Colorado New Employer Information
Congratulations on your decision to become a new employer in Colorado! You will need a few things in place before you run your first payroll:
Federal and State Tax Accounts
Federal Tax Accounts:
- Although it is not required, we recommend that you also enroll in the Electronic Federal Tax Payment System (EFTPS). You can register online. You will need to have this account to view any tax deposits made on your behalf by Patriot Software, or to make tax payments yourself online.
- To find out more about EFTPS, please read our article, “What Is EFTPS?”
State of Colorado Tax Accounts:
- As a Colorado new employer, you will need to set up accounts with the:
- Department of Revenue for state income taxes (SIT), also know as wage withholding account number
- Department of Labor and Employment for state unemployment taxes (SUI)
- Both of these registrations can be done via the Colorado Business Express.
- The Colorado new employer SUTA tax rate is 0.017 for 2022 for the non-construction industry. **If you are in the construction or trades industry, your rate will be higher. Please visit the CDLE -Beginning Rates for more information.
- The Colorado Department of Labor and Employment will assign your business a new SUTA tax rate every year. This is based on your type of business.
- To learn more about SUTA please read our article, “What Is SUTA Tax?”
- Colorado does have some localities with income taxes. You will also need to register with your local government if your business is affiliated in any of these localities: Aurora, Denver, Glendale, Greenwood Village, and Sheridan.
Setting Up Your New Employee:
- Have your employees fill out the required Form I-9. This is a two-part form. The first part is filled out by the employee, and the second part is filled out by the employer.
- You will need to keep each employee’s completed Form I-9 as long as the individual works for you.
For more information, please read “What Should Be in an Employee File?”
- For more information about the I-9, please read “Form I-9 In a Nutshell.”
- Have your new employee fill out the form DR 0004 for state income taxes (SIT).
- Employers in Colorado are required by law to report new employees with the Colorado State Directory of New Hires within 20 days from the date of hire or rehire. This is an online process, and as a new employer you will need to register to use the system first.
- For more information, please visit the SDNH.
Once you have all the necessary information, you will be able to set up payroll for your business. You need to keep employee payroll records for at least three years. For more information, please read our help article, “What Employers Should Know About Employee Payroll Records”
Please note, this is not an all-inclusive list for new employers, and there may be other requirements that are not included here. Please visit the Colorado.gov website for more details.
Let us know if you have any questions. We are here to help!
Let us know if you liked the post. That’s the only way we can improve.