Wisconsin Salary Paycheck Calculator
You’re likely familiar with Wisconsin’s squeaky cheese, sub-zero temperatures, and the Lombardi Leap. Although all of these things make Wisconsin unique, so does its payroll taxes. If you don’t know much about them, then this article is a good starting point.
Does Wisconsin require tax withholding from paychecks?
Wisconsin requires that employers withhold income tax from employee paychecks if both of these criteria are met:
- The company pays wages to a Wisconsin resident or a non-resident for services performed in Wisconsin and,
- The business:
- operates in Wisconsin and is registered in Wisconsin
- is registered outside of Wisconsin but still conducts some aspect of business in Wisconsin.
- operates in Wisconsin and is registered in Wisconsin
If you meet these requirements, you’ll register for a tax withholding number with Wisconsin’s online tool, My Tax Account, or fill out a registration form and pay a fee.
How do I know how much to take out of employees’ checks?
You’ll calculate the amount to take out of employees’ paychecks by obtaining Wisconsin form WT-4, Employee’s Wisconsin Withholding Exemption Certificate, from each employee when they start working for you. This is the state counterpart to federal Form W-4.
This form allows employees to disclose important information such as the number of exemptions and other information needed to determine the proper withholding for state income tax.
When do Wisconsin withholding taxes need to be paid?
You’ll need to send the withholding tax to Wisconsin quarterly, monthly, or semi-monthly, and the state will tell you your filing frequency when you register for your tax withholding number.
In addition to paying the tax, you’ll also need to file Form WT-6, Withholding Tax Deposit Report, using the same frequency you use to pay. You’ll need to file this form even when no tax is withheld or due.
An annual reconciliation is also required for all businesses using Form WT-7, Employers Annual Reconciliation of Wisconsin Income Tax Withheld.
There are a few different ways to file these forms, which you can find in this helpful Wisconsin Department of Revenue FAQ.
What’s Wisconsin’s unemployment tax rate?
The employer must pay state unemployment tax to help provide financial support to employees who are out of work through no fault of their own.
The taxable wage base for unemployment insurance in Wisconsin is $14,000 for 2022. That means only the first $14,000 of each employee’s pay is taxable.
The Department of Workforce Development has a comprehensive rate table. Rates for 2022 range from 0 – 12%, while new employers pay rates ranging from 2.9 – 3.25%.
Federal payroll taxes in Wisconsin
On top of the state payroll taxes, you’ll need to withhold and pay federal payroll taxes. There are four central federal payroll taxes you need to know about.
Federal income tax
This is paid only by employees through paycheck deductions.
You can determine how much to withhold by obtaining a Form W-4 from each employee when they start working for you.
This will show the employee’s dependents, filing status, and other variables that will allow you to determine the appropriate withholding rate. And with payroll software, you can input the data from Form W-4 and the calculations will be made automatically.
Federal Insurance Contributions Act (FICA) 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.
Additional Medicare Tax
Employees who earn more than $200,000 a year will need to have the Additional Medicare tax taken out of their pay. For 2022, the tax rate is 0.9