Hiring employees in Kansas brings an employer a wide range of legal responsibilities under both federal and state laws. Here’s a list of nine essential steps you should take early on to avoid problems.
1. Register as an employer
When you started your business, you should have registered with the Kansas Secretary of State (unless you’re a sole proprietor). But you have additional registrations to complete when you become an employer.
For starters, you need to register as an employer with the IRS and the Kansas Department of Revenue (DOR). You can obtain a federal employer identification number (FEIN) from the IRS by submitting Form SS-4, “Application for Employer Identification Number.”
Once you have your FEIN, you can register with the DOR for a state tax identification number. If you prefer not to register online, you can complete and sign the Business Tax Application (CR-16). You can then fax it to 785-291-3614 or mail it to:
Kansas Department of Revenue
P.O. Box 3506
Topeka, KS 66601-3506
2. Confirm the employee’s employment eligibility
Every new employee must complete the U.S. Citizenship and Immigration Services’ Form I-9, “Employment Eligibility Verification.” The employee is required to fill out Section 1 of the form by their first day of employment. You’ll need to complete Section 2 by the end of the third business day after the employee begins work. Keep it on file for three years after the date of hire or one year after the employment ends, whichever is later.
Unlike some states, Kansas doesn’t currently require employers to use the federal E-Verify system.
3. Check your liability for Kansas unemployment insurance
All employers are subject to the provisions of the Kansas unemployment insurance law, known as the Employment Security Law. However, they’re not all subject to the law’s taxing provisions. Coverage is determined by the type and nature of the business, the number of workers employed, and the amount of wages paid for work.
You’re required to file Form K-CNS 010, “Status Report,” within 15 days of the date of your first employment to determine whether you’re liable for the tax. Most employers become subject to state unemployment insurance taxes upon paying a worker(s) more than $1,500 in a calendar quarter.
When the Kansas Department of Labor determines you’re liable, you’ll receive a six-digit employer account number and a personal identification number (PIN), which you will need to file electronic wage reports.
For 2023, the wage base in Kansas is $14,000 for unemployment purposes, meaning you need only pay unemployment insurance taxes on the first $14,000 of an employee’s wages. The tax rate for non-construction new employers is 2.75 percent. The rates for established employers range from 0.17 to 6.4 percent.
If you meet the tax liability requirements at any time during a year, you must file Form K-CNS 100, “Quarterly Wage Report and Unemployment Tax Return,” for all quarters of that year in which you had any employees. A quarterly wage report must be filed each quarter thereafter until your account is closed. Employers with 50 or more employees are required to file their quarterly reports and make payments online.
All quarterly tax reports and payments are due by the end of the month following the end of each quarter. For example, the first quarter ends on March 31, and reports and payments are due by April 30.
Employers with fewer than 50 employees that filed a paper report in the previous quarter will receive a Quarterly Wage Report and Unemployment Tax Return in the mail. The form will include the account number and tax rate, how to reach the employer’s field representative and other information.
Kansas encourages all employers to file and make payments online. If you prefer to use the mail, returns should be sent to:
Kansas Department of Labor
P.O. Box 400
Topeka, KS 66601-0400
4. Report your new hires
Under both the federal Personal Responsibility and Work Opportunity Reconciliation Act (PWORA) and Kansas state law, all employers must report certain information on their newly hired and re-hired employees to the state Department of Labor’s New Hire Directory within 20 days of the hire (a rehired employee includes any individual who has been separated from employment for 60 consecutive days). The information is used to locate parents who owe child support.
Kansas New Hire Directory
P.O. Box 3510
Topeka, KS 66601-3510
Employers can report electronically by either entering or uploading the data. Employers that submit reports electronically must submit the reports by two monthly transmissions, if necessary, which are not less than 12 days or more than 16 days apart.
5. Understand your Kansas income tax withholding requirements
Employers must withhold money from each employee’s wages to help pre-pay that employee’s state income tax. An employer must withhold Kansas tax if the employee is 1) a resident of Kansas performing services inside or outside Kansas, or 2) a nonresident of Kansas performing services in Kansas.
Note, though, that sole proprietors and partners in a partnership aren’t considered to be employees of their business—so it’s not necessary to withhold income tax from their compensation. If you’re a sole proprietor or partner, you’ll make quarterly estimated income tax payments instead.
The first step to determine the amount to withhold from an employee’s paycheck is having the employee complete Form K-4, “Employee’s Withholding Allowance Certificate,” as soon as the employee is hired or taxable payments begin.
You can choose between two methods to compute the withholding amount: the percentage formula or the wage bracket tables. Both methods use a series of tables for single and married taxpayers for different payroll frequencies (e.g., weekly or monthly). The wage bracket approach is generally considered easier than the percentage method.
The size of your payroll will determine how often you must file and pay Kansas withholding tax—the larger the payroll, the more often. Five frequencies are possible: annual, quarterly, monthly, semi-monthly, and quad-monthly. Each filing frequency has a different set of due dates. Your initial frequency is based on your estimated taxes and appears on your Withholding Registration Certificate.
You must file a Withholding Tax Deposit Report (Form KW-5) for every reporting period, regardless of whether Kansas tax was withheld. Even annual filers must file Form KW-5; the Annual Withholding Tax Return (KW-3) is not a substitute. Payments and returns must be filed electronically.
You should review the withholding amount every year. If there’s a change in marital status or the number of exemptions, the employee should fill out a new form.
