Register as an Employer in Virginia: Virginia Tax Withholding, VEC Account and First Hire Checklist

Before your first paycheck, a Virginia employer needs to register for withholding with Virginia Tax, register with the Virginia Employment Commission (VEC) for unemployment tax once it meets the liability test, arrange workers' compensation once it has three or more employees, post the required notices, and set up pay practices that meet Virginia's wage and hiring rules. This guide walks through those steps in the order most new employers handle them, with the fees, deadlines and filing rules you need.

This article is informational content, not legal or tax advice. Rules, rates and deadlines change. Items marked (verify) are not settled figures in this guide, so confirm them with the named agency before you rely on them. For complex payroll, multiple owners, or contractor versus employee questions, consult a qualified attorney or CPA.

Before You Hire: Confirm Your Entity

Virginia has no general statewide business license. The State Corporation Commission (SCC) forms your entity and issues no business license. If you form an LLC, the Articles of Organization (Form LLC1011) cost $100 and are filed online through the SCC Clerk's Information System at cis.scc.virginia.gov. Online filings can be expedited: next day for $50 or $100 (submitted by 2:00 PM Eastern, response by 4:00 PM the next business day), or same day for $200 (submitted by 10:00 AM Eastern, response by 4:00 PM). Expedited service is online only and nonrefundable.

A Virginia LLC files no annual report. It pays a $50 annual registration fee to the SCC, due the last day of the 12th month after the month the LLC was organized and every year after that. The SCC assesses the fee about two months ahead. A late payment adds a $25 penalty, and the LLC is canceled at the end of the third month after the due date.

A stock corporation files Articles of Incorporation (Form SCC619, $75) and pays by authorized shares: $100 for up to 5,000 authorized shares, plus $30 for each additional 5,000 shares (check the SCC annual fee schedule). The annual registration fee is due the last day of the formation month, and the annual report is due the last day of the 12th month after formation. It may be filed no earlier than three months before that date.

If you do business under a name other than your legal name, file an assumed name certificate with the SCC for $10. It is not filed with the circuit court, and no newspaper publication is required. To hold a name before you file, a name reservation costs $10 and lasts 120 days. An LLC name must include limited company, limited liability company, LC, L.C., LLC or L.L.C., and it must be distinguishable from names already on file.

A Virginia entity must also keep a registered agent. That agent must be a Virginia resident with a Virginia street registered office available during business hours, and must be either a member of the Virginia State Bar or a member, manager, officer, trustee or general partner of the entity. An entity cannot be its own agent.

How to Hire Your First Employee in Virginia: The Checklist

Work through these in order. Items 1 and 2 are the two registrations to complete first, and the VEC account is required once you meet its liability test.

