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Starting a Business - How to Open an Account

Step 1

Read the Small Business Guide to learn what’s required to start and operate a business in Washington:

  • For instructions for business licensing and hiring employees, read the "Start" chapter. 
  • For ongoing responsibilities, read the "Run" chapter.

Step 2

File a Business License Application with the Department of Revenue (DOR). Indicate on the application that you intend to hire an employee. If you plan to hire a worker under the age of 18, apply for a Minor Work Permit as part of your business license application.

Need help applying? Download our step-by-step guide.

When can I hire workers?
You may start hiring as soon as you have completed and submitted your Business License Application, as long as you have indicated that you plan to hire.

Step 2

DOR will process your application, and notify L&I to open a workers' compensation account. They will also notify the Employment Security Department (ESD) to open an unemployment insurance account.

Within 2 weeks, you'll receive a letter from your new workers' comp account manager, and a packet of information that includes:

  • Your workers' comp rate.
  • The amount you can deduct from your employees' paychecks
  • Instructions for filing your quarterly reports.
  • Required posters for your workplace.
  • Notification of workplace safety and health requirements

How much will I need to pay in premiums?
The packet we send you will include your workers' comp rate. This rate is based on the risk classification we assign you, which is determined by the business activity you noted on your business license application. If we have questions, we will call you for more information.

The rates for each risk class are calculated based on the frequency and severity of illnesses and injuries affiliated with that activity. With some exceptions, rates are stated in cost per worker hour.

When and how do I pay my premiums?
Premium payments are due quarterly, and you can pay them online.

To complete your quarterly report, you will total up worker hours for the preceding calendar quarter and multiply them by your rate. For example, if your rate is $0.7126 and you had 5 employees who worked a total of 2164 hours during the quarter, your premium would be $1,542.07 ($0.7126 x 2164 hours).

Step 4

  • Read the Small Business Guide to understand your obligations as an employer. Specifically:
    • In the "Grow" chapter, read section 2, "Employees".
    • In the "Run" chapter, read sections 4 and 5 regarding employment taxes.
  • Report any employees to the DSHS New Hire Reporting Program within 20 days of hire.

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