To pay part-time employees, you follow the same federal payroll process you would for full-time staff: classify the worker under the Fair Labor Standards Act, collect an I-9 and W-4, report the hire to your state, track hours, withhold and match payroll taxes, deposit those taxes on the IRS’s schedule, and file quarterly and annual returns. The FLSA does not distinguish between part-time and full-time workers for minimum wage, overtime, or recordkeeping.1U.S. Department of Labor. Part-Time Employment Ten hours a week or thirty-five, the obligations are the same.
Classify the Worker First
Most part-time employees are non-exempt. That means they must earn at least the federal minimum wage of $7.25 per hour and receive overtime at one-and-a-half times their regular rate for any hours over 40 in a single workweek.2U.S. Department of Labor. Wages and the Fair Labor Standards Act If your state’s minimum wage is higher, pay that instead. Overtime is a per-workweek calculation; you cannot average a busy week against a slow one.
Exempt status is harder to reach for part-timers because it requires both a duties test (executive, administrative, or professional work) and a salary at or above the enforced federal threshold, currently $684 per week or $35,568 annually after a federal court vacated the Department of Labor’s 2024 rule.3U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption From Minimum Wage and Overtime Protections Under the FLSA Misclassifying a non-exempt employee as exempt exposes you to back pay plus an equal amount in liquidated damages.
Collect the Paperwork Before the First Paycheck
Form I-9
Every new hire, regardless of hours, must complete Form I-9 to verify identity and work authorization.4U.S. Citizenship and Immigration Services. I-9, Employment Eligibility Verification The employee fills out Section 1 on or before day one, then presents original documents from the Lists of Acceptable Documents: either a single List A document (like a U.S. passport) or one List B document for identity plus one List C document for work authorization. You cannot tell them which documents to bring, and photocopies do not qualify.5U.S. Citizenship and Immigration Services. Instructions for Form I-9, Employment Eligibility Verification
Form W-4
The W-4 tells you how much federal income tax to withhold.6Internal Revenue Service. About Form W-4, Employee’s Withholding Certificate The 2026 form asks for name, address, Social Security number, and filing status, with optional steps for multiple jobs, dependent credits, or extra withholding.7Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate If the employee never turns one in, withhold as if they were single with no adjustments.8Internal Revenue Service. Publication 15 (2026), Employer’s Tax Guide
New Hire Reporting
Federal law requires you to report every newly hired employee to your state’s Directory of New Hires within 20 days of the start date.9Office of the Law Revision Counsel. 42 USC 653a – State Directory of New Hires The report includes the employee’s name, address, and Social Security number along with your business name and EIN. States use the data mainly to enforce child support orders, and missing the deadline can bring state-level fines.
Calculate Gross Pay and Track Hours
For a non-exempt part-time worker, gross pay is the hourly rate multiplied by hours worked in the pay period, with overtime applied to any hours over 40 in a single workweek.2U.S. Department of Labor. Wages and the Fair Labor Standards Act Accurate timekeeping is your responsibility. The FLSA requires you to track hours worked each day and total hours each workweek for every non-exempt employee.10U.S. Department of Labor. Recordkeeping and Reporting Use a time clock, software, or a paper log; the format matters less than the completeness. When records are missing and a wage dispute lands in court, judges generally credit the employee’s account.
Withhold From Each Paycheck
Social Security and Medicare
Withhold Social Security tax at 6.2% and Medicare tax at 1.45% from every paycheck. Social Security tax applies only to the first $184,500 of 2026 wages; Medicare has no cap.11Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
Additional Medicare Tax
Once an employee’s wages from your business cross $200,000 in a calendar year, withhold an extra 0.9% Additional Medicare Tax on every dollar above that threshold, regardless of filing status.12Internal Revenue Service. Topic No. 560, Additional Medicare Tax There is no employer match on this piece. It rarely hits a single part-time job, but it can when an employee holds multiple positions.
Federal Income Tax
Federal income tax withholding runs off the W-4 combined with the tables in IRS Publication 15-T.8Internal Revenue Service. Publication 15 (2026), Employer’s Tax Guide The amount depends on filing status, pay frequency, and any W-4 adjustments. Payroll software handles this once you enter the W-4 correctly; manual calculations use the percentage method or wage bracket tables the IRS publishes each year.
Pay the Employer’s Own Taxes
Matching FICA
On top of what you withhold, you owe a matching 6.2% for Social Security (up to the same $184,500 wage base) and 1.45% for Medicare on all wages.11Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates The combined employer-employee FICA burden is 15.3% on wages up to the cap. This share never appears on the employee’s pay stub; it comes out of the business.
FUTA
Federal unemployment tax is paid entirely by the employer. The gross rate is 6.0% on the first $7,000 of each employee’s annual wages, reduced to an effective 0.6% for employers who pay state unemployment taxes on time and claim the 5.4% credit.13Internal Revenue Service. FUTA Credit Reduction That comes out to a maximum of $42 per employee per year, reported on Form 940.
State Taxes
Every state runs its own unemployment insurance program with its own rate and wage base, and most states also require state income tax withholding. Rates, forms, and deadlines vary; check with your state’s labor and tax agencies before running your first payroll.
Deposit and File on Time
The IRS assigns you a monthly or semi-weekly deposit schedule based on your total employment taxes during a lookback period. If that liability was $50,000 or less, you deposit monthly, by the 15th of the following month. Above $50,000, you deposit semi-weekly on a schedule tied to your paydays.14Internal Revenue Service. Topic No. 757, Forms 941 and 944 – Deposit Requirements Accumulate $100,000 or more in taxes on a single day and the deposit is due the next business day. Late deposits carry graduated penalties starting at 2% and reaching 15%.15Internal Revenue Service. Failure to Deposit Penalty
Most employers file Form 941 each quarter to report wages, withheld income tax, and both shares of FICA. Deadlines are April 30, July 31, October 31, and January 31, with an extra ten days if you made all deposits on time.16Internal Revenue Service. Instructions for Form 941 Very small employers whose annual employment tax liability is $1,000 or less may qualify to file Form 944 once a year instead.17Internal Revenue Service. About Form 944, Employer’s Annual Federal Tax Return
After year-end, file Form 940 for FUTA by January 31 (plus ten days if all deposits were on time).18Internal Revenue Service. Employment Tax Due Dates Furnish Form W-2 to each employee and file copies with the Social Security Administration by February 1, 2027, for the 2026 tax year, whether you file on paper or electronically.19Internal Revenue Service. General Instructions for Forms W-2 and W-3
Pay Frequency, Pay Stubs, and Records
Federal law doesn’t set pay frequency, but most states do, ranging from weekly to monthly. Pick a schedule, stick to it, and tell employees what it is at hire. Direct deposit is the cleanest distribution method; paper checks work if delivered on the scheduled date. Most states require a pay stub showing gross wages, each deduction, and net pay. There is no federal pay-stub law, but the FLSA does require you to keep internal records of wages paid and deductions for each pay period.10U.S. Department of Labor. Recordkeeping and Reporting
Keep payroll records for at least three years under the FLSA. Records used to compute pay, such as time cards, schedules, and wage rate tables, must be kept for at least two years.20U.S. Department of Labor. Fact Sheet 21 – Recordkeeping Requirements Under the Fair Labor Standards Act (FLSA) For each non-exempt employee, records must include full name, Social Security number, address, hours worked each day and week, regular pay rate, total earnings, all deductions, and net wages.10U.S. Department of Labor. Recordkeeping and Reporting The IRS wants tax documents kept generally four years from the date the tax becomes due or is paid. Store I-9s separately and hold them for three years after hire or one year after employment ends, whichever is later.