Delaware Hourly Paycheck and Payroll Calculator

Delaware Hourly Paycheck Calculator

Delaware is home to thousands of small businesses. Being a small business owner means you’ll have to tackle payroll taxes at some point. Whether you’re planning to hire your first worker or looking to freshen up your payroll knowledge, we’ve got you covered. 

This guide will walk you through the basics of Delaware’s payroll taxes. We’ve also included information about some important paycheck rules like minimum wage and overtime.

Delaware state payroll taxes

Delaware withholding tax

Delaware uses a progressive tax system. That means the more you make, the more you owe. The maximum tax rate is 6.6%.

Residents and some non-residents need to have Delaware income tax withheld from their paychecks to pay their annual tax bill. 

How much tax is withheld depends partially on federal Form W-4, Employee’s Withholding Certificate. Information like tax filing status and the number of dependents impact the amount of tax withheld. 

Employees need to complete this form when they start working for you. And if they fail to complete it, that doesn’t mean you withhold no tax. Instead, you’ll withhold tax as if the worker is single and has no dependents. 

With information from Form W-4, you’ll use payroll software or Delaware’s withholding tax tables or formulas to calculate the withholding tax. 

How frequently you’ll pay the tax to the state depends on how much you withhold per year. Payment frequencies are:

• Quarterly – File Form W-1Q each quarter
• Monthly – File Form W-1 each month
• Eighth monthly (up to eight times a month) – File Form W-1A each withholding period

Annual reconciliations on Form W3, Annual Reconciliation of DE Income Tax Withheld, and copies of Form W-2 need to be sent to the Delaware Division of Revenue by the last day of January.

Delaware unemployment tax

Delaware’s Division of Unemployment Insurance administers the state unemployment insurance program. Delaware charges employers unemployment tax on the first $14,500 of each worker’s wages each year. Most new employers pay a 1.8% tax rate, and experienced employers pay rates ranging from 0.3% to 8.2%.

Quarterly reports on Form UC-8, Employer’s Summary Assessment Report, need to be filed even when you paid no wages or have no tax due. 
You can use The Division of Unemployment Insurance’s employer handbook to learn more about how unemployment tax works in Delaware.

Other Delaware paycheck rules

Here are some key rules to know:

• New hire reporting: Newly hired employees need to be reported to the Delaware State Directory of New Hire Reporting within 20 days of hire. 
• Minimum wage: The minimum wage in Delaware is $10.50 per hour.
• Final paychecks: When employees leave or are let go, employers must pay the final wages no later than the next regularly scheduled payday.
• 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. 

Overtime pay: Delaware doesn’t have a state law covering overtime pay. It follows the federal Fair Labor Standards Act, which generally requires employers to pay hourly employees at least 1 ½ times the regular hourly rate for all hours worked over 40 in a week.

Federal payroll taxes in Delaware

Don’t forget about federal payroll taxes. Some are paid by the employer, some are paid by the employee, and some are jointly paid.

Employer-paid federal payroll taxes

FUTA – Federal unemployment tax

Like the state, the federal government also has an unemployment tax. It’s called FUTA and 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 many employers only have to pay 0.6% each year.

Employee-paid federal payroll taxes

FIT – Federal income tax withholding

Workers need to pay their federal income taxes throughout the year via payroll deductions. How much tax that gets taken out depends on a few factors, including their pay, tax filing status, and the number of dependents.

You’ll start by collecting Form W-4, Employee’s Withholding Certificate, from each employee when they start work. Information on this form is the foundation for the tax withholding calculation. Using Form W-4’s information and the employee’s pay amount, you’ll use the federal withholding tax tables or payroll software to calculate how much tax to take out. 

Keep the completed Form W-4 in your payroll files. There’s no need to send it to the IRS unless they ask for it.

Additional Medicare tax

Some of your employees may need to pay the Additional Medicare tax. For employees earning more than $200,000 per year, you’ll need to withhold 0.9% on the excess wages.

Jointly-paid federal payroll taxes

FICA – Federal Insurance Contributions Act

The Federal Insurance Contributions Act, or FICA tax, 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.

Paying federal payroll taxes

FIT, FICA, and Additional Medicare tax are usually paid monthly or semi-weekly, depending on how much tax you owe. Some employers with large dollar payrolls may need to make next-day payments.

Regardless of your payment frequency, you’ll need to send the IRS quarterly payroll tax returns on Form 941, Employer’s Quarterly Federal Tax Return. These returns are due even if you had no wages or taxes due for the quarter.

FUTA is generally paid annually. But some employers may need to pay quarterly if they owe more than $500. Each time you make a payment, whether annually or quarterly, you’ll need to file Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
While paying your employees on time and correctly is critical, so is paying the payroll taxes and filing your reports. Most payroll providers take care of all this so you’ll never miss a deadline.