9 Can’t-Skip Steps When Hiring Employees in Missouri

Barbara C. Neff

When you’re going through the process of hiring new employees, you have a lot of hoops to jump through—and the “hoop-jumping” doesn’t end when your preferred candidate accepts the offer of a position. As a Missouri employer, you assume numerous obligations under both state law and federal law. Take the following steps to keep up with your responsibilities as an employer. 

1. Register as an employer 

If you haven’t already done so, you need to register as an employer with the Internal Revenue Service (IRS) and the Missouri Department of Revenue.

The federal employer identification number (FEIN) is a prerequisite for your Missouri registration. To apply, fill out IRS Form SS-4, “Application for Employer Identification Number. Once you have your FEIN, you can register with the Department of Revenue online or with Form 2643, “Missouri Tax Registration Application.” You can submit the form by mail, fax, or email:

Taxation Division
P.O. Box 357
Jefferson City, Missouri 65105-0357

Fax: (573) 522-1722

E-mail: [email protected]

You should receive your tax number within 10 business days from the date the Department of Revenue receives your properly completed application.

2. Check employee eligibility

Every new employee you hire 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.

If you apply for a state contract or grant that exceeds $5,000 (or a tax credit, tax abatement, or loan from the state), then Missouri law requires you to use the federal E-Verify system for employment eligibility verification.

3. Report your new hires

The federal Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) requires all employers to report certain information on their newly hired employees to a designated state agency—in this case, the Missouri Department of Social Services. The information is used to locate parents who owe child support.

You’re required to report newly hired employees within 20 calendar days of their hire date. You can register to report online or report new hires by mail or fax:

Missouri Department of Revenue
P.O. Box 3340
Jefferson City, Missouri 65105–3340
Fax: (877) 573–6172

If you submit by mail or fax, you may send any of the following:

  • IRS Form W-4, “Employee’s Withholding Certificate.” Make sure your business name, FEIN, and address are written at the top of each form.
  • Form MO W-4, “Employee’s Withholding Certificate.”
  • A printed list that contains all of the required information. Use at least a 10-point font size, and have your business name, FEIN, and address clearly displayed at the top of the report.

If you file electronically, you must submit the reports in two monthly transmissions not more than 16 days apart.

Noncompliance with the new hire reporting requirements can result in fines up to $25. If the failure to report is the result of a conspiracy between the employer and the employee to not provide the required report or to provide a false or incomplete report, the fine is $350 for each failure to report or each false or incomplete report.

Note: You must also notify the Family Support Division within 10 days of terminating the employment of a worker who is subject to wage withholdings. 

4. Determine your liability for unemployment insurance

A general business employer typically becomes liable for unemployment insurance (UI) tax when it:

  • Pays $1,500 in wages (cash and in-kind) in a calendar quarter
  • Has a worker for some portion of a day in each of 20 different weeks of a calendar year
  • Becomes liable under the Federal Unemployment Tax Act (see Step 6 below) and employs a worker in Missouri

You must notify the Missouri Division of Employment Security within 30 days of the date that you become liable to pay taxes as an employer. You can do this on the Online Business Registration portal, through UInteract, or by submitting an Unemployment Tax Registration form to the division.

Each employer that becomes liable to report workers’ wages and pay unemployment taxes is assigned to an industrial classification division. Until you’re eligible for an experience rate, you’re assigned an annual tax rate. The 2023 rate for new employers that are not in the mining or construction industries is 2.511%. Based on the average cash balance of the Unemployment Trust Fund, the annual rate may be increased or reduced.

An employer generally becomes eligible for an experience rate after two full calendar years of unemployment insurance tax liability. The experience rate is intended to incentivize employers to maintain stable employment, review claims, and reduce unemployment.

The Division of Employment Security keeps a record of experience for your account, including taxable wages reported, contributions paid (including voluntary payments made to reduce your tax rate), and benefits charged (based on claims filed by former or current employees). Unemployment taxes paid are credited to your account. Benefits paid to eligible claimants are charged against the accounts of the claimant’s employers during the base period of the claim.

