How to Register with Texas TWC as a New Employer

When you hire your first employee in Texas, one of your earliest legal obligations is registering with the Texas Workforce Commission (TWC). TWC administers the state's unemployment insurance (UI) program, and every employer who meets the coverage threshold must register, pay state unemployment taxes, and file quarterly wage reports.

Unlike states with income taxes (where you might also register with a state tax agency for withholding purposes), Texas has no state income tax. Your TWC registration is your only state-level payroll tax registration requirement. This guide walks you through the entire process, from determining when you must register to understanding your ongoing quarterly obligations.

When You Must Register

Texas law requires you to register with TWC as a liable employer when you meet either of the following thresholds:

• Wage threshold: You pay $1,500 or more in total wages to all employees during any calendar quarter
• Employment threshold: You employ one or more workers for at least some portion of a day in 20 or more different calendar weeks during a calendar year (the weeks do not need to be consecutive)

Once you meet either threshold, you must register with TWC within 10 days. Do not wait until the end of the quarter or until your first quarterly report is due. The 10-day clock starts from the date you first meet the liability criteria.

Voluntary Registration

Even if you do not meet the mandatory thresholds, you may voluntarily elect coverage with TWC. Some employers do this to provide their employees with access to unemployment benefits or to qualify for the FUTA credit. Voluntary coverage requires TWC approval and commits you to a minimum coverage period of two calendar years.

What You Need Before You Start

Gather the following information before beginning the TWC online registration. Having everything ready allows you to complete the process in a single session (typically 10–15 minutes):

1. Federal Employer Identification Number (EIN): Your 9-digit number from the IRS. If you do not have one, apply at IRS.gov using Form SS-4 (free, with instant online issuance).
2. Business legal name and any trade name or DBA (doing business as).
3. Business entity type: Sole proprietorship, general partnership, limited partnership, LLC, corporation, etc.
4. Texas Secretary of State filing number (if applicable — for LLCs, corporations, and other registered entities).
5. Business physical address and mailing address in Texas.
6. Date you first paid wages or expect to pay wages to Texas employees.
7. NAICS code (North American Industry Classification System): Identifies your industry. TWC uses this to assign your initial SUI rate. Look it up at the U.S. Census Bureau NAICS website.
8. Owner/officer information: Name, Social Security number, title, ownership percentage, and date of birth for each principal owner, partner, or corporate officer.
9. Number of employees currently employed or expected.
10. Prior TWC account number (if you previously had a Texas employer account under a different business entity — TWC may transfer your experience rating).

How to Register Online

TWC offers online employer registration through its Unemployment Tax Services (UTS) portal. Here is the step-by-step process:

Step 1: Go to twc.texas.gov

Navigate to the Texas Workforce Commission website and locate the "Unemployment Tax Services" section under "Employers." Click on "Register for an Unemployment Tax Account."

Step 2: Create a User Account

If you do not already have a TWC online account, you will need to create one. Provide a valid email address, create a username and password, and complete the security verification. TWC will send a confirmation email.

Step 3: Select Your Employer Type

Choose the appropriate employer type from the options: commercial employer, domestic employer, agricultural employer, nonprofit, or governmental entity. Most businesses select "commercial employer."

Step 4: Enter Your Business Information

Complete the registration form with your federal EIN, business name, entity type, address, NAICS code, date of first wages, and owner/officer details. The system validates your entries as you go and will flag any inconsistencies.

Step 5: Submit and Receive Confirmation

After reviewing your entries, submit the registration. You will receive an on-screen confirmation number. TWC typically processes online registrations within 3 to 7 business days. Your TWC Employer Account Number and initial tax rate will be mailed to your business address and also available in your online UTS account.

