Starting an LLC is a smart move for many entrepreneurs. But what happens when it’s time to grow your business and bring in help? A common question is:
Can an LLC hire employees?
The short answer is YES — whether you’re a single-member or multi-member LLC, you can absolutely hire employees. But there are a few legal and tax steps you need to take before doing so.
Let’s walk through what you need to know.
✅ Yes, an LLC Can Hire Employees
An LLC (Limited Liability Company) is a legal business structure that can:
- Enter into contracts
- Open a business bank account
- Pay taxes
- And yes — hire employees
Whether you’re based inside or outside the United States, as long as your LLC is registered and compliant, you can legally hire workers in the U.S.
🧾 What You Need Before Hiring Employees
Here are the key steps your LLC must take before you bring someone on board:
1. Get an EIN (Employer Identification Number)
An EIN is required to hire employees.
You can get it for free from the IRS.
Apply here: IRS EIN Application
2. Register with Your State’s Department of Labor
Most states require you to register your business for:
- State income tax withholding
- Unemployment insurance (UI)
This allows you to legally withhold taxes and contribute to state benefit programs.
3. Understand Worker Classification
Make sure the people you’re hiring are truly employees — not independent contractors.
Misclassifying workers can lead to serious fines from the IRS.
4. Set Up Payroll
Use a payroll service or software to manage:
- Employee wages
- Tax withholding
- Benefits (if applicable)
- Year-end tax documents (like W-2s)
Some great tools to consider:
5. Follow Federal & State Labor Laws
This includes:
- Minimum wage compliance
- Workplace safety rules (OSHA)
- Anti-discrimination laws (EEOC)
- Proper hiring documentation (I-9, W-4)
You must verify each employee’s eligibility to work in the U.S. using Form I-9.
👩💼 Can a Single-Member LLC Hire Employees?
Yes! Even if you’re a one-person LLC, you can hire others. But you’re not considered an “employee” of your own LLC—you’re the owner.
This means:
- You pay yourself through distributions, not payroll
- You can hire employees and put them on payroll
- You must follow the same rules as any other employer
🌎 Can a Foreign-Owned LLC Hire Employees in the U.S.?
Yes, a U.S.-registered LLC owned by a non-resident can hire U.S.-based employees.
However, you must:
- Have a valid EIN
- Follow federal and state hiring laws
- Work with a local registered agent or HR/payroll company
This is a great option for global entrepreneurs running U.S. e-commerce or service businesses.
👉 Tip: Consider services like Remote or Deel to manage international compliance.
📊 What Taxes Will You Need to Pay?
When you hire employees, your LLC becomes responsible for:
- Employer portion of Social Security and Medicare (FICA)
- Federal unemployment tax (FUTA)
- State unemployment taxes (SUTA)
- Withholding and remitting federal and state income taxes
Failing to pay employment taxes can result in IRS penalties.
🛠 Bonus: Checklist for Hiring Employees with an LLC
Here’s a quick step-by-step:
- ✅ Get an EIN
- ✅ Register with state agencies (labor, unemployment)
- ✅ Create a compliant job description
- ✅ Set up payroll (Gusto, ADP, etc.)
- ✅ Verify employee eligibility (Form I-9)
- ✅ File new hire reports with the state
- ✅ Keep employment records
- ✅ Provide necessary benefits and workers’ comp if required
🚀 Final Thoughts: Growing Your LLC the Right Way
Hiring employees is a big step—but it’s also a sign that your LLC is growing. With the right setup, you can stay compliant, protect your business, and build a strong team.
Whether you’re hiring your first assistant or building a full-time staff, always make sure:
- Your legal paperwork is in order
- You’re following both federal and state rules
- You consult a payroll or HR expert if needed
Need Help Setting Up Payroll or Hiring Legally?
Let me know your LLC’s state, business type, and goals—I’ll help you:
- Choose the best payroll solution
- Register with the right agencies
- Create a hiring checklist for your situation
📩 Just ask, and I’ll guide you through it step by step!