Congratulations on your decision to become a new employer in Colorado! You will need a few things in place before you run your first payroll. For Colorado employer registration help, check out our partner, CorpNet.
Federal and Colorado State Tax Accounts
Before running payroll in Colorado, you must set up the required federal and state tax accounts.
Federal Tax Accounts
Apply for a Federal Employer Identification Number (FEIN)
Your business will need an Employer Identification Number (EIN, also called a FEIN) if you do not already have one.
The simplest way to get an EIN is to apply online with the IRS. There is no cost to apply.
For more information, read our help article: “Your Step-by-step Guide on How to Apply for EIN”
Enroll in EFTPS (Recommended)
Although it is not required, we recommend you enroll in the Electronic Federal Tax Payment System (EFTPS) — the IRS’s free online service for paying federal taxes electronically.
You can register online at eftps.gov.
To learn more, read our article: “What Is EFTPS?”
Colorado State Tax Accounts
Register as a New Employer in Colorado
Colorado new employers must register on Colorado Business Express to obtain the following state tax accounts:
Wage withholding account number (for state income tax/SIT withholding) — registered through the Colorado Department of Revenue
State Unemployment Insurance (SUI) account number — registered through the Colorado Department of Labor and Employment (CDLE)
Colorado new employers must also register for Colorado FAMLI (Family and Medical Leave Insurance — Colorado’s paid family and medical leave program). Register for Colorado FAMLI on the state website.
Get Your Colorado SUTA Rate
Before running payroll in Patriot, you need to enter your Colorado State Unemployment Tax Assessment (SUTA) rate.
The Colorado new employer SUTA rate for non-construction industries in 2026 is 3.05% (all-in rate, which includes a 0.17% support rate and a 1.35% surcharge). If you are in the construction or trades industry, your rate will be higher — visit the CDLE Beginning Rates page for your industry-specific rate.
The Colorado Department of Labor and Employment assigns each business a new SUTA rate annually based on your industry type and experience rating.
For more information, read our article: “What Is SUTA Tax?”
Register for Local Income Taxes (If Applicable)
Colorado has localities that impose their own local income taxes. If your business operates in any of the following localities, you must also register with that local government:
Note: Aurora’s local income tax ended in January 2025.
State-mandated Requirements
Sign up for Workers’ Comp Insurance
Colorado requires all employers with at least one employee to carry workers’ compensation insurance.
You can sign up through a private insurance provider or through a state-operated fund. Learn more about Colorado workers’ comp requirements at the Colorado Division of Workers’ Compensation.
Patriot Payroll offers a free pay-as-you-go (PAYG) workers’ comp integration through our partner, ERGO NEXT Insurance. Get a free quote with ERGO NEXT here.
Enroll in Colorado Secure Savings or Offer a Qualifying Retirement Plan
Colorado requires employers with 5 or more employees who have been in business for at least 2 years to either enroll in Colorado Secure Savings — the state-mandated retirement savings program — or offer employees a qualifying retirement plan alternative.
Patriot has partnered with Vestwell to offer affordable retirement plans for small businesses that integrate with Patriot Payroll. Learn more about Patriot’s Vestwell integration here.
Setting Up Your New Employee
Complete Form I-9 (Employment Eligibility Verification)
Federal law requires all employers to verify each new employee’s identity and authorization to work in the United States using Form I-9.
Form I-9 is completed in two parts:
Employee completes Part 1 on or before their first day of work.
Employer completes Part 2 within three business days of the employee’s first day by reviewing the employee’s identity and work authorization documents.
You must retain each employee’s completed Form I-9 for as long as the individual works for you. For more information, read:
Have Employee Fill Out Federal Form W-4
Have your new employee fill out Form W-4, Employee’s Withholding Certificate, to determine the correct amount of federal income tax to withhold from their paychecks. Colorado uses the federal Form W-4 as the basis for state income tax withholding as well.
For more information, read: “What Is a W-4 Form, and What Is it Used for?”
Have Employee Fill Out Colorado State Form DR 0004
Have your new employee fill out Colorado Form DR 0004 — the Colorado Employee Withholding Certificate used to determine the correct amount of Colorado state income tax (SIT) to withhold from their paychecks.
Report New Hires to the State of Colorado
Colorado employers must report all new hires and rehires to the Colorado State Directory of New Hires (SDNH) within 20 days from the date of hire or rehire. New employers must register to use the SDNH system before submitting their first new hire report.
Meet Minimum Wage Requirements
Colorado employers must pay at least the Colorado state minimum wage of $15.16 per hour in 2026, or the rate required by your locality if it is higher. Check with your local government for current local minimum wage rates.
You are also required to display the Colorado minimum wage and labor law poster in a location where employees can read it.
Obtain and Display Required Labor Law Posters
Colorado employers must display all required federal and state labor law posters in a location where employees can read them.
Get annual poster updates and all federal, state, county, and city labor law updates through Patriot’s labor law poster store, powered by PosterElite.
Record-Keeping Requirements
Colorado employers are required to keep employee payroll records for at least three years. For more information, read our help article: “What Employers Should Know About Employee Payroll Records”
Once you have all the necessary information in place, you will be able to set up payroll for your business in Patriot. Let us know if you have any questions — we are here to help!
Please note, this is not an all-inclusive list for new employers, and there may be other requirements that are not included here. Please visit the Colorado.gov website for more details.