How to Start a Cleaning Business in Michigan

Michigan is a quietly good place to start a cleaning business. LLC formation is one of the cheapest in the country — $50 up front, $25 a year — services aren't subject to the 6% sales tax, and the state has no janitorial bonding regime and no AB 5-style ABC test. The pieces to learn before your first job: the 3-employee workers' comp threshold under MCL 418.115, the new Earned Sick Time Act schedule that pulled small employers in on October 1, 2025, and the 24 cities — Detroit foremost — that levy a local income tax on every hour your crew works inside their limits.

1. Pick a business structure

For a one-to-three-person crew, the practical comparison is a Michigan LLC versus a sole proprietorship. The sole prop is free and lets you start tomorrow, but it leaves your personal assets exposed to any customer claim, employee injury, or vehicle incident. A Michigan LLC costs $50 to form and $25 a year to keep in good standing — one of the lowest combined LLC costs in the country. For almost any operator planning to hire help or chase a commercial account, the math works.

To form one, file Articles of Organization (Form CSCL/CD-700) with LARA's Corporations, Securities & Commercial Licensing Bureau (CSCL) — Corporations Division through the MiBusiness Registry. Online filings typically clear in 7–10 business days, with expedited tiers available for an added fee. If you'd rather not handle the paperwork, Northwest Registered Agent will file the CD-700 and act as your resident agent for a modest annual fee.

2. Register with the state

Run a name search in the MiBusiness Registry to confirm the name is distinguishable from existing Michigan entities. The CD-700 asks for your members or managers, your purpose, and your resident agent and registered office — which must be a physical Michigan street address under MCL 450.4207. No P.O. boxes. You can serve as your own resident agent if you are a Michigan resident available during business hours.

Once formed, every Michigan LLC files an Annual Statement (Form CSCL/CD-2700) with LARA by February 15 each year for $25, beginning the year after formation. The fee is small; the calendar reminder is the important part. Miss the filing repeatedly and LARA will move your entity into "not in good standing" status, and eventually dissolution.

3. Get your EIN and a business bank account

Apply for a free Employer Identification Number at irs.gov. It takes about ten minutes; ignore the look-alike sites that charge a fee. With the EIN letter and your stamped LARA Articles in hand, most Michigan banks will open a business checking account the same day. Run every dollar of cleaning income and supply purchase through that account from day one, paired with QuickBooks — that single discipline makes city payroll filings and the annual statement dramatically less painful.

4. Business licenses and permits

Michigan does not have a statewide cleaning-business license. Specialty work that touches asbestos, lead paint, mold remediation, or regulated food-handling can trigger separate LARA or EGLE permits, but standard residential and commercial cleaning is not in that category. What you file depends on where you operate:

• Detroit — Every business operating inside city limits needs a Certificate of Occupancy from the Zoning Division for any physical location, plus a Business License through the Buildings, Safety Engineering and Environmental Department (BSEED), filed through Accela/eLAPS. If you clean food-service or medical facilities, the Detroit Health Department also requires an Environmental Health Clearance.
• Grand Rapids — No general business license, but Grand Rapids regulates specific trades and home-based occupations. A standard cleaning service is not in the licensed-trades list; if you run the business from your home, run the zoning check.
• Lansing, Ann Arbor, and most other Michigan cities — No general business license for cleaning. Check home-occupation rules if you operate from a residence.

Sole proprietorships and general partnerships operating under any name other than the owner's legal name file a Certificate of Assumed Name with the county clerk in each county of operation — Wayne for Detroit, Kent for Grand Rapids, Washtenaw for Ann Arbor. LLCs and corporations file assumed names with LARA instead.

5. Sales tax on cleaning services

This is the easy section in Michigan: cleaning services are not subject to Michigan sales tax. The General Sales Tax Act taxes retail sales of tangible personal property, and the statute does not list janitorial or routine cleaning among taxable services. Both residential and commercial cleaning labor are outside the 6% tax. The rate is 6% state with no local add-on — Michigan's constitution prohibits local sales taxes, so it's 6% in every county.

Two edges to know:

• If you separately resell supplies, equipment, or consumables to clients as line items on the invoice, those product sales are taxable and you need a Michigan sales tax license. Register through Michigan Treasury Online at mto.treasury.michigan.gov or on paper via Form 518.
• Legislative proposals to expand the 6% tax to currently-exempt services circulated in 2025. As of May 2026 none have been enacted, but it's worth watching if you build long-range pricing.

6. Insurance and bonding

Carry general liability before your first paying job. Michigan does not mandate a minimum, but commercial clients and property-management vendor portals almost universally ask for $1M per occurrence / $2M aggregate on a Certificate of Insurance. Next Insurance is one of the easier paths to a fast online quote for a small janitorial GL policy; a local broker is worth talking to once you carry multiple commercial accounts.

