Rhode Island Hourly Paycheck and Payroll Calculator

Rhode Island Hourly Paycheck Calculator

Rhode Island is unique in many ways and is undoubtedly situated in one of the most beautiful areas in the nation. It is, however, not unique in that it also has complicated payroll taxes and paycheck rules. We’ve answered your most commonly asked questions about Rhode Island’s payroll taxes and regulations below.

Rhode Island payroll taxes

Here’s what you need to know about withholding payroll taxes in Rhode Island.

• Rhode Island payroll taxes start with employees filling out Form RI W-4. This information helps you determine how much you should withhold. 
• If an employee does not complete this form, you will need to withhold tax as though no exemptions were claimed.
• Employees only need to update Form RI W-4 in case of life events (such as marriage, divorce, birth or adoption of a child, etc.) which may impact their taxes.
• The personal income tax rate in Rhode Island is 3.75%–5.99%.
• Rhode Island does not have reciprocity with other states. 

Additional Rhode Island forms

In addition to Form RI W-4 mentioned above, Rhode Island employers also need to file the following forms:

1. Rhode Island Annual W/H Reconciliation (RI-W-3)
2. Rhode Island Income Tax Transmittal Form for the Reporting of W2 Information (RI State W2)
3. Rhode Island Income Tax Withholding Coupon [Monthly] (941M – until 2020)*
4. Rhode Island Income Tax Withholding Coupon [Quarterly] (941Q – until 2020)*
5. Rhode Island Employer’s Quarterly Tax Return and Reconciliation [Quarterly] (RI 941 – for after 2020)
6. Rhode Island Income Tax Withholding Coupon [Weekly]*
7. Rhode Island Quarterly Contributions (RI TX-17)
8. New Hire Report

Rhode Island unemployment tax rate

Rhode Island requires most employers to pay unemployment insurance tax to help compensate workers who are out of work through no fault of their own. 

• Employers pay Rhode Island unemployment tax on the first $28,200 of an employee’s wages.
• New employers pay at a rate of 0.88%.
• Experienced employers pay at a rate of 0.88%–9.49%.
• Unemployment tax in Rhode Island should be paid quarterly to the Rhose Island Division of Taxation, Employer Tax Section.

Paying Rhode Island taxes

Here’s what you need to know about paying Rhode Island taxes:

• How often employers pay depends on the amount of tax you withhold in a year. 
• Rhode Island’s payment frequencies are: weekly, monthly, quarterly. 

Rhode Island salary threshold

Because Rhode Island doesn’t have its own salary threshold, as long as the state minimum wage is satisfied it adheres to the federal salary threshold.

• The federal salary threshold is now $684 per week on a salary basis or on an hourly basis at a rate not less than $27.63 an hour.
• The Department of Labor permits employers to count some bonuses, commissions, and other incentive payments toward meeting the standard salary level (up to 10%).
• Employees who earn at least $107,432 per year may qualify as “highly compensated.”
• See this Department of Labor fact sheet for details.

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. 

New hires

Employers in Rhode Island need to report new employees.

• New hires must be reported to the Rhode Island New Hire Reporting Directory.
• New hires must be reported within 15 days of their first day of work. 

Payroll stubs

You must provide a pay stub to every employee that includes:

1. Company’s legal name and address
2. Employee’s name and last four digits of their Social Security number
3. Pay period beginning and end dates
4. Total hours worked
5. Rate of pay
6. Gross wages
7. The amount and reason for any deduction

Final paychecks

Employers must pay final wages to employees no later than the day after their last day.

Time off

Rhode Island law requires employers to provide the following types of time off to employees.

• Jury duty
• Family & parental leave applies to employers with 50 or more employees for parental and family medical leave. It applies to all employers for temporary caregiver leave.
• Sick leave
• Medical leave
• Domestic violence applies to employers under the sick leave law. This time off must be paid if the employer has 18 or more employees. It can be  unpaid if the company has fewer than 18 employees.

Federal payroll taxes

In addition to Rhode Island-specific taxes, both you and your employees will pay a variety of federal payroll taxes. Check out the breakdown below.

Federal income tax

Unless they are exempt, your employees will pay federal income tax.

1. You must withhold federal income tax from employees’ pay, unless they are exempt. 
2. Each employee’s Form W-4 will differ based on their filing status and dependents, among other details—so the amount of income tax to be withheld will vary.
3. Form W-4 does not need to be sent to the IRS, but should be kept for your records.

FICA

Both you and your employees will pay Federal Insurance Contributions Act, or FICA tax.

• FICA is made up of the Medicare tax and the Social Security tax. 
• In 2023, the Social Security tax requires employers and employees to each contribute 6.2% of wages up to $2,600. 
• The Medicare tax requires employers and employees to each contribute 1.45% of all wages. 
• See the IRS webpage for details, like maximum thresholds.

FUTA

Like the state, the federal government also has an unemployment tax, called FUTA, which is paid by employers.

• FUTA is an annual tax an employer pays on the first $7,000 of each employee’s wages. 
• The FUTA rate for 2023 is 6.0%, but many employers are able to pay less, for instance, up to 5.4% each year due to tax credits.
• Most employers will pay this tax annually with Form 940. But larger employers with more than $500 in tax due will have to pay quarterly. 

Additional Medicare tax

The Additional Medicare tax is paid by employees. Here’s what you should know:

• For employees who earn over $200,000 per year, 0.9% of earnings will need to be withheld for the Additional Medicare tax. 
• Whether or not your employee owes this tax may depend on their filing status.

Paying federal taxes

How often you’ll pay federal payroll taxes depends on how much you owe.

• Semi-weekly or monthly payments are required for federal withholding, Additional Medicare, and FICA taxes. And every quarter, a summary payroll tax return is due on Form 941, Employer’s Quarterly Federal Tax Return.
• Quarterly or annual payments are required for federal unemployment tax. Most employers will pay annually, but quarterly payments are necessary if you owe more than $500. Each time you make a payment, you’ll need to file a payroll tax return on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

We’re here to help

If you don’t love manual number crunching and payroll taxes sound overwhelming to you, take advantage of Gusto’s full-service payroll options or use an experienced accountant to help you with the process.