Georgia employees is $5.15/hour. However, in most cases, the federal government’s minimum wage—which is $7.25/hour—applies instead.
- Non-exempt employees in Georgia who work overtime (more than 40 hours in a week) must be paid overtime pay, which is 1.5 times the regular rate of pay. See more Georgia minimum wage and hourly law FAQs on GDOL’s website.
- The state of Georgia doesn’t require employers to provide paid sick leave, medical leave, vacation time, or severance—that’s up to the individual employer.
- Georgia is an at-will state, which means Georgia employers are legally allowed to terminate a person’s employment without reason or cause.
- Under the Equal Employment Opportunity Commission’s Equal Pay Act, it’s illegal for Georgia employers to pay an employee less than the opposite sex for the same work.
Step 4: Fill out the Georgia new hire reporting form and furnish forms to employee
Every time you hire a new employee in Georgia, you need to report information about that employee to the Georgia New Hire Reporting Center within 10 days of the employee’s official hiring date. The hiring date is generally considered to be the first date an employee performs services you’ll pay them for, or the first day an employee on commission is eligible to earn commission.
You can report newly hired employees or re-hired employees by registering here. You’ll provide basic information like the employee’s name, address, Social Security number, date of birth, and work start date. Check out the Georgia new hire brochure for more information and instructions.
From there, you’ll complete a number of other important hiring documents, including:
- Employment contract: It’s a good idea to write an employment contract detailing the job responsibilities your employee will have, the wages you’ll pay, and a summary of the workplace policies available in your employee handbook.
- Form I-9: The US Citizenship and Immigration Services (USCIS) uses Form I-9, the Employment Eligibility Verification Form, to verify that employees are able to work in the US. As an employer, you have to complete the I-9 form for every employee you hire, and each employee must attest to their employment authorization. You don’t have to file Form I-9 with the USCIS or Immigration and Customs Enforcement (ICE). Instead, you hold onto the form as a record for at least three years from the date of hire or from one year after employment ends. Download Form I-9 and read the completion instructions here.
- Form W-4: Each new employee you hire needs to complete IRS Form W-4, The Employee’s Withholding Certificate, on or before the date of their employment. Form W-4 determines how much federal income tax will be withheld from the employee’s paychecks. Download the form.
- Form G-4: You also need to give employees Form G-4, the Georgia Employee’s Withholding Allowance Certificate, to fill out.
Make sure you keep copies of all the above documents as part of your business’s records.
Step 5: Set up your payroll system
Hiring an employee for the first time is a good opportunity to set up or update your payroll system. Using a small business payroll system makes it easier to pay your employees on time and prep for tax season. Regardless of the system you use, make sure you account for the following payroll taxes:
- Federal income withholding taxes: You’ll use Form W-2 to file federal income tax withholding reports to the IRS. You’ll also file Form 941 on a quarterly basis and Form 940 annually.
- State income withholding taxes: Georgia employers use Form G-7, the Employer’s Quarterly Return, to report and pay withholding tax. Learn more about filing deadlines and form instructions by downloading the Georgia Department of Revenue’s 2023 Employer’s Tax Guide.
- Social Security and Medicare taxes
- Unemployment taxes
Need help determining withholdings for your employees? Check out Gusto’s Georgia Hourly Paycheck and Payroll Calculator and Georgia’s Salary Paycheck and Payroll Calculator.
Step 6: Display labor law posters and required notices
The state of Georgia requires employers to post certain labor law signs in the workplace, so employees understand their rights and know which resources are available to them. Review the Georgia Department of Labor’s posting requirements to see which notices you’re obligated to post and how to download them. Here are all the required federal labor law posters as well.
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