Hiring your first employee in Nebraska

What do you have to register for before your first payroll?

Nebraska splits your payroll setup across two agencies and two portals. One Nebraska Tax Application, Form 20, opens everything the Department of Revenue runs, so income tax withholding and your sales tax permit come out of a single application and share one Nebraska ID Number. Unemployment insurance is entirely separate: you apply for an unemployment insurance account number through the Department of Labor at dol.nebraska.gov/uiconnect, and the quarterly Combined Tax Report you file there has nothing to do with the Form 941N you file with Revenue. Workers compensation is a third thing again, bought from a private insurer because Nebraska runs no state fund. There is a fourth step people miss: if you perform construction services in Nebraska you must also be listed on the Department of Labor's Contractor Registration Database, and a contractor who is not on it has 5 percent Nebraska income tax withheld from payments made to it by another contractor.

Does Nebraska require income tax withholding?

Yes. You register with the Nebraska Department of Revenue, before you withhold anything. the form 20 instructions say you must apply for an income tax withholding certificate prior to withholding income taxes for nebraska, and set no grace period; allow two weeks if you file the paper form 20 rather than registering online.

Registration is free. Circular EN says in as many words that you apply for the withholding certificate on Form 20 and there is no fee for that certificate. Three Nebraska rules catch employers who are used to somewhere else. First, there is a floor on how little you can withhold: every employer with more than 24 employees must withhold at least 1.5 percent of each employee's taxable wages, and you may only go below that if the employee gives you documentation such as dependants, marital status or itemised deductions justifying it. Second, Circular EN describes no reciprocity agreement with any neighbouring state. A nonresident who splits time between Nebraska and elsewhere does not hand you an exemption certificate; they file a Form 9N telling you what percentage of their wages to treat as Nebraska wages, and an employee working 100 percent in Nebraska files nothing. Third, LB 1023 of 2024 added a convenience-of-the-employer rule that bites remote workers from 2025 onward. Compensation a nonresident earns working outside Nebraska is Nebraska source income if they work in Nebraska more than seven employment duty days in the year and the outside work was for their own convenience when it could have been done in Nebraska. Any partial day in Nebraska counts as a full day, and once the eighth day is passed every Nebraska day becomes withholdable.

What unemployment insurance does Nebraska charge a new employer?

A new Nebraska employer pays 1.25% on the first $9,000 each employee earns, so roughly $113 per employee in the first year. For 2026 a new Nebraska employer outside construction pays 1.25 percent on the first $9,000 of each worker's wages. A new construction employer pays 5.40 percent, which is the category twenty rate. Nebraska calls this a combined tax because it bundles two things: the contribution that builds your own experience account, and a State Unemployment Insurance Tax slice that the Commissioner of Labor can set anywhere from 0 to 20 percent of the combined tax and that earns you no reserve credit. For 2026 the SUIT allocation is 20 percent. There is a live conflict in the state's own material here, and the statute wins. The Employer's Guide to Unemployment Insurance, last revised 28 April 2021, says a new non-construction employer pays the lesser of the state's average tax rate or 2.5 percent, and the 2026 state average rate is only 0.55 percent, so following the Guide gives you 0.55 percent. That is wrong. Section 48-649.02(2) has said since 2017 that in no event shall the rate under subsection (1) be less than one and twenty-five hundredths percent, and the Department's own 2026 rate guide published 16 December 2025 prints the new employer rate as 1.25 percent. Use 1.25 percent. Wage base note: the $9,000 applies to categories one through nineteen, while a category twenty employer pays on the first $24,000, a split created by LB428 in 2019 and written into section 48-648.02. What no source read here resolves is which base a brand new construction employer uses, since it is assigned the category twenty rate but has no experience rating and so is arguably not a category twenty employer; confirm with the Department before running a construction payroll. Liability itself is FUTA-shaped: you become a liable general business employer once you have one or more people in covered employment on a day in 20 different calendar weeks in a year, or pay $1,500 in gross wages in any calendar quarter, or are already liable for federal unemployment tax and have employment here. Liability then covers the whole calendar year and the following year, and ending it takes a written application filed by 31 January.

