Bookkeeping, payroll, and accounting services for small businesses across Northwest Arkansas.

Call or Text: (479) 685-9673

How do I set up payroll for my first employee?

Start with a federal Employer Identification Number if you don’t already have one. The IRS issues these immediately through their website. You need the EIN before you can register with Arkansas or process any payroll.

Register with the Arkansas Department of Finance and Administration for state income tax withholding. This gives you an account number for reporting and remitting the state taxes you withhold from employee paychecks. You can register online through the DFA website. Register separately with the Arkansas Department of Workforce Services for unemployment insurance. Even with just one employee, you need to be in their system.

Get employee paperwork completed before their first day. They need to fill out a W-4 for federal withholding and an I-9 to verify employment eligibility. Arkansas follows the federal W-4 form so you don’t need separate state withholding paperwork. Collect banking information if you’re doing direct deposit.

Workers’ comp insurance is required in Arkansas for most employers. Get coverage before your employee starts working. The cost varies based on what type of work they’ll be doing. Don’t skip this because the penalties for operating without coverage add up quickly.

Now you need to decide how you’ll actually run payroll. Manual calculation works but requires confidence with the math and tax deposit rules. Payroll software like QuickBooks or Gusto automates calculations and handles tax filings. Or you can outsource through payroll setup and management services to have someone else handle the details.

For a first employee, software or outsourcing usually makes more sense than manual. The cost is modest and the risk of making mistakes drops significantly. Getting withholding wrong means your employee gets a surprise tax bill. Missing tax deposits means penalties that compound fast.

Once payroll is running, you’ll file Form 941 with the IRS quarterly and make regular tax deposits. Arkansas requires quarterly wage reports too. The deposit schedule depends on your total tax liability but most small employers with one employee deposit monthly.

The setup can feel overwhelming because there are multiple registrations and decisions happening all at once. Many business owners work with a bookkeeper near Gentry to get everything configured correctly from the start. The cost of professional help is usually less than the cost of fixing mistakes later, especially when penalties and back taxes get involved.

Take it one step at a time. Get the registrations done, choose your payroll method, and set up a consistent schedule for processing. Your first payroll is the hardest one. After that, it becomes routine.

Northwest Arkansas's Dedicated Bookkeeping Partner

The Next Step:
A Quick Conversation

Tell us about your business and where you need help. We'll listen, ask a few questions, and give you a clear plan and honest price.

More Questions

How do I set up recurring invoices in QuickBooks?

In QuickBooks Online, go to Settings and select Recurring Transactions to create invoice templates that send automatically on your schedule. Choose between Scheduled, Reminder, or Unscheduled modes depending on how much control you want over each invoice.

Read answer

How do I categorize transactions correctly in QuickBooks?

Consistency matters most. Use the same category for the same type of expense every time, and make sure your chart of accounts actually matches how your business operates.

Read answer

What information does a bookkeeper need from me?

A bookkeeper needs access to your financial accounts, business formation documents, and receipts to keep accurate books. Start with bank and credit card logins, your EIN letter, and any prior financial records or tax returns.

Read answer

What home office expenses can I deduct?

You can deduct a portion of rent or mortgage interest, utilities, insurance, property taxes, and repairs if you use part of your home exclusively and regularly for business. The IRS offers two calculation methods.

Read answer

How do I handle multi-state tax filings for my trucking business?

IFTA is the primary multi-state tax filing for trucking. You register through your base state and file quarterly returns reporting fuel purchases and miles driven in each jurisdiction. Good mileage and fuel tracking is essential.

Read answer

What credentials should a bookkeeper have?

Look for certifications like QuickBooks ProAdvisor or Certified Bookkeeper, but don't stop there. Practical experience, industry knowledge, and business ownership background often matter as much as formal credentials.

Read answer

Oliver Bookkeeping Solutions offers monthly bookkeeping, payroll, and accounting services to small businesses in Benton County and across Northwest Arkansas.

Client Reviews

5-Star Rated Firm

Social

  • QuickBooks Level 1 Certified badge
  • QuickBooks Level 2 Certified badge
  • QuickBooks Payroll Certified badge

© 2026 Oliver Bookkeeping Solutions, LLC