Hiring your first employee in North Dakota

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

North Dakota has no single employer account. ND TAP, the Tax Commissioner's portal, carries income tax withholding and the sales tax permit behind one login, which is the closest thing to a one stop, but it stops there. Unemployment is a separate registration with Job Service North Dakota in its own UI EASY system, and workers compensation is a third application to Workforce Safety and Insurance. The Secretary of State entity filing is a fourth step and opens none of the tax accounts. Budget for three payroll registrations plus the entity filing, each with its own deadline, and note that the tightest of those deadlines is the withholding one at seven days.

Does North Dakota require income tax withholding?

Yes. You register with the North Dakota Office of State Tax Commissioner, within seven days of hiring an employee.

The seven day registration deadline is the shortest in this dataset, and it is not on the Tax Commissioner's withholding page or in its published withholding guideline. It sits in the administrative code at N.D. Admin. Code 81-03-03.1-02, which says an employer required to withhold must register within seven days of hiring an employee, and the rule is what binds you. Register through ND TAP. Two exemptions cut the other way and are worth knowing before you set up payroll. Minnesota and Montana residents working in North Dakota can be freed from North Dakota withholding under reciprocity if they give you Form NDW-R, renewed by 28 February each year, and a Minnesota resident must also return home at least once a month to qualify. Separately, a nonresident present in the state for not more than 20 days in the tax year, with no other North Dakota source income, whose home state offers a similar exclusion or has no income tax, is outside withholding under the nonresident mobile workforce exclusion. Wages a farmer or rancher pays purely for agricultural labour are not subject to withholding at all. Form 306 must be filed for every period even when you paid no wages, and the officers, LLC governors or managers responsible for filing are personally liable for the tax, a liability that survives dissolving the business.

What unemployment insurance does North Dakota charge a new employer?

A new North Dakota employer pays 1% on the first $46,600 each employee earns, so roughly $466 per employee in the first year. For 2026 a new non-construction employer pays 1.00% on the first $46,600 of each worker's wages, down slightly from 1.03% on $45,100 in 2025. A new construction employer pays 9.67%, close to ten times as much, so how the work is classified matters more here than the headline rate does. The 1.00% figure is the positive balance rate a genuinely new account starts on. Job Service publishes a second new employer rate of 6.07% for a new account already carrying a negative balance, which is what an employer inheriting a predecessor's experience record can land on. The wage base is not a fixed figure in statute: it is recalculated every year as 70% of the statewide average annual payroll, so it moves every January. Register within 20 days of first employing workers. You are liable once you have one or more workers in 20 different weeks of a calendar year or pay $1,500 in wages in any calendar quarter, with separate tests for agricultural, domestic and nonprofit employment. You stay on the new employer rate until you have six quarters of coverage as of the preceding October, or ten quarters if you are a construction employer.

Do you need workers compensation insurance in North Dakota?

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

North Dakota is a monopoly state fund state, and that changes the shape of the whole answer. You cannot buy a workers compensation policy from a private insurer here, because state law does not allow private insurers to underwrite the cover at all. WSI is the sole provider and regulator, so there is nothing to quote or shop, no broker in the loop, and your existing multi-state policy does not stretch to cover a North Dakota worker. What you do instead is open a WSI account and file an Application for Insurance before anyone starts work. There is no headcount to wait for: coverage is required for all employees, full time, part time, seasonal and occasional, before they begin working. An out-of-state employer is pulled in by significant contacts, and any one of three tests is enough: an employee earns or is expected to earn 25% or more of their gross annual pay from you for services in North Dakota, or 25% of your gross annual payroll is for services in North Dakota, or you hire someone in North Dakota to work in North Dakota. One full time remote worker living in the state clears the first test by themselves. Being uninsured costs a $10,000 penalty plus $100 for every day it continues, and you remain liable for the actual cost and reserves of any claim from the uninsured period. Premium is a rate per class of employment applied to payroll, with each worker's payroll capped at 70% of the state average annual wage and a minimum charge of $250 per period even in a period with no employees, so no single rate can be quoted. Unlike Washington, it is unlawful to take any part of the premium out of wages. Owners, partners, corporate officers and their spouses, the employer's children under 22, farm and ranch labour, household domestic workers and place of worship staff sit outside the mandate and can only be covered electively. WSI holds reciprocal agreements with Idaho, Montana, Oregon, South Dakota, Utah, Washington and Wyoming for temporary work across those borders, but each one has to be requested and approved in advance rather than assumed.

How quickly must you report a new hire in North Dakota?

No later than twenty days after the date the employer hires the employee. Reports go to the North Dakota Health and Human Services, Child Support.

Report every newly hired employee within 20 days, counting from the date services for pay were first performed. Newly hired covers a returning worker who has been separated from you for at least sixty consecutive days, so a seasonal rehire is reportable all over again. Unlike Ohio, North Dakota does not extend the duty to independent contractors: the statute defines employee by reference to Internal Revenue Code section 3401, so only people you actually put on payroll are in scope. Any employer with more than twenty-four employees at any time must report electronically, and failing to do so is treated as not reporting at all. A W-4 or equivalent form is the accepted format, and the report has to state whether you offer the employee health insurance, a data element several states leave out. The penalty is $20 for each failure to report after a written warning, rising to $250 for each report where employer and employee agreed not to file, or where a false or incomplete report was filed. This is a separate filing from your quarterly wage reports and nothing about registering for payroll tax satisfies it.

