What does a first hire in New Hampshire involve?
Four things, in roughly this order: workers' comp before you hire, an unemployment tax account with the state, a new hire report within 20 days, and federal payroll from the first paycheck. What you skip is state income tax withholding. The New Hampshire Department of Revenue Administration's interest and dividends tax page says plainly that the state does not have an income tax on an individual's reported W-2 wages.
That one missing piece makes New Hampshire payroll simpler than Vermont or Massachusetts payroll, and that's all it does. The easy mistake is reading no state income tax as no state paperwork at all.
What order should you set it up in?
- Get an Employer Identification Number from the IRS, which is free and issued online once the application is approved.
- Bind a workers' compensation policy before you make the hire.
- Register with New Hampshire Employment Security so you can file the quarterly tax and wage report.
- Collect a signed Form W-4 when the employee starts work, and complete Form I-9 together with them.
- Report the hire to New Hampshire Employment Security within 20 days.
- Pick a regular payday, weekly or biweekly, and tell the employee before the first one.
- Deposit federal payroll taxes electronically and file Form 941 every quarter.
The IRS EIN page says you never have to pay a fee for an EIN, so skip any site that charges for one. The IRS hiring employees page says all U.S. employers must complete Form I-9 for every person they hire, and that if a new employee doesn't hand in a completed W-4, you withhold as if they're single.
What comes out of the paycheck, and what do you pay on top?
Federal income tax withholding is worked out from the employee's W-4. Social Security and Medicare are set percentages withheld on top of that, and you match both. Publication 15 caps the Social Security part at an annual wage base and adds a 0.9% Additional Medicare Tax on very high wages, neither of which a first hire is likely to reach. The rates for 2026 are in IRS Publication 15, the Employer's Tax Guide. Unemployment tax is different: the IRS employment taxes page says you pay federal unemployment tax only from your own funds, and employees don't have it withheld.
| Tax | Rate (%) | Who pays it | Source |
|---|---|---|---|
| New Hampshire income tax on wages | 0 | Nobody, no tax on W-2 wages | NH DRA |
| Social Security, employee share | 6.2 | Withheld from the employee | IRS Publication 15 |
| Social Security, employer share | 6.2 | Employer | IRS Publication 15 |
| Medicare, employee share | 1.45 | Withheld from the employee | IRS Publication 15 |
| Medicare, employer share | 1.45 | Employer | IRS Publication 15 |
| Federal unemployment, after the full state credit | 0.6 | Employer | IRS Publication 15 |
| New Hampshire unemployment, new employer, before any fund balance reduction | 2.7 | Employer | NHES |
Publication 15 puts the federal unemployment rate at 6.0% before a credit of up to 5.4% for state unemployment tax. You get the full credit if you paid your state unemployment taxes in full, on time and on all the same wages, and the state isn't a credit reduction state, which drops the federal rate to 0.6%. So paying New Hampshire unemployment tax late can cost you on the federal side too.
What does New Hampshire Employment Security need from you?
Two things. A new hire report, and a tax and wage report every quarter. The NHES business compliance page says employers must report all new hires within 20 days, and you can do it online through the NHES WebTax and New Hire Reporting system.
Say you open a small cafe in Concord and hire your first barista. Don't save the new hire report for the quarterly paperwork, because 20 days is much shorter than a quarter. The quarterly report is separate. The NHES employer claims and taxes page says every employer files a tax and wage report for every calendar quarter while providing employment, and a new employer starts at a rate of 2.7%, minus any fund balance reduction in place for that quarter. After the first year, the rate moves based on whether you paid on time and how much in benefits went to people who used to work for you.
Do you need workers' comp for one employee?
Yes, and before you hire. The New Hampshire Department of Labor's workers' compensation employer page says the law requires employers to provide workers' compensation insurance, and that employers must apply for and obtain coverage prior to the hiring of any employee. One part-time hire in Nashua is still a hire. If you're unsure whether someone counts as an employee at all, sort that out before the policy, not after.
Want payroll set up right the first time?
Book a free consultation or call (603) 805-2308 and walk through your first hire before the first payday.
How often do you have to pay?
Weekly or biweekly, on paydays you set in advance. RSA 275:43 says wages are due within 8 days after the end of the work week for weekly pay, or within 15 days for biweekly pay. Paying less often takes a written petition to the labor commissioner and the commissioner's approval, and even then it's at least once a month.
The same statute covers how you pay. Direct deposit needs the employee's written authorization, and if you pay by direct deposit, electronic transfer or a payroll card, you have to offer the option of a paycheck as well. For the wage itself, RSA 279:21 ties the New Hampshire minimum to the federal minimum wage law, so check the federal figure rather than looking for a separate state one.
What federal filings run all year?
Withheld income tax, both halves of Social Security and Medicare, and federal unemployment tax are deposited electronically. The IRS employment taxes page lists the free Electronic Federal Tax Payment System as one way to do it, alongside a payroll service making the payment for you.
| Filing | Goes to | When it is due |
|---|---|---|
| Tax and wage report | NHES | Every calendar quarter with employment |
| Form 941 | IRS | Last day of the month after each quarter ends |
| Form 940 | IRS | January 31, covering the previous year |
| Form W-2 | Employees and the SSA | January 31, covering the previous year |
Those dates come from the IRS employment tax due dates page, which also says that if you deposited all the tax on time, you get 10 extra calendar days to file Form 941 or Form 940.
What if the hire lives or works in Vermont or Massachusetts?
Then this checklist isn't the whole picture. Both states tax income: the Vermont Department of Taxes estimated income tax page covers Vermont residents working in another state, and the Massachusetts DOR regulation 830 CMR 62.5A.1 counts income from employment carried on in Massachusetts as Massachusetts source income, even for non-residents. Neither page is an employer withholding guide. Neither settles every case either, a Massachusetts resident working in New Hampshire being one. Check the other state's withholding rules before the first payday. Fixing the wrong state's withholding after a few months takes longer than setting it up once.
Ledger House runs payroll and keeps the monthly books, so the wages on the quarterly reports can be checked against your accounts. If you're about to make a first hire, get in touch and talk it through. The first consultation is free and commits you to nothing.
