The short answer
An Idaho employer generally needs a federal EIN, an Idaho income tax withholding account, an Idaho unemployment insurance account and a workers' compensation policy before the first paycheck. Idaho withholding is reported on Form 910 on an assigned schedule and reconciled each year on Form 967 with the W-2s. Federal taxes go on Form 941 each quarter and Form 940 each year. Who files depends on your setup.
Before the first paycheck
Hiring your first employee turns on several state and federal accounts at once. Most of them must exist before you pay anyone, so the order matters.
- A federal EIN. The Idaho State Tax Commission says you must have an EIN before you apply for an Idaho withholding account. The IRS issues EINs online at no charge.
- Idaho Business Registration. One application covers the Idaho withholding account and the employer accounts with the Idaho Department of Labor and the Industrial Commission. Use the same employer name and EIN you will use on your employees' W-2s.
- Workers' compensation insurance. The Industrial Commission says it must be in place before the first employee is hired.
- New-hire paperwork. A federal Form W-4 for each employee is required, and the Tax Commission strongly encourages a Form ID W-4 for Idaho withholding. Form I-9 belongs in the payroll file too.
Idaho income tax withholding
The Tax Commission says you must have an Idaho withholding account if you have an employee earning income while in Idaho, including family members and household help. Its definition of employer includes religious, educational and charitable organizations, even tax-exempt ones.
You report and pay Idaho withholding on Form 910, filed online through the Tax Commission's Taxpayer Access Point (TAP). The Tax Commission assigns the cycle for a full calendar year based on how much you withhold: twice a month for the largest employers, monthly for those withholding less than $25,000 a month and more than $750 a quarter, quarterly for $750 or less a quarter, and annually for less than $750 a year. Monthly filers are due the 20th of the following month, and quarterly filers by the last day of the month after the quarter. You file a zero return for any period with no withholding, and you report based on when wages were paid, not when they were earned.
Once a year, Form 967 reconciles the account. It is due with the W-2s by the last day of January. The total withheld on the W-2s should equal the total paid in on the year's Forms 910; a difference means a payment was missed or a paycheck was coded wrong. The Tax Commission publishes withholding tables and revises them as needed, often partway through a year, so payroll software or tables need updating when a new table comes out.
| Account or form | Agency | How often | What the books should show |
|---|---|---|---|
| Idaho withholding, Form 910 | Idaho State Tax Commission | Assigned cycle: semimonthly, monthly, quarterly or annual | Idaho tax withheld as a liability, cleared by each payment |
| Form 967 with W-2s | Idaho State Tax Commission | Once a year, by the last day of January | W-2 totals that match the year's Form 910 payments |
| Unemployment insurance report | Idaho Department of Labor | Quarterly, by the last day of the month after the quarter | Employer tax as an expense; quarterly wages that match payroll |
| Workers' compensation policy | Insurer; the Industrial Commission enforces coverage | In place before the first hire; premium based on payroll | Premium as an employer expense, never deducted from wages |
| Form 941 and deposits | IRS | Quarterly return; deposits monthly or semiweekly | Federal withholding and FICA liabilities that clear after each deposit |
| Form 940 | IRS | Once a year, by January 31 | Federal unemployment tax as an employer expense |
Idaho unemployment insurance
Unemployment insurance is a tax the employer pays; it is not withheld from wages. The Idaho Department of Labor's employer handbook says a general employer must report and pay if, in the current or preceding year, it paid wages of $1,500 or more in any calendar quarter, or had someone working some part of a week in 20 different weeks.
Reports and payments are due quarterly, by the last day of the month after each quarter ends, and the handbook says there is no grace period. Once an account is active, a report is due every quarter even if no wages were paid. Paying the state tax on time also matters federally: the handbook notes an employer cannot take the maximum credit on federal Form 940 unless state unemployment taxes were paid by the Form 940 due date.
Churches are a special case. The handbook lists work for a church or a church-controlled religious organization as exempt employment, and minister pay has its own rules; see church payroll basics rather than applying this guide to a church.
Workers' compensation
The Industrial Commission says employers with one or more full-time, part-time, seasonal or occasional employees must carry workers' compensation unless specifically exempt. Premiums are based on payroll and the type of work, the employer pays the entire cost, and deducting any part of the premium from wages is prohibited. Coverage comes from a private insurer, the State Insurance Fund, the assigned risk pool or, for large employers, approved self-insurance.
Some people are exempt, such as sole proprietors themselves and working members of an LLC or partnership. Whether a worker is an employee at all is a separate question; the Industrial Commission uses a right-to-control test, the IRS has its own guidance, and employee vs. independent contractor walks through what each side's records look like.
Federal payroll taxes in brief
IRS Publication 15 (2026) is the federal employer's guide. Most employers file Form 941 each quarter, by April 30, July 31, October 31 and January 31, reporting federal income tax withheld and Social Security and Medicare taxes. The taxes themselves are deposited electronically on a schedule set by a lookback period. Publication 15 says a new employer is a monthly schedule depositor for its first calendar year, which means depositing each month's taxes by the 15th of the following month. Larger employers deposit on a semiweekly schedule, and anyone who accumulates $100,000 in a deposit period deposits the next business day.
Form 940 reports federal unemployment tax once a year, due January 31. W-2s go to employees, and Copy A with Form W-3 goes to the Social Security Administration, by January 31.
What the books should show, and who files
Payroll touches the books in three places: gross wages and employer taxes as expenses, the amounts withheld as liabilities until they are paid, and the net paychecks out of the bank. A clean file keeps a separate liability account for each agency and checks that each one returns to zero after its payment. The Tax Commission says to keep payroll records for at least four years, including wage payments, taxes withheld, W-4s, W-2s and I-9s.
Who prepares and files these returns varies. Many small employers use a payroll provider that files for them; some owners file themselves; others have a CPA do it. Whoever it is should be named in writing so nothing is filed twice or not at all. The site's payroll software list compares common providers, and in-house vs. outsourced bookkeeping covers who does the rest of the work.
Small business bookkeeping covers recording and reconciling payroll in the books from your provider's reports. Running payroll and filing payroll returns for a business are not among the listed services, so name who does them. For churches, church payroll is part of the church service, and exactly which filings are included is confirmed in writing during the consultation.
