Puerto Rico payroll setup for your first hire

Withholding and the employer number are two doors.

Paycheck withholding sits with the Department of the Treasury. The door is SURI. Unemployment and temporary non-occupational disability sit with the Department of Labor and Human Resources. The door is the Employer Services Portal. This is not the District of Columbia’s Form FR-500 at MyTax.DC.gov plus the Employer Self-Service Portal. This is not Rhode Island’s one Business Application and Registration. This is not Delaware’s Form UC-1, due no later than 20 days after the first day of business. This is not California’s one employer payroll-tax registration.

Publication 25-01 says that since December 10, 2018, withholding transactions go through SURI. A new employer registers there. On the SURI homepage, choose Create SURI Logon and finish the form. An employer who already has a Treasury account, but no SURI login, registers as an existing employer and makes a username and password. Publication 24-01 prints the same December 10, 2018 rule for the prior year’s wage file. Use the live SURI screen for the account you are opening now.

Register paycheck withholding with the Department of the Treasury.

Puerto Rico takes income tax from a paycheck. This is not Texas’s rule of no state paycheck withholding. A federal Employee’s Withholding Certificate still sits with the IRS when federal rules require it. The Puerto Rico certificate is a different form, described below.

The quarterly withholding return is Form 499 R-1B, the Employer’s Quarterly Return of Income Tax Withheld. The Form 499 R-1B instructions say every employer who must withhold income tax from wages under section 1062.01 of the Puerto Rico Internal Revenue Code of 2011 files that return. File it by the last day of the month after the quarter that ends March 31, June 30, September 30, or December 31. File it even if you paid no wages and withheld no tax. The only door is electronic, through SURI. A quarterly unemployment file does not close Form 499 R-1B.

Those instructions, citing Administrative Determination No. 18-14 of December 10, 2018, set the deposit clock from January 1, 2019. A monthly depositor withheld $50,000 or less in the lookback period and deposits by the 15th day of the month after the withholding. A semiweekly depositor withheld more than $50,000 in that lookback and deposits on Wednesday or Friday, based on the payday. If the quarter’s withholding is under $2,500, you may send the tax with the quarterly return. If withheld tax hits $100,000 on any day inside a deposit period, deposit it by the close of the next business day. From then on, you are a semiweekly depositor for the rest of that year and the next calendar year. The lookback is the 12 months that end on June 30 of the prior year. The form’s printed example is the 2019 year, looking back to July 1, 2017 through June 30, 2018. These pages do not print a different dollar line.

The same instructions say interest is 10 percent a year on tax not paid by the due date. If interest applies, a delay of more than 30 days and not more than 60 days adds a 5 percent surcharge. A delay of more than 60 days adds a 10 percent surcharge. A return filed late without a good reason draws a penalty from 5 percent up to 25 percent of the tax, plus $500 for each quarterly return or annual reconciliation that was not filed. A late deposit of withheld wage tax is 2 percent of the shortfall for 30 days, plus 2 percent for each extra 30 days, and that piece stops at 24 percent. A separate penalty of 25 percent to 50 percent of the shortfall also applies, and a repeat can reach 100 percent. Pay the missing withholding through the wages-withholding account in SURI. Those dollars are the withholding file. They are not the unemployment file.

The employee form is Form 499 R-4.1, the Withholding Exemption Certificate, revised December 13, 2016. The employee gives it to you. If the employee does not, you withhold without the personal exemption, the dependent exemption, or the deduction allowance. A change in those claims needs a new certificate. An employee age 16 through 26 can claim an exemption on the first $40,000 of wages, and the form asks for a date of birth. If the yearly wage is $40,000 or less, that employee signs the form and does not fill the rest. Wages over $40,000 are withheld on the excess. A military spouse who elects the Military Spouses Residency Relief Act is not withheld for Puerto Rico on those wages. Those wages can still be withheld under federal rules. If the employee claims more than eight dependents, send a copy of the certificate to the Fiscal Audit Bureau. The year-end wage statement is Form 499R-2/W-2PR. Publication 25-01 says you file wage records electronically through SURI in the EFW2PR format. SURI takes one original file per employer, per employee, per tax year. A correction is Form 499R-2c/W-2cPR. Form 499 R-1B does not replace the W-2PR. The W-2PR does not replace Form 499 R-1B.

