Nebraska Salary Paycheck Calculator
Ready, set, grow! You’ve started your small business in Nebraska, and it’s grown to the point that you now need to hire employees. Congratulations!
If you don’t know where to begin when it comes to calculating payroll, you’re in the right place. We’re here to help. We’ve answered the most frequently asked questions about Nebraska payroll taxes. We’ve also included information on the standard payroll rules and laws you’ll need to know as an employer.
State payroll taxes in Nebraska
How do employers calculate state income tax withholding for employees’ paychecks?
Since employees need to pay their state tax bill throughout the year, you’ll need to calculate the withholding amount. It starts with Form W-4N, Employee’s Nebraska Withholding Allowance Certificate, which all employees should fill out when they start working for you. Information your employees provide on this form, along with Nebraska’s tax withholding tables, allows you to figure the tax amount.
When does Nebraska withholding tax need to be paid to the state?
How often you’ll need to pay the tax depends on how much you withhold. Generally, monthly or quarterly payments are necessary.
Regardless of when you make payments, all employers need to file quarterly wage reports using Form 941N, Nebraska Income Tax Withholding Return. Some businesses may be allowed to file a single Form 941N for the entire year. These companies will need to receive permission from the state to qualify as annual filers.
All employers, regardless of how frequently you pay or file your wage reports, need to submit annual reconciliations. You’ll use Form W-3N and send copies of your federal Form W-2 and 1099s that have Nebraska tax withheld.
How is Nebraska’s unemployment tax calculated?
Nebraska uses a tiered unemployment tax system that classifies employers into one of 20 categories. Classifications generally are based on your experience with paying claims to your former employees.
Tax rates range from 0% to 5.4%. New, non-construction employers pay a 1.25% tax rate, and new construction employers pay 5.4%.
Nebraska charges unemployment tax on the first $9,000 of each employee’s wages each year except for those employers in category 20 (the highest taxed group). These employers pay tax on the first $24,000 of each worker’s pay each year.
All employers will pay their unemployment tax quarterly and submit wage reports. Wage reports are due even in quarters when you have no payroll.
What is the salary threshold in Nebraska?
Because the state of Nebraska 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.
When do new employees need to be reported to the state?
Employers have 20 days from the date of hire to report new employees to the state.
When is Workers’ Compensation insurance required in Nebraska?
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 do employers need to give final paychecks to (former) employees who leave the company?
When an employee leaves, regardless of whether they leave voluntarily or not, final wages must be paid by the next regularly scheduled payday—but no more than two weeks after their last day.
Does Nebraska require employers to provide paid leave to employees?
Yes, Nebraska law requires employers to provide two different types of leave.
- Jury leave: When an employee is selected for jury duty, they must be paid their regular wages for the entire time they serve.
- Voting leave: Employers are required to provide up to two hours of paid leave to allow workers to vote.
Federal payroll taxes in Nebraska
Let’s not forget about federal payroll taxes.
Do I have to pay FICA as the employer?
Yes. 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.
What about other federal payroll taxes?
You will want to know about these two key federal payroll taxes.
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 many employers only have to pay 0.6% each year.
Additional Medicare tax
The Additional Medicare tax is relevant to anyone who earns more than $200,000 in wages for the year. You will have to withhold 0.9% on the excess amount.
How much do I have to withhold from my employee’s paychecks for federal income tax (FIT)?
You will need to have each employee fill out a Form W-4, Employee’s Withholding Certificate. This form is designed for employees to provide personal information that will allow you to determine the level of withholding. Withholding amounts are based on several factors, including the number of dependents and tax filing status. And if you don’t want to do the math, payroll software makes these calculations quickly.
Employees should complete a W-4 when they begin working for you and any time when their circumstances change that may affect how much tax they owe. If they fail to provide a W-4, you’ll need to withhold tax as if they are single with no dependents.
When do federal payroll taxes need to be paid?
The IRS requires you to pay these taxes annually, quarterly, monthly, or semi-weekly depending on the amount of tax owed. Warning: If you have taxes that are more than $100,000 in a day, you are required to deposit the taxes with the IRS by the next business day.
FICA, federal income tax, and Additional Medicare tax are paid most frequently, either monthly or semi-weekly. Annual or quarterly payments are not an option. However, each quarter you will have to provide a summary on Form 941, Employer’s Quarterly Federal Tax Return.
The federal unemployment tax is generally paid annually using Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. But for employers with a tax of more than $500, quarterly payments are required.
If you don’t want to do this alone, Gusto’s comprehensive payroll and compliance options ensure your payroll is on time and correct.
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.