Nebraska Hiring Guide: Unemployment Tax at 1.25%, $15 Minimum Wage, Paid Sick Time and Workers Compensation for New Employers

Hiring your first employee in Nebraska means registering with several agencies, and none of them issues one master license. Nebraska has no general state business license and no county business license. Registration follows the activity instead: the Department of Revenue handles income tax withholding, the Department of Labor handles unemployment tax, and the Secretary of State handles your entity and any trade name. This guide covers the employer obligations that start with your first payroll, including Department of Revenue withholding, nebraska unemployment tax accounts, nebraska new hire reporting, minimum wage, paid sick time and workers' compensation.

This is informational content, not legal or tax advice. Payroll rules are easy to misapply, so confirm your situation with a CPA or employment attorney, especially if you use contractors, seasonal workers or employees in more than one state.

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Step 1: Register with the Department of Revenue Before Your First Payroll

Get a Nebraska ID from the Nebraska Department of Revenue and register for income tax withholding before you pay anyone. The withholding registration is tied to having employees, so treat it as a prerequisite for your first paycheck. You can start the process through the department's online business registration.

If your business also makes retail sales, rents or leases tangible personal property, or provides taxable services, you need a separate Nebraska sales and use tax permit. The state sales tax rate is 5.5%. Registration follows activity, so an employer that only pays wages and does not sell taxable items may not need the sales permit at all. Confirm which registrations apply to you on the Department of Revenue website.

Step 2: Open Your Unemployment Insurance Tax Account

Open an unemployment insurance tax account with the Nebraska Department of Labor (NDOL) through NEworks, the department's online system. Payroll tax questions belong with NDOL and the Department of Revenue. The U.S. Department of Labor does not administer Nebraska unemployment accounts.

New employers pay a new-employer rate. For 2026, that rate is 1.25% for non-construction employers and 5.40% for construction employers. The taxable wage base is $9,000 for most employers and $24,000 for employers in rate category 20. Check with NDOL which rate and wage base apply to your business before you calculate your first quarter's tax.

Employer type	2026 new-employer rate	Taxable wage base
Non-construction	1.25%	$9,000 ($24,000 for rate category 20)
Construction	5.40%	$9,000 ($24,000 for rate category 20)

For help with your account, call the NDOL unemployment insurance tax help line at (402) 471-9898.

Step 3: Report Every New Hire to DHHS

Nebraska requires employers to report each new hire or rehire to the Department of Health and Human Services (DHHS) within 20 days (48-2303). Rehires count, so the same report is due when a former employee returns. The statute also allows electronic transmissions 12 to 16 days apart. Ask DHHS how often your electronic reports must go out, which data fields are required and how to set up a reporting account before you hire anyone.

Most missed reports happen because no one owns the task. Assign it to a specific person, and add it to your onboarding checklist so the report goes out with the new hire's tax forms.

Step 4: Pay at Least the State Minimum Wage

Nebraska's minimum wage is $15.00 per hour starting January 1, 2026. It rises 1.75% each January 1 beginning in 2027. NDOL publishes the new rate each October 15 (48-1203), so check the published figure every fall before you set next year's pay scale. As a rough estimate, a 1.75% increase on $15.00 would put the 2027 rate near $15.26, but treat that as an estimate and confirm the official figure with NDOL.

Employees ages 14 and 15 may be paid a youth rate of $13.50 per hour. Confirm the conditions for using the youth rate with NDOL before you apply it to any employee.

Step 5: Plan for Paid Sick Time

The Healthy Families and Workplaces Act requires paid sick time for employers with 11 or more employees. The requirement has applied since October 1, 2025. Count your employees carefully as you grow, because crossing the threshold changes your obligations. Employers below the threshold should confirm with NDOL whether any part of the act applies to them.

For covered employers, confirm the accrual rate, carryover rules, how to count employees and any notice requirements with NDOL. Build the policy into your employee handbook and your payroll software before the first hire, not after an employee asks for leave.

Step 6: Buy Workers' Compensation Coverage Before the First Day

Nebraska requires workers' compensation coverage for employers with one or more employees (48-106). The statute includes exceptions, including household domestic workers and some farm work. Do not assume you are exempt because you are small or your employee works part time. A single part-time employee triggers the requirement unless an exception applies.

Put coverage in place before the employee starts work. Confirm your exemption status and coverage details with a licensed insurance agent or an attorney, because the right answer depends on the job duties and how you classify each worker.

Licenses That May Apply to Your Trade

Nebraska licenses by occupation, not by general business activity. Use this table to find the agency that governs your trade, then confirm the requirements directly with that agency.

Trade or activity	Who licenses or permits it
Electricians	State Electrical Division
Plumbers	The city or village nearest the job
Food and pesticide applicators	Nebraska Department of Agriculture (permits)
Health professions and child care	Department of Health and Human Services
Passenger carriers and household goods movers	Public Service Commission
Retail liquor sales	Liquor Control Commission, working with the city or county that grants the retail license

Local rules add another layer. Cities and counties may impose city sales taxes, city occupation taxes and zoning rules. Nebraska has 93 counties and 528 municipalities (cities and villages), so confirm the rules of the specific city or village where you will operate with the local clerk or planning office.

Set Up Your Entity and Trade Name

Your legal entity and any trade name are filed with the Nebraska Secretary of State, Business Services Division. The key items for a new employer are:

LLC formation: File a Certificate of Organization for $100. Every LLC must maintain a registered agent with a Nebraska office.
Publication: New LLCs and corporations must publish a notice in a legal newspaper for three successive weeks and file proof of publication with the Secretary of State.
Trade names: Register a trade name with the Secretary of State. Registration lasts 10 years. The fee is $100 online or $110 in office or by mail, and renewal is $110.
Recurring reports: LLCs file a biennial report in odd-numbered years, and corporations file a biennial report and occupation tax in even-numbered years.

Hiring Checklist and Key Dates

Register with the Department of Revenue for income tax withholding before the first payroll.
Open your unemployment insurance tax account through NEworks.
Set your payroll to meet the $15.00 minimum wage and the $13.50 youth rate where it applies.
Set up paid sick time if you will have 11 or more employees.
Bind workers' compensation coverage before the employee's first day.
Report each new hire or rehire to DHHS within 20 days.
Calendar the October 15 minimum wage announcement every year.
Calendar your entity's biennial report. LLCs file between January 1 and April 1 of odd-numbered years. Corporations are due March 1 of even-numbered years and are delinquent after April 15.

Official Resources

For unemployment accounts, minimum wage, paid sick time and new hire reporting, contact the Nebraska Department of Labor through NEworks or the unemployment insurance tax help line at (402) 471-9898. The Nebraska SBDC can also help you review your setup before your first hire.

Final Note

This guide is informational only and is not legal, tax or employment advice. Rates, wage figures and deadlines change, so confirm each one with the agency named before you act. For complex situations, including mixed employee and contractor workforces, multi-state payroll or ownership questions, consult a qualified CPA or attorney.