So you hired your first employee in the Virgin Islands. Congratulations! Now what? There’s no single checklist the government hands you when you become an employer. You’re expected to know the registration requirements, set up withholding correctly, and run your first payroll without making expensive mistakes.
Here’s exactly what to do, in order.
Step 1: Get Your Federal Employer Identification Number
If you don’t already have an EIN, this comes first. Apply at IRS.gov — it’s free, takes about 10 minutes online, and you get your number immediately. You’ll use it on every payroll tax form, every W-2, and every 1099 you ever file.
Step 2: Register with the VI Bureau of Internal Revenue
The BIR is the territory’s tax authority. You need to register as an employer to establish your payroll tax account. That’s what lets you remit 501VI deposits and file 941VI quarterly returns. Contact the BIR directly for current employer registration forms. Main office: 6115 Estate Smith Bay, Suite 225, St. Thomas. Phone: (340) 715-1040. Additional offices in St. Croix.
Step 3: Register with the VI Department of Labor
In addition to the BIR, you need to register with VIDOL to set up your unemployment insurance (UI) account. The USVI has its own UI program, separate from any mainland state. As an employer, you pay UI taxes on covered wages. Register at vidol.gov or visit a VIDOL office. You’ll receive your UI account number, which you’ll need for quarterly wage reporting.
Step 4: Get Workers’ Compensation Coverage
Workers’ comp is required for virtually all USVI employers. The Virgin Islands operates its own Workers’ Compensation Administration (WCA). You need coverage before your employee starts — not after. Get it through the WCA or a private insurer licensed in the USVI. Operating without it and having an employee get injured on the job is a serious personal liability exposure.
Step 5: Have Your First Employee Complete Required Forms
- Form I-9 (Employment Eligibility Verification) — federal requirement, completed on or before the first day of work
- Form W-4 (Employee’s Withholding Certificate) — tells you how much federal income tax to withhold
- USVI Withholding Certificate — for VI income tax withholding (the USVI mirrors federal withholding under the Naval Service Appropriation Act, so W-4 info applies here too)
- Direct deposit authorization — routing and account number for NACHA processing
Step 6: Know What You Need to Withhold
| Withholding Type | Rate | Who Pays |
|---|---|---|
| USVI Income Tax | Based on W-4 / withholding tables | Employee (withheld by employer) |
| Social Security | 6.2% employee + 6.2% employer | Split |
| Medicare | 1.45% employee + 1.45% employer | Split |
| VIESA | 8% of gross wages | Employee (withheld by employer) |
Note: USVI employers don’t withhold federal income tax separately. The USVI income tax mirrors the federal tax under the mirror code. You file with the BIR, not the IRS, for income tax purposes.
Step 7: Set Your Deposit Schedule
New employers start on the monthly deposit schedule for the first calendar year. Deposit the taxes accumulated each month by the 15th of the following month using Form 501VI. Keep running totals of what you owe after each payroll run so the deposit amount isn’t a surprise.
Step 8: Post Required Notices
- VIDOL Minimum Wage poster (updated April 24, 2026 — get the new version from vidol.gov)
- Workers’ Compensation information
- EEOC poster
- FMLA poster (if you have 50+ employees)
Step 9: Run Your First Employee’s Payroll
With registrations complete and withholding set up, you’re ready. Before you run it, double-check:
- Gross pay is correct
- All four withholding types are calculated
- Employer shares of Social Security and Medicare are recorded
- A pay stub is generated for the employee
- Net pay is right
Step 10: Calendar Your First 941VI
Mark your first quarterly 941VI deadline now. Get your payroll records organized from day one. Reconciling a full quarter from messy records is much harder than keeping clean books from the start.
The Easier Way to Start
New employers who start on Lasinja get withholding calculations, form generation, and deposit tracking set up from their first payroll run. Your first 941VI generates automatically and your first W-2 is ready in January without any extra effort.
Hiring your first employee is a milestone. Don’t let the payroll side slow you down. Set up your first employee in Lasinja today.
Once you’re up and running, these guides will become your go-to resources: VIESA explained, Form 941VI line-by-line, 501VI deposit deadlines, and the 2026 compliance calendar. Bookmark them for easy reference when needed.