Hiring Your First Employee in Georgia: Withholding, Unemployment Tax, E-Verify, Workers' Comp, New Hires

Hiring your first employee adds obligations you have not handled before. Until now you may have dealt only with your Secretary of State filing and perhaps a sales tax account. Once you pay a W-2 employee, you take on federal payroll duties, Georgia withholding, unemployment insurance, and in many cases workers' compensation and E-Verify. Each one is a separate registration with a separate agency. This checklist puts them in the order most businesses should handle them.

This article is general information, not legal or tax advice. Rules and rates change, and your situation may differ. Confirm details with the named agency, and talk to a CPA or employment attorney before you hire, especially if you plan to pay anyone as a contractor.

Before You Start: Entity, Local License and Sales Tax

Georgia has no general state business license. The Secretary of State issues none, and sales tax registration with the Department of Revenue is not a business license. Before you hire, confirm these pieces:

• Entity filing with the Secretary of State (eCorp). Articles of Organization (LLC) or Articles of Incorporation (corporation) cost $110 total, which is the $100 fee plus a $10 service charge. Online filings take about 7 to 10 business days and paper filings about 15 business days. Expedited review costs $120 (2 business days), $275 (same day if received by noon) or $1,200 (one hour on business days). A name can be reserved for 30 days for $35. LLCs and corporations file an annual registration for $60 ($50 plus a $10 service charge) between January 1 and April 1. An LLC files its first one the year after it forms. Check the Secretary of State for the current window and late penalty.
• Trade name (DBA) filing, if needed. A trade name is filed with the Clerk of Superior Court in the county where the business is chiefly carried on, not with the Secretary of State. Expect a clerk fee of about $165 plus newspaper publication once a week for two weeks. Confirm the exact amount with your county clerk.
• Local occupation tax certificate. This is the document most people call a business license. The city issues it if your business is inside city limits, and the county issues it for unincorporated areas. Georgia has 159 counties and about 537 cities and towns, and each sets its own formula, deadlines and prerequisites. More than half of Georgians live outside any city, so the county may be your issuer. A business inside a city pays the city, not the county. Ask your local government which one applies before you assume.
• Professional licenses, if your trade requires them. Contractors, electricians, plumbers, cosmetology and real estate, among others, are licensed through state boards such as the Secretary of State Professional Licensing Boards Division.
• Sales tax, if you sell taxable goods. Register at the Georgia Tax Center (gtc.dor.ga.gov). Registration is free. The state rate is 4%, and combined state and local rates run from 6% to 9% by county and city (Atlanta is 8.9%). Georgia issues no separate resale permit. Buyers use Form ST-5, the certificate of exemption. Remote sellers owe collection at $100,000 of Georgia sales or 200 separate transactions.
• Cottage food. Cottage food businesses have needed no state license since July 1, 2025 (HB 398), but local business licensing and zoning still apply.

Georgia Has Several Separate Employer Accounts

Each item below is a different account with a different agency. Registering with one does not register you with the others, so track each one separately.

Account	Agency	Needed when
Federal employer ID number and payroll deposits	IRS (irs.gov)	You have employees
Georgia withholding payroll account	Department of Revenue, Georgia Tax Center	You have employees
Unemployment insurance account	Georgia Department of Labor	You meet the liability thresholds in Step 3
Workers' compensation policy	Private insurer	You regularly have three or more workers
E-Verify affidavit (for the local certificate)	Your city or county	Always, in some form: a full affidavit above 10 employees, an exemption affidavit at 10 or fewer
New hire report	Georgia New Hire Reporting Program (Department of Labor)	Every new hire or rehire

Step 1: Get Your Federal Employer Basics

Start with the IRS. Get an employer identification number (EIN) at no cost, and use it on payroll filings and bank forms in place of your Social Security number.

• Collect a Form W-4 from each employee before the first paycheck.
• Complete a Form I-9 for each new hire to verify identity and work authorization under federal rules. Keep it on file. Do not send it to the government.
• Set up federal payroll tax deposits and quarterly filings. Your deposit schedule depends on your payroll size, so confirm it on irs.gov.

Two federal points affect your budget. The Social Security wage base is $184,500 for 2026, so wages above that amount in a year are not subject to Social Security tax. Self-employment tax does not apply to employees. Employees pay their share through withholding, and you pay the employer share. Self-employment tax is the separate tax a self-employed owner pays on their own earnings.

Step 2: Register for Georgia Withholding

Any business with employees must register for a withholding payroll account at the Georgia Tax Center under O.C.G.A. 48-7-100. After you submit online, the account number usually arrives by email in about 15 minutes. You do not need to renew the registration while the business has employees.

