Hiring your first employee in New York

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

New York looks like two agencies but registers you once. Form NYS-100 opens your unemployment account with the Department of Labor and your withholding and wage reporting account with the Department of Taxation and Finance at the same time, and from then on one quarterly return reports all three. What the combined account does not cover is insurance: workers compensation, disability benefits and Paid Family Leave are bought from a private carrier or the State Insurance Fund, not registered for with the state.

Does New York require income tax withholding?

Yes. You register with the New York State Department of Taxation and Finance, file form nys-100 once you have a federal ein and meet unemployment liability, which for a general business is the first day of the calendar quarter in which you pay $300 or more in wages.

You must withhold New York State income tax, and on top of that New York City or Yonkers tax if the employee lives or works there, so a single hire can create three withholding obligations. Watch for a second, separate payroll tax if the employee works in the New York City metro area: the Metropolitan Commuter Transportation Mobility Tax applies to employers with more than $312,500 of covered payroll in a quarter across the twelve county district, at rates that rise with payroll size.

What unemployment insurance does New York charge a new employer?

A new New York employer pays 4.1% on the first $17,600 each employee earns, so roughly $722 per employee in the first year. The 2026 new employer rate is 4.1%, which is the 4.025% unemployment rate plus the 0.075% re-employment services rate every contributory account pays. Do not use the 3.4% figure the state also publishes, which is only a component. The bigger change for 2026 is the wage base, which jumped from $12,800 to $17,600 after the state paid off its unemployment trust fund loan, so budget for roughly 37% more taxable wages per employee than in 2025. From 2026 the base resets every January to 18% of the state average annual wage, so it moves every year. A general business becomes liable in the quarter it pays $300 or more in wages, which is a very low trigger.

Do you need workers compensation insurance in New York?

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

Virtually all New York employers must carry coverage from the first person who works for them, and there is no opt out. The trap is who counts as an employee: in a for-profit business the Board counts part time, temporary, seasonal, casual, day labor, leased and borrowed workers, and it counts family members and unpaid volunteers as well. The narrow exceptions are a sole proprietorship, partnership or LLC with no employees, and a corporation owned entirely by one or two people who hold all the stock and all the offices and have no other workers.

How quickly must you report a new hire in New York?

Within 20 days of the employee's hiring date. Reports go to the New York State Department of Taxation and Finance.

You have 20 days from the hiring date, which is the first day services are performed for pay, not the offer date. A rehire counts if the person was separated from you for 60 or more consecutive days. Two New York specific catches: you must also report whether dependent health insurance is available and the date the employee qualifies, and since 2022 you must report independent contractors whose contract exceeds $2,500.

Does New York have paid family leave or state disability insurance?

New York runs two separate employee-funded programs on top of workers compensation, and both ride on one insurance policy you buy from a carrier. The rate here is Paid Family Leave: for 2026 employees contribute 0.432% of gross wages, capped at $411.91 a year, funding up to 12 weeks of leave. Statutory disability benefits use a completely different and much older formula: the employee pays half of one percent of wages but never more than sixty cents a week, about $31 a year, and the employer pays whatever the premium costs above that. Coverage is required once you have had an employee on each of at least 30 days in a year.

Do you need a sales tax permit in New York?

The permit is called a Certificate of Authority. The timing rule has teeth: you must apply at least 20 days before your first taxable sale, and you cannot legally make a taxable sale until the certificate arrives, so treat it as a lead time rather than a formality. Operating without a valid certificate carries a penalty of up to $500 for the first day plus up to $200 for each day after, to a maximum of $10,000. The Tax Department does not publish a registration fee, so none is stated here.

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

New York has required marketplace providers to collect state and local sales tax on the third party sales they facilitate since June 2019, so the big platforms handle the tax on your marketplace sales. The provider's duty applies whether or not you are registered, but that does not erase your own obligations: sales through your own website still count toward your registration threshold and still need reporting. If a platform collects for you, get its Marketplace Provider Certificate so you can document why those receipts were not taxed by you.

If your sales drop, when can you stop collecting?

New York does not publish a trailing period, and the mechanism is unusual enough to be worth understanding. Economic nexus is tested on a rolling look back at the immediately preceding four sales tax quarters, so your status can turn on and off as older quarters drop out of the window rather than being fixed for a calendar year. Separately, the only reasons the Tax Department publishes for surrendering a Certificate of Authority are stopping business, selling it, or changing legal form, and falling below the threshold is not on that list. Until your account is closed you must keep filing on time even for periods with no taxable sales.

Does New York charge a tax on revenue rather than profit?

New York has no statewide gross receipts tax in the mould of Washington's business and occupation tax or Ohio's commercial activity tax. The closest thing an employer will actually meet is the Metropolitan Commuter Transportation Mobility Tax, but that is levied on payroll expense rather than revenue and only applies in the twelve county New York City metro district. New York City imposes its own local taxes on some businesses, including a commercial rent tax on certain Manhattan tenants.

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

Application for Authority is $250 for a foreign LLC and $225 for a foreign business corporation. A foreign LLC also pays a $50 Certificate of Publication fee on top of the newspaper charges described below. Expedited handling is $25 for 24 hour, $75 for same day, $150 for two hour.

The filing fee is the small part of the cost for an LLC. Within 120 days of filing, a foreign LLC must publish a notice once a week for six successive weeks in two newspapers designated by the county clerk, then file a Certificate of Publication with the publishers' affidavits. Newspaper rates vary enormously by county and are highest in Manhattan, so the county you name in the application drives the real bill. Both entity types must attach a certificate of existence from their home state dated within the last year.

Where these figures come from

Every number on this page was read on New York'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.