Workers' compensation in Michigan is set by MCL 418.115. A private non-agricultural employer must carry coverage when either condition is true:

• You regularly employ 3 or more employees at one time, or
• You regularly employ fewer than 3, but at least one of them has worked 35 or more hours per week for 13 or more consecutive weeks during the preceding 52 weeks.

A solo owner-operator is exempt. The line where coverage becomes mandatory is the moment you add a regular full-time helper or your third part-time crew member. Member-managers of an LLC and corporate officers have separate inclusion/exclusion rules — the Workers' Disability Compensation Agency at LEO is the source.

Michigan does not have a janitorial-registration or bonding program comparable to California's AB 1978. A small voluntary janitorial dishonesty/fidelity bond ($10,000–$25,000) is a market-credibility item for higher-end accounts, but it's a sales credential, not state law.

7. Hiring and payroll

Michigan's 2026 minimum wage is $13.73/hour standard, effective January 1, 2026, under the post-Mothering Justice restoration of the 2018 ballot initiative. The tipped rate is $5.49/hour (40% of standard, provided tips bring the employee to full minimum), and the youth (16–17) rate is $11.67/hour. The tipped wage is on a multi-year glidepath toward full minimum — verify the next step before budgeting past 2026.

The Earned Sick Time Act replaced the old Paid Medical Leave Act after the 2024 Mothering Justice ruling and the 2025 ESTA 2.0 amendments. Accrual is 1 hour for every 30 hours worked. The annual use caps depend on headcount:

• 11 or more employees (in 20+ workweeks in the current or prior calendar year): up to 72 hours/year, effective February 21, 2025.
• 10 or fewer employees: up to 40 hours/year, effective October 1, 2025.

Headcount includes everyone nationwide — full-time, part-time, temp, and staffing-agency workers. Michigan has no state paid family leave program; federal FMLA still applies at 50+ employees within a 75-mile radius.

For worker classification, Michigan uses a common-law / economic-reality test — no ABC presumption is in force, though SB 6 (introduced in 2025) would adopt one. The Attorney General's Payroll Fraud Enforcement Unit actively reviews misclassification on referral. A cleaner who works only for you, on your schedule, with your supplies and your branding almost always reads as a W-2 employee on UIA or LEO audit. Gusto handles Michigan UIA, the city-tax withholding described below, and ESTA tracking out of the box; the hiring guide walks through when to convert your first regular helper to W-2.

The piece Michigan operators most often underestimate is local income tax. 24 cities levy a local income tax under the Uniform City Income Tax Ordinance (Act 284 of 1964):

• Detroit: 2.4% resident / 1.2% non-resident.
• Grand Rapids and Saginaw: 1.5% / 0.75%.
• Lansing, Flint, Battle Creek, Pontiac, Port Huron, Jackson, Muskegon, and 14 other "ordinance cities": 1.0% / 0.5%.

Non-resident withholding follows where the work is physically performed, day by day. A suburban cleaner who works two days a week inside Detroit owes Detroit non-resident tax only on those days' wages — but as the employer, you must register, withhold, and remit. Many small operators discover this only after an audit notice; build job-site payroll tracking from day one.

8. Get your first clients

Michigan cleaning markets are regional. Metro Detroit carries the bulk of commercial and residential volume; Grand Rapids and West Michigan lean residential and small-commercial; the Up North vacation-rental corridor from Traverse City through Mackinac runs seasonal. Three veins worth knowing:

• Suburban residential and recurring maid service in places like Troy, Novi, Rochester Hills, Ada, and the Ann Arbor townships, where Nextdoor, Google reviews, and realtor referrals carry most early bookings.
• Short-term rental turnover cleaning along the Lake Michigan shoreline and the Traverse City area, where reliability and same-day turnover capacity win contracts — see the Airbnb cleaning playbook.
• Commercial office and medical cleaning in downtown Detroit, Southfield, and the Grand Rapids CBD, driven by direct outreach to property management firms.

In all three veins, online reviews compound. Set up the Google Business Profile the week you incorporate, ask every happy client for a review within 48 hours of the job, and use a tool like NiceJob to automate the ask once volume justifies it. The lead generation page has the longer playbook.

9. Pick your software stack

For a Michigan operator whose work skews residential and small-commercial, the residential-cleaning-business stack is the right reference point. A field-service platform like Jobber earns its keep first for scheduling, quotes, invoicing, and the client portal. Books, payroll, insurance, and reviews fill in around it — with city-tax handling at the payroll layer doing more work than most operators expect.

A note on accuracy

Every fee, threshold, and rule above is current for Michigan as of May 2026. LARA filing fees, the 4.25% income-tax rate, ESTA accrual rules, the 2026 minimum wage, and the local income-tax rosters all change — verify with LARA, the Michigan Department of Treasury, LEO, and your city's tax administrator before relying on a specific number for a filing or a tax decision. This guide is editorial, not legal or tax advice.