Modern payroll platforms bundle enough of this that a separate system is redundant below roughly ten people. They store employee records, handle the tax registrations and filings, collect the required onboarding paperwork, track time off, and produce the documents an employee asks for. That is the entire requirement at your size. Buying a dedicated system on top of it means paying twice for overlapping capability and maintaining two sets of records that will eventually disagree.
What you do need from the first employee, regardless of what software you use, is the record keeping the law expects. Signed offer terms, tax withholding forms, verification of eligibility to work, and any state specific new hire reporting, which Nevada requires within a defined window. These are obligations with deadlines rather than administrative preferences, and they exist whether or not you have a system. A folder and a checklist satisfies them at small scale, as long as the folder is somewhere other than one person's laptop.
The signals that you have outgrown the bundled version are recognisable when they arrive. You are answering the same policy questions repeatedly and there is nowhere to point people. Time off is tracked in a spreadsheet somebody has to maintain. Onboarding a person takes a day of your attention because nothing is written down. You have people in more than one state, which multiplies the compliance surface immediately. Or you are approaching thresholds where additional employment regulations begin to apply.
Until then, the useful investment is not software. It is writing down how things actually work: what the hours are, how time off is requested, what happens in the first week, and what the expectations are. That document does more for a small team than any system, and it is what you would have to produce anyway before configuring one.
Whatever you use, keep employment records for the period your state and federal rules require rather than deleting when somebody leaves. Retention periods apply to payroll records, tax forms, and eligibility documentation, and they extend beyond the end of employment. A folder that survives a departure, with restricted access, satisfies this at small scale.