North Dakota Hourly Paycheck Calculator
Starting your new business in North Dakota requires perseverance and dedication. No two days will be the same. And when it comes time to hire employees, you’ll have more responsibility. Paying employees involves more than writing a paycheck. There are taxes, deadlines, and payroll rules you’ll need to follow.
To make it easier for you, we’ve summarized the federal payroll taxes and North Dakota state payroll taxes, as well as some important payroll-related laws—like the minimum wage and Workers’ Compensation insurance requirements.
North Dakota state payroll taxes
North Dakota withholding tax
Employers need to withhold North Dakota income tax from employees’ paychecks. There is an exception for any employees who are residents of Minnesota and Montana. North Dakota has tax reciprocity agreements with these two states, which exempts these workers from North Dakota income tax. These employees will need to complete Form NDW-R, Reciprocity Exemption from Withholding, each year.
For all other employees, you’ll use the federal Form W-4, Employee’s Withholding Certificate, as the starting point for your withholding calculations. With information like tax filing status and the number of dependents you’ll find on Form W-4, you’ll use North Dakota’s percentage method or tax withholding tables to determine the amount of tax to take out.
Paying North Dakota withholding tax
Most employers will pay withholding tax quarterly. But employers who withhold less than $500 a year can pay annually.
Along with your quarterly payments, you’ll need to file quarterly payroll reports on Form 306, Income Tax Withholding Return. North Dakota encourages employers to file reports and make payments electronically, but paper returns and check payments by mail are allowed.
Annual report filing requirements
All employers need to submit annual payroll reports using Form 307, North Dakota Transmittal of Wage and Tax Statement. This report needs to be accompanied by copies of:
- Federal Form W-2, Wage and Tax Statement
- Federal Form 1099
North Dakota unemployment tax
Most employers in North Dakota will need to pay state unemployment tax to help provide financial assistance to unemployed workers.
North Dakota’s unemployment tax is charged on the first $38,400 of each worker’s pay each year. This amount, called the wage base, can change.
New employers in the construction industry will pay rates of 9.69%. New businesses that are not in the construction industry will pay either 1.02% or 6.09%, depending on the balance in the unemployment trust fund.
Established employers with a history of reporting wages and paying taxes will be assigned a rate based on that history. Rates range from 0.08% to 9.69%.
You’ll need to pay the tax and file a wage report each quarter—both of which need to be done electronically.
Other North Dakota paycheck rules and laws
As a North Dakota employer, you’ll want to keep the following paycheck rules in mind.
- Minimum wage
- The minimum wage in North Dakota is $7.25 per hour.
- Hourly employees need to be paid overtime—at least 1 ½ times their hourly rate for all hours worked over 40 in a week.
- New hire reporting
- Employers need to report newly hired and rehired employees to the state directory within 20 days of the employee’s first day of work.
- Final paychecks
- When an employee leaves, whether voluntarily or not, their final wages are due no later than 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.
Federal payroll taxes in North Dakota
All North Dakota employers and employees pay various federal payroll taxes. There are four withholding taxes that you will send to the Internal Revenue Service:
- Federal income tax (FIT)
- Additional Medicare tax
- Federal unemployment tax (FUTA)
Taxes paid by both the employer and employee:
- Social Security and Medicare tax (FICA)
Federal income tax (FIT)
Use Form W-4 to determine the amount of federal income taxes to withhold from your employees’ paychecks. Employees should complete this form when hired and whenever they have changes that may impact the amount of tax they will owe.
Use the information on Form W-4 and tax tables to compute the amount of tax to take out. To make it easier on you, payroll software can help with the math by making the calculations for you.
Don’t mail the W-4s to the IRS; just file them away in case of an audit.
Social Security and Medicare tax (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.
|Social Security tax||6.2% on the employee’s first $1472,000 in 2022|
|Medicare tax||1.45% on all wages|
Federal unemployment tax (FUTA)
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.
Filing and paying Federal payroll taxes
You’ll need to send the withheld taxes and your portion of FICA to the IRS either monthly or semi-weekly, depending on how much tax you owe. And each quarter, you’ll need to do a summary report on Form 941, Employer’s Quarterly Federal Tax Return.
For federal unemployment tax, you’ll need to make quarterly payments if your tax is more than $500. If your tax is less than $500 a year, you can pay the tax when you complete your annual summary report on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
Use Gusto’s North Dakota Hourly Paycheck Calculator to get started. And in just a few seconds, you’ll see how easy it is to calculate your payroll taxes accurately.