How to Do Payroll in Michigan: A Step-by-Step Guide

Last reviewed: July 2026

Michigan payroll follows the federal pattern closely, but a few local details still trip up first-time employers: a state withholding certificate that isn't the same as the federal W-4, a taxable wage base that can shift depending on your account standing, and a semimonthly pay rule with its own due dates if you choose that schedule. Here's the full sequence, start to finish.

1. Get Your Federal EIN

Start with a federal Employer Identification Number. Apply free at IRS.gov, and you'll have it within about fifteen minutes. Every state registration that follows, along with your business bank account and payroll software, needs this number.

2. Register with Michigan Treasury

Register for a withholding account with the Michigan Department of Treasury. This lets you withhold Michigan's flat-rate income tax from employee paychecks and remit it on the schedule Treasury assigns based on your expected withholding volume.

3. Register for SUI with the UIA

Register with the Unemployment Insurance Agency (UIA), part of the Department of Labor and Economic Opportunity. New employers pay 2.7% (5% for construction) in 2026 on a taxable wage base of $9,000 per employee, which rises to $9,500 if your account falls delinquent on payments.

This tax is fully employer-paid. Your rate becomes experience-rated after a couple of years, moving up or down based on how many former employees have drawn unemployment benefits against your account.

4. Collect Employee Paperwork

Before day one, collect three forms from every new hire:

• Form I-9, verifying work eligibility, with Section 2 completed within three business days of the start date.
• Federal Form W-4, for federal withholding.
• Form MI-W4, the Michigan Withholding Exemption Certificate. Without it, Treasury requires withholding with zero exemptions.

Report the new hire to the Michigan New Hire Operations Center within 20 days of the start date. Most payroll software submits this automatically once the hire is entered into the system.

5. Set a Legal Pay Schedule

Michigan allows weekly, biweekly, semimonthly, or monthly pay, provided paydays are regular and posted where employees can see them. If you choose semimonthly, wages earned from the 1st through the 15th are due by the 1st of the following month, and wages from the 16th through month's end are due by the 15th of the following month.

Hourly employees generally must be paid at least every two weeks, while salaried staff can be paid on a longer cycle. Whatever schedule you settle on, keep it consistent; the Michigan Payment of Wages and Fringe Benefits Act treats an irregular schedule as a compliance flag on its own.

6. Run Payroll and Make Deposits

Each pay period, calculate gross wages, apply federal withholding from the W-4, apply Michigan withholding from the MI-W4, and withhold the employee's share of Social Security and Medicare. You owe a matching FICA amount as the employer, on top of federal and state unemployment tax.

Federal deposits follow the IRS's semiweekly or monthly schedule and get reported quarterly on Form 941. State withholding deposits follow the schedule Treasury assigned at registration. Our paycheck calculator shows federal and Michigan withholding side by side, and the W-4 helper walks new hires through both forms before their first check.

7. Close Out the Year

W-2s are due to employees and the Social Security Administration by January 31. Michigan also expects an annual reconciliation of withholding through the Treasury's online system, so the totals reported on your W-2s line up with what you deposited across the year. Filing this reconciliation in January, rather than waiting, avoids the scramble that late notices tend to create.

Frequently Asked Questions

How do I set up payroll for the first time in Michigan?

Get a federal EIN from the IRS, register with Michigan Treasury for withholding, register with the Unemployment Insurance Agency for a SUI account, collect I-9, W-4, and MI-W4 forms from each employee, then pick a pay schedule and run your first payroll.

What state tax form replaces the W-4 in Michigan?

Michigan employees fill out Form MI-W4, the Employee's Michigan Withholding Exemption Certificate, alongside the federal W-4. Without one on file, you withhold state tax with no exemptions applied.

How often do Michigan employers have to pay employees?

Michigan lets employers choose weekly, biweekly, semimonthly, or monthly pay, as long as paydays are regular and posted. Semimonthly filers must pay wages from the 1st through the 15th by the 1st of the next month, and the rest of the month by the 15th.

When do new hires need to be reported in Michigan?

Michigan employers must report every new hire and rehired employee to the Michigan New Hire Operations Center within 20 days of the start date.