Payroll Taxes for Your First Employee: A Florida Guide
By Timothy LeGendre, CPA · Florida License #AC62625 · Published 2026-08-13
A Florida CPA's guide to payroll taxes when you hire your first employee: FICA, FUTA, Form 941, deposit schedules, and the trust-fund trap.
The Short Answer
The day you hire your first employee, the government makes you its tax collector. You now withhold federal income tax and the employee's share of Social Security and Medicare from every paycheck, and you pay a matching share plus federal and Florida unemployment tax out of your own pocket. You report it all on Form 941 every quarter and Form 940 once a year, and you deposit the tax electronically on a set schedule, usually monthly. The one rule that matters more than any number: the money you withhold from your employee was never yours. It's held in trust, and spending it instead of remitting it can make you personally liable for the full amount, even behind a corporation or LLC. The good news for Florida owners is that there's no state income tax to withhold, so the state side is lighter than almost anywhere else.
What hiring your first employee actually triggers
Before the first paycheck goes out, a handful of accounts and forms have to be in place. This is the part first-time employers underestimate, not because any single step is hard, but because there are several, and a couple of them have to happen before you can run payroll at all.
You need a federal Employer Identification Number (EIN), which you get from the IRS with Form SS-4 (free, and usually issued the same day online). You register with the Florida Department of Revenue for reemployment tax. Each new hire fills out a Form W-4 so you know how much income tax to withhold, and a Form I-9 verifying they're authorized to work, which you keep on file rather than send anywhere. And within a short window after their start date, you report the hire to Florida's new-hire directory, a step that exists mostly to enforce child-support orders and is easy to forget.
Here's the full paperwork map for a Florida employer:
| Form | What it does | When |
|---|---|---|
| Form SS-4 | Apply for your federal Employer Identification Number (EIN) | Before the first payroll |
| Form W-4 | Employee tells you how much income tax to withhold | On hire, kept on file |
| Form I-9 | Verify the employee is authorized to work (kept, not filed) | Within 3 days of hire |
| Form 941 | Report wages, withheld income tax, and both shares of FICA | Quarterly |
| Form 940 | Report and pay federal unemployment (FUTA) tax | Annually, by Jan 31 |
| Form RT-6 | Florida reemployment tax quarterly report | Quarterly |
| Forms W-2 / W-3 | Report each employee's annual wages to them and the SSA | By Jan 31 |
The employer tax stack, as of 2026
Payroll tax comes in two flavors: the part you withhold from the employee and forward to the government, and the part you pay yourself on top of their wages. These rates and wage bases are set federally (and adjusted most years), so I keep them in one table rather than scattered through the article. As of the 2026 tax year:
| Tax | Who pays | Rate | Applies to |
|---|---|---|---|
| Social Security | Employee + employer | 6.2% each (12.4% total) | First $184,500 of wages (2026) |
| Medicare | Employee + employer | 1.45% each (2.9% total) | All wages, no cap |
| Additional Medicare | Employee only (you withhold) | 0.9% | Wages over $200,000 |
| Federal income tax | Employee only (you withhold) | Per the W-4 and IRS tables | All wages |
| FUTA (federal unemployment) | Employer only | 6.0%, net 0.6% after the state credit | First $7,000 of wages |
| Florida reemployment | Employer only | 2.7% (new-employer rate) | First $7,000 of wages |
The practical way to feel the weight of this is to price out a single hire. Take a first employee earning $50,000 a year. On top of that salary, your own share of the payroll taxes for 2026 runs roughly:
- •Social Security, 6.2% of $50,000 = $3,100
- •Medicare, 1.45% of $50,000 = $725
- •FUTA, 0.6% of the first $7,000 = $42
- •Florida reemployment, 2.7% of the first $7,000 = $189
That's about $4,056, or roughly 8% on top of the wage, and it's the employer's cost alone. Separately, you withhold the employee's own 6.2% and 1.45% ($3,825 more) plus their federal income tax, and send all of it to the IRS. A useful rule of thumb: budget an employee to cost you noticeably more than their salary once payroll taxes, and eventually workers' comp and any benefits, are loaded in.