What You Receive After Registration

Once TWC processes your registration, you will receive the following:

• TWC Employer Account Number: This is your unique account number for all TWC correspondence, filings, and payments. It is formatted as a nine-digit number. This number is different from your federal EIN — use the correct one for each filing.
• Initial SUI Tax Rate: New employers are typically assigned a rate of 2.7% (the general new employer rate). Some industries receive a different initial rate based on historical claims data for that industry classification. Your rate notice specifies your exact rate and the taxable wage base ($9,000 per employee).
• Tax Rate Notice: TWC sends an annual rate notice each year, typically in November or December, showing your rate for the upcoming calendar year. Your initial rate applies until TWC has enough experience history (generally three complete fiscal years) to calculate an experience-based rate.
• Access to Unemployment Tax Services (UTS): With your account number, you can file quarterly wage reports (Form C-3), make tax payments, view your account history, and manage your employer profile online.

Quarterly Filing Obligations: Form C-3

Once registered, your primary ongoing obligation to TWC is filing the Employer's Quarterly Report (Form C-3) each quarter. This is Texas's equivalent of California's DE 9/DE 9C or the IRS Form 941.

What the C-3 Report Contains

The Form C-3 has two main components:

• Summary section: Total wages paid during the quarter, total taxable wages (wages up to $9,000 per employee), total tax due (taxable wages multiplied by your SUI rate), and payment information.
• Wage detail section: An employee-level listing showing each worker's name, Social Security number, and total wages paid during the quarter. TWC uses this data to determine unemployment benefit eligibility when employees file claims.

Filing Methods

You can file the C-3 in several ways:

• Online through UTS: The preferred method. Log into your UTS account, enter your wage data, and submit electronically. Payment can be made via ACH debit at the same time.
• Electronic file upload: If you have many employees, you can upload a formatted wage file directly to UTS rather than entering each employee individually.
• Paper filing: TWC still accepts paper C-3 forms mailed to their Austin processing center, though electronic filing is strongly encouraged.
• Through your payroll provider: If you use a payroll service like PDS Payroll, , or , they file the C-3 on your behalf as part of their service.

Filing Deadlines Table

C-3 quarterly reports and tax payments are due by the last day of the month following the end of the quarter:

If a due date falls on a Saturday, Sunday, or state holiday, the deadline is extended to the next business day. Payment must be received (not just postmarked) by the due date for paper filers; electronic payments must be initiated by the due date.

Electronic Filing Requirements

TWC encourages all employers to file electronically through the UTS portal. While electronic filing is not technically mandatory for all employers, it offers significant advantages:

• Faster processing: Electronic filings are processed immediately, reducing the risk of late-filing penalties due to mail delays.
• Automatic calculations: The UTS system calculates your tax due based on the wages you enter, reducing math errors.
• Immediate confirmation: You receive a confirmation number upon submission, providing proof of timely filing.
• Integrated payment: You can authorize an ACH debit from your bank account at the time of filing.
• Account access: View your filing history, tax rate, account balance, and any correspondence from TWC.

Employers with 250 or more employees in Texas are required to file the wage detail portion of the C-3 electronically (either through UTS or by electronic file upload). Smaller employers are strongly encouraged to do so but may still file by paper.

Texas New Hire Reporting

In addition to TWC registration and quarterly reporting, Texas employers must report all newly hired and rehired employees to the Texas Attorney General's Office (not TWC) within 20 days of the employee's start date.

• What to report: Employee's name, address, Social Security number, date of hire, and your employer name, address, and federal EIN.
• How to file: Online through the Texas New Hire Reporting portal (newhire.com/tx), by fax, or by mail.
• Why it matters: New hire reporting is primarily used to locate parents who owe child support and to detect fraudulent unemployment and public assistance claims. Federal law requires this reporting in all states.

Penalties for Late Filing and Non-Compliance

TWC imposes penalties for employers who fail to register, file, or pay on time. Understanding these penalties helps you appreciate the importance of timely compliance:

Late Payment Penalties

• Interest on late taxes: TWC charges interest at a rate of 1.5% per month (or fraction of a month) on unpaid tax balances, starting from the day after the due date.
• Penalty for late payment: A penalty of 5% of the tax due is assessed if payment is not received by the due date.

Late Filing Penalties

• Failure to file: If you do not file the C-3 by the due date, TWC may assess an estimated tax based on your previous filings or industry average, plus applicable penalties and interest.
• Incomplete wage detail: If you file the summary portion but omit or have errors in the employee wage detail, TWC may assess additional penalties and your employees may have difficulty claiming unemployment benefits.

