Louisiana Hourly Paycheck Calculator
Mardi Gras and New Orleans are synonymous with fun and good times. From the delicious Cajun fare to the lively jazz music, everyone’s sure to have a good time in The Big Easy.
One thing that’s rarely a good time is processing payroll taxes. But there’s no need to worry about it. We’ve got the key details of Louisiana’s payroll taxes covered for you here, so you’ll be back to dancing in the street in no time.
Louisiana state payroll taxes
Louisiana withholding tax
Louisiana employers need to deduct state income tax from workers’ paychecks. These deductions are paid to the state to cover the employee’s tax bill for the year.
The amount that gets deducted is based primarily on Form L-4, Employee’s Withholding Allowance Certificate. Employees should complete this form when they start working for you so you can calculate the correct withholding amount.
With your employee’s information from Form L-4 and pay amount, you’ll use the withholding tables or formula to come up with the amount to withhold. (Of course, if you’d rather skip the tables and formulas, you can use Gusto to do payroll for you.)
Your payment frequency depends on how much tax you withhold in a month.
|Louisiana Withholding Tax Payment Frequency|
|Withholding Tax Per Month||Payment Frequency|
|$0 – $499||Quarterly|
|$500 – $4,999||Monthly|
Employers must make all payments greater than $5,000 electronically.
Quarterly payroll tax returns are required using Form L-1, Employer’s Return for Louisiana Withholding Tax. Don’t forget to file this report even in quarters when no taxes are withheld.
Each year, employers need to file an annual summary report on Form L-3, Transmittal of Withholding Tax Statements, along with copies of Form W-2, Wage and Tax Statement, and Form 1099.
Louisiana unemployment tax
Louisiana charges employers unemployment tax to provide financial benefits to unemployed workers. Register your business with the Louisiana Workforce Commission to receive your unemployment account number so you can file your wage reports and pay your tax.
The wage base in Louisiana for unemployment tax is $7,700. This is the maximum amount of each employee’s pay that is subject to Louisiana’s unemployment tax each year. Keep in mind the wage base can change.
New employers are charged tax rates based on the average for their industry. You’ll pay this rate for up to 45 months. After that, you’ll receive an experience rate based on how you used the unemployment system.
Unemployment tax rates range from 0.09% to 6.20% and the tax is paid quarterly. Although taxes can be paid online or through the mail, quarterly wage reports must be filed electronically.
Other Louisiana paycheck rules
Here are key Louisiana paycheck laws to keep in mind.
- Final paychecks: When employees leave or are terminated, their last payment is due by the next regularly scheduled payday or 15 days after separation, whichever occurs first.
- Minimum wage: Louisiana’s minimum wage follows the federal minimum wage, which is $7.25 per hour.
- New hire reporting: New and rehired employees need to be reported to the Louisiana Department of Social Services within 20 days of hire.
- Workers’ Compensation insurance – 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: Louisiana does not have a state law covering overtime pay. Therefore, the rules under the federal Fair Labor Standards Act apply. Generally, overtime pay of at least 1 ½ times the regular hourly rate is required for hours worked over 40 in a week.
Jury duty: Employers must provide leave to employees summoned for jury duty. In some instances, the leave must be paid.
Federal payroll taxes in Louisiana
Now that we’ve covered the Louisiana state taxes and laws let’s talk about the federal payroll taxes. There are four to know about. You (the employer) pay some, and your employees pay some.
|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 most employers only have to pay 0.6% each year.
FIT – Federal income tax withholding
Employees need to pay their federal tax bill with deductions from their paychecks.
The amount you’ll deduct depends on a few factors you’ll get from Form W-4, Employee’s Withholding Certificate. You’ll want employees to complete this form when they start work and update it whenever their tax situation changes.
With information like tax filing status and the number of dependents shown on Form W-4 and your employee’s pay, you can use the federal tax tables to calculate the tax amount. Another option that will save you time and money is to use payroll software. Calculations are quick and easy when you automate your payroll.
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.
Additional Medicare tax
Some employees will have to pay more Medicare tax than the 1.45% under FICA.
Employees earning more than $200,000 per year will have the Additional Medicare tax withheld from their pay. The current tax rate is 0.9% on wages over $200,000.
Paying federal payroll taxes
How often you’ll need to pay your federal payroll taxes will depend on how much you owe in a year.
FUTA is usually paid annually. But employers that owe more than $500 will need to make quarterly payments. You’ll also need to file a payroll tax return each time you make payment. Use Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, to summarize your payroll tax data.
FIT, FICA, and Additional Medicare tax are most often paid monthly or semi-weekly. But some employers with big dollar payrolls may need to make next-day payments. Regardless of when you pay, everyone files Form 941, Employer’s Quarterly Federal Tax Return, each calendar quarter.
Keep a close eye on filing deadlines because penalties for late filing can accumulate quickly. The same goes for payments. And if you’d rather not keep track of the deadlines, we understand. That’s why our dedicated payroll teams can manage your payroll process for you, leaving you with more time to focus on your business.