Delaware payroll setup for your first hire

Delaware takes state income tax from paychecks. Open the Combined Registration Application. That file is not Form UC-1.

Delaware takes state income tax from paychecks. This is not Texas, Florida, Washington, Tennessee, Nevada, South Dakota, or New Hampshire. Those states do not take state income tax from paychecks. 30 Del. C. § 1151 is the withholding duty. The employer’s guide says every employer required to deduct and withhold tax files a withholding return and pays the tax to the Division of Revenue. Get a federal Employer Identification Number, called EIN, from the IRS first. The guide says a Delaware withholding agent uses that same federal EIN as the withholding identification number. A Division of Unemployment Insurance account number is not that number.

Register on the Combined Registration Application, called CRA. The guide says complete the CRA online through OneStop. OneStop is Delaware’s business portal. A new business uses the initial withholding return in the CRA package for the first payment. The guide says all new employers file withholding returns on a monthly basis until the next lookback. The lookback is July 1 through June 30 immediately before the calendar year. $6,020.00 or less in that lookback files quarterly. $6,020.01 to $33,460.00 files monthly. $33,460.01 and greater files eighth-monthly. The Division mails the vouchers for the method it assigns. A shop that buys another employer’s business must not use the predecessor’s number.

Form W-1 is the monthly withholding return. The guide says file it by the 15th of the month after the wages. Form W-1Q is the quarterly withholding return. File it by the last day of the month after the quarter. Form W-1A is the eighth-monthly return. File it within 3 days after the period ends, not counting weekends and state holidays. Those periods end on the 3rd, 7th, 11th, 15th, 19th, 22nd, 25th, and last day of the month. Give each employee Form W-2 by January 31, or within 30 days after the last wage if the job ends earlier. Form W-3, the annual reconciliation with W-2 copies, is due February 28. Form WTH-REC, the annual report of withholding, is due January 31. A quarterly unemployment report is not Form W-1. It is not Form W-3. Do not copy Montana’s missing quarterly withholding return onto Delaware. Delaware does use Form W-1Q when the lookback puts you on the quarterly method. A new account still starts monthly.

Collect a federal W-4, or a Delaware SD/W-4A or W-4NR. Delaware has no reciprocal paycheck-withholding agreement with any other state.

The employer’s guide says obtain a signed federal Form W-4 or W-4A, or Delaware Form SD/W-4A or Form W-4NR, at hire. SD/W-4A and W-4NR are Delaware worksheets for withholding allowances. The guide says SD/W-4A is not required of every Delaware wage earner, and it is not required to sit in the employer’s files. Form W-4NR is the nonresident withholding computation worksheet. A nonresident should review the Delaware withholding certificate so the annual tax estimate is right. The federal W-4 can be the certificate you keep. It does not create a reciprocal exemption.

The same guide is the reciprocity rule. Some states agree not to tax a nonresident’s wages earned in the other state. Delaware does not have a reciprocal agreement with any other state on nonresident employees. Do not hand a North Dakota or Montana reciprocity certificate to a Delaware hire and stop Delaware withholding. A person who lives in another state and works in Delaware can still have Delaware tax taken from the paycheck. That missing agreement is not the unemployment test. It is not the new-hire clock.

Form UC-1 is due no later than 20 days after the first day of business. That one form covers seven State agencies. The tax test is $1,500 in a quarter, or one person in 20 different weeks.

The Division of Unemployment Insurance collects state unemployment tax. That tax is often called SUTA, state unemployment tax, or SUI, state unemployment insurance. Official pages say unemployment insurance tax or unemployment tax assessments. This division sits inside the Delaware Department of Labor. It is not Montana’s Department of Labor and Industry. It is not New Hampshire Employment Security. It is not North Dakota’s Job Service.

The employer FAQ is the registration clock. Open the account on Form UC-1, “Report to Determine Liability and if Liable Application for Employer Account Number.” Employers should submit Form UC-1 no later than 20 days after the first day of business. The FAQ says this single registration form covers obligations to seven State agencies. Complete only the sections that apply to the business. Download Form UC-1, or ask the Unemployment Insurance Employer Contributions Unit. The handbook names the same form. The 20-day clock is not a permission to skip the tax test. It is also not California’s registration clock. There is no $100-in-a-quarter test on the Delaware FAQ.

19 Del. C. § 3302(12) and the employer handbook are the regular-shop test. You are an employer if, in the current or preceding calendar year, you paid wages of $1,500 or more in any calendar quarter, or you had at least one person in employment for some portion of a day in each of 20 different calendar weeks. Those weeks need not be consecutive. The person need not be the same person each week. One of those two tests is enough. This is not Montana’s $1,000-in-a-calendar-year test. Montana then reports that whole year back to January 1. Delaware does not print that January 1 catch-up. This is not New Hampshire’s 30-day Employer Status Report. This is not North Dakota’s 20-day UI EASY registration, even though both states use a 20-day registration clock. North Dakota’s clock starts after the first hire. Delaware’s Form UC-1 clock starts after the first day of business. Do not copy Maryland’s Combined Registration Application onto Delaware as if it were the same file. Maryland’s form can start withholding and unemployment. Delaware’s withholding file is the CRA with the Division of Revenue. Delaware’s unemployment file is Form UC-1. They are not the same form.