Failure to Register

• Operating without registration: Employers who meet the liability threshold but fail to register with TWC face back-assessment of all taxes owed from the date they became liable, plus penalties and interest on the entire amount.
• This can be significant: If you have been operating for a year or more without registering, the back taxes, penalties, and interest can add up quickly. TWC conducts audits and cross-references IRS data to identify unregistered employers.

Other Compliance Issues

• Misclassifying employees as independent contractors: TWC takes worker misclassification seriously. If an audit determines that workers you classified as 1099 contractors should have been W-2 employees, TWC will assess back SUI taxes on all wages paid to those workers, plus penalties and interest.
• Fraud: Knowingly filing false information or failing to report wages to avoid tax liability can result in criminal penalties under the Texas Unemployment Compensation Act.

Common Registration Mistakes to Avoid

• Waiting too long to register: The 10-day window is tight. Do not wait until the end of the quarter or your first C-3 due date. Register as soon as you first pay qualifying wages.
• Confusing TWC account number with federal EIN: These are two different numbers for two different agencies. Use your TWC account number for all Texas SUI filings, and your federal EIN for IRS filings.
• Wrong NAICS code: Your industry classification affects your initial SUI rate. Double-check that you select the correct NAICS code during registration. Correcting it later requires contacting TWC.
• Not reporting successor status: If you acquired a business that already had a TWC account, you may be eligible to inherit that business's experience rating. Failing to report successor status means you start with the default new employer rate instead of potentially inheriting a lower rate.
• Ignoring voluntary coverage: If you do not yet meet the mandatory threshold but plan to grow quickly, voluntarily registering early ensures your employees have UI coverage and you begin building an experience rating history sooner.

Payroll Software That Handles TWC Filing

The easiest way to ensure timely and accurate TWC compliance is to use payroll software that automates your C-3 filings and tax payments. Here are three options that work well for Texas employers:

• PDS Payroll: Full-service payroll provider that handles TWC registration, quarterly C-3 filings, tax payments, and multi-state compliance for businesses with employees in Texas and beyond.
• : Automates Texas SUI reporting, files your C-3 each quarter, calculates and remits your SUI taxes, and handles federal payroll taxes. Ideal for small businesses and startups. Free trial available.
• : Comprehensive payroll and HR solution that manages TWC filings, tax deposits, new hire reporting, and W-2 generation. Strong customer support for Texas-specific questions.

Frequently Asked Questions

How long does TWC registration take?

The online registration through UTS takes approximately 10 to 15 minutes to complete. TWC processes the application within 3 to 7 business days. Your account number and initial rate assignment are mailed to your business address and become available in your UTS online account.

Do I need to register with TWC if I only have 1099 contractors?

No. TWC registration is required only when you have W-2 employees who meet the liability thresholds. Independent contractors do not trigger the registration requirement. However, ensure your workers are correctly classified — TWC audits for misclassification and can reclassify contractors as employees if the working relationship does not support independent contractor status.

What if I have employees in Texas and other states?

You must register with each state where you have employees. Your TWC registration covers only Texas-based employment. If you hire a remote employee in another state, you must register with that state's unemployment insurance agency and comply with its payroll tax requirements. A multi-state payroll provider like PDS Payroll can manage registrations and filings across all states.

Can my payroll provider register with TWC for me?

Some payroll providers, including Gusto, will handle the TWC registration process on your behalf as part of their employer onboarding. Check with your provider to see if this is included. Even if they register for you, it is a good idea to set up your own UTS online account so you can view your SUI rate, account balance, and any TWC correspondence directly.

What happens if I close my business?

If you permanently stop employing workers in Texas, you should close your TWC account by contacting TWC or updating your account status through UTS. File a final C-3 report for the last quarter in which you paid wages. Failure to close your account means TWC will continue expecting quarterly filings, and non-filing penalties will accrue.

Is TWC registration the same as getting a Texas business license?

No. TWC registration is specifically for unemployment insurance tax purposes. It is not a general business license or permit. Depending on your business type and location, you may also need permits from your city, county, or state licensing agencies. TWC registration does not satisfy those requirements.