1. Open a Virginia Tax withholding account. Register online with Virginia Tax at tax.virginia.gov. You will need your FEIN, NAICS code, business start date and responsible party information. Use paper Form R-1 only when online registration is blocked. You must withhold on any wages that federal law requires withholding on, and you must file even when no tax is owed. Your filing frequency follows your withholding liability:
   • Under $100 a month: quarterly on Form VA-5, due April 30, July 31, October 31 and January 31.
   • $100 to under $1,000: monthly on Form VA-5, due the 25th of the following month.
   • $1,000 or more: semi-weekly. Form VA-15 is due within three banking days when withholding exceeds $500, followed by Form VA-16 each quarter.
   Everything is filed electronically. Form VA-6 and any W-2 or 1099 showing Virginia withholding are due January 31. Employers with no more than five employees may request a waiver from semi-weekly filing (Tax Bulletin 15-3).
2. Register for unemployment tax with the VEC. You are liable if you owe federal unemployment tax, if your quarterly payroll is $1,500 or more, or if you employ someone for at least 20 weeks in a calendar year. Agricultural, domestic and nonprofit employers have different tests. Register online through the VEC's Employer Self Service. Mailing Form VEC FC-27 is only for employers who have met a liability test on the form. The VEC then mails a New Employer notice with your account number and rates. The taxable wage base is $8,000 per employee per year (Va. Code 60.2-229). Quarterly reports and tax are due April 30, July 31, October 31 and January 31, and they must be filed electronically (eForm FC20/21, Employer Self Service or Web Upload). The VEC's FAQ gives new employers an initial base rate of 2.5 percent plus add-ons until a calculated rate applies. Check with the VEC for the current add-ons before you budget. A late report carries a $100 penalty per report without good cause (Va. Code 60.2-513).
3. Arrange workers' compensation at three or more employees. Once you have three or more employees, you need workers' compensation coverage in place. Get the policy before the third person starts work, and compare quotes from licensed insurance agents rather than accepting the first offer.
4. Post the required notices. Post the Job Safety and Health Protection poster, the workers' compensation notice and the Earned Income Tax Credit publication, along with the others on the VEC's required posters list. Post them where employees can read them, and check the VEC list for updates, since required postings can change.
5. Set up pay rules that meet Virginia law. The state minimum wage is $12.77 in 2026, $13.75 in 2027 and $15.00 in 2028. Read the current paid sick leave and paid family leave rules before you write your policies. Under the pay range and pay history law (Va. Code 40.1-28.7:12, effective July 1, 2026, verify details), every public and internal job posting must state the wage or salary range, and that range must be set in good faith. Employers may not seek or rely on a candidate's pay history. The Attorney General can seek civil penalties of up to $1,000 for a first violation and up to $5,000 for later violations. An individual can sue within one year, but only after the employer has had a chance to correct a posting problem.
6. Classify every worker correctly. Va. Code 40.1-28.7:7 presumes that a person paid for services is an employee unless the employer shows that the person is an independent contractor under IRS guidelines. The limit for filing suit is three years (verify 2026 changes). The VEC may penalize misclassification under Va. Code 60.2-513. Document each contractor relationship before the first payment.
7. Review the other 2026 changes and report new hires. Each item below needs verification. A noncompete is unenforceable against an employee discharged without cause and without severance, for agreements signed on or after July 1, 2026 (Va. Code 40.1-28.7:8, verify). Noncompetes with low-wage employees are barred (verify). The threshold for Human Rights Act coverage may have dropped to five employees, so check the current Code before you state a number to anyone. For the new-hire reporting deadline and portal, check with the Virginia Division of Child Support Enforcement.

Local Taxes Are Separate: BPOL and Personal Property

Virginia's business license is a local tax, not a state one. The Business, Professional and Occupational License (BPOL) tax is levied under Va. Code 58.1-3700 and following, administered by each city or county, usually through the Commissioner of the Revenue. Not every locality levies a general license. Va. Code 58.1-3704 allows a locality to levy none, and examples without a general county license include Stafford, Rockingham, Bedford County, Washington County, Montgomery County, Louisa and Fluvanna. Towns can displace the county tax. Do not assume your locality charges BPOL or uses the same rate as the next one over. Localities set their own rates and filing deadlines.

State law sets a floor that depends on population. A locality with more than 50,000 people cannot require a license for gross receipts under $100,000. For a locality with 25,000 to 50,000 people, the floor is under $50,000. No floor applies under 25,000 people. Localities over 50,000 may waive the license up to $200,000 (verify the waiver ceiling with your locality). Regulated trades and professions also need licenses from state boards such as DPOR, the Department of Health Professions, VDACS and ABC, which are separate from BPOL.

Business personal property tax is also set locally and is separate from your payroll registrations. Confirm your city or county rules with the Commissioner of the Revenue before your first filing year closes.

Where to Get Help

The Virginia Small Business Development Center network offers free and low-cost advising at virginiasbdc.org. The SBA Richmond district office, at sba.gov/district/richmond, is another starting point. If you are choosing a payroll provider, evaluate vendors separately from these registrations, because your Virginia Tax and VEC accounts stay with you regardless of which software runs your payroll.

Confirm every fee and deadline on the agency page before you file. Virginia rules change often. For complex situations, including multiple owners, mixed contractor and employee roles, or a multi-locality operation, work with a qualified attorney or CPA before you run your first payroll.