Vermont Hourly Paycheck Calculator
Vermont might be small in size, but it packs a punch on payroll taxes and paycheck rules. Whether your small business is just starting out or you’ve been in the game for a while, staying up to date with paycheck laws and payroll taxes is a must. That’s why we’ve compiled the most frequently asked questions about these topics.
Vermont state payroll taxes
How is Vermont withholding tax calculated?
You’ll need employees to fill out Form W-4VT, Employee’s Withholding Allowance Certificate, when they start working for you. Although a new form isn’t required each year, employees should review it annually for changes. With information from Form W-4VT and your worker’s gross wages, you’ll use the Vermont withholding tables or wage bracket charts to calculate your employee’s withholding.
How often is withholding tax paid to the state?
Usually, your payment frequency will mirror your federal payment frequency. If you’re required to pay your federal payroll taxes weekly, you’ll pay your Vermont tax withholding weekly.
For some employers, paying withholding tax electronically is mandatory. Specifically, if:
- You’re on a semi-weekly payment frequency,
- You pay more than $100,000 per year, or
- You use a payroll filing service.
All other employers are encouraged to pay online, but it’s not required.
All employers will file quarterly payroll reports using Form WHT-436, Quarterly Withholding Reconciliation. You’re encouraged to file this document online.
All employers will file annual reconciliations using Form WHT-434, Annual Withholding Reconciliation, and you’ll need to send copies of your federal Form W-2, Wage and Tax Statements, and Form 1099.
How is Vermont’s state unemployment tax calculated?
Vermont employers pay unemployment tax on the first $15,500 of each employee’s wages each year. This amount is called the wage base, and it can change.
Most new employers will pay a 1% tax rate, but certain construction companies will pay rates between 2.3% and 4%. For established companies with a history of using the unemployment system, rates range from 0.4% to 8.4%. Quarterly wage reports and tax payments are required from all employers and must be completed online.
What’s the minimum wage in Vermont?
As of January 1, 2022, Vermont’s minimum wage is $12.55 per hour.
When do new employees need to be reported to the state?
All employers have ten days from the worker’s first day of work to report them to the state directory.
Is overtime pay required for hourly employees?
Vermont does have rules requiring overtime pay. Check out the details in this Summary of Vermont Wage and Hour Laws.
When is Workers’ Compensation required in Vermont?
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.
When are final paychecks due to departed workers?
For those who voluntarily resign, final wages are due no later than the next regularly scheduled pay date. For terminations or layoffs, employers have 72 hours from the last day of employment to pay final wages.
Does Vermont require employers to provide paid leave to employees?
Most Vermont employers will need to provide paid sick leave to employees at a rate of one hour for every 52 hours worked.
Federal payroll taxes in Vermont
How do employers know how much tax to take out for federal taxes?
It starts with getting Form W-4, Employee’s Withholding Certificate, from employees when you hire them. Information on this form is critical for making an accurate tax calculation. Using this information and the federal tax tables, you can figure out how much tax to withhold. Alternatively, you can use payroll software to do the heavy lifting for you.
How is the FICA tax calculated?
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.
| FICA Tax | |
| Social Security tax, each pays | 6.2% on the first $147,000 of wages in 2022 |
| Medicare tax, each pays | 1.45% on all wages |
Who pays the Additional Medicare tax?
Some employees may need to pay the Additional Medicare tax. It depends on their tax filing status and their taxable income. As an employer, you’re responsible for withholding this tax from employees who earn more than $200,000 per year. The 2022 tax rate is 0.9% on wages over $200,000.
Do employers need to pay federal unemployment tax if they already pay state unemployment tax?
Yes, 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.
How are federal payroll taxes paid?
When you pay your federal payroll taxes depends on how much tax you owe.
| Federal Payroll Tax Payment Frequency | |
| Tax Type | Payment Frequency |
| FICA | Monthly, semi-weekly, or next day |
| Federal income tax withholding | Monthly, semi-weekly, or next day |
| Additional Medicare tax | Monthly, semi-weekly, or next day |
| Federal unemployment tax | Annually or quarterly |
You’ll also need to file payroll tax returns.
- Form 941, Employer’s Quarterly Federal Tax Return
- Used for:
- FICA
- Federal income tax withholding
- Additional Medicare tax
- Used for:
- Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return
- Used for:
- Federal unemployment tax
- Used for:
Remember to pay and file your payroll tax returns on time. Penalties can be assessed for delinquencies. Using a payroll provider reduces the risk of missing deadlines.
Disclaimer
The information provided by the Employer Tax Calculator is for general information and estimation. All of the taxes or fees that apply to your business may not be accounted for, or fully up to date. Gusto, Inc. (dba “Gusto”) does not promise or guarantee that the information in the Employer Tax Calculator is accurate or complete, and Gusto expressly disclaims all liability, loss or risk incurred by employers or employees as a direct result or an indirect consequence of its use. By using the Employer Tax Calculator, you waive any rights or claims you may have against Gusto in connection with its use.