Does North Dakota have paid family leave or state disability insurance?

No. North Dakota 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.

North Dakota runs no state paid family leave programme and no state disability insurance, so there is no payroll deduction of that kind and no fourth payroll account to open. If you already run payroll in California, Washington or Delaware, do not carry that deduction across. Two things here are easy to misread. A 2021 bill would have created a voluntary paid family medical leave programme at Century Code chapter 34-06.2, funded partly by the state and paired with an employer tax credit, and drafts of it are still findable on the legislature's site; it did not become law, and Title 34 of the Century Code has no chapter 34-06.2 today. Separately, the North Dakota Family Leave Act at Century Code chapter 54-52.4 does grant twelve weeks of leave, but it defines employer as the state and excludes political subdivisions, so it binds state agencies only and not private employers. For a private employer the only family leave obligation is the federal FMLA, which is unpaid.

Do you need a sales tax permit in North Dakota?

The permit itself is free. Century Code 57-39.2-14 lays out the entire permit regime and imposes a charge in exactly one place: $50 to issue or reissue a permit after the commissioner has revoked one, which can happen for non-compliance or for filing four consecutive quarters of returns showing no tax due. There is no fee on an original application. Apply through ND TAP, the same portal as your withholding account. Three things catch people out. A permit is not transferable, so buying an existing business means applying for your own rather than inheriting the seller's. A permit is issued for each place of business in the state and must be displayed conspicuously at the place it names. And North Dakota's local city and county sales taxes are administered by the Tax Commissioner on the locals' behalf, so one registration and one return cover state and local tax, but you still have to source each sale to the delivery location to get the local rate right.

Security deposits. The commissioner may require a surety bond, in an amount the commissioner fixes, whenever it is judged necessary to secure collection of the tax, under Century Code 57-39.2-12(3). The statute sets no cap, so a new or out-of-state seller should not assume the free permit is the only cost of getting registered.

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

A marketplace facilitator collects North Dakota state and local tax on the sales it facilitates, and once it gives you written certification that it will do so, you are no longer liable for tax on those sales. The instruction if you also hold your own permit is to leave marketplace sales off your return entirely, not to report them and claim a deduction, which is the opposite of how Washington handles the same situation. The facilitator's own duty turns on physical presence in the state, or more than $100,000 of taxable sales through the marketplace in the current or prior calendar year, counting the sales it makes on its own behalf as well as yours. Everything you sell through your own website or any other channel stays yours to collect and remit, and those direct sales are what you measure against your own threshold.

If your sales drop, when can you stop collecting?

North Dakota's remote seller test looks at the previous calendar year or the current one, so a year in which you cross carries the following year with it and dropping back below the threshold does not end the duty straight away. One discrepancy is worth flagging. The Tax Commissioner's sales and use tax page describes the trigger as taxable sales into the state exceeding $100,000, while the statute at Century Code 57-39.2-02.2 measures gross sales from the sale of tangible personal property and other taxable items delivered in this state. The statute is what binds you and it is the broader wording, so measure against it rather than against the summary. Your permit also stays open until you close it, so tell the Tax Commissioner when you genuinely stop selling into North Dakota instead of filing zero returns indefinitely. Filing four consecutive quarters showing no tax due is itself grounds for revocation, and getting the permit back afterwards is the one situation in which a permit costs $50.

Does North Dakota charge a tax on revenue rather than profit?

North Dakota has no broad tax on business revenue: nothing resembling Washington's business and occupation tax, Ohio's commercial activity tax or Oregon's corporate activity tax, and no annual state business licence fee either. The reason this still needs saying is that the state does use the phrase gross receipts tax, and it means something far narrower than the same phrase means elsewhere. It is a set of substitute sales tax rates on three specific goods, charged instead of the ordinary 5% state rate: 7% on alcohol, 3% on new farm machinery used exclusively for agricultural production, and 3% on new mobile homes. If you sell one of those you charge that rate on that sale; if you do not, the phrase has nothing to do with your business and your receipts as such are not taxed. The state level exposures for an ordinary business expanding here are corporate or pass-through income tax and the sales tax you collect, not a receipts tax.

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

$135 to register a foreign LLC and $145 for a foreign business corporation, neither of which scales with capital or authorized shares. The ongoing cost differs more than the entry cost does: a foreign LLC's annual report is $50 and due 15 November, while a foreign corporation's is $25 and due 15 May. Amending a foreign registration is $50 for an LLC and $40 for a corporation, and withdrawing later is $20 either way. The corporation figures come from the Secretary of State's separate corporation fee schedule rather than the LLC one.

The Secretary of State names having employees working in the state as an example of transacting business, which is the thing that triggers this filing, and so are having a liability to collect sales tax and needing a state licence or permit to do the work. Hiring one North Dakota employee therefore tends to pull in the entity registration as well as the payroll accounts. Filing goes through the FirstStop portal and you will need a North Dakota registered agent. This is the entity step only and opens no tax accounts: withholding, unemployment, workers compensation and the sales tax permit all remain separate registrations afterwards.

Where these figures come from

Every number on this page was read on North Dakota'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.