How to Hire Your First Employee for a Cleaning Business (10 Steps)

To hire your first employee for a cleaning business, you set up as an employer before day one (an EIN, state tax and unemployment accounts, workers' comp and a payroll method), then do the hire in order: offer, Form I-9 and Form W-4 on the first day, a state new-hire report within 20 days or sooner, and payroll taxes deposited on schedule. None of it is hard, but each step has a deadline.

Below are the steps in order, then a dated example hire with the first paycheck worked out. Rules vary by state and city, so this is a map, not legal or tax advice; check each step against the official links.

Before you start: is your first hire an employee or a contractor?

Many cleaning owners start by paying a helper on a 1099. The IRS says what matters is whether you have "the right to control the details of how the services are performed," and it looks at three groups of evidence: behavioral (do you control what they do and how), financial (who sets the pay, who supplies the tools) and type of relationship (is it ongoing, is the work central to your business). See Independent contractor or employee? on irs.gov.

A typical cleaning helper works clients you booked, on your schedule, with your checklist and products, doing the core work of your business. That looks much more like an employee. The Department of Labor uses its own "economic reality" test for wage-and-hour law; it proposed a new version in February 2026, so check that page for the current status, and some states apply stricter tests of their own.

If you're unsure, an accountant or employment attorney can look at your setup, and either you or the worker can ask the IRS for a ruling with Form SS-8 (the IRS says it can take at least six months). This post assumes your first hire is a W-2 employee.

The 10 steps to hire your first employee

1. Get an EIN

You need an Employer Identification Number to run payroll, even as a sole proprietor. It's free and takes minutes on the IRS EIN page. The IRS warns to beware of websites that charge for an EIN; there is no fee.

2. Register with your state

Most states need two accounts before your first payday: state income tax withholding (if your state has an income tax) and unemployment insurance with your state workforce agency. Your state assigns your unemployment tax rate. The SBA's hiring checklist covers these state steps too.

3. Get workers' compensation insurance

General liability doesn't cover your own employee getting hurt; workers' comp does, and most states require it once you have employees. Some set a headcount: Florida, for example, requires it for non-construction businesses with four or more employees, counting corporate officers and LLC members. Texas is the outlier: the Texas Department of Insurance says most private employers aren't required to carry it, but those who don't must notify their employees and the state. Find your state's rules through the Department of Labor's list of state workers' comp offices, and tell your liability insurer and any bond company that you now have staff.

4. Choose how you'll run payroll

You can run payroll by hand with IRS Publication 15, use a payroll service, or hire a bookkeeper. A service calculates withholding, files the forms and makes the deposits, which is why many owners use one even for a single employee. Pick a pay schedule, such as weekly or every two weeks.

5. Set your pay rules (this is where cleaners get caught)

• Minimum wage: the federal minimum is $7.25 an hour, but many states and cities set higher ones, and the employee gets the higher rate (DOL FLSA page; state minimums).

• Overtime: non-exempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek.

• Drive time between clients is paid time. The DOL says travel "from job site to job site during the workday, is work time and must be counted as hours worked." The drive from home to the first house usually isn't (Fact Sheet #22).

• Short breaks are paid too: rest breaks of about 20 minutes or less count as hours worked; a real meal break of 30 minutes or more generally doesn't.

• Training and shadow shifts are paid. Training only goes unpaid if it's outside normal hours, voluntary, not job related and no other work is done, which a ride-along never is.

Check that your prices can carry the wage first; our house cleaning pricing guide builds a price from your costs.

6. Post the job and interview

Write a short ad with the pay range, hours and areas. Ask every candidate the same questions and score the answers so you compare people fairly. A paid working interview (a real clean, side by side, on payroll) shows you more than any question. If you want this done for you, the Cleaning Business Hiring & Training System has ready job ads, a 12-question interview guide with a scorecard and a working-interview sheet.

7. Run the background check the legal way

If you use a screening company for background checks, the Fair Credit Reporting Act applies. The FTC and EEOC's guide says you must:

1. Tell the applicant in writing, in a stand-alone document (not buried in the application), that you may use the report.

2. Get their written permission.

3. Before rejecting someone because of the report, give them a copy of it and "A Summary of Your Rights Under the Fair Credit Reporting Act."

4. If you then reject them, send an adverse action notice with the screening company's contact details and their right to dispute.

Some states and cities add limits on criminal history questions.

8. Do the day-one paperwork: I-9 and W-4

• Form I-9 proves identity and work authorization. The employee completes Section 1 no later than their first day. You review their documents and complete Section 2 within three business days of the start date; USCIS's example is that a Monday start means Section 2 by Thursday (USCIS Section 2 guidance). You keep the I-9 on file for three years after hire or one year after the job ends, whichever is later.

• Form W-4 tells you how much federal income tax to withhold. The IRS says to have it on file when work starts; if an employee doesn't give you one, you withhold as if they are single (IRS hiring employees). Add your state's withholding form if it has one.

