How to Do Payroll in Idaho: A Step-by-Step Guide

Last reviewed: July 2026

Idaho is a straightforward state to run payroll in compared to many others. There's a flat-ish withholding system, a single state agency for income tax, and pay frequency rules that most small businesses already follow by habit. The part that trips people up isn't the math. It's forgetting a registration step, missing a deposit deadline, or assuming a national payroll app already knows Idaho's rules when it doesn't.

This walkthrough covers the full sequence, from your very first registration to your year-end W-2s, so you can set things up once and get it right.

1. Get Your Federal EIN

Before anything else, apply for an Employer Identification Number from the IRS. It's free, the online application takes about fifteen minutes, and you get the number immediately at the end of the session. You'll need it for every state registration that follows, plus your business bank account and your payroll software setup.

Apply at irs.gov/ein. Don't use a paid third-party site for this step. The IRS never charges for an EIN.

2. Register With Idaho's Tax and Labor Agencies

Idaho lets you handle both of your core state registrations in one application. The Idaho Business Registration form (commonly called IBR-1) registers you with the Idaho State Tax Commission for income tax withholding and with the Idaho Department of Labor for unemployment insurance at the same time. You can file it online at business.idaho.gov.

Have your EIN, owner and officer information, and your expected first paycheck date ready before you start. Online applications typically process within 10 to 15 business days, so submit it as soon as you know you're hiring, not the week before your first payroll.

• Your withholding account lets you remit Idaho income tax withheld from paychecks
• Your SUI account comes with a new-employer rate of 1.0% on the first $58,300 of each employee's 2026 wages
• Once you build a few years of claims history, your SUI rate becomes experience-rated and can move up or down from there

3. Get Workers' Compensation Coverage

Idaho requires workers' compensation insurance for employers with one or more employees, with only narrow exemptions for certain family members and a handful of specific occupations. Coverage needs to be in place before your first employee starts working, not after.

You can buy a policy from any carrier licensed in Idaho, and the Idaho Industrial Commission oversees compliance statewide. Rates depend on your industry classification and claims history, so it's worth getting quotes from more than one carrier when you're starting out.

4. Set Up Withholding

Every employee fills out two forms before their first paycheck: the federal Form W-4 and Idaho's own Form ID W-4. They're not interchangeable. Idaho's version bases most of the allowance calculation on the number of qualifying children in the household rather than a broad personal allowance, so an employee's federal and state numbers often won't match.

If an employee never turns in a Form ID W-4, withhold as if they claimed zero allowances. Our free W-4 helper tool walks employees through both forms in plain language, and our paycheck calculator lets you check a sample paycheck against Idaho and federal withholding before you run your first real payroll.

5. Choose Your Pay Schedule

Idaho Code 45-608 sets the rule: pay wages at least once every calendar month, and the pay period a given check covers cannot end more than 15 days before the payday itself. Weekly, biweekly, and semi-monthly schedules all fit comfortably inside that rule, and most Idaho small businesses land on biweekly because it lines up evenly with hourly time tracking.

Final pay works differently. When an employee quits, is fired, or is laid off, you owe all wages due by whichever comes first: the next regular payday, or ten days after separation (weekends and holidays don't count toward that window). If the employee submits a written request for earlier payment after they've already left, you then have 48 hours to pay it.

6. Deposit Taxes and File on Schedule

Once you're running payroll, three separate clocks start ticking: federal deposits, Idaho withholding deposits, and Idaho SUI reporting.

Federal income tax and FICA deposits follow the IRS's semi-weekly or monthly lookback schedule, reported quarterly on Form 941. Idaho withholding uses its own Form 910, filed monthly if you withhold more than $750 a quarter but less than $25,000 a month, quarterly if you withhold $750 or less per quarter, or annually if your total liability stays under $750 for the year. SUI wages get reported quarterly on Form TAX020, due the last day of the month after each quarter closes: April 30, July 31, October 31, and January 31.

Miss a federal deposit and the penalty starts at 2% for a few days late and climbs from there. Idaho's late-deposit penalties follow a similar escalating structure, so treat both calendars as fixed, not flexible.

7. Close Out the Year

At year-end, issue W-2s to every employee and file them with the Social Security Administration by January 31. Idaho layers one more filing on top: Form 967, the Idaho Annual Withholding Report, reconciles everything you deposited through the year against what you actually withheld, and it's due the same day as your W-2s, the last day of January.

If the totals on your Form 967 don't match your W-2s and your Form 910 deposits, the Tax Commission will flag it, and you'll spend time on an amended filing instead of moving on to next year. A quick internal reconciliation before you file catches most of these errors early.

Doing all of this by hand every pay period is manageable for a one or two-person payroll, but it gets tedious fast once you add employees, benefits, or multiple pay rates. This is where a payroll platform earns its keep. Gusto calculates and files both your federal and Idaho payroll taxes automatically, handles new hire reporting, and generates W-2s and Form 967 data at year-end, so the calendar above becomes something the software tracks instead of something you have to remember.

Frequently Asked Questions

What are the basic steps to run payroll in Idaho?

Get a federal EIN, register with the Idaho State Tax Commission for withholding, register with the Idaho Department of Labor for SUI, arrange workers' compensation coverage, collect employee paperwork, pick a pay schedule, and then run payroll each period while depositing taxes on the schedule your accounts are assigned.

Do I need to register with the state before hiring my first employee in Idaho?

Yes. You need an Idaho withholding account with the Idaho State Tax Commission and an SUI account with the Idaho Department of Labor before your first payroll. Both can be handled in one application through Idaho Business Registration.

How often can I pay employees in Idaho?

Idaho law requires wages at least once per calendar month, and the pay period covered by a given paycheck cannot end more than 15 days before that payday. Weekly, biweekly, and semi-monthly schedules all satisfy this rule.

What form do Idaho employees use for state tax withholding?

Idaho employees complete Form ID W-4, the state's own withholding certificate. It is separate from the federal Form W-4, and Idaho's version bases the allowance count mainly on qualifying children rather than a general personal allowance.