The employer number needs a federal number first.

The unemployment tax is often called SUTA, state unemployment tax, or SUI, state unemployment insurance. Official pages say unemployment insurance, and they pair it with SINOT. The office is the Department of Labor and Human Resources. It is not the Department of the Treasury’s withholding desk.

The employer-services page says a new employer can register on the portal for an employer number and for unemployment and SINOT payments. Employers already in the Department’s tax system, about 70,000 of them, are registered for you. They get a letter with the login. Do not open a second account if that letter is yours. The page’s address is 505 Edificio Prudencio Rivera Martínez, Ave. Muñoz Rivera, Hato Rey, PR 00918. The mail box is P.O. Box 195540, San Juan, PR 00919-5540. The phone is (787) 754-5353.

The portal help for the employer-number request says the request gets you a new state employer account number. The note on that page says you must already have a Federal Employer Account Number. The Spanish help calls it the federal employer number. Have the federal employer identification number, called a FEIN, from the IRS before you start. The request has six steps. The first four complete Form PRSD-1. Step five checks the entries. The last step is the filing receipt. A person who is not logged in finds the request on the home tab. A Department user finds it under employer information. The portal’s about page says the Department issues the access account. Hold the state employer account number the Department assigns. Do not substitute the federal number. Do not substitute the SURI withholding account.

The wage caps are $7,000 and $9,000. The 2026 percent is not on the Department’s page.

Read the Department’s page and the federal table as two documents. Do not pretend the Department printed a percent it did not print.

The employer-services page says that each calendar quarter you file a quarterly declaration of wages paid to each employee. You can type each employee, import a file, or bring last quarter’s names in with zero wages. The portal then figures the tax. The three parts are unemployment, SINOT, and a special contribution. The Spanish page calls that third part aportación especial. The same page says the portal figures taxable wages with a cap of $7,000 for unemployment and $9,000 for SINOT in a calendar year. It says the rates are the rates in force for the current calendar year. It does not print those rates. Payment on that page is an electronic bank debit, called ACH, from a bank account. The page does not print the quarterly due dates. Use the due date on the return in your portal account.

The U.S. Department of Labor’s January 2026 table of significant unemployment-insurance provisions prints a Puerto Rico row. The size of payroll is any size. The wages subject to tax are $7,000. The experience-rated range is 1.2 percent to 5.40 percent. The new-employer rate is 2.80 percent. Footnote 4 says the new-employer figure is the base rate, and a higher rate can apply by industry or by another factor in the law. Footnote 3 says the experience-rated range does not include surtaxes or non-unemployment taxes. SINOT is not in that 2.80 percent. The report says it is for information only. It is not an official reading of the territory’s unemployment law. The $7,000 cap matches the Department’s page. The 2.80 percent does not appear on that page. Enter the rate on the notice the Department sends you.

Bloomberg Tax, a secondary news report dated May 5, 2026, says the same 2.8 percent new-employer rate for 2026, on a $7,000 wage base, and an experience range of 1.2 percent to 5.4 percent. It says the new-employer rate was 3.1 percent in 2025. That 3.1 percent is Bloomberg’s sentence. It is not a line on the Department’s employer-services page. Do not add a SINOT percent. The Department’s page does not print one. Do not add a special-contribution percent. That page does not print one either.

This is not California’s $100-in-a-quarter test. There is no 15-day California registration clock on these pages. This is not the District of Columbia’s 2.7 percent new-employer rate plus a 0.2 percent assessment on $9,000. This is not Rhode Island’s 1.21 percent cash rate on $30,800. The Department’s page does not print a $1,500-quarter or 20-week test. The federal table’s size-of-payroll cell says any size. Use the Department’s notice for the account you just opened.

New hire is 19 days on the Department’s text and 20 days in its federal paragraph.

The new-hire report is a list of who you just hired. It is not a box on Form PRSD-1. It is not a box on Form 499 R-1B. It is not the quarterly wage declaration.

