The short answer
Decide whether the person is an employee or an independent contractor, get a W-4 and I-9 from each employee, set up payroll, register for Florida reemployment tax, and report each new hire to Florida within 20 days. Then withhold and pay payroll taxes every pay period and file quarterly returns.
Last reviewed: October 2026
Employee or contractor?
It depends on control, not on what you call them. If you set the hours, provide the tools and direct how the work is done, the person is probably an employee. Calling an employee a contractor can lead to back payroll taxes and penalties. See the IRS guide.
Contractors fill out a W-9. If you pay a contractor $2,000 or more in a year (for payments made in 2026 and later), you send them a Form 1099-NEC by January 31.
Paperwork for each new employee
- Form W-4: tells you how much federal income tax to withhold.
- Form I-9: verifies they can work in the U.S. Keep it on file; don't send it in.
- E-Verify: required in Florida for private employers with 25 or more employees.
- Florida new-hire report: due within 20 days of the hire date.
Payroll taxes
- Withhold federal income tax, Social Security and Medicare from each paycheck, and pay the employer's matching share.
- Deposit the taxes on time through the IRS's EFTPS system.
- File Form 941 each quarter, Form 940 (federal unemployment) each year, and W-2s by January 31.
- Florida reemployment tax: register with the Department of Revenue. New employers start at 2.7% on the first $7,000 each employee earns in a year (source).
A payroll service handles the withholding, deposits and filings for you, which is worth it for most small businesses. Late payroll deposits carry some of the steepest IRS penalties.
Other Florida rules
- Minimum wage: $15.00 an hour as of September 30, 2026.
- Workers' compensation: most Florida employers with four or more employees must carry it. Construction businesses need it with even one employee.
Using family or the owner
If you own an S corporation and work in it, you're an employee too and need to be on payroll. Paying your children in a sole proprietorship has special tax rules. Ask us before you set it up.
More for business owners
- Starting a business in Florida
- Should I elect S corporation status?
- Hiring your first employee
- Closing a business
- Selling a business
Back to the Business Owner Center.
Disclaimer: This page is general information, not tax or legal advice. Every situation is different, and tax rules change. Reading this page doesn't make you a client.