6. Prepare for your federal payroll tax obligations
In addition to Kansas state income tax, you generally must withhold federal income tax from an employee’s paycheck. You’ll need to collect IRS Form W-4, “Employee’s Withholding Certificate,” from each new hire on or before the day they start work. Like its state counterpart, the form is used to determine how much of their pay should be withheld for federal income taxes. Make sure your employees complete it properly.
You don’t have to submit Form W-4 to the IRS, but you must keep a copy on file for at least four years. It provides verification that you’re withholding federal income tax according to the employee’s wishes. It must be available for IRS inspection upon request.
You must also withhold each employee’s share of Social Security and Medicare taxes under the Federal Insurance Contributions Act (FICA). FICA is a federal tax that employers and employees split.
The 2023 tax rates for both employees and employers are 6.2 percent of the first $160,200 of an employee’s earnings for Social Security (for a total tax of 12.4 percent) and 1.45 percent of all wages for Medicare (a total of 2.9 percent).
You also may be required to withhold an Additional Medicare Tax. Employers must withhold the 0.9 percent on an individual’s wages paid in excess of $200,000 in a calendar year.
You must deposit federal income tax withheld and both the employer and employee portions of Social Security and Medicare taxes. You should determine which schedule you’re required to use—monthly or weekly—before the beginning of each calendar year.
- Paid wages of $1,500 or more to employees in any calendar quarter during the current or previous tax year, or
- Had one or more employees for at least some part of a day in any 20 or more different weeks in the previous year or 20 or more different weeks in the current tax year, counting all full-time, part-time, and temporary employees.
The tax due is 6 percent of the first $7,000 of an employee’s wages during the year.
Deposits for the federal unemployment tax are required for the quarter within which the tax due exceeds $500. Deposits must be made by the end of the month following the end of the quarter.
It’s important to stay current on your reporting, in addition to your deposits, on all of these. You do that on IRS Form 940, “Employer’s Annual Federal Unemployment Tax Return,” and IRS Form 941, “Employer’s Quarterly Federal Tax Return.”
Form 940 is due by January 31, but if you deposited all FUTA tax when due, you have until February 10 to file.
File your initial Form 941 for the quarter in which you first paid wages that are subject to Social Security and Medicare taxes or subject to federal income tax withholding. The form is due by the last day of the month that follows the end of the quarter.
If you made timely deposits in full payment of your taxes for the quarter, you can file Form 941 by the 10th day of the 2nd month that follows the end of the quarter. For example, you may file it by May 10 for the 1st quarter (as opposed to April 30 if you didn’t).
Going forward, you must file Form 941 every quarter (every three months), regardless of whether you have any taxes to report—unless you’re a seasonal employer or are filing your final return.
And employers must furnish a completed wage and tax statement (IRS Form W-2, “Wage and Tax Statement”) to each employee by the last day of January each year. Form W-2 shows the amounts of income, Social Security, and Medicare taxes you withheld in the prior year. You’re also required to send copies to the Social Security Administration and the Kansas DOR.
7. Line up your workers’ compensation coverage
Just about all Kansas employers, except those in certain agricultural pursuits or with a gross annual payroll of $20,000 or less, must provide workers’ compensation insurance for all of their employees. That includes family members, part- and full-time workers, and leased employees.
When computing the cost, all payroll is taken into account, including that paid outside Kansas. For sole proprietorships or partnerships, the wages paid to the owners and any of their family members aren’t included in the computation of the gross annual payroll (except for corporate employers).
Kansas defines the term “employee” very broadly. It includes all employees, even seasonal, minors, or others who have been hired to do only certain jobs.
Some employers and employers who aren’t covered can elect into coverage. Depending on the circumstances, options may be available for:
- Non-covered employers, those with payrolls of $20,000 or less, or certain agricultural pursuits
- Corporate employees owning ten percent or more of stock
- Individuals, proprietors, or partnerships
To obtain workers’ compensation insurance coverage, you can contact:
- A Kansas licensed insurance agent
- The Kansas Insurance Department for information on group-funded pools (groups of employers that form a self-insurance program to jointly ensure their ability to pay claims, administered by the Kansas Department of Insurance)
- The Division of Workers Compensation for information on self-insurance (you must demonstrate the financial ability to pay any claims that might arise)
8. Obtain and post the required posters
Federal and state laws require employers to display a variety of employment law posters in a conspicuous location in the workplace. The posters generally inform employees of their rights and their employers’ responsibilities.
Federally mandated posters may include:
- Fair Labor Standards Act Minimum Wage
- Know Your Rights: Workplace Discrimination is Illegal
- Job Safety and Health: It’s the Law
- Your Employee Rights Under the Family and Medical Leave Act
- Your Rights Under USERRA
The U.S. Department of Labor has an online “poster advisor” to help employers determine which posters they need to display
Kansas requires the following posters:
- Notice to Workers About Unemployment Insurance
- Workers Compensation Rights and Responsibilities
- Child Labor
- Human Trafficking Resources
- Human Trafficking
- No Smoking
- Equal Opportunity
9. Brush up on employment laws and restrictions
Employers are subject to a wide range of federal and state employment laws. Potentially relevant federal statutes include:
- Fair Labor Standards Act
- Title VII
- Americans with Disabilities Act
- Age Discrimination in Employment Act
- Pregnancy Discrimination Act
- Affordable Care Act
- Family and Medical Leave Act
- Occupational Safety and Health Act
Applicable state laws may include:
You have a lot to keep up with as a Kansas employer. Gusto can lighten your load—find out how.