The employer-services page says every Puerto Rico employer must report new employees within the first 19 days of hire, full time or part time. It says the old path was a fax, and the portal is an added way to file, print the form, and see the hire history. The next heading on that same page is the federal law. It names the Personal Responsibility and Work Opportunity Reconciliation Act, called PRWORA, from 1996. It says an employer must give the new employee’s data to the local directory where the person is hired or rehired, full time or part time, on or before 20 days after the hire. The page does not say which number wins. Work to the shorter clock, 19 days. That is the only count that meets both sentences.

The local-law paragraph on that page does not print a day count. It says the Child Support Administration, called ASUME, under Act 5 of December 30, 1986, as amended, requires employers to give information on every person hired or rehired. The portal disclaimer says the 1996 federal act generally uses 20 days for a new hire or a rehire, and that you may report online, by mail, or by another means. That is a second official 20-day sentence. It does not erase the 19-day sentence on the employer-services page. Keep both. File inside 19 days.

The portal help for an individual new hire calls the electronic form PRSDNH-1, the State Register of New Employees. It has an employer section and an employee section. The employee section asks for the date of birth, the Social Security number, the name, the address, the date work started, the hire status, and whether you will offer a medical plan. The portal will not take a form with a required field left blank. You confirm the form, and the portal shows a receipt. The help page says this service is how you meet PRWORA and Puerto Rico’s Act 5 of December 30, 1986. This is not the District of Columbia’s 20-day directory. This is not Rhode Island’s 14-day report. This is not Maine’s 7-day report.

Workplace injury insurance is a State Insurance Fund policy before work starts.

The fund calls this workers’ compensation. It is a policy from the State Insurance Fund Corporation. It is not the District of Columbia’s market of licensed private insurers. It is not Texas optional coverage. It is not North Dakota’s Workforce Safety and Insurance in name, but it is a fund you buy from the territory, not a policy the unemployment portal sells. The Department of Labor and Human Resources does not sell this policy. A payroll login is not a policy.

The policies page says a permanent policy is for work that runs through the year and renews each year. A temporary policy is for a short job, such as a construction project, an event, or a contract, and you request it before that activity starts. A first policy must be active before any work activity starts. The steps on that page are the application, the business facts, the estimated payroll, tax or incorporation papers if they apply, and the first premium from that payroll and the risk class. The page says the same “active before work” line twice.

Employer immunity on that page means the employee does not sue you in civil court for a covered work injury. The fund pays the medical care, the wage replacement, and rehabilitation. You keep that protection only if three things stay true. The policy is current. You declare payroll correctly and on time. You pay the premium by the fund’s deadline. Miss one, and the fund can reject the claim and you can be sued. To renew, file the payroll statement on or before August 15 with current numbers, attach quarterly returns from the Department of Labor and Human Resources, the Department of the Treasury, or the IRS, and pay the premium by the date on the fund’s notice. The phones on that page are 1-844-765-4927, 1-844-728-7666, and 1-855-353-6636.

The employer guide says an individual employer is a person who employs one or more workers and must insure them with a current policy. The same blurb says you can self-insure if you work your own business. That sentence is about the owner, not a substitute for a policy after you hire someone. A legal entity that hires employees must meet the workers’ compensation law. The guide says every employer keeps an active policy, reports payroll truthfully, pays on time, and reports a work injury by the legal deadline. The guide’s own first-time block does not print the steps. Use the policies page for those steps. The online-transactions page says payments, payroll declarations, and certificates are for a registered employer. Register on that portal if you do not have an account yet.

How Gusto and Patriot describe Puerto Rico

Confirm the withholding account on SURI. Confirm the state employer account number on the Employer Services Portal, after the federal employer identification number. Confirm the rate on the Department’s notice, and keep the January 2026 federal table beside it because the Department’s page does not print the 2.8 percent. Confirm the new-hire file on Form PRSDNH-1 inside 19 days. Confirm the State Insurance Fund policy is active before work starts. The fund sells that policy. The payroll vendor does not.

Gusto’s payroll terms say the payroll service is available in the United States, excluding U.S. territories. They also say the business must be registered in the United States, excluding U.S. territories, and the bank account must be there too. Gusto’s add-employees article says Gusto does not support employees living in U.S. territories, and it names Puerto Rico and the U.S. Virgin Islands. Gusto’s state-registration hub is a list of state headings. The headings name the states and the District of Columbia. Puerto Rico is not a heading on that hub. There is no Gusto article on that hub that walks through SURI, the Employer Services Portal, or the State Insurance Fund. See Gusto on the directory.