Trust-fund taxes vs. your own taxes (the distinction that matters most)
Half of what you send the IRS was never your money. That single idea is the most important thing on this page, because it decides who is personally on the hook if something goes wrong.
When you withhold federal income tax and the employee's 6.2% Social Security and 1.45% Medicare from a paycheck, you're holding that money in trust for the government. It's the employee's tax, collected by you, sitting in your account only until the deposit is due. These are called trust-fund taxes. Your matching share of FICA, along with FUTA and Florida reemployment tax, is different, that's your own business tax, an expense you owe like any other.
The distinction turns real when cash gets tight. If an owner is short one month and uses the withheld trust-fund money to cover rent or another payroll instead of depositing it, the IRS treats that far more harshly than an ordinary unpaid bill, because you spent money that belonged to your employees and the government, not to you.
The Trust Fund Recovery Penalty
Under IRC §6672, the IRS can assess a penalty equal to 100% of the unpaid trust-fund taxes personally against any “responsible person”, an owner, officer, or anyone with authority over which bills get paid, who willfully fails to remit them. “Willfully” here just means you chose to pay other expenses first; it doesn't require bad intent. This penalty pierces the corporation or LLC that normally shields you, and it can't be wiped out in bankruptcy. It is, in short, the one business tax that can follow you home, which is exactly why deposits come before every other bill.
Hiring your first employee this year?
Getting payroll set up right the first time is a lot cheaper than fixing a misclassification or a missed deposit later. Walk through it with me on a 30-minute discovery call.
Book a Discovery CallPick a time on my calendar. No obligation.
Form 941, Form 940, and the deposit schedule
Reporting and paying are two separate acts on two separate calendars, and mixing them up is the classic first-year mistake. You report on a return; you deposit the actual money on a faster schedule.
Form 941 is the employer's quarterly federal tax return. On it you report the wages you paid, the income tax you withheld, and both shares of Social Security and Medicare. It's due the last day of the month after each quarter ends, April 30, July 31, October 31, and January 31. Form 940 is the annual FUTA return, filed once a year by January 31 (you get until February 10 if you deposited all your FUTA on time).
The deposits, the money itself, usually move on a faster clock. Most new employers are monthly depositors: the income tax and FICA for a given month are deposited by the 15th of the following month. Your schedule is set by a “lookback period”: report $50,000 or less of employment taxes in it and you deposit monthly; more than that and you become a semiweekly depositor, tied to your paydays. One rule overrides everything else, if you ever accumulate $100,000 or more of payroll tax liability on a single day, it has to be deposited by the next business day. Deposits go through the electronic system (EFTPS); you don't mail a check with the return.
Two simplifications help the smallest employers. If your total payroll tax for a quarter is under $2,500, you can just pay it with the Form 941 instead of making separate deposits. And if the IRS notifies you that your annual employment tax liability is $1,000 or less, it may put you on the annual Form 944 instead of quarterly 941s. You can't elect Form 944 on your own, though, the IRS has to assign it to you in writing.
The Florida layer (lighter than most states)
Florida has no personal income tax, so there's nothing to withhold at the state level and no state wage-withholding return to file. For a first-time employer that's a real simplification, in most states you'd be running a parallel state withholding system on top of the federal one.
What Florida does levy is reemployment tax, its version of state unemployment tax. You become liable once you pay $1,500 in wages in a calendar quarter, or have at least one employee for any part of a day in 20 different weeks during a year, whichever comes first. The new-employer rate is 2.7% on the first $7,000 of each employee's annual wages; after a few years of history, your rate is adjusted up or down based on your own layoff experience. You report and pay it quarterly on Form RT-6, on the same April 30 / July 31 / October 31 / January 31 calendar as the federal 941.
