Michigan payroll setup for your first hire

One start file. Treasury is not UIA.

Michigan takes state income tax from paychecks. The Department of Treasury collects that withholding. UIA collects state unemployment tax. That tax is often called SUTA, state unemployment tax, or SUI, state unemployment insurance. You can open those two accounts on one start file. You still file them on two sites.

Treasury’s new-business page starts that file on Michigan Treasury Online, called MTO. The paper file is the Registration for Michigan Taxes (Form 518). UIA rides the same application. After that, withholding reports go to MTO. Unemployment reports go to MiUI, the Michigan Unemployment Insurance portal. An MTO login is not a UIA Employer Account Number. A payroll login is not either account.

When you owe unemployment: $1,000 in a calendar year, or one person in 20 weeks

MCL 421.41(1) is the regular-shop test. You are an employer if you pay $1,000 or more in a calendar year. You are also an employer if you have one or more people in 20 different weeks in a calendar year. The weeks do not have to be consecutive. The people do not have to be the same. One of those two tests is enough. UIA Schedule A, the Liability Questionnaire, restates both dates. It also tells you to start the Employer’s Quarterly Wage/Tax Report in the first quarter you had payroll.

This is not California’s $100-in-a-quarter test. It is not Illinois’s $1,500-in-a-quarter test. It is not New Jersey’s $1,000-year test by itself. New Jersey stops at the year total. Michigan adds the 20-week path. Do not copy California onto Michigan. Do not copy New Jersey’s one-form finish onto Michigan either. The start file can be shared. The later portals are not.

Other tests sit in that same statute. Agricultural labor uses $20,000 in a quarter, or ten workers in 20 weeks. Domestic service uses $1,000 in a quarter. If you are already subject to federal unemployment tax, you are subject in Michigan for the work that federal tax covers. This scorecard is the regular-business path.

Register unemployment when the facts show you are an employer. File the quarterly report on the 25th.

UIA decides liability from the facts you send. UIA’s employer page says you must register for an employer account if you have employees covered by Michigan unemployment law. Register online. UIA’s registration page says you receive the Employer Account Number, called the EAN, after you register in MiUI and there are no further questions. There is no 15-day California clock on that page. File when the facts show you are an employer. The quarterly reports follow that liability.

After UIA issues the EAN, hold that number and the tax rate on the UIA notice. Use that number on reports and payments. Do not substitute a federal EIN. UIA’s tax page sets the new-employer rate at 2.7 percent for the first two years of liability, except construction. Construction uses a separate average rate. For 2026 that construction figure is 5.0 percent. Use the rate on your UIA notice, not a number from a software page. Taxes are due only on the taxable wage base. UIA’s wage-base page sets the default at $9,500. A reduced $9,000 base applies when the trust-fund test is met and the account is not delinquent. Confirm the figure on your notice.

UIA Schedule A is the filing clock. Unemployment taxes are due beginning with the first calendar quarter in which you had payroll. The Employer’s Quarterly Wage/Tax Report is due April 25, July 25, October 25, and January 25. That is the 25th, not the last day of the month. File on MiUI. Software pages often call that form UIA 1028. A quarterly wage report is not the new-hire report.

Register withholding on Michigan Treasury Online. A federal W-4 is not enough.

Michigan withholds state income tax from paychecks. The 2026 Michigan Income Tax Withholding Guide says every Michigan employer that must withhold federal income tax must register and withhold Michigan income tax. MCL 206.703(2) is that duty. Out-of-state shops with people working in Michigan must register too. Nonprofit shops that pay wages must withhold. Register on MTO or mail Form 518. Treasury’s MTO page says you cannot register by telephone. Online e-Registration is authenticated within 10 to 15 minutes. Paper can take four to six weeks. You need a federal EIN for the online file. The Treasury account number is usually that same EIN. Do not reuse a prior owner’s number.

Collect a signed Withholding Exemption Certificate from each worker. That paper is Form MI-W4. A federal W-4 is not enough. If the Michigan form is invalid and the worker does not fix it, withhold as if the person claimed zero exemptions. File the Sales, Use and Withholding return on the schedule Treasury assigns. Software pages often call the periodic return Form 5080 and the annual return Form 5081. Frequency depends on the schedule Treasury assigns. An MTO withholding account is not a UIA unemployment account. City income tax, where a city imposes it, is a third collector. It does not ride MTO.

New hire is a 20-day report. A quarterly wage report does not satisfy it.