The same FAQ names other paths. Agricultural labor uses $20,000 in cash in a quarter, or 10 workers for a portion of a day in any 20 weeks, in the current or preceding calendar year. Domestic work uses $1,000 in a quarter. This scorecard is the regular-business path.

The quarterly unemployment file is Form UC-8 and Form UC-8A. The 2026 wage base on the Employer Services table is $14,500. A new employer’s rate there is 1.0 percent, plus a 0.2 percent Op & Tech tax.

The employer FAQ says file Forms UC-8 and UC-8A. Gross wages on that report include commissions, bonuses, and the cash value of compensation that is not cash. You have one month after the quarter to file and pay. The quarter that ends March 31 is due by the end of April. The quarter that ends June 30 is due by the end of July. The quarter that ends September 30 is due by the end of October. The quarter that ends December 31 is due by the end of January. The FAQ prints interest of 1.5 percent a month on a late payment, and a penalty of $17.50 for each late report. A quarterly UC-8 is not Form W-1. It is not Form W-1Q. It is not the new-hire report. The offices do not share a form.

Use the Employer Services merit table for 2026. That table prints a taxable wage base of $14,500. It prints a new employer rate of 1.0 percent. It prints a new construction rate of 1.0 percent. The FAQ still says taxable wages include pay up to $18,500. The same FAQ’s quarterly-filing answer still says taxable wages are the first $10,500. The handbook still discusses a 2019 wage base of $16,500. Prefer the Employer Services table for the 2026 wage base and the new-employer rate. The FAQ’s Operations and Technology question prints the 2026 Op & Tech rate as 0.2 percent under Title 19. Op & Tech is the assessment that helps pay for operations and technology in the Unemployment Insurance Division. The FAQ says that tax has been separated out, and that the Division had not billed it yet and will bill past quarters when the letter arrives. Use the rate on your live notice and on that bill. Do not type Montana’s 0.18 percent Administrative Fund Tax onto Delaware. Do not type New Hampshire’s 2.7 percent new-employer line onto Delaware. Do not type North Dakota’s $46,600 wage base onto Delaware.

New hire is a 20-day State Directory of New Hires file. Form UC-1 does not take it. The withholding registration does not take it either.

The new-hire report is a list of who you just hired. It is not a box on Form UC-8. It is not the CRA. The Delaware State Directory of New Hires sits with the Division of Child Support Services. The When and How page, the employer’s guide at section 3(d), and 30 Del. C. § 1156A require the report within 20 days of hire. The statute counts 20 days from the date the employer hires the employee. The guide says the report needs the employee’s name, address, Social Security number, date of hire, and state of hire, plus the employer’s name, address, and federal EIN. A federal Form W-4 can carry that report. Electronic or magnetic reports may use two transmissions a month, not less than 12 days apart and not more than 16 days apart.

File on the State Directory of New Hires. The directory homepage prints a mailing address of P.O. Box 138201, Sacramento, CA 95813-8201, and fax (855) 481-0047. The employer’s guide still prints P.O. Box 90370, Atlanta, GA 30364, and the same fax. Use the address on the live directory page. The guide’s Atlanta box is the older print. The Delaware pages do not print Montana’s rehire gap of more than 60 days in a row. A rehire or a return to work is still a report. A quarterly UC-8 does not satisfy that clock. Opening the withholding account does not satisfy it either. This is not West Virginia’s 14-day New Hire Reporting Center file. This is not Massachusetts’s 14-day MassTaxConnect new-hire path. This is not Alabama’s seven-day report. This is not Georgia’s 10-day report. This is not Mississippi’s 15-day report.

Workplace injury insurance is due before any employee starts work. One employee is enough. This is not a state monopoly.

This is not North Dakota’s Workforce Safety and Insurance monopoly. It is not Washington’s exclusive state fund. It is not Ohio’s Bureau of Workers’ Compensation monopoly. It is not South Dakota’s optional coverage. It is not Texas optional coverage. It is not Georgia’s, North Carolina’s, or Virginia’s three-employee wait. It is not Florida’s or South Carolina’s four-employee wait. It is not Mississippi’s, Alabama’s, or Tennessee’s five-employee wait. Delaware calls this workers’ compensation. The workers’ compensation knowledge base says all employers with one or more employees must carry that insurance. Coverage must begin before any employee starts work. The rule covers full-time, part-time, temporary, and seasonal workers unless a listed exclusion applies.