There's a useful connection between the state and federal unemployment taxes: the federal FUTA rate is technically 6.0%, but paying your Florida reemployment tax on time earns a credit of up to 5.4%, which is what brings the real FUTA rate down to 0.6%. In other words, staying current with Florida is what keeps your federal unemployment tax cheap, another reason not to let the small state filing slide.
The payroll mistakes I see most
The five that cost first-time employers the most, whether they came from doing it themselves or from a provider nobody was watching:
Spending the money you withheld
The withheld income tax and the employee's share of FICA sit in your account between payday and the deposit deadline, and in a tight month it's tempting to treat that balance as working capital. It isn't yours. Using it to make rent or cover another bill is exactly the fact pattern that triggers the Trust Fund Recovery Penalty, and unlike most business debts, that one follows you personally even through a corporation or LLC.
Calling an employee a 1099 contractor to skip payroll tax
Reclassifying a real employee as a contractor doesn't make the payroll taxes disappear, it just moves them to a line item labeled "penalty" if you're caught. The test is control, not the label on the agreement. If you set the hours, direct the work, and provide the tools, you likely have an employee no matter what the paperwork says.
Missing a deposit deadline
Payroll tax penalties are for being late, not for owing the money, and they escalate fast, from 2% for a deposit a few days late up to 15% once the IRS has to send a notice. New employers get tripped up because the deposit deadline is separate from the return deadline: the Form 941 is quarterly, but the deposits are usually monthly. Set a calendar reminder for the 15th.
Forgetting FUTA and Florida reemployment because they look small
At 0.6% on the first $7,000, FUTA tops out around $42 per employee for the year, and the Florida reemployment tax isn't much larger, so both are easy to overlook. But the Form 940 and the RT-6 are still required filings, and skipping the state registration is how a first-time employer ends up with a Florida Department of Revenue notice for a tax they didn't know existed.
Not running an owner's S-Corp salary through real payroll
If you've elected S-Corp status, your own reasonable salary is W-2 wages and rides on this same machinery, real paychecks, withholding, a Form 941. Paying yourself with distributions and no payroll is one of the most common S-Corp errors, and it's the first thing an examiner looks for.
That second one, employee versus contractor, is worth its own read if you're on the fence about your first worker; my 1099 vs. W-2 guide walks through the control test and the real cost of getting it wrong. And if you've elected S-Corp status, the salary you run through this same payroll is its own decision, covered in my S-Corp reasonable salary guide.
How I handle this for clients
I don't process payroll in-house, the actual paycheck-cutting and tax-filing runs through a dedicated payroll provider like Gusto or ADP, which does that one job well and cheaply. What I do is make sure the whole thing is set up right and that it lands correctly in your books and on your return. That means confirming the worker is genuinely an employee before the first check, getting the EIN and Florida registration in place, choosing a provider that fits, and watching the deposits actually happen on schedule.
The reason to have a CPA in the loop on payroll isn't the arithmetic, the software handles that. It's the judgment calls the software doesn't make: whether someone should be W-2 or 1099, what an owner's reasonable salary should be, how the payroll expense flows into job costing, and how the whole thing ties out at year end. Because I keep the books and prepare the return, payroll isn't a mystery I'm reconstructing in March, it's a clean line I've watched all year. If you want the bigger picture of how clean books make all of this a byproduct rather than a scramble, my bookkeeping guide for Florida contractors covers labor burden and how payroll fits the bigger financial picture.
If you're about to make your first hire and want to be sure the payroll side is set up correctly from day one, that's a conversation worth having before the first paycheck, not after a notice. I'm in Mount Dora and I work with businesses across Lake County, Seminole County, and remotely throughout Florida. The first conversation is a 30-minute discovery call, and the figures in this guide are current as of the 2026 tax year.
More reading
Want to keep going?
Comparisons · 11 min read
1099 vs W-2: The Real Take-Home Math for Florida Workers and Employers
A Florida CPA's guide to 1099 vs W-2, what each one means, the self-employment tax math, when each makes sense, and the IRS classification rules.
