Mississippi Hourly Paycheck and Payroll Calculator

Mississippi Hourly Paycheck Calculator

Keeping up to speed on payroll taxes can be challenging. With changing tax rates, varying due dates, and a variety of forms, it’s hard to know what you’re supposed to be doing. That’s why we’ve created this Mississippi Hourly Paycheck Calculator, along with this guide, to help you understand your payroll tax requirements. 

Mississippi state payroll taxes

Mississippi withholding tax

With graduated individual income tax rates that max out at 5%, employees need to pay their tax bill throughout the year via tax withholding.

Calculating Mississippi withholding tax starts with Form 89-350, Mississippi Employee’s Withholding Exemption Certificate. Have employees complete this form when they start working for you. With information from this form and tax tables, you’ll be able to determine how much tax to take out. 

Employees should review their Form 89-350 each year and complete a new form when their tax situation changes. 

Mississippi encourages employers to file and pay their withholding taxes electronically—and if you owe $20,000 or more, it’s required. 

Employers need to pay withholding tax monthly or quarterly. You’ll receive notification from the Mississippi Department of Revenue about which frequency to use.  
All employers need to file an annual informational return using Form 89-140, Mississippi Annual Information Return. You’ll need to include copies of your federal Form W-2s, Wage and Tax Statement, and any 1099s that have Mississippi income tax withheld.

Mississippi unemployment tax

Mississippi’s unemployment tax rates start at 1% for new employers in their first year of having employees. It goes up each year until you qualify for a modified rate based on your experience and use of the unemployment fund.

Modified tax rates range from 0% to 5.4%.

Unemployment tax is charged on the first $14,000 of wages paid to each employee each year. 

Quarterly wage reports and tax payments are required. Mississippi allows you to pay your unemployment tax online or via paper check. Remember that reports are still needed even if you paid no wages or have no tax due.

Other Mississippi payroll rules and regulations

Keep these payroll rules in mind when paying your employees.

• Minimum wage: Mississippi doesn’t have a state minimum wage. Therefore, the federal minimum wage of $7.25 per hour is required in Mississippi. 
• Final paychecks: Mississippi has no law for when final wages need to be paid. Aim to pay them by the next regularly scheduled payday.
• 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: Mississippi has no state law governing overtime pay. Therefore, the federal Fair Labor Standards Act rules apply, which generally requires hourly employees to be paid at least 1 ½ times their hourly rate when they work more than 40 hours in a week.

New hires: Newly hired or recently rehired employees must be reported to the state directory within 15 days of starting work.

Federal payroll taxes in Mississippi

Don’t forget that you’ll need to pay and withhold federal payroll taxes. There are four you need to know about.

FICA

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.

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.

Federal income tax withholding

Your employees will need to pay their federal income tax bill throughout the year via payroll withholding. The process for calculating the amount is similar to Mississippi’s.

You’ll need to get a completed Form W-4, Employee’s Withholding Certificate, from each worker when they begin working for you. Information on this form will help you determine the amount of tax to take out of their paychecks. Things like tax filing status and the number of dependents will affect the amount withheld.

A new Form W-4 isn’t required each year, but employees should review it annually for changes. If their tax situation changes, they should complete a new form. 
With your employees’ tax information from Form W-4 and their wages, you’ll be able to use the federal tax tables to figure out how much tax to withhold. But you can automate this calculation by using payroll software. Once you set up an employee, you’ll be able to calculate taxes quickly with just a few clicks.

Additional Medicare tax

You may have high-earning employees who owe the Additional Medicare tax. Any employee earning more than $200,000 per year must have this tax withheld from their pay. The rate for 2022 is 0.9%.

Paying federal payroll taxes

You’ll need to pay your federal payroll taxes regularly, depending on how much tax you owe. The most common payment frequencies are semi-weekly or monthly. 

You’ll need to file federal payroll tax returns too. Use Form 941, Employer’s Quarterly Federal Tax Return, each quarter for FICA, federal withholding, and Additional Medicare taxes.

Use Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, each time you make a federal unemployment tax payment. 

Now you’re ready to pay your employees and cut those payroll checks! Remember: automating the payroll tax calculations prevents calculation errors and lets you spend more time growing your business.