Do you need workers compensation insurance in Nebraska?

Yes, from your first employee. Nebraska sets no headcount to reach, so there is no free window before coverage is required.

• every resident employer and every nonresident employer performing work in Nebraska that employs one or more employees in its regular trade, business, profession or vocation
• agricultural employers only once they employ ten or more unrelated full-time employees on each working day for thirteen calendar weeks, with coverage beginning thirty days after the thirteenth week

Nebraska sets no headcount at all for an ordinary business. Section 48-106 applies the Act to every resident employer and every nonresident employer performing work in Nebraska that employs one or more employees in its regular trade or business, which means your first Nebraska hire creates the duty even if your office is in another state. The exclusions are by class of worker, not by size: railroad employees in interstate commerce, household domestic servants in a private home, and agricultural employers whose only workers are related to them, meaning a spouse or someone within the third degree by blood or marriage. An agricultural employer with unrelated workers stays outside the Act until it reaches ten or more unrelated full-time employees on each working day for thirteen calendar weeks, and if it stays out it must give each unrelated employee a signed written notice, in the words the statute prescribes, that they are not covered. Failing to give that notice makes the employer liable under the Act anyway. There is no state insurance fund and no registration step with the state: section 48-145 says you either insure with a carrier licensed to write workers compensation in Nebraska, or get the compensation court's approval to self insure on proof of financial ability, or join an authorised risk management pool. Going without is expensive twice over. Willfully failing to secure payment is a Class I misdemeanour, the civil penalty is up to $1,000 for each violation with every day of continued failure counting as a separate violation, the employer can be enjoined from doing business in Nebraska until it complies, and individual officers, members, managers or partners with authority to secure the payment can be held personally liable alongside the company.

How quickly must you report a new hire in Nebraska?

Within twenty days after the date of hire or rehire; an employer reporting electronically or magnetically may instead file two monthly transmissions not less than twelve and not more than sixteen days apart. Reports go to the Nebraska Department of Health and Human Services, through the Nebraska New Hire Reporting Center.

The deadline is twenty days from the date of hire, which section 48-2302 defines as the day the employee begins employment, not the day you made the offer. The Nebraska trap is who counts. Section 48-2302 defines employee to include an independent contractor or a person who is compensated by or receives income from an employer or other payor regardless of how that income is denominated, so Nebraska is one of the states where your 1099 contractors get reported alongside your W-2 staff. Temporary, seasonal and recalled workers all count too. What you report is the employee's name, address and Social Security number, the date of hire or rehire, and your own name, address and federal tax identification number. The state contracts the intake out to Stellaware, so reports go to ne-newhire.com rather than to a government portal, which is normal here and not a scam. Penalties are mild by national standards: the department may levy a fine of up to $25 for each employee not reported, and section 48-2306 tells it to weigh the employer's good faith efforts to comply before doing so.

Does Nebraska have paid family leave or state disability insurance?

No. Nebraska runs no state paid family leave fund and no state disability insurance, so there is no payroll deduction of that kind and no extra account to open.

Nebraska runs no state disability insurance fund and no paid family and medical leave insurance programme, so there is no payroll contribution of that kind to withhold or match and no extra account to open. What Nebraska does have, and what makes stale guidance dangerous here, is a paid sick time mandate funded entirely out of the employer's own pocket. The Nebraska Healthy Families and Workplaces Act took effect on 1 October 2025 and reaches only an employer who employs eleven or more employees, so a business with ten Nebraska staff owes nothing under it. Employees accrue at least one hour of paid sick time for every thirty hours worked and start accruing after eighty hours of consecutive employment. A small business, defined as eleven to nineteen employees in a given week, must let an employee accrue and use up to forty hours a year; everyone at twenty or more is a large business and the figure is fifty-six hours. The size test looks backwards as well as forwards, so you are not a small business if at any point in the current or previous calendar year you had twenty or more employees on payroll for twenty or more calendar weeks. Part-time and temporary workers count toward the headcount and earn the time; genuine independent contractors, owner-operators, seasonal agricultural workers, anyone under sixteen and anyone working under eighty hours in Nebraska in a year are excluded. Unused accrued time carries over to the next year. The other 2026 change to diarise is unrelated to leave: Nebraska's minimum wage went to $15.00 on 1 January 2026.

