Montana Hourly Paycheck Calculator
Montana is Big Sky country with its mountains and wide-open spaces. Whether you’re launching an outdoor adventure venture or starting a brewery near a ski resort, learning about Montana’s payroll taxes is a must for all small business owners.
We’ve summarized the key information you’ll need below. We’ll cover all payroll taxes (both federal and state) along with the most essential paycheck rules you’ll need to know.
Montana state payroll taxes
Montana withholding tax
Wage withholding is the money held back by an employer to pay an employee’s income tax. But how much do you withhold?
The amount of tax you’ll withhold depends on:
- The employee’s gross pay,
- The length of your payroll period, and
- The information on Form MW-4, Montana Employee’s Withholding Allowance and Exemption Certificate
Have employees complete Form MW-4 when they start working for you and update it when their tax situation changes that will impact the amount of state income tax they owe.
With information from Form MW-4 and your employee’s gross pay, you’ll use Montana’s withholding tables to figure out how much tax to withhold. But if you prefer a faster and easier solution, you can use payroll software to make calculations for you. Once you set up your employee in the system, withholding tax calculations will be made automatically for you.
Paying Montana withholding tax
The frequency you pay your withholding tax to the Montana Department of Revenue depends on how much tax you withhold in a year.
|Montana Withholding Tax Payment Schedule|
|Amount withheld||Payment schedule|
|$1,199 or less||Annually – due by January 31|
|$1,200 – $11,999||Monthly – due by the 15th of the following month|
|$12,000 or more||Accelerated – follow your federal payment schedule|
New employers will pay monthly, and the Department of Revenue will notify you by November 1 if your payment schedule changes.
Unlike many states that require quarterly payroll tax returns, Montana only requires an annual filing. You’ll use Form MW-3, Montana Annual W-2 1099 Withholding Tax Reconciliation, and also submit copies of:
- Federal Form W-2, Wage and Tax Statement, and
- Federal Form 1099s that have Montana state withholding.
If you’d like more information on Montana withholding tax, check out their helpful withholding tax guide.
Montana unemployment tax
Unemployment tax is charged on the first $38,100 of each employee’s wage each year. New employers pay the average rate of employers in their industry, while established businesses pay rates ranging from 0% to 6.12%.
You’ll need to make quarterly payments and file quarterly wage reports. Be sure to file a wage report even if you paid no wages or have no tax to pay.
Montana paycheck rules and laws
Along with state payroll taxes, keep these state paycheck laws in mind.
- Minimum wage: The minimum wage in Montana is $9.20 per hour, and it receives an annual cost-of-living adjustment.
- Final paychecks: When you discharge an employee, final wages are due immediately. For employees who resign, final payment is due the sooner of:
- The next regularly scheduled payday, or
- Fifteen days after their last day.
- Overtime: Hourly employees are due overtime pay of 1 ½ times their regular hourly rate for all hours worked over 40 in a week.
- 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.
Federal payroll taxes in Montana
There are four federal payroll taxes you’ll need to collect and pay.
|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
Employees need to pay their federal income tax bill throughout the year via payroll deductions.
The amount of tax you’ll take out of your workers’ pay is based primarily on information from Form W-4, Employee’s Withholding Certificate. Workers should fill this out when they start working for you. And although a new form isn’t required each year, it’s a good idea to have employees review it annually for any changes.
With the Form W-4 information, you’ll use the federal tax tables or payroll software to make the withholding calculation.
Additional Medicare tax
The Additional Medicare tax doesn’t have an acronym like the other federal payroll taxes.
It’s a tax that some of your workers will need to pay when they file their annual tax returns. You’ll need to withhold the Additional Medicare tax from workers earning more than $200,000 per year. The current rate is 0.9% on the excess wages.
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.
|Social Security tax||6.2% on the first $147,000 of wages in 2022|
|Medicare tax||1.45% on all wages|
Paying federal payroll taxes
Paying FICA, Additional Medicare tax, and FIT
Most employers need to pay FICA, Additional Medicare tax, and FIT either monthly or semi-weekly, depending on the amount of tax due. But some large employers may need to pay the next business day.
Regardless of how often you pay, you’ll need to file quarterly payroll tax returns on Form 941, Employer’s Quarterly Federal Tax Return.
FUTA is most commonly paid annually, but some large employers may need to pay quarterly. You’ll submit Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, each time you make payment.
Take a look at Gusto’s Montana Hourly Paycheck Calculator to see how easy calculating paychecks can be. Just input your employee’s pay and Form W-4 information and let the calculator do the rest. But if you would instead prefer leaving payroll to the pros, no problem. Give Gusto a try.