Texas Employer Account Setup (2025): EIN, TWC, SUTA, and IRS Checklist for New Businesses By TexasPayroll.com — Powered by BrightPath Pay & People Solutions
- TexasPayroll.com Editorial Team
- Nov 29, 2025
- 4 min read
Updated: Nov 30, 2025
Imagine this: You hire your first employee, enter their hours, hit “Run Payroll” — and suddenly the system asks for account numbers you’ve never heard of.
EIN. TWC account. SUTA rate. IRS deposit schedule. Quarterly filing IDs.
Most Texas employers run into this exact roadblock the first time they try paying someone, because legally, payroll setup happens BEFORE payroll, not after.
And skipping these steps can lead to:
Retroactive state unemployment taxes
Rejected payroll filings
IRS notices
Tax payments being applied to the wrong business
Mismatched employee wage records
Delays in paying employees
This guide walks you through exactly how to set up your Texas employer accounts the right way in 2025.
Step 1: Get Your IRS Employer Identification Number (EIN)
What is an EIN?
Your Employee Identification Number is your business’s federal ID — required for hiring workers, withholding taxes, filing payroll reports, and sending W-2s.
You need it for:
payroll tax withholding
quarterly federal 941 filings
annual 940 reporting
W-2/W-3 processing
business banking
setting up payroll software
Apply here (Free & instant):
Common mistakes when applying:
❌ Selecting the wrong entity type
❌ Misspelling the legal business name
❌ Using the owner’s SSN instead of a business EIN
❌ Not saving the SS-4 confirmation letter (This is a BIG one)
Real example: Houston, 2022
A retailer accidentally entered their DBA instead of their legal LLC name when applying for an EIN. Mismatched names caused IRS deposits to misapply → resulted in $3,600+ in corrections and penalties.
Step 2: Register With the Texas Workforce Commission (TWC)
TWC manages unemployment taxes (SUTA) and employer wage reporting.
Register here:
You must register if you:
pay $1,500+ in wages in one quarter, OR
employ at least 1 worker for 20+ weeks in a year
What TWC assigns you:
TWC Account Number
SUTA Tax Rate (new employers: 2.7%)
wage reporting login credentials
Texas SUTA in 2025:
Wage base: $9,000
New employer rate: 2.7%
Cost per employee (estimate): $243/year
Common TWC issues:
❌ Registering late → Retroactive tax charges
❌ Using an incorrect FEIN → Mismatched wage records
❌ Not adding the business owner as the authorized officer
Step 3: Confirm Your IRS Deposit Schedule (Monthly vs. Semiweekly)
The IRS assigns your deposit frequency based on your total tax liability.
Most new Texas employers are monthly depositors, meaning:
Payroll run anytime in January
Taxes due February 15
Semiweekly depositors follow stricter rules:
Paychecks Wed–Fri → deposit by next Wednesday
Paychecks Sat–Tue → deposit by next Friday
IRS penalties for late deposits:
2% penalty if 1–5 days late
5% if 6–15 days late
10% if 16+ days late
15% if after notice
Real Texas example:
A small HVAC company in Brenham became a semiweekly depositor without realizing it. Late deposits → $11,000+ in penalties.
Step 4: Set Up a Dedicated Payroll Bank Account
Keeping payroll funds separate prevents:
Overdrafts
Payment delays
Tax deposit mistakes
Rejected payroll runs
Your payroll bank account should:
✔ Match your EIN
✔ Allow ACH transactions
✔ Be separate from operations
✔ Support payroll company debits
Step 5: Prepare Required Onboarding Documents
Before you ever run payroll, you must collect:
Federal Forms
✔ W-4
✔ I-9
✔ SSA verification (optional but helpful)
Texas Requirements
✔ Texas New Hire Report (within 20 days)
✔ Pay frequency notice
✔ Classification agreement
Company-Level Documents
✔ Direct deposit form
✔ PTO/holiday policy
✔ Employee handbook acknowledgment
✔ Job description
✔ Salary/hourly compensation agreement
Step 6: Choose a Legal Pay Frequency (Texas Rule)
Texas allows:
weekly
biweekly
semimonthly
monthly
BUT:
Hourly (non-exempt) employees must be paid at least twice per month.
(Texas Labor Code § 62.003)
✔ Best practices:
Hourly → biweekly or weekly
Salary → semimonthly or biweekly
Step 7: Select a Payroll System That Supports Texas Requirements
Your payroll provider must support:
Texas SUTA reporting
Texas new hire reporting (if available)
Child support withholding
Multi-state employees
Overtime rules
Direct deposit
Quarterly 941 filings
Annual W-2 & 1099 processing
Common mistake:
Assuming all payroll systems automatically handle state requirements.
Many don’t.
Real Texas example:
A Dallas employer used software that didn’t file SUTA correctly. TWC recalculated wages → issued $5,400+ in back taxes and penalties.
⭐ Texas Employer Account Setup Checklist (Copy This)
✔ Apply for your IRS EIN
✔ Register with the Texas Workforce Commission
✔ Receive your SUTA rate
✔ Confirm your IRS deposit schedule
✔ Set up a dedicated payroll bank account
✔ Collect W-4, I-9, and new hire documents
✔ Establish a compliant pay frequency
✔ Choose payroll software
✔ Configure employee classifications
✔ Enable direct deposit
✔ Report new hires within 20 days
Why Proper Setup Matters (Real Consequences)
Houston Retailer (2021)
Ran payroll before registering with TWC →TWC created a retroactive account and billed 7 quarters of taxes.
Austin Restaurant Group (2023)
Used one bank account for all expenses →Payroll bounced →Wage claim filed with TWC.
Dallas Startup (2022)
Misapplied EIN →IRS reclassified deposits →Owed thousands in interest and penalties.
These issues are preventable with proper setup.
⭐ Need Help? BrightPath Can Handle Your Employer Setup (Coming Soon)
TexasPayroll.com is launching payroll + HR services through BrightPath Pay & People Solutions.
We will help Texas employers with:
EIN registration
TWC setup
SUTA / SUI configuration
Payroll system setup
Onboarding compliance
Time-tracking integration
Ongoing, Personalized, Dedicated payroll support
Local, Texas-specific payroll support is what sets BrightPath apart.
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