9. Report the new hire to your state

Employers must report each new hire (name, address, Social Security number, first day of paid work, plus your business name, address and EIN) to the state directory of new hires within 20 days of the hire date, according to the federal Office of Child Support Services. Some states want it sooner: Alabama asks for it within seven days.

10. Deposit and file payroll taxes, and put up the posters

• Deposits: a new employer is a monthly depositor for its first calendar year, which means taxes on wages paid in one month are due by the 15th of the next month (IRS Notice 931). Deposits are made electronically, for example through EFTPS or your IRS business tax account.

• Form 941 every quarter, due April 30, July 31, October 31 and January 31 (IRS due dates).

• Form 940 once a year for federal unemployment tax (FUTA), plus Form W-2 to each employee and the Social Security Administration, both due January 31.

• Posters: you must display the federal minimum wage poster, and the DOL's free Poster Advisor tells you which others apply. Your state has its own.

Worked example: a first hire, dated and with the first paycheck

Here's a fictional owner, Dana, a solo house cleaner who hires her first helper, Jess, at an example wage of $18 an hour. Your wage, state rates and insurance will differ.

Two to three weeks before: Dana already has an EIN. She registers with her state for withholding and unemployment, buys a workers' comp policy, signs up for a payroll service and prints the posters.

Monday, Nov. 2, 2026: Jess accepts the offer after a paid working interview and signs the background-check disclosure and permission.

Monday, Nov. 16 (first day): Jess completes I-9 Section 1 and a W-4. Dana checks her documents and finishes Section 2 by Thursday, Nov. 19.

New-hire report: due within 20 days, so by Dec. 6 (Nov. 23 in Alabama). Dana files it in week one.

First paycheck (pay period Nov. 16–29, paid Friday, Dec. 4): Jess works 28 hours in week one and 24 in week two: 44 hours cleaning plus 8 hours driving between clients. Neither week passes 40 hours, so there's no overtime.

• Paid hours: 44 + 8 = 52

• Gross pay: 52 × $18 = $936.00

• Withheld from Jess: Social Security 6.2% = $58.03, Medicare 1.45% = $13.57, plus federal (and any state) income tax from her W-4

Dana's own costs on top of the $936 (IRS Topic 751, Topic 759):

• Employer Social Security 6.2%: $58.03

• Employer Medicare 1.45%: $13.57

• FUTA 0.6% (the 6.0% rate after the full 5.4% state credit, on the first $7,000 of wages a year): $5.62

• State unemployment at an example 2.7%: $25.27

• Workers' comp at an example $3.00 per $100 of payroll: $28.08

• Total on top of wages: $130.57, so the paycheck costs Dana $1,066.57

That's $20.51 per paid hour, or $24.24 per hour Jess actually spends cleaning ($1,066.57 ÷ 44), because the drive time is paid but not billable.

Deposit: the $143.20 of Social Security and Medicare ($71.60 withheld plus Dana's $71.60) plus the income tax withheld is due by Friday, Jan. 15, 2027, since Jess was paid in December. The $5.62 of FUTA can wait: FUTA is only deposited once more than $500 is owed, and at 0.6% of $7,000 it's at most $42 per employee per year, so Dana pays it with Form 940.

Year end: Jan. 31, 2027 is a Sunday, so the Q4 Form 941, Form 940 and Jess's W-2 are due Monday, Feb. 1, 2027.

Common mistakes with a first cleaning employee

• Paying a helper on a 1099 while controlling their schedule, checklist and supplies.

• Not paying drive time between houses, or unpaid "training days."

• Missing I-9 Section 2 by day three, or the new-hire report.

• Assuming general liability covers an injured employee.

• Running a background check without the stand-alone disclosure and written permission.

• Forgetting the employer taxes and insurance on top of the wage when you price jobs.

If you're still finding enough work to justify the hire, start with how to get cleaning clients without paying for leads.

FAQ

Do I need an LLC to hire an employee?

No. A sole proprietor can have employees with an EIN and the state accounts above. Whether an LLC makes sense is a separate question.

Can my first cleaner be a 1099 contractor instead?

Only if they truly run their own business. A helper who cleans your clients' homes on your schedule, with your supplies and checklist, usually doesn't fit the IRS or DOL tests. If you're not sure, ask an accountant or employment attorney, or file Form SS-8.

How much does an employee cost beyond the hourly wage?

At least 7.65% for your share of Social Security and Medicare, FUTA of up to $42 a year per employee, your state unemployment rate and workers' comp. In the example above that added $130.57 to a $936 paycheck, about 14%. Your state and insurer set the last two.

Do I have to pay my cleaner for driving between houses?

Yes. Under the FLSA, travel from one job site to another during the workday counts as hours worked. The commute to the first house and home from the last usually doesn't.