How to register for payroll taxes in Colorado

Why registration comes before the first paycheck

Hiring your first W-2 employee in Colorado triggers state payroll tax obligations immediately, not at year-end. You must withhold Colorado income tax from any employee whose pay is subject to federal withholding if they are a Colorado resident (working inside or outside the state) or a nonresident performing services in Colorado. Unemployment insurance liability begins once you pay at least $1,500 in wages in a calendar quarter or employ at least one person for any part of a day in 20 different weeks of the current or previous year. And Colorado's paid-leave program, FAMLI, requires every business with at least one qualifying employee to register and remit premiums. Getting accounts opened before you run payroll avoids non-filer notices, penalties, and interest later. If this is also your first hire anywhere, it helps to understand the broader mechanics of running payroll for the first time before layering on the Colorado specifics.

The three state accounts and who issues them

Colorado splits employer payroll taxes across two agencies and three accounts. The Colorado Department of Revenue issues the wage withholding account for state income tax, managed online through Revenue Online. The Colorado Department of Labor and Employment (CDLE) runs unemployment insurance, administered through its MyUI Employer+ portal. CDLE's FAMLI Division runs the paid family and medical leave program through a separate portal, My FAMLI+ Employer. Registering for one does not register you for the others, which routinely surprises founders coming from single-portal states.

Step-by-step registration

1. Get a federal EIN from the IRS if you don't have one; every state application asks for it.

2. Open your withholding and unemployment accounts. In-state businesses can use MyBizColorado (mybiz.colorado.gov) to apply for both at once. Out-of-state businesses apply for withholding with the Wage Withholding Account Application (CR 0100) instead. There is no fee and no renewal requirement for the withholding account.

3. Register the unemployment account in MyUI Employer+ if you didn't use MyBizColorado. Expect to create a user login with multi-factor authentication, then supply liability wage information, a physical business address (no PO boxes), a NAICS code, and owner/officer details totaling 100% ownership.

4. Register for FAMLI in My FAMLI+ Employer. You'll report your employee headcount at registration; self-employed founders with no employees are exempt.

5. Report each new hire to the Colorado State Directory of New Hires within 20 calendar days.

Have your EIN, legal entity name, first payroll date, ownership details, and estimated wages ready before you start. Once the accounts exist, most payroll software files these returns and payments for you.

Ongoing obligations and deadlines

Withholding filing frequency depends on your estimated annual withholding, as of August 2026: under $7,000 files quarterly (due the last day of the month after the quarter), $7,000 to $50,000 files monthly (due the 15th of the following month), and over $50,000 files weekly by EFT. A return is required even when zero tax is due.

Unemployment premiums and wage reports are filed quarterly in MyUI Employer+, due April 30, July 31, October 31, and January 31. New employers pay an introductory rate based on industry for their first year (three years for construction), and premiums apply to the first $30,600 of each employee's wages in 2026, up from $27,200 in 2025. Your rate notice arrives each December.

FAMLI premiums follow the same quarterly deadlines. As of August 2026 the premium is 0.88% of wages up to the Social Security wage cap, split evenly at 0.44% employer and 0.44% employee. Businesses with nine or fewer employees owe only the employee share but must still register, report wages, and update their headcount annually by February 28. Choosing payroll software that already supports FAMLI deductions saves real reconciliation pain here.

Remote employers and local head taxes

If your startup is based elsewhere but employs Coloradans, the same rules apply: withholding covers Colorado residents and nonresidents working in Colorado, and FAMLI covers Colorado employees regardless of where the company sits. Out-of-state businesses use the paper CR 0100 for withholding rather than MyBizColorado.

Several cities also levy an occupational privilege tax (OPT) requiring separate city registration. In Denver, employees earning at least $500 in the city in a month owe $5.75 per month (withheld by you) and you owe $4.00 per employee per month, plus $4.00 for each owner or partner regardless of earnings. Aurora and Greenwood Village each charge $2 employee plus $2 employer per month once an employee earns $250 in a month; Greenwood Village charges a one-time $10 license fee.

FAQ

Do I need to register for FAMLI if I have fewer than 10 employees?

Yes. Every business with at least one qualifying Colorado employee must register in My FAMLI+ Employer and file quarterly wage reports. The small-employer break is on cost, not registration: with nine or fewer employees you skip the 0.44% employer share and remit only the employee share you deduct from paychecks.

What happens if I have no payroll in a filing period?

File anyway. The Department of Revenue requires a zero return for withholding periods with no tax due; skipping it triggers non-filer billing notices. Unemployment wage reports are likewise expected each quarter while your account is active, so close accounts you no longer need.

My startup is in another state with one remote employee in Colorado. Do I really need all three accounts?

Generally yes. A Colorado-resident employee triggers wage withholding, unemployment premiums once you cross the $1,500-per-quarter wage threshold, FAMLI registration, and new-hire reporting within 20 days. City OPT only applies if the employee works in a city that levies it, such as Denver.