Read the articleFlorida Tax Guides · 11 min read
S-Corp Reasonable Salary: A Florida CPA's Guide
A Florida CPA's guide to setting a defensible S-Corp reasonable salary: the IRS factors, valuation methods, documentation, and audit risk.
Read the articleIndustry Guides · 11 min read
Bookkeeping & Taxes for Florida Contractors: A CPA's Guide
Bookkeeping for Florida contractors, job costing, retainage, 1099 subs, equipment depreciation, and the S-Corp election. From a Florida CPA.
Read the articleFrequently asked questions
- What payroll taxes does an employer actually pay?
- An employer handles two categories. First, taxes you withhold from the employee's pay and forward to the government: federal income tax (based on their Form W-4) plus the employee's 6.2% Social Security and 1.45% Medicare. Second, taxes you owe on top of wages out of your own pocket: a matching 6.2% Social Security and 1.45% Medicare, federal unemployment tax (FUTA), and Florida reemployment tax. For 2026, Social Security applies to the first $184,500 of wages and Medicare has no wage cap. The employer's own share generally adds roughly 8% to 10% on top of what you pay the employee.
- What is the difference between trust-fund taxes and the employer's own taxes?
- It is the single most important distinction in payroll, because it decides who is personally on the hook. The federal income tax and the employee's share of Social Security and Medicare that you withhold are "trust-fund" taxes: that money was never yours, you are holding it in trust for the government until you deposit it. Your matching FICA and your FUTA are your own business taxes. If cash gets tight and an owner spends the withheld trust-fund money on rent or payroll instead of depositing it, the IRS can assess the Trust Fund Recovery Penalty, equal to 100% of the unpaid trust-fund tax, personally against any responsible person, piercing the corporation or LLC.
- When do I file Form 941 and Form 940?
- Form 941 is the employer's quarterly federal tax return, where you report wages, withheld income tax, and both shares of FICA. It is due April 30, July 31, October 31, and January 31 for the four quarters. Form 940 is the annual FUTA return, due January 31 (you get until February 10 if you deposited all your FUTA tax on time). Very small employers whose annual employment tax runs $1,000 or less may be notified by the IRS to file the annual Form 944 instead of quarterly 941s, but you cannot choose it on your own, the IRS has to assign you to it in writing.
- How often do I have to deposit payroll taxes?
- Most new employers are monthly depositors: you deposit the income tax and FICA for a month by the 15th of the following month. Your schedule is set by a "lookback period," if you reported $50,000 or less in employment taxes during it, you deposit monthly; more than $50,000 makes you a semiweekly depositor. One rule overrides both: if you ever accumulate $100,000 or more of payroll tax liability on a single day, you must deposit it by the next business day. Deposits are made electronically through EFTPS, never by mailing a check with the return.
- Do I owe Florida payroll tax if I have no state income tax to withhold?
- Florida has no personal income tax, so there is nothing to withhold at the state level, which is a genuine advantage over most states. But you still owe Florida reemployment tax (the state's version of unemployment tax) once you become liable, generally after you pay $1,500 in wages in a calendar quarter or have an employee for any part of a day in 20 different weeks. The new-employer rate is 2.7% on the first $7,000 of each employee's annual wages, reported quarterly on Form RT-6. You also have to report every new hire to the state new-hire directory shortly after their start date.
- Can I just pay my first worker as a 1099 contractor to avoid all of this?
- Not if the facts make them an employee. Whether someone is an employee or an independent contractor is decided by how much control you have over their work, not by what you call them or whether they agreed to a 1099. If the IRS or the Florida Department of Revenue reclassifies a worker you treated as a contractor, you can be hit with the back payroll taxes you should have withheld and paid, plus penalties and interest, and the withheld portion can again become a personal liability. When it is a genuinely close call, it is worth getting a professional read before the first payment rather than after a reclassification.