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Staying on top of federal tax rates and minimums is one thing—juggling local ones, especially if you’re a multistate employer, is even harder.
From Alabama to Wyoming, we’ve got you covered. Below is everything you need to know about rules and payroll taxes by state.
*Please note that this information is accurate as of January 1, 2024.*
State payroll taxes are taxes imposed by state governments on employers and/or employees to fund specific state programs. These taxes are distinct from federal employment taxes and may vary from state to state.
The primary purposes of state payroll taxes include funding state-run programs such as unemployment insurance, disability insurance, workers’ compensation, and other labor-related initiatives.
If you live in the U.S., there’s a good chance you don’t just pay federal income taxes—over forty states impose income taxes on individuals as well. On top of those state taxes, many city governments levy their own.
The way income taxes are calculated vary widely from state to state. Some have a single rate that applies to all taxable income, but most have multiple rates and brackets. Supplement this guide by visiting your state’s tax or finance website.
Since 1938, the United States has had a federally-mandated minimum wage—currently $7.25 per hour. Some states and cities, however, have their own, higher minimums that employers are required to follow.
Rates for regular and tipped employees vary. Look up your state above to view specific tax and minimum wage rates. Keep in mind that the city you live in may have a higher minimum wage than your state (in that case, the highest of the two applies).
Note that “maximum tip credit” refers to the difference between the regular and tipped minimum wages. If an employee’s hourly tips fall under this amount, the employer may be required to compensate them. State laws on this vary.
Unemployment insurance is a government-operated program designed to provide financial assistance to individuals who have lost their jobs and meet specific eligibility criteria. The program aims to support workers during periods of involuntary unemployment.
Employers typically contribute to the unemployment insurance fund through payroll taxes, and eligible individuals can then claim benefits for a limited duration, helping to partially replace lost wages.
Unemployment Insurance is funded jointly through both federal and state payroll taxes. State unemployment insurance (SUI) rates vary from employer to employer. Keep in mind that your state labor department should mail your business’s specific rate to you each year.
Note that some states allow businesses to make a voluntary contribution to their unemployment tax account in order to reduce their rate the following year.
You can find a rundown of state-by-state rates and maximums on the right.