Virginia Salary Paycheck Calculator
Processing payroll in Virginia doesn’t have to be a chore. Here, you’ll find answers to your most frequently asked questions regarding payroll taxes in Virginia.
Virginia payroll taxes
Does Virginia have a personal income tax?
Answer: Yes. Virginia uses a progressive tax system with rates ranging from 2% to 5.75%. Most taxpayers will be in the 5.75% tax bracket since income above $17,000 a year is taxed at the highest rate.
With different tax rates, how do I know how much to withhold from my employees’ paychecks?
Answer: Figuring out how much tax to withhold isn’t as simple as taking the tax rate multiplied by wages. The withholding amount is also based on the number of exemptions an employee claims.
Using Form VA-4, each employee will notify you of their exemptions. Based upon this and tax tables, you can calculate the withholding amount. Luckily payroll programs will make this calculation for you with just a few clicks of the mouse.
If your employee doesn’t provide a Form VA-4, you’ll need to withhold tax as if no exemptions were claimed. Unfortunately, you can’t substitute the federal Form W-4 to calculate Virginia withholding.
Do my employees need to complete a form VA-4 each year?
Answer: No. A new Form VA-4 is only necessary when the employee needs to adjust their number of exemptions. This often happens when there’s a life change that could impact taxes—like getting married, or divorced. Employees should (ideally) provide the new form to you within ten days of the change so you can adjust the withholding quickly.
When do I need to pay the Virginia withholding tax to the state?
Answer: How much tax you withhold each month determines how often you need to pay. Filing frequencies are:
If you hire more employees and start withholding more tax, the state will notify you if your filing frequency changes.
Besides paying the tax, are there forms I must file too?
Answer: Yes. You’ll need to file payroll tax returns on either Form VA-5 or VA-16 depending on your filing frequency. Also, all employers must file an annual summary report on Form VA-6 by January 31 for the prior year.
Be aware that you must still file a payroll tax return even if you have no tax due.
Does Virginia have an unemployment tax?
Answer: Yes. Employers pay Virginia unemployment tax on the first $8,000 of an employee’s wages each year. Base rates range from 0.33% to 6.43% depending on your claims history.
As with the withholding tax, you’ll need to file a report and pay the tax. Unemployment tax in Virginia is paid each quarter to the Virginia Employment Commission.
What is the salary threshold in Virginia?
Because the state of Virginia doesn’t have its own salary threshold, it adheres to the federal salary threshold, which is now $684 per week (equivalent to $35,568 per year for a full-year worker). 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.
Is my company required to have Workers’ Compensation insurance in Virginia?
Answer: 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.
Are there other Virginia rules and laws I should know about?
Answer: Keep in mind the following:
New hires: Employers are required to report new or rehired employees to the state directory
within 20 days of employment.
Pay dates: Salaried employees must be paid at least once a month.
Final paychecks: When an employee leaves, you must provide the last paycheck no later than the next regularly scheduled pay date.
Paystubs: You must provide a pay stub to every employee that includes:
- Number of hours worked
- Rate of pay
- Gross wages
- The amount and reason for any deduction
Federal payroll taxes
How does FICA tax work?
Answer: 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 each employee’s wage each year|
|Medicare tax||1.45% on all of an employee’s wages each year|
Do I need to withhold federal income tax from my employees’ pay?
Answer: Yes, unless an employee is exempt from federal income tax. You’ll know whether they are exempt when they complete Form W-4.
Form W-4 should be completed by an employee when they begin working for you. The information on this form will determine how much tax you’ll withhold. Things like tax filing status and the number of dependents affect how much is withheld.
Keep the W-4 forms with your payroll records. You don’t need to send them to the IRS.
Are there other federal payroll taxes I need to pay?
Answer: You’ll need to pay federal unemployment tax and some of your employees may need to pay the Additional Medicare tax.
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.
Additional Medicare tax
Some of your employees may need to pay the Additional Medicare tax. If you have any employees earning more than $200,000 per year, you must withhold 0.9% on the excess.
How do I pay these federal taxes to the IRS?
Answer: The IRS requires you to pay these taxes annually, quarterly, monthly, or semi-weekly depending on how much tax you owe.
FICA, federal income tax, and additional Medicare tax are paid most frequently, either monthly or semi-weekly. Annual or quarterly payments for these taxes is not an option. However, each quarter you will have to provide a summary on Form 941.
Federal unemployment tax is generally paid annually using Form 940. But for employers with a tax of more than $500, quarterly payments are required.
Hopefully you’re feeling confident about processing your Virginia payroll. Check out the Virginia Salary Paycheck Calculator. If you still need some guidance, call on a qualified accountant to help you.