What payroll taxes and forms do you owe when you hire a maintenance employee for your apartments?
You become an employer. You collect Form W-4 and Form I-9, report the hire to your state, withhold income tax and the employee's 7.65% Social Security and Medicare, pay a matching 7.65%, deposit the taxes, file Form 941 every quarter and Form 940 once a year, and give a Form W-2 by January 31. If a single-member LLC owns the building, the LLC does all of this under its own name and EIN.
First, is the person an employee?
Publication 15, the IRS employer's guide, uses the common-law test: someone who performs services is an employee if you can control what will be done and how it will be done. A handyman you schedule, train, equip and pay by the hour to work only on your buildings usually fits. A plumber with a business, tools and other customers who quotes a price for a job usually does not, and is paid as a contractor and reported on Form 1099-NEC.
Calling an employee a contractor does not change what they are. If the facts point to an employee, run payroll.
Whose name the payroll is in
Publication 15 says single-owner disregarded entities are treated as separate entities for employment taxes, and must report and pay employment taxes on employees' wages using the entity's own name and EIN. So an LLC whose income goes on your Schedule E still runs payroll as the LLC. If you own several buildings in several LLCs, the employee is on the payroll of whichever LLC hires them; the cost of their time at another building should be charged to that building in the books.
Paperwork on the first day
- Form W-4, so you know how much federal income tax to withhold.
- Form I-9, Employment Eligibility Verification, from U.S. Citizenship and Immigration Services.
- A report to your state's new hire registry. Publication 15 says all 50 states have one and that a new employee includes someone rehired after at least 60 days away; many states accept a copy of the W-4.
- A state payroll account with your state unemployment tax agency, and a withholding account if your state has an income tax.
The first-year calendar
| When | What | Rule in Publication 15 |
|---|---|---|
| Every payday | Withhold income tax, 6.2% Social Security and 1.45% Medicare | For 2026 the Social Security wage base is $184,500; Medicare has none |
| By the 15th of the next month | Deposit the withheld and employer taxes | A new employer is a monthly depositor for its first calendar year |
| April 30, July 31, October 31, January 31 | File Form 941 | Required each quarter once you pay wages, even with nothing to report; a quarter under $2,500 can be paid with the return |
| Each quarter, if over $500 | Deposit FUTA tax | Otherwise carry it to the next quarter |
| January 31 | Give the employee a Form W-2, file Copy A with Form W-3 with the SSA, file Form 940 | Form 940 reports federal unemployment tax |
If you expect $1,000 or less of employment taxes for the year, Publication 15 says you can ask the IRS in the first quarter to file one Form 944 instead of four 941s, but only after the IRS tells you in writing that you may.
What the employee costs on top of wages
Publication 15 sets the 2026 FUTA rate at 6.0% of the first $7,000 of wages, with a credit of up to 5.4% for state unemployment tax paid in full and on time, which leaves 0.6%. State unemployment rates and wage bases vary, so the state line below is made up.
Example a made-up part-time technician earns $24 an hour for 25 hours a week, 52 weeks a year, or $31,200. The employer pays 6.2% Social Security, $1,934.40; 1.45% Medicare, $452.40; FUTA at 0.6% of $7,000, $42; and a made-up state rate of 2.7% on a made-up $9,000 base, $243. Total employer taxes: $2,671.80. Each quarter, wages are $7,800, the employee's 7.65% withheld is $596.70, the employer match is $596.70 and say $450 of income tax is withheld, so the Form 941 liability is $1,643.40, under $2,500.
Ask your insurance agent whether your state requires workers' compensation coverage for one employee, and add that premium to the cost.
Recording payroll in the books
Keep gross wages and the employer's taxes in their own expense accounts. Amounts you withhold from the employee are not your expense: they are a liability until you deposit them, so record them in a payroll liabilities account and clear it with each deposit. A payroll provider's single bank debit can then be split into wages, employer taxes and the liability it pays off.
If the employee also gets a unit, the rules on lodging are covered in paying an on-site manager with a free unit.
What DoorKeeping does and does not do here
DoorKeeping does not run payroll or file employment tax forms; a payroll provider or your accountant does that. What it does is keep the property's books: payroll debits arrive through the bank feed, are matched and coded, and land in the right LLC with wages, taxes and liabilities apart. Work orders and vendor job links let you send the jobs your employee cannot do to an outside vendor. It costs $2 per unit per month, with no other fees for owners or tenants, and gives no tax advice.
Sources
- IRS, Publication 15 (2026), Employer's Tax Guide, read Oct 30, 2026
Questions
- Does a single-member LLC need its own EIN for payroll?
- Yes. Publication 15 says single-owner disregarded entities report and pay employment taxes on their employees' wages under the entity's own name and EIN.
- How often do I file payroll taxes for one employee?
- Form 941 each quarter, due April 30, July 31, October 31 and January 31, and Form 940 once a year by January 31. New employers deposit monthly in their first year.
- How much does an employee cost in payroll taxes?
- The employer pays 7.65% for Social Security and Medicare, federal unemployment tax of usually 0.6% on the first $7,000, and state unemployment tax at a rate that varies by state.