Do you need a sales tax permit in Nebraska?

The permit is free, and this is confirmed in statute rather than inferred: section 77-2705(3)(b) says there shall be no charge to the retailer for the application for or issuance of a permit. It does not expire, it is not assignable, and it stays valid until revoked. Two mechanics cost money. A separate permit is required for each place of business in Nebraska, so a second storefront means a second permit, though a retailer with at least 80 percent ownership of more than one licensed location can apply on Form 11 to file one combined return, and combined filers must then e-file monthly. And the free permit stops being free after trouble: restoration costs $25 after a first revocation and $50 after each successive one. Selling without a permit is a criminal matter, a Class IV misdemeanour under section 77-2713, with each day of operation a separate offence. Filing frequency is set from your estimated annual liability on the Form 20 itself: $3,000 or more is monthly, $900 to $2,999 quarterly, under $900 annually.

Security deposits. No routine bond or deposit. Nothing in section 77-2705, which is the permit section, conditions a permit on security, and no bond requirement appeared on any Department of Revenue registration page read here. The one bond in the sales tax chapter is narrow and will not touch an ordinary retailer: under section 77-2708, a retailer that transfers its accounts receivable to a subsidiary which does not itself hold a Nebraska sales tax permit must post a surety bond in favour of the State of Nebraska of not less than twice the tax payable on the outstanding receivables the subsidiary held at the end of the prior calendar year. There is no stated cap on that bond.

Does a marketplace like Amazon or Etsy handle the tax for you?

Nebraska calls the platform a Multivendor Marketplace Platform rather than a marketplace facilitator, and LB 284 of 2019 put it in section 77-2701.13 with effect from 1 April 2019. An MMP that crosses the same $100,000 or 200 transaction threshold must hold its own Nebraska sales tax permit and collect, report and remit Nebraska and local sales tax on the sales it facilitates for others. So Amazon or Etsy handles the tax on what it sells for you. Nebraska then does something that catches sellers out, because it is the opposite of the Indiana rule. Your sales through an MMP still count toward your own threshold. The Form 20 instructions put it flatly: sales of a remote seller through an MMP count towards the thresholds. A seller with $30,000 of its own website sales and $90,000 through a marketplace is over $100,000 and must register in Nebraska even though the platform is already collecting on the larger part. What you get is a deduction, not an exemption: you file a Form 10 reporting all of your Nebraska sales and deduct the MMP sales that the platform has reported and remitted. If you assume the platform's collection means you have no Nebraska filing duty, you will be a non-filer.

If your sales drop, when can you stop collecting?

Nebraska tests the previous or the current calendar year, so a year in which you exceed $100,000 of Nebraska retail sales or make 200 or more separate Nebraska transactions drags the following year in with it. You keep collecting and filing through that next year even if your Nebraska sales collapse, and the earliest you can be clear is the year after that. There is no wind-down period expressed in days and no separate trailing rule. What does not happen on its own is deregistration. Neither the statute nor the Department's remote seller notice or FAQ sets out a procedure for switching off once you fall below the threshold, and the permit stays valid until revoked, so the returns keep falling due until you close the account. The route for that is on the Form 20 instructions: cancel the Nebraska ID number on your final return or file a Nebraska Change Request, Form 22. Going quiet instead is how businesses collect non-filer notices.

Does Nebraska charge a tax on revenue rather than profit?

