Minnesota Employer Registration: Unemployment Insurance, Withholding and the New-Hire Report
Minnesota Employer Registration: Unemployment Insurance, Withholding and the New-Hire Report
The day you hire your first employee in Minnesota, your registration work changes. Minnesota has no general statewide business license, so minnesota employer registration is not one form filed in one place. It is three separate obligations handled by different agencies: state income tax withholding with the Minnesota Department of Revenue, unemployment insurance (UI) with DEED, and reporting each new hire to the state's new-hire registry. This guide covers what each one requires, what it costs, and the order most employers take them in.
Informational only: This guide is general information, not legal or tax advice. Tax rates, wage bases and reporting rules change, and the official agency pages linked here control. For payroll setup or a worker classification question, consult a qualified CPA or employment attorney.
Registrations are not licenses
Before you work through payroll paperwork, sort out what counts as a license. Minnesota issues no general business license. Forming an LLC or corporation with the Secretary of State is a filing. The Department of Revenue Minnesota Tax ID is a tax registration. Neither one is a license to operate.
Licenses are issued by trade or activity. The agencies you are most likely to meet are the Department of Labor and Industry (DLI), the Minnesota Department of Health (MDH), the Minnesota Department of Agriculture (MDA), the Alcohol and Gambling Enforcement Division, the Office of Cannabis Management, the Department of Children, Youth, and Families (DCYF), MnDOT, DVS and the professional licensing boards. Local zoning and city licenses apply on top of those. Search your activity on License Minnesota before you hire anyone to perform it.
Before the first payroll: what to have ready
Most of the registrations below ask for the same core information, so gather it first:
- Your legal business name and the name you will operate under, if different
- Your federal Employer Identification Number (EIN) from the IRS
- Your Minnesota street address and principal place of business
- A plain description of what the business does, since the industry you report affects your unemployment insurance rate
- The date you expect to pay your first wage
Step 1: Entity filing, assumed names and your tax ID
If you operate as an LLC, the Articles of Organization (Minnesota Statutes, Chapter 322C) cost $155 filed online or in person and $135 by mail. Corporations file Articles of Incorporation (Chapter 302A) at the same $155 fee. Neither filing requires newspaper publication. Both entity types file an Annual Renewal with the Secretary of State at no fee, due every December 31. Reinstatement after a missed renewal costs $65 by mail or $85 online or in person on the current Secretary of State fee schedule, so calendar the deadline. Check the figures on the Secretary of State site before you file.
A C corporation pays a flat 9.8 percent corporation franchise tax, and an LLC that files federally as a C corporation pays the same rate. An LLC taxed as a partnership or disregarded entity passes its income through to the owners, who pay the individual income tax instead.
If you run the business under a name other than your legal name, file a Certificate of Assumed Name (Chapter 333) with the Secretary of State. It costs $50 online or in person and $30 by mail. Assumed names are filed only with the Secretary of State, not with a county. You must publish the certificate for two consecutive issues in a qualified legal newspaper in the county of your principal place of business, and failure to publish may make the certificate invalid. The certificate must be renewed each year at no charge. Many first-time owners miss the publication step, so schedule it the same week you file.
Before you pay the first wage or make your first taxable sale, register with the Department of Revenue for a Minnesota Tax ID and a withholding account. If you will sell taxable goods or services, the same process gives you a sales and use tax account. Start on Revenue's New Business Registration page. The state sales tax rate is 6.875 percent, and local taxes are added on top of it.
Step 2: State income tax withholding
Once you pay wages, you withhold Minnesota income tax from each employee's pay and remit it to the Department of Revenue. Individual income tax in Minnesota has four brackets, 5.35 percent, 6.80 percent, 7.85 percent and 9.85 percent, and withholding is how most of that tax is collected during the year.
Your withholding account and filing frequency are set when you register with Revenue. This guide does not restate the current withholding tables, deposit schedule or required forms, because those change. Check them on the Department of Revenue site before your first payroll run, and confirm the deposit deadline for your filing frequency there.
Step 3: Unemployment insurance with DEED
Register with DEED's UI program through ui.mn.gov when you begin paying wages. UI is a payroll tax that the employer pays. Its 2026 figures are below.
| Item | 2026 figure |
|---|---|
| Taxable wage base, per employee per year | $44,000 |
| Base tax rate | 0.40 percent |
| Maximum experience rate | 8.90 percent |
| Additional assessment | 14.00 percent of the tax |
A new employer has no claims history, so there is no single new-employer rate. DEED assigns your rate by industry, using the industry average experience rating plus the base rate and assessments. Under Minn. Stat. 268.051, subd. 5, the rate can never fall below 1 percent. Confirm your assigned rate with DEED rather than assuming it will match the base rate.
As arithmetic only, a worker paid the full $44,000 wage base and taxed at the 0.40 percent base rate generates $176 of base tax. The 14.00 percent additional assessment adds $24.64, for a total of $200.64 on that worker. Your assigned rate will not be the base rate, so treat this as a way to read the formula, not a forecast of your bill.
Step 4: Report every new hire within 20 days
Minn. Stat. 142A.29 requires employers to report every new hire to the state new-hire registry within 20 calendar days of the hire date. Count calendar days from the date the person starts work. An employee hired on March 1 must be reported by March 21.
There is one exemption. A hire does not have to be reported if the person will work under two months and earn under $250 a month. Both conditions must be true for the exemption to apply. A person who will work two months or longer, or who will earn $250 or more in a month, must be reported. Seasonal and short-term hires are where employers most often miscount, so note the start date and the expected length of each engagement at the time of hire.
This guide does not name the reporting channel or form. Confirm the submission method and the receiving agency on the state's pages before your first hire.
Local layers: counties, cities and townships
Minnesota has 87 counties, about 853 cities and about 1,780 townships. Local governments set zoning and license many businesses by category, and the rules vary widely from one jurisdiction to the next. Minneapolis and Saint Paul both license by category, and neither issues a general business license. A business in either city needs the license for its specific activity, so ask the city which categories apply to you.
Zoning is also set locally. Check the city or township before you lease space, buy property or open to the public, because a use that is allowed in one place may be restricted in the next.
Common mistakes to avoid
- Treating the tax ID as a license. The Minnesota Tax ID lets you withhold and file taxes. It does not authorize you to perform a regulated trade.
- Skipping DBA publication. Filing the Certificate of Assumed Name is only half of the step. Publication is required, and a missed publication can make the certificate invalid.
- Assuming a new-employer rate. Your UI rate is assigned by industry, so describe your business accurately when you register, and confirm the rate with DEED.
- Missing the 20-day clock on short hires. The exemption requires both conditions. A two-month job or a higher monthly pay rate brings the hire back into the reporting requirement.
- Looking for a statewide business license. Minnesota does not issue one. Search by activity on License Minnesota and check local requirements separately.
Recommended order of operations
- Choose your structure and file it with the Secretary of State as an LLC or corporation, or file a Certificate of Assumed Name if you use a trade name, then publish it.
- Register with the Department of Revenue for a Minnesota Tax ID and a withholding account, and add a sales and use tax account before any taxable sale.
- Register with DEED's UI program when you begin paying wages, and confirm your assigned rate.
- Within 20 calendar days of each hire, report the new hire to the state registry unless the exemption clearly applies.
- Check the trade, activity and local licenses that apply to your work before you open or hire for that work.
Where to get help
The Minnesota Small Business Development Center Network, administered by the Minnesota Department of Employment and Economic Development, offers business advising through its SBDC page. For entity structure, payroll setup or worker classification, consult a qualified CPA or employment attorney. Those decisions depend on your facts, and this guide cannot make them for you.