Your experience rate is calculated by dividing your account balance by your average annual taxable payroll. Your account balance is the difference between total benefits charged and contributions paid, plus any unassigned surplus, through the preceding July 31.

Depending on how long you’ve been required to report quarterly wages prior to the previous July 1, your average annual taxable payroll is:

  • One-third of the total taxable wages paid during the 36-month period prior to the last July 1,
  • If no wages for employment were paid during any one calendar half year in the 36-month period prior to the last July 1, twice the amount of taxable wages paid during the calendar half year in this period where the taxable payroll was highest,
  • The total taxable wages paid during the 12-month period prior to the last July 1, or
  • If no wages for employment were paid during any one calendar half year in the 12-month period prior to the last July 1, twice the amount of taxable wages paid during the calendar half year in the 24-month period prior to the last July 1 where the taxable payroll was highest.

Unemployment insurance tax rates can range from 0%–6%, not including the maximum rate surcharge or contribution rate adjustment. Rates for employers participating in the Shared Work Program can range from 0%–9%, also without the maximum rate surcharge or contribution rate adjustment.

A determination of the annual tax rate for the following year is mailed to all employers in November. The rate is applied to the taxable wage base for each employee. For 2023, the taxable wage base is $10,500.

Your wage report must be filed and contributions paid by the last day of the month following the end of each calendar quarter: April 30, July 31, October 31, and January 31). Quarterly contribution and wage reports may be filed online using UInteract or mailed to:

Missouri Division of Employment Security
P.O. Box 888
Jefferson City, Missouri 65102-0888

5. Understand your Missouri withholding duties

Missouri employers are required to withhold state income taxes each pay period from employees who are:

  • Earning wages in Missouri
  • Missouri residents working in a state with no income tax
  • Missouri residents working in a state with a lower income tax rate than Missouri

The withholding is based on the employee’s wages during that pay period and the number of dependents reported by the employee on Form MO W-4. If an employee doesn’t complete and turn in the required Form MO W-4, you should withhold at the tax rate for single taxpayers.

You’ll use an employee’s gross taxable wages and the withholding tables to determine the amount to withhold. In determining the amount of tax to be withheld, make sure you use the table for the correct payroll period: daily, weekly, biweekly, semimonthly, or monthly.

New employers are initially assigned a filing frequency based on their estimates of future withholdings. Filing frequencies are assigned as follows:

  • Employers that are required to withhold $500 per month for at least two months during the preceding 12 months file monthly. Reports are due on the 15th day of the following month.
  • Employers that aren’t required to file and pay taxes withheld on a monthly basis that withhold at least $100 per quarter during at least one of the preceding four quarters file quarterly. Reports are due on the last day of the following month.
  • Employers that are required to withhold less than $100 during each of the preceding four quarters file annually. Returns are due January 31.
  • Employers that withheld $9,000 or more in each of at least two months during the prior 12 months file quarter-monthly. A quarter-monthly period means:
  1. The first seven days of a calendar month
  2. Days 8–15 of a calendar month
  3. Days 16–22 of a calendar month
  4. The 23rd day through the last day of a calendar month

Quarter-monthly reporters must make a payment at the end of each quarter-monthly period to pay 90 percent of the withholding due for the filing period. The payment must be made within three banking days following the end of the period or deposited in a designated depository within four banking days after the end of the period. Reports and payments must be made electronically.

Use Form MO-941, “Employer’s Return of Income Tax Withheld,” to report and remit withheld wages. You must file even if you have zero withholding to report.

You can file returns electronically through the MyTax Missouri Portal. Paper filings can be submitted but may result in a delay in processing time:

Taxation Division
P.O. Box 999
Jefferson City, Missouri 65105-0999

If your withholding tax return is timely filed and timely paid, you can claim a “compensation deduction” from your payments. The timely compensation deduction is computed as follows:

Amount of Compensation Deduction: Year-to-date tax withheld:

  • 2% 0 to $5,000
  • 1% $5,001 to $10,000
  • 0.5% More than $10,000

On the other hand, if your return is filed or paid late, interest and penalties may be charged. The interest percentage rate for delinquencies is updated annually and published in the Employer’s Tax Guide (Form 4282).