Nebraska has nothing resembling Washington's B and O, Ohio's CAT or Oregon's CAT, and there is no corporate franchise tax on top of income tax. If you sell services, software or industrial goods there is no receipts-based cost of doing business here at all. But do not answer no and stop, because Nebraska taxes gross proceeds in one specific corner and it catches ordinary shops. The litter fee applies to manufacturers, wholesalers and retailers of ten product categories: food for human or pet consumption, groceries, cigarettes and other tobacco, soft drinks and carbonated water, liquor, wine and beer, household paper products, glass containers, metal containers, plastic or fibre containers, and cleaning agents and toiletries. The rate is $175 per $1,000,000 of gross proceeds and it is charged on receipts, not on profit. Anyone whose annual Nebraska gross proceeds from covered products come to less than $100,000 is out, which is why most businesses never meet it, but at or above $100,000 you must hold a litter fee licence for each place of business and file a Nebraska Litter Fee Return, Form 28. The year runs 1 July to 30 June and the return and payment are due by the following 1 October. Failing to get the licence is a Class IV misdemeanour. The fee is currently set to terminate on 30 September 2030. Two other narrow levies now appear on the Form 20 revised June 2026 and are worth checking if they touch your trade: a Remittance Transfer Excise Tax on remittance transfer providers licensed under the Nebraska Money Transmitters Act, and a Kratom Product Retailer Excise Tax. Their rates were not read for this record.

Do you have to register your out-of-state company in Nebraska?

Both entity types cost the same to qualify, and both statutes say the same thing: $110 if the filing is submitted in writing and $100 if it is submitted electronically. Section 21-192 sets that for a foreign LLC's application for certificate of authority and section 21-2,205 sets it for a foreign corporation's. The stored figures are the paper fees printed on the current official forms, both revised 1 July 2021; deduct $10 if you file online. There is one asymmetry. The foreign LLC form prints its fee as $110 in-office or $100 online plus $10 for the certificate, so budget $120 on paper and $110 online for an LLC, while the foreign corporation form carries no such add-on. A foreign nonprofit corporation pays $30. Nothing scales with authorized shares at the qualification stage.

You need a Nebraska registered agent with a street address, and both entity types must attach an original certificate of existence from the home state; for a corporation it must be no more than sixty days old, and for an LLC a certified copy of the certificate of organization is expressly not accepted in its place. The corporation filing also demands a full list of officers and directors with street addresses. Skipping the filing is far more dangerous for a corporation than for an LLC. Under section 21-2,204 a foreign corporation transacting business without a certificate of authority may not maintain any proceeding in a Nebraska court until it gets one, and is liable for a civil penalty of $500 for each day, capped at $10,000 for each year, which the Attorney General collects. Section 21-162 puts an unregistered foreign LLC under the same court bar but attaches no monetary penalty and expressly preserves the validity of its contracts and its right to defend a suit. Neither statute makes members or managers personally liable merely for the failure. Qualifying opens no tax accounts, so the Form 20 registration, the unemployment insurance account and any sales tax permit are all still ahead of you. Budget for the ongoing filings too, because they differ by entity type: an LLC files a biennial report in each odd-numbered year at $30 on paper or $25 online, while a corporation files a biennial report by 1 March of each even-numbered year together with an occupation tax computed on its paid-up capital stock, starting at a minimum of $26 and rising through brackets to $23,990 above $100,000,000 of capital stock.

Where these figures come from

Every number on this page was read on Nebraska's own agency pages, its statute, or a current-year official form, and this record was last reviewed on 2026-09-08. Where a state's explainer page disagreed with its statute or its current form, we followed the statute or the form and said so in the relevant section, because a state's consumer-facing pages are often the last thing updated when a figure changes.

Anything we could not confirm on a primary source is left blank rather than estimated. A missing figure on this page means we could not verify it, not that it is zero.

This is general information, not legal or tax advice. Rules change and your circumstances matter. Confirm anything you are about to act on with the agency named beside it.