19 Del. C. § 2306 says the chapter applies to employment in which one or more employees are engaged, except where the code says otherwise. Section 2307 leaves out a household worker or a casual worker in a private home who earns less than $750 in cash in any 3-month period from that home. Farm laborers sit outside the chapter unless the employer carries the insurance. Section 2308 includes executive officers. As many as eight stockholder-officers of a corporation, or eight members of a limited liability company, may be exempted if the business and those people agree in writing. A written exemption does not turn the shop into a zero-employee shop for the people who still work there. This scorecard is the regular shop that has employees. That shop has coverage before the first employee starts. A payroll login is not a policy. A withholding account is not a policy. A Form UC-1 account is not a policy. The Office of Workers’ Compensation does not sell the ordinary policy.

How Gusto and Patriot describe Delaware

Confirm the withholding identification number on the Division of Revenue notice. The employer’s guide says that number is the federal EIN. Confirm the unemployment account number and the 2026 rate on the Division of Unemployment Insurance notice and on the Employer Services table. Confirm the 0.2 percent Op & Tech bill when the letter arrives. Confirm workplace injury insurance before the first employee starts. Confirm the 20-day new-hire file with the State Directory of New Hires. Confirm Form UC-1 as its own 20-day file. The CRA does not replace it.

Gusto’s Delaware help article says Middesk (Gusto’s business-verification company) may register state income-tax withholding and state unemployment insurance (SUI). It names the Delaware Division of Revenue for withholding and the Delaware Department of Labor for unemployment tax. Those doors match the employer’s guide and the employer FAQ. It lists Delaware among the states that mail the account numbers to the business. You still send those numbers back before Gusto can file. The article asks for a withholding account number from a Division of Revenue notice, such as Form W1, and an unemployment account number from a quarterly tax report or a Notice of Assessment Rate. The employer’s guide says the withholding identification number is the federal EIN. Hold the number the Division prints. The article says if you do not have an assigned unemployment rate yet, enter the new employer rate and update it when the notice arrives. The article does not print the 1.0 percent figure. The Employer Services table does. The article lists DE W1, DE W1A, DE W1Q, DE W3, DE UC-8, a state W-2, and a DE New Hire Report among files. Those form names match the employer’s guide and the FAQ. It says construction companies register on paper Form CRA and must supply proof of workers’ compensation insurance. The employer’s guide sends new withholding agents to the CRA online through OneStop. Confirm the live OneStop path if the shop is in construction. Middesk’s standard order covers state income-tax withholding and state unemployment insurance. It does not open workplace injury insurance. The article says a separate Gusto page covers local tax and Paid Family and Medical Leave, called PFML. For Delaware, the article says the Department of Labor handles unemployment tax and paid family and medical leave. The employer FAQ puts unemployment with the Division of Unemployment Insurance. The Delaware Paid Leave page puts the leave program on LaborFirst, the Department of Labor portal for that program. Those are two files. The article says companies with 10 or more employees must take part in PFML. It says a shop with fewer than 10 can choose to join, and that Gusto does not file that optional coverage. The Paid Leave page says most businesses with 10 or more employees working in Delaware must participate. Its table marks nine or fewer employees as exempt. 19 Del. C. § 3701 says anyone who employs fewer than 10 employees in this State during the previous 12 months is not an employer under that chapter. A first-hire shop with one employee stays off LaborFirst until the headcount reaches that line. The article also says a business in Wilmington, or a shop with an employee who lives or works in Wilmington, needs a city account for the city’s earned income tax and head tax. That line is what the software page says. The City of Wilmington wage-tax page is the city collector for earned income tax. The city’s cost-of-doing-business page says a licensed business pays a head tax of $15 a month for each employee after five who works in the city. Open those city files when the shop or an employee is in Wilmington. They are not a statewide first-hire step. The employer’s guide does not print a Wilmington file or a LaborFirst file. Read Gusto’s Delaware help article. See Gusto on the directory.

