Hiring Your First Employee in Michigan (2026)
The Michigan-specific steps for a first W-2 hire, layered on top of the federal checklist. Every figure links to the state agency or official source we checked.
Minimum wage
$13.73/hour in 2026, and scheduled to rise again in 2027.
State unemployment tax (SUTA)
New employers typically pay 2.7%, and the taxable wage base is $9,000 for qualified employers. Employers delinquent on UI taxes pay on $9,500 instead.
Income tax withholding registration
Register for state income tax withholding with the Michigan Department of Treasury, either online through Michigan Treasury Online or with Form 518, and with the UIA for unemployment. Some Michigan cities, such as Detroit, levy their own income tax. Employees file Form MI-W4.
New-hire reporting
Report within 20 calendar days of hiring or rehiring to the Michigan New Hires Operation Center.
Workers' compensation
Required if you regularly employ 3 or more employees at one time, or if even one employee has worked 35 or more hours a week for 13 or more weeks in the past 52 weeks.
Paid sick leave, family leave & disability
Under the Earned Sick Time Act, employees accrue at least 1 hour per 30 hours worked. Small employers (10 or fewer employees) can cap annual use at 40 hours; larger employers can cap it at 72 hours. You can frontload the hours instead of tracking accrual. Michigan has no state paid family leave or disability insurance program.
Required posters
LEO lists the wage-and-hour posting requirements, including the minimum wage poster and the Earned Sick Time Act notice. MIOSHA has separate safety posters. Federal posters apply too; the DOL FirstStep Poster Advisor shows which ones. Official posters are free.
Worked example: one full-time employee at $18/hour
This uses the same assumptions as our employee cost calculator: $18/hour, 40 hours a week, 52 weeks, 2026 federal rates, and Michigan's new-employer SUTA rate. Workers' comp is a placeholder; your insurer's rate for the job class will differ.
| Wages: $18 × 40 h × 52 weeks | $37,440.00 |
| Social Security (6.2%) | $2,321.28 |
| Medicare (1.45%) | $542.88 |
| FUTA (0.6% of first $7,000) | $42.00 |
| MI unemployment: 2.7% of first $9,000 | $243.00 |
| Workers' comp, illustrative $1.00 per $100 of payroll | $374.40 |
| Total before benefits | $40,963.56 |
That's 1.09× wages, or about $19.69 per hour paid, before benefits, paid leave, and payroll software. $18/hour is above Michigan's 2026 minimum wage.
FAQ
What is the Michigan SUTA rate for new employers in 2026?
New employers typically pay 2.7%, and the taxable wage base is $9,000 for qualified employers. Employers delinquent on UI taxes pay on $9,500 instead.
Is workers' comp required for my first employee in Michigan?
Required if you regularly employ 3 or more employees at one time, or if even one employee has worked 35 or more hours a week for 13 or more weeks in the past 52 weeks.