Rhode Island Salary Paycheck Calculator
Rhode Island may be the smallest state in the United States, but it is not small on payroll taxes and paycheck rules. If you’re a small business owner in Rhode Island just starting out or looking to hire your first employee, you probably have heaps of questions about payroll taxes. You’re not alone. Payroll taxes can be tricky. That’s why we put together this helpful guide and this easy-to-use calculator for you to use.
Rhode Island state payroll taxes
Rhode Island withholding tax
Like many other states, Rhode Island requires employers to withhold income taxes from employee’s paychecks and periodically submit the funds to the Rhode Island Division of Taxation.
There are a couple of important notes to keep in mind about Rhode Island’s withholding tax rules.
First, Rhode Island does not require employers to file for or obtain a registration number specifically to withhold state income tax from employee’s paychecks. Federal taxpayer identification numbers are used for this purpose in Rhode Island.
Next, Rhode Island requires the use of a state-specific withholding certificate to determine the withholding amount. Have employees complete Form RI W-4, Employee’s Withholding Allowance Certificate when they start working for you.Using information from Form RI W-4, your employee’s pay amount, and your payroll frequency, you’ll look at Rhode Island’s withholding tables to determine how much tax to take out.
Rhode Island unemployment tax
Rhode Island’s unemployment tax is called the Employment Security tax. It’s paid by employers to provide financial support to unemployed workers.
The taxable wage base is $24,600 per employee per year. This means that the tax is only charged on wages up to this amount. Wages above this threshold are still reported to the state but aren’t taxable. The wage base is slightly higher if you’ve had numerous unemployment claims against your company. Employers will be informed of their tax rate in December each year, and new employers pay a tax rate of 0.98%. Unemployment tax is reported and paid to the state’s Division of Taxation quarterly using Form TX-17, Quarterly Tax and Wage Report.
Rhode Island job development tax
All Rhode Island employers must pay the job development tax to support the Rhode Island Human Resource Investment Council and administration of the Employment Services and Unemployment Insurance departments.
Instead of paying this as an additional tax, the employer’s unemployment tax is reduced by 0.21% to “pay” the job development tax.
Rhode Island temporary disability insurance tax
Employees are responsible for paying for temporary disability insurance to benefit workers unable to work due to non-work-related injury or illness.
Employers will withhold 1.3% on the first $74,000 of each employee’s wage each year for the temporary disability insurance tax.
Other Rhode Island paycheck rules and laws
Below are additional paycheck rules that Rhode Island employers should know.
- New Hires: Rhode Island requires all new hires and rehires to be reported within 14 days of the hire date to the Rhode Island New Hire Reporting Directory.
- Salary threshold: Because the state of Rhode Island 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.
- Family & Parental Leave: The Rhode Island Parental and Family Medical Leave Act (RIPFMLA) allows employees who’ve worked for 12 consecutive months to take up to 13 consecutive weeks of parental or family medical leave every two years.
- Final paychecks: In Rhode Island, an employee’s last paycheck must be paid by 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.
- Paid sick leave: The Healthy and Safe Families and Workplaces Act requires Rhode Island employers with 18 or more employees to provide up to 40 hours of paid sick leave each year to each employee. Employers with fewer than 18 workers must still provide up to 40 hours of leave, but it doesn’t have to be paid.
Federal payroll taxes
Here are four federal payroll taxes that you will want to know about.
Federal income tax withholding
This is paid only by employees, and you can determine how much to withhold by obtaining a Form W-4, Employee’s Withholding Certificate, from each employee. Form W-4 covers key details about the employee’s dependents, filing status, and other variables that will allow you to determine the proper withholding amount.
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 wages in 2022|
|Medicare tax||1.45% on all wages|
Additional Medicare tax
Employees who earn more than $200,000 in wages a year will be subject to the Additional Medicare tax withholding of 0.9%.
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.
Paying federal payroll taxes
How often you pay your federal payroll taxes depends on how much 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|
|FUTA||Annually or quarterly|
You’ll need to file payroll reports too. There are two to know about.
- Form 941, Employer’s Quarterly Federal Tax Return
- Used for:
- Federal income tax withholding
- Additional Medicare tax
- Used for:
- Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return
- Used for:
- Used for:
Congratulations! Now you’re up to speed and ready to process your payroll. But if you’re still unsure and would rather leave it to the experts, give Gusto a try.