Patriot’s registration article tells new shops to register on Delaware One Stop. It names a withholding account with the Delaware Department of Revenue, unemployment through a digital Form UC-1, and workers’ compensation with the Office of Workers’ Compensation. The two tax doors match the CRA and Form UC-1. The article says the 2026 new-employer SUTA rate is 1.0 percent for construction and for other industries. That line matches the Employer Services table. Use the rate on your live notice. The article says employees complete a federal Form W-4 for federal and Delaware income tax. The employer’s guide also accepts that federal form, and it names Delaware Form SD/W-4A and Form W-4NR. The article puts the 20-day new-hire report with the Delaware State Directory of New Hires. That clock matches 30 Del. C. § 1156A. The article says workplace injury insurance is due if you have at least one employee, through a private provider or a state-operated fund. The first-employee line matches 19 Del. C. § 2306 and the knowledge base. The knowledge base does not name a state fund as the only market. This is not North Dakota’s Workforce Safety and Insurance monopoly. Patriot’s tax article says Full Service files Form UC-8, Form W-1, Form W1A, and Form W-3. Those forms match the FAQ and the employer’s guide. The same article puts the Operations and Technology Assessment on Form UC-8. The employer FAQ says the 2026 Op & Tech rate is 0.2 percent and that the Division bills it in a letter, including past quarters. Use that bill. The registration article also tells new shops to register for Delaware Paid Leave on LaborFirst after a my.delaware.gov account, and to apply for a Wilmington earned income taxpayer account if the business is inside the city. Those two lines are what the software page says. Use the Paid Leave page and § 3701 for the leave file. A shop with nine or fewer employees is in the exempt row. The Wilmington account is a local overlay for a shop or an employee in the city. It is not a step for every Delaware employer. Read Patriot’s registration article and Patriot’s Delaware payroll-tax article. See Patriot on the directory.

What still sits on the employer

• Register withholding on the Combined Registration Application through OneStop when you must withhold Delaware tax. The withholding identification number is the federal EIN. Do not reuse a predecessor’s number.
• Collect a federal Form W-4 or W-4A, or Delaware Form SD/W-4A or Form W-4NR. Delaware has no reciprocal paycheck-withholding agreement with any other state.
• File a new withholding account monthly until the next lookback. Later, $6,020.00 or less files quarterly on Form W-1Q. $6,020.01 to $33,460.00 stays monthly on Form W-1, due the 15th of the next month. $33,460.01 and greater files eighth-monthly on Form W-1A. Give employees Form W-2 by January 31. File Form WTH-REC by January 31. File Form W-3 by February 28.
• File Form UC-1 no later than 20 days after the first day of business. That form covers seven State agencies. Complete only the sections that apply. Hold the unemployment account number the Division assigns. Do not substitute the federal EIN for that unemployment number.
• You are a regular unemployment employer at $1,500 of wages in a calendar quarter, or one person for some portion of a day in each of 20 different weeks, in the current or preceding year. The 20-day Form UC-1 clock is not that tax test.
• File Forms UC-8 and UC-8A by the end of the month after the quarter. Enter the unemployment rate from the live notice. The 2026 Employer Services table prints a $14,500 wage base, a 1.0 percent new-employer rate, and a 1.0 percent new-construction rate. The FAQ prints a 0.2 percent Op & Tech rate for 2026 and says the bill can cover past quarters. Do not use the FAQ’s older $18,500 or $10,500 wage-base lines for 2026. Do not use the handbook’s 2019 wage base.
• File the 20-day new-hire report with the Delaware State Directory of New Hires. A federal Form W-4 can carry it. A quarterly UC-8 does not. The CRA does not. The Delaware pages do not print a 60-day rehire gap.
• Carry workplace injury insurance before any employee starts work. One employee is enough, including part-time, temporary, and seasonal workers, unless a listed exclusion applies. The Office of Workers’ Compensation does not sell the ordinary policy. Payroll software does not issue it.
• Open Delaware Paid Leave on LaborFirst when the shop has 10 or more employees in the State during the previous 12 months. The Paid Leave page marks nine or fewer employees as exempt. A one-employee first hire stays off that account. Open Wilmington earned income tax, and the city head tax, only when the shop or an employee is in Wilmington. Those city files are not a statewide first-hire step.
• Do not copy another state’s clock onto Delaware. Delaware does not use California’s $100-quarter test. Delaware does not use New Hampshire’s missing paycheck-withholding account. Delaware does not use New Hampshire’s 30-day Employer Status Report. Delaware does not use Montana’s $1,000-year unemployment test. Delaware does not use Montana’s report-the-year-back-to-January-1 rule. Delaware does not use North Dakota’s exclusive state fund. Delaware does not use Washington’s exclusive state fund. Delaware does not use Ohio’s Bureau of Workers’ Compensation monopoly. Delaware does not use South Dakota’s optional workplace injury insurance. Delaware does not use Texas optional coverage. Delaware does not use Georgia’s, North Carolina’s, or Virginia’s three-employee workplace-injury wait. Delaware does not use Florida’s or South Carolina’s four-employee wait. Delaware does not use Mississippi’s, Alabama’s, or Tennessee’s five-employee wait. Delaware does not use West Virginia’s 14-day new-hire clock. Delaware does not use Massachusetts’s 14-day MassTaxConnect new-hire path. Delaware does not use Alabama’s seven-day new-hire clock. Delaware does not use Georgia’s 10-day new-hire clock. Delaware does not use Mississippi’s 15-day new-hire clock. Delaware does not use Maryland’s one Combined Registration Application for both withholding and unemployment.

Also forming a company in Delaware? Process Score compares registered agents there.