Maine Salary Paycheck Calculator
Payroll taxes can be daunting. With a slew of different deadlines and forms to fill out and different laws in every state, it can seem impossible to keep it straight. Main business owners, don’t worry, you’ll be off to a good start with the information below. We’ve summarized the key state and federal payroll taxes, and we’ve included the most common paycheck rules you’ll need to know.
Keep this guide by your side so you can spend less time worrying about payroll taxes and paycheck rules and more time growing your business.
Maine state payroll taxes
Maine withholding tax
Start with making sure your business is registered with Maine’s Revenue Services so you can send tax payments to the state.
Calculating Maine’s withholding tax starts with Form W-4ME, Employee’s Withholding Allowance Certificate. Have employees complete this form when they start working for you. Like the federal Form W-4, the Maine form will give you the information you’ll need to calculate the amount of tax to withhold from workers’ paychecks. Things like tax filing status and the number of allowances impact the withholding amount.
With information from Form W-4ME and tax tables or a mathematical formula, you’ll be able to compute the tax amount. But it’s easier if you use payroll software. Once your employee is set up in the software, enter their wages, and then your tax calculations will be made automatically.
Paying Maine withholding tax
Maine uses two payment frequencies for withholding tax. You will have to pay either semi-weekly or quarterly.
|Payment Frequency for Maine’s Withholding Tax|
|Annual withholding tax||Payment frequency|
|$18,000 or more||Semi-weekly|
|$0 – $17,999||Quarterly|
Maine requires withholding tax to be paid electronically if you owe more than $10,000 per year.
You can pay with a check if you owe less, but you’ll also need to submit Form 900ME, Payment Voucher for Maine Income Tax Withheld. This form isn’t required if you pay online.
Maine requires employers to complete quarterly and annual reconciliations of withholding tax electronically. Quarterly reports are made on Form 941ME, Employer’s Return of Maine Income Tax Withholding. And annual reports are made on Form W-3ME, Reconciliation of Maine Income Tax Withheld in 2022.
If you issue 250 or more federal Forms W-2, Wage and Tax Statement or 1099, you’ll need to send electronic copies to Maine along with your annual reconciliation.
Maine unemployment insurance tax
Maine’s unemployment insurance tax is charged on the initial $12,000 of each worker’s wages each year.
New Maine employers pay a rate of 2.45%, while established companies pay rates that range from 0.53% to 6.16%.
You’ll make quarterly payments for unemployment tax and report wages on Form ME UC-1, Unemployment Contributions Report.
Other Maine paycheck laws and rules
You’ll want to keep the following paycheck rules in mind.
- New hire reporting: All new and rehired employees must be reported to Maine’s Employer Portal within seven days of hire.
- Salary threshold: The state minimum salary threshold for Maine is $735.59 per week, which is equivalent to $38,250 annually. In Maine, the duties employees’ are responsible for is another factor for determining if employees are exempt from overtime.
- Final paychecks: Former employees must be paid their final wages 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.
Earned paid leave: Most employers with more than ten regular employees must provide earned paid leave at a rate of one hour for every 40 hours worked up to a maximum of 40 hours per year. The leave can be used for any reason.
Federal payroll taxes in Maine
There are four federal payroll taxes you’ll want to know about when processing your Maine payroll.
Federal withholding tax
Employees need to pay their federal income taxes as they go. That means you’ll need to withhold tax from their pay. But how much?
How much withholding tax you’ll take out depends on information from Form W-4, Employee’s Withholding Certificate. Employees should complete this form when they begin working for you. With this information, you use the federal tax tables or payroll software to calculate the tax amount.
Additional Medicare tax
Some employees may need to pay the Additional Medicare tax. It depends on their tax filing status and taxable income. Although you won’t know who has to pay, you’re required to withhold it from employees earning more than $200,000 per year.
You’ll withhold 0.9% on all wages over $200,000.
FICA tax (Social Security and Medicare)
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||6.2% on the first $147,000 of each employee’s wages in 2022|
|Medicare||1.45% on all wages|
Federal unemployment insurance 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.
Filing and paying federal payroll taxes
How often you’ll need to pay federal payroll taxes depends on how much you owe. The most common frequencies are semi-weekly and monthly. But quarterly and annual payments are possibilities.
|Semi-weekly or Monthly Federal Payroll Taxes|
|Federal withholding tax|
|Additional Medicare tax|
|Quarterly or Annual Federal Payroll Taxes|
|Federal unemployment insurance tax|
In addition to paying your federal payroll taxes, you’ll also have to file payroll tax returns. Luckily, these are only done quarterly or annually.
Form 941, Employer’s Quarterly Federal Tax Return, is due each calendar quarter to report and reconcile your withholding, Additional Medicare, and FICA taxes.
Form 940, Annual Federal Unemployment (FUTA) Tax Return, is due whenever you make a FUTA payment. If you owe less than $500, you’ll file and pay annually. But anytime you owe $500 or more, you’ll need to make quarterly payments.
Gusto put together a nifty salary paycheck calculator that you can use to see how easy calculating payroll taxes can be when you use automation. And if you’d rather leave the payroll number crunching to the professionals, give Gusto a try.