Patriot’s new-employer page by state is a table of registration articles. The table lists the 50 states and the District of Columbia. Puerto Rico is not in the table. The page does not link a Puerto Rico registration article. Patriot does not claim, on that page, to open a SURI account, a Department of Labor and Human Resources employer number, or a State Insurance Fund policy. See Patriot on the directory.

The gap is the grade. For a first hire in Puerto Rico, these two vendors’ published registration lists do not take the three doors off your desk. You still open SURI. You still request the employer number. You still put the State Insurance Fund policy in force before work starts. You still file Form PRSDNH-1 inside 19 days. A vendor checklist for a state is not a Puerto Rico account.

What still sits on the employer

• Open withholding on SURI with the Department of the Treasury. Publication 25-01 says a new employer registers after December 10, 2018, using Create SURI Logon. Open the employer number on the Employer Services Portal with the Department of Labor and Human Resources. Those are two doors. Have the federal employer identification number before Form PRSD-1. If the Department already mailed you a login, do not open a second employer number.
• Hold the state employer account number. Do not substitute the federal employer identification number. Do not substitute the SURI withholding account.
• Withhold Puerto Rico income tax from wages. Have the employee complete Form 499 R-4.1. If they do not, withhold without the exemptions and the deduction allowance. A worker age 16 through 26 can use the first-$40,000 wage exemption on that form. A military spouse can elect the Military Spouses Residency Relief Act. More than eight dependents means you send a copy to the Fiscal Audit Bureau. File Form 499 R-1B every quarter through SURI, even with no wages. A monthly depositor at or under $50,000 in the lookback deposits by the 15th of the next month. Over $50,000 is semiweekly. Under $2,500 in the quarter can ride the quarterly return. A $100,000 day is due the next business day. File Form 499R-2/W-2PR electronically. Correct it on Form 499R-2c/W-2cPR.
• File the quarterly wage declaration on the Employer Services Portal. The three parts are unemployment, SINOT, and the special contribution. The caps on the Department’s page are $7,000 for unemployment and $9,000 for SINOT in a calendar year. The page does not print the percent. The January 2026 federal table prints a new-employer rate of 2.80 percent on $7,000, a range of 1.2 percent to 5.40 percent, and a size of payroll of any size. That table says it is not an official reading of the law, and a higher new-employer rate can apply by industry. Bloomberg Tax, a secondary report, prints the same 2.8 percent and says 2025 was 3.1 percent. Enter the rate on your notice. Do not print a SINOT percent the Department did not print.
• File Form PRSDNH-1 with the Department within 19 days of hire, full time or part time. The Department’s page also says the federal law uses on or before 20 days, and the portal disclaimer says generally 20 days. Act 5 of December 30, 1986 requires the hire and rehire information and does not, on that page, print its own day count. Form PRSD-1 does not satisfy the new-hire clock. Form 499 R-1B does not satisfy it. The quarterly wage declaration does not satisfy it.
• Buy the State Insurance Fund policy and have it active before any work starts. A permanent policy renews yearly. A short job uses a temporary policy requested before the activity. File the payroll statement by August 15, attach the quarterly returns the policies page names, and pay the premium on the fund’s notice. Immunity needs a current policy, a true on-time payroll declaration, and an on-time premium. The unemployment account does not sell this policy.
• Do not copy another state’s clock onto Puerto Rico. Puerto Rico does not use California’s $100-in-a-quarter test. Puerto Rico does not use a 15-day California registration clock. Puerto Rico does not use Texas’s rule of no state paycheck withholding. Puerto Rico does not use the District of Columbia’s Form FR-500, the District’s 2.7 percent rate, the District’s 0.75 percent paid family leave, or the District’s licensed private insurer. Puerto Rico does not use Delaware’s Form UC-1. Puerto Rico does not use Rhode Island’s one Business Application and Registration, or Rhode Island’s 14-day new-hire report. Puerto Rico does not use Maine’s 7-day new-hire report.

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