#How to Hire Your First Employee When You Have Never Done It Before

•11 min read read

TL;DR (Direct Answer): To hire your first employee, you need to: get an EIN from the IRS, set up payroll, write a clear job description, post the role, screen candidates with structured interviews, make a written offer, and onboard with the required legal paperwork (I-9, W-4, state new hire forms). Most first-time employers underestimate the legal setup and overestimate the difficulty of the interview process. Structured hiring tools like Hirenest walk first-time employers through every step of the interview and evaluation process so you make your first hire with confidence — not guesswork.

#Get an Employer Identification Number (EIN)

Apply free at IRS.gov. You will receive it immediately. Required for payroll, business bank accounts, and employer tax returns.

#Register With Your State

Most states require registration for state income tax withholding, state unemployment insurance (SUTA), and new hire reporting. Check your state's department of labor website.

#Set Up Payroll

Use a payroll service — not manual calculation:

  • Gusto ($40–$80/month, most popular for small business)
  • QuickBooks Payroll (good if already using QuickBooks)
  • Wave Payroll (free for some states)

#Get Workers' Compensation Insurance

Required in almost every state before your first employee's first day.

#Part 2: Define the Role

Before posting, write down:

  • What specific problem does this person solve?
  • What does success look like at 90 days? (3 specific outcomes)
  • What are the non-negotiable hours, location, physical requirements?
  • What can you actually afford to pay? (Add 15–25% above salary for payroll taxes and workers' comp)

#Part 3: Write and Post the Job

Good posting includes: Job title (use what candidates search), location and hours, what they will actually do, specific requirements (not "team player"), pay range, how to apply.

Free posting platforms:

  • Indeed (largest reach)
  • LinkedIn (professional roles)
  • Facebook Jobs (local hourly roles)
  • Craigslist (trades and service roles)

#Part 4: Screen Applicants

Phone screen first (10–15 minutes):
Confirm availability matches, they understand the role, communication is clear. This eliminates 50–70% before in-person interviews.

Red flags to screen out: Cannot explain why leaving current role, schedule conflicts, wants significantly more than posted range.

#Part 5: Run the Interview

Use the same 5 questions for every candidate:

  1. "Tell me about your most recent job and why you are moving on."
  2. "Describe a time you made a mistake at work. What happened and what did you do?"
  3. "Tell me about your experience doing [specific task in this role]."
  4. "What would make you really good at this job? What would be challenging?"
  5. "Do you have any questions about the role or business?"

Score 1–3 per answer. Compare scores before deciding.

#Part 6: Make the Offer in Writing

Include: job title, start date, pay rate and frequency, hours and schedule, at-will statement, probationary period, benefits, acceptance deadline (48–72 hours).

Required by federal law:

  • Form I-9 (within 3 business days of start)
  • Form W-4
  • FLSA employee rights notice

State requirements: Vary — check your state's department of labor.

#Part 8: Onboard Well

  • Week 1: Role introduction, expectations, written "First 30 Days" checklist
  • Week 2: Check-in on questions and confusion
  • 30-day check-in: What is going well? What is not? What do you need?

#How Hirenest Helps First-Time Employers

Hirenest guides first-time employers through structured interviews for any role — so you run the same quality process enterprise HR teams use, without needing one yourself.

#FAQ

Do I need an employment lawyer to hire my first employee?
For most straightforward hires, no. If hiring in a heavily regulated industry or dealing with complex compensation, a brief consultation is worth it.

What is the difference between an employee and an independent contractor?
Employees work regular hours under your direction using your tools. Contractors work autonomously for multiple clients. Misclassification is a significant legal risk — when in doubt, treat as an employee.

How much does it actually cost to hire one employee?
Budget 15–25% above their salary for employer payroll taxes, workers' comp, and benefits. A $40,000/year employee typically costs $46,000–$52,000 all-in.

What if the hire does not work out in the first 30 days?
In most at-will states you can end employment at any time. Do it professionally with a brief clear conversation and their final paycheck ready.

Can I hire a family member as my first employee?
Yes, but they are subject to all the same legal requirements. Consult a tax professional as the IRS treats family employment differently in some cases.