The new-hire report is a list of who you just hired. It is not a box on the Employer’s Quarterly Wage/Tax Report. The State of Michigan New Hire Reporting Form (Form 3281) requires the report within 20 days of the hire date. The hire date is the date services are first performed for pay. A rehired person is someone who was gone for at least 60 consecutive days. The form sits with the Michigan New Hires Operation Center. It does not sit with UIA.

File at mi-newhire.com. The 2026 withholding guide points to that same site. Employers who send reports electronically send two monthly files, not less than 12 nor more than 16 days apart, when they have people to report. A quarterly UIA 1028 does not satisfy that clock.

Workplace injury insurance uses a two-part test

This is not a first-hire policy for every shop. It is also not North Carolina’s three-employee-only wait. It is not New Jersey’s first-worker rule. Michigan uses two paths. Either path is enough. Michigan calls this workers’ compensation.

WDCA’s insurance-requirements page is the agency rule. MCL 418.115 is the statute. A private shop must carry coverage if it regularly employs three or more people at one time, including part-time people. A private shop with fewer than three people must still carry coverage if at least one person has been regularly employed 35 or more hours a week for 13 weeks or longer in the preceding 52 weeks. Partners count as employees of the partnership. Corporate officers count as employees of the corporation. A manager-member counts as an employee of a limited liability company. A sole owner is never an employee of that sole proprietorship. Agricultural and household shops use other tests on that same page.

WDCA does not sell insurance. Buy a policy from a licensed private carrier, qualify as self-insured, or file an exclusion form when every person who would count can be left off. Ordinary first-hire shops do not self-insure. A payroll login is not a policy.

How Gusto and Patriot describe Michigan

Confirm the live withholding number on MTO. Confirm the unemployment account and rate on MiUI. Confirm workplace injury insurance with a carrier or on WDCA’s insurance-requirements page.

Gusto’s Michigan help article says you must register the business entity with the Department of Licensing and Regulatory Affairs (LARA) before Middesk (Gusto’s business-verification company) may register state income-tax withholding and state unemployment insurance (SUI). Confirm the live numbers on MTO and MiUI. Confirm the rate on the UIA notice. Gusto also says Michigan mails tax-account letters to the business, not to Middesk. Gusto’s Michigan article names the Sales, Use and Withholding return (Form 5080), the annual return (Form 5081), and a Michigan new-hire report. It says Gusto reports payroll withholding only. Sales-and-use figures on those same forms sit on you. City withholding registration also sits on you. Read Gusto’s Michigan article and Gusto’s forms list. See Gusto on the directory.

Patriot’s tax table says Full Service files Michigan Unemployment Insurance (SUI or SUTA) on Form UIA 1028. It files Michigan income-tax withholding on Form 5080 and Form 5081. Patriot’s registration article tells you to open those accounts on e-Registration. It does not claim Patriot opens those accounts. The article prints a 2.7 percent new-employer SUTA rate for two years. Use the rate on your UIA notice, not a number from a software page. The same article says workplace injury insurance is due at one employee through a private provider or a state-operated fund. WDCA’s page does not use a one-employee first-hire rule. It uses the three-employee test or the 35-hour test. It does not name a state fund. Read Patriot’s article and Patriot’s registration article. See Patriot on the directory.

What still sits on the employer

• Decide that the $1,000 calendar-year test, or the 20-week test, has been met. Household and agricultural shops use other tests.
• Complete e-Registration or Form 518 so Treasury and UIA can open withholding and unemployment.
• Hold the UIA Employer Account Number. Do not substitute a federal EIN for that number.
• Enter the tax rate from the UIA notice, not a marketing figure.
• File the Employer’s Quarterly Wage/Tax Report on MiUI by April 25, July 25, October 25, and January 25 after payroll begins.
• Register withholding on MTO or Form 518. Collect MI-W4. File Form 5080 on the schedule Treasury assigns. File the annual Form 5081.
• File the Michigan new-hire report within 20 days of hire or rehire. A quarterly UIA 1028 does not satisfy that clock.
• Buy workplace injury insurance when you regularly employ three people at one time, or when one person works 35 hours a week for 13 weeks. Partners, officers, and LLC manager-members count. A sole owner does not. Payroll software does not issue that policy.
• Do not copy another state’s clock onto Michigan. Michigan can share a start file. Michigan does not finish on one portal. Michigan does not use California’s $100-quarter test. Michigan does not use New Jersey’s first-worker workplace-injury rule. Michigan does not use North Carolina’s three-employee-only workplace-injury rule.

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