6. Gear up for your federal payroll tax responsibilities

Employers generally must also withhold federal income tax from each employee’s pay, so be sure to collect IRS Form W-4 from each new hire, on or before the day they start work. The form is used to determine how much of their pay to withhold for federal income taxes. Make sure your employees complete it properly.

You aren’t required to submit Form W-4 to the IRS, but you must keep a copy on file for at least four years. The form provides proof that your federal income tax withholding matches the employee’s instructions and must be available for inspection if the IRS ever requests it. 

You also must withhold employees’ share of Social Security and Medicare taxes under the Federal Insurance Contributions Act (FICA). FICA is a federal tax that both employers and employees pay. It includes two taxes: Medicare tax and Social Security tax. The 2023 tax rates for both employees and employers are 6.2% of the first $160,200 of an employee’s earnings for Social Security (for a total of 12.4%) and 1.45% of all wages for Medicare (2.9% total).

You also may be required to withhold the Additional Medicare Tax. Employers must withhold the 0.9% tax from 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 Social Security and Medicare taxes. The IRS deposit schedules are either monthly or weekly, and you must determine which schedule you’re required to use before the beginning of each calendar year.

In addition, you’ll need to pay federal unemployment taxes (FUTA) if you:

  • 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 amount due is 6% of the first $7,000 of an employee’s wages during the year.

You are also responsible for filing IRS Form 941, “Employer’s Quarterly Federal Tax Return,” and IRS Form 940, “Employer’s Annual Federal Unemployment Tax Return.” Deposits for the federal unemployment tax are required for the quarter within which the tax due exceeds $500. The tax must be deposited by the end of the month following the end of the quarter. 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 timely deposited all taxes when due, you have 10 additional calendar days to file the return. For example, you have until May 10 to file it for the first quarter (as opposed to April 30 if you didn’t timely deposit all taxes due).

After your first filing, you must file for every quarter, regardless of whether you have any taxes to report, unless you’re a seasonal employer or are filing your final return.

You must also furnish a completed wage and tax statement (Form W-2, “Wage and Tax Statement,” or Form 1099-NEC, “Nonemployee Compensation”) to each employee by the last day of January each year. Send a copy to the Missouri Department of Revenue, too. 

7. Secure workers’ compensation coverage 

Generally, Missouri employers with at least five employees must carry workers’ compensation insurance. Employers in the construction industry, however, are required to carry the coverage if they have one or more employees. These thresholds apply regardless of whether the employees are part-time/casual laborers, full-time, or family members.

The members of a limited liability company (LLC) and officers of a corporation are included in the employee count. Sole proprietors and partners in a partnership are not included unless they elect, with their insurer, to be covered. 

You can obtain coverage from an insurance carrier or opt to be self-insured as an individual or as part of a group trust if you satisfy certain requirements related to financial capability. Generally, insurance companies base their rates on loss data on each job classification code compiled by the National Council on Compensation Insurance.

8. Display the required employment law posters

Federal and state laws require employers to post several labor law posters in a conspicuous location in the workplace.

Federally required posters may include the following:

The U.S. Department of Labor has a online “poster advisor” to help you determine which posters you need to display.

Missouri requires the following posters regarding state employee protections: 

9. Familiarize yourself with applicable employment laws

Employers may be subject to a wide range of federal and state employment laws, including the following:

Potentially relevant state employment laws include:

Unlike those in some other states, Missouri employers aren’t required to provide vacation pay, holiday pay, severance pay, or paid sick leave under state law. 

Although Missouri generally permits the concealed carry of firearms, employers can prohibit employees—even if they hold a concealed carry permit or endorsement—from carrying concealed firearms on employer property. You must post signs on your premises if you have such a prohibition. The signs must be at least 11 by 14 inches, with one inch or larger letters, and displayed in a conspicuous place. You can also prohibit employees who hold a permit or endorsement from carrying concealed firearms in employer-owned vehicles.

The steps outlined above may seem daunting to any employer. Automated tools and services like the ones Gusto offers can make it easier to keep up and let you focus more of your valuable time on building your business.

Barbara C. Neff has been writing about a variety of legal and other topics since 2001. She has a law degree and a master's degree in journalism.

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