How to Do Payroll in Connecticut

Last reviewed: July 2026

Connecticut employers answer to two state agencies before the first paycheck goes out: the Department of Revenue Services for income tax withholding, and the Department of Labor for unemployment insurance. Neither registration substitutes for the other, and both need to be in place before you process payroll. Here is the order that keeps you compliant from day one.

Step 1: Get a Federal EIN

Apply for your Employer Identification Number at irs.gov/ein. The application is free, and an online submission during business hours returns your EIN immediately. Every state registration below asks for this number.

Step 2: Register With DRS

Connecticut taxes wages at the state level, so register for a withholding account through the Department of Revenue Services (DRS) before your first payroll. The account number you receive goes on every withholding return and deposit you file afterward.

Employees claiming Withholding Code E, more than 14 reductions, or exempt status require a copy of their CT-W4 sent to DRS separately, so build that check into your onboarding paperwork.

Step 3: Register for SUI With CTDOL

Unemployment insurance is administered by the Connecticut Department of Labor, a separate registration from DRS. Once approved, you'll receive an account number and a rate.

• New employer rate: 1.9% for 2026, down from 2.2% the prior year.
• Taxable wage base: $27,000 per employee for 2026.
• Fund solvency tax: an additional 1.0% applies on top of your charged rate.

From the Payroll Desk

Connecticut phases in the higher 2026 wage base with a rate adjustment, so don't assume last year's rate notice still applies. Wait for the current one before budgeting SUI costs.

Step 4: Set Up Withholding

Connecticut relies on its own form rather than the federal W-4 alone: the CT-W4, Employee's Withholding Certificate. Employees pick a lettered withholding code (A through F) based on filing status and combined spousal income, and if no CT-W4 is filed, you're required to withhold at the highest rate.

Our W-4 Helper walks new hires through both the federal form and the concepts behind the CT-W4 code selection, and the paycheck calculator shows how a chosen code changes take-home pay.

Step 5: Choose a Pay Frequency

Weekly pay is Connecticut's default rule. If weekly payroll doesn't fit your business, you can apply to the Department of Labor to establish a less frequent schedule, though it can never run less often than monthly. Whatever schedule you land on, wages are due no more than 8 days after the pay period ends.

Step 6: Deposits and Filing Calendar

Federal deposit frequency (monthly or semiweekly) is set by your lookback-period liability, and Connecticut withholding deposits typically follow a comparable schedule tied to the amount withheld. Every quarter you'll reconcile federal withholding on Form 941; see our Form 941 guide for the line-by-line breakdown.

On the state side, plan for quarterly DRS withholding filings and CTDOL wage reports, both due on their own calendars. Build every due date into a shared calendar the week you register, not the week before a deadline.

Step 7: Year-End: W-2s

W-2s go out to employees and to the Social Security Administration by January 31. Connecticut requires its own year-end reconciliation of state withholding, filed with DRS. Getting your account numbers right at registration makes this step mostly automatic if you're running payroll software.

Frequently Asked Questions

How often do I need to pay employees in Connecticut?

Weekly is the default under Connecticut law. Employers can apply to the Department of Labor for a less frequent schedule, such as biweekly or semimonthly, but pay periods can never run less often than once a month, and wages are due within 8 days of the period's end.

What is the Connecticut new employer SUI rate?

New employers pay 1.9% for 2026, applied to the first $27,000 of each employee's wages. A 1.0% fund solvency tax also applies on top of the base charged rate.

Which form handles Connecticut state withholding?

Form CT-W4, Employee's Withholding Certificate. Employees select a withholding code based on filing status and combined household income, and employers must withhold at the highest rate if no CT-W4 is on file.

When do I need to report a new hire in Connecticut?

Within 20 days of the hire date. Report to the Connecticut Department of Labor's New Hire Registry, typically by submitting a copy of the employee's CT-W4.

Gusto automates the DRS and CTDOL filings above once your account numbers are entered, including the CT-W4 code logic and quarterly SUI reports. If manual tracking of Connecticut's weekly-pay default sounds like a chore, take a look at Gusto.