• Have each employee complete Form G-4 for Georgia income tax withholding.
• File withholding returns through the Georgia Tax Center. The Department of Revenue assigns your filing frequency, so check with it for your schedule and the correct form in the G-7 series.
• Georgia income tax is one flat rate: 5.19% for 2025 and 4.99% for 2026. Use the current year's rate in your payroll software.

Step 3: Register for Unemployment Insurance

Unemployment insurance is a separate account with the Georgia Department of Labor. You are liable when you meet either test:

• You paid wages of at least $1,500 in any calendar quarter, or
• You had at least one worker in 20 different calendar weeks in a year.

Farm employers have their own thresholds: 10 or more workers on any day in 20 weeks, or $20,000 or more of cash payroll in a quarter. The taxable wage base is $9,500 per employee.

New employers receive a beginning rate. The Department of Labor's tax booklet lists 2.70%, and a 2023 law reportedly holds the new employer rate slightly lower through 2026, so the rate is about 2.7%. Confirm your exact rate on the rate notice (Form DOL-626) from the Department of Labor. Your total rate includes an administrative assessment, so do not budget from the base rate alone.

To register, use the Employer Status Report (Form DOL-1A) and confirm the current online process with the Department of Labor, since forms and portals change.

Quarterly tax and wage reports and payments are due by the end of the month after each quarter:

• April 30 (January to March)
• July 31 (April to June)
• October 31 (July to September)
• January 31 (October to December)

Late reports draw a penalty and interest.

Step 4: Report Every New Hire

Report each new hire and rehire to the Georgia New Hire Reporting Program, a Department of Labor program, within 10 days. Check the Department of Labor for the reporting site and the required data. Independent contractors are not reported through this program, so getting worker classification right from the start (see Step 8) also keeps your reporting clean.

Step 5: Decide on Workers' Compensation

Georgia requires workers' compensation coverage when your business regularly has three or more employees in the same business. Part-time workers count. Farm laborers and domestic servants are excluded. Corporate officers and LLC members are counted. Coverage comes from a private insurer, so talk to an agent before your third regular worker starts. Review your options under Georgia business insurance coverage.

Step 6: Complete E-Verify for Your Local Certificate

Private employers with more than 10 employees must use the federal E-Verify program. They must also file an E-Verify affidavit with the city or county to get or renew the occupation tax certificate (O.C.G.A. 36-60-6). Employers with 10 or fewer employees file an exemption affidavit instead. The local government sets its own forms and timing, so confirm them there.

Step 7: Set Your Pay Rules

Georgia's own minimum wage is $5.15 an hour, but with limited exceptions the federal minimum of $7.25 applies. The state law (O.C.G.A. 34-4-3) exempts employers with sales of $40,000 or less, employers with five or fewer employees, farm owners and others. For nearly every employer, the federal rate governs. If you think you may be exempt, confirm your status with the Department of Labor before you set pay.

Georgia has no state paid sick leave mandate and no state paid family leave program, based on current Department of Labor pages. Check those pages again before you write your policies, because rules can change.

Step 8: Review the 2026 Changes and Classify Workers Correctly

HB 463 lets employees exclude up to $1,750 of overtime pay and up to $1,750 of cash tips from Georgia income through 2028. It also places reporting duties on employers. Confirm the form and deadline with the Department of Revenue before your first payroll.

Act 466 (HB 987, effective July 1, 2026) lets independent contractors have portable benefit accounts without losing contractor status. That law does not change who counts as an employee. Whether a worker is an employee depends on the facts of the working relationship, not the label in your contract. Misclassifying an employee as a contractor creates tax, withholding, unemployment and insurance exposure, so get advice before you hire anyone on a 1099.

Keep Records and Post Required Notices

Keep W-4s, G-4s, I-9s, payroll records and quarterly reports organized, and keep them for the retention periods that federal and state rules require. Check the IRS and the Department of Labor for those periods. Post required workplace notices where employees can see them. Federal and state agencies publish the current poster requirements, so check with them rather than relying on an old poster set.

Where to Get Help

The Georgia Small Business Development Center at the University of Georgia (georgiasbdc.org) offers free advising for new employers. The Secretary of State Corporations Division (sos.ga.gov/corporations-division) handles entity filings, and the Department of Revenue (dor.georgia.gov) handles withholding and sales tax. For complex situations, such as multi-state payroll, owner compensation or contractor relationships, consult a qualified CPA or employment attorney.