Alaska Hourly Paycheck and Payroll Calculator

Alaska Hourly Paycheck Calculator

If you’re a business owner with employees in Alaska, there are some Alaska-specific payroll taxes and paycheck laws you need to know about. Whether you’re new to running payroll in Alaska or you’ve done it for a while, here’s a handy primer to keep around.

What to know about Alaska payroll taxes

Alaska may be the largest state in the country, but its list of payroll taxes is small. The key Alaska state payroll tax you need to know about is the unemployment insurance tax. It’s a tax that both employers and employees pay. 

In Alaska, unemployment insurance (UI) tax is called Employment Security Tax, and it’s required of all employers with employees that work in Alaska. One exception is for fishing employers who have fewer than ten crew members and pay the crew in shares of the catch.  

For 2022, you have to pay the Alaska UI tax on the first $45,200 of each employee’s wages. The tax rate is specific to your business and may change each year. You’ll find yours for the upcoming calendar year via a rate notice from Alaska’s Department of Labor and Workforce Development (mailed prior to January 1). 

On the employee side, the 2022 rate is 0.56% of wages up to $45,200. Employers must withhold this tax from employees’ paychecks and send it quarterly to Alaska’s Department of Labor and Workforce Development.

Don’t forget federal payroll taxes

You’ll also need to pay and withhold federal payroll taxes. 

Employee-paid taxes

There are two federal payroll taxes paid solely by employees. They are the federal income tax and the Additional Medicare tax.

Federal Income Tax

The Form W-4 (which is filled out by your employees at the time of hiring) contains information you need to withhold the correct amount of federal income tax. That amount depends on each employee’s filing status, gross wages, and other factors. 

Additional Medicare tax

All employers must withhold this 0.9% tax from employee earnings that exceed $200,000 each year. 

Employee- and employer-paid taxes

There is one federal payroll tax that is paid by both the employee and the employer. It’s FICA, which stands for Federal Insurance Contributions Act tax, and t is made up of the Medicare tax and the Social Security tax.In 2022, the Social Security tax requires employers and employees to each contribute 6.2% of wages up to $147,000. The Medicare tax requires each to contribute 1.45% of all wages. See the IRS webpage for details, like maximum thresholds.

Employer-paid taxes

There is only one federal payroll tax paid exclusively by the employer. It’s the FUTA tax, which stands for Federal Unemployment Tax Act. This is the federal unemployment tax. It’s an annual tax employers pay on the first $7,000 of each employee’s wages. The FUTA rate for 2022 is 6%, but most employers only have to pay 0.6% each year.

Workers’ Compensation

Requirements to obtain Workers’ Compensation vary by state, this table outlines some of these requirements. If you determine that your company is required to purchase Workers’ Compensation insurance in your state, learn how to sign up for this insurance with Gusto. Sometimes, companies get a request for a workers’ comp audit—head to this article and click the workers’ comp audit reports dropdown for more information.

More Alaska paycheck laws to know:

• You must report new hires within 20 days of hire to the Alaska Department of Revenue Child Support Services Division.
• The minimum wage in Alaska is $10.34/hour as of January 1, 2022. 
• If employees are kept on-call, you may need to pay them for their on-call time in certain situations. Consult with the Alaska Department of Labor and Workforce Development for more information.
• Non-exempt employees working more than 8 hours in a day or more than 40 hours in a week must be paid overtime: 1½ times their regular rate of pay for the extra time worked. Note: Only employers with four or more employees are required to pay overtime rates. Employers with fewer than four employees may pay their employees by their regular rate for any hours that exceed the limits noted above. Alaska also exempts certain industries from overtime requirements.
• You’re not allowed to offer compensatory time (comp time) instead of overtime pay in Alaska.
• Employers must provide pay stubs with the following information to employees each time they are paid:
  • Dates of the pay period,
  • Number hours worked (both regular and overtime),
  • Pay rate,
  • Gross wages,
  • Tax deductions, and 
  • Other authorized deductions.
• When an employee is terminated or laid off, you must give them their final paycheck within three working days (excluding weekends and holidays). If an employee voluntarily leaves, the final paycheck is due on the next regularly scheduled pay date—as long as that’s at least three days after the employee’s last day.  
• The fishing industry has different payroll rules they must follow. Review the Alaska Department of Labor and Workforce Development FAQ for additional information.

If you’d rather have someone else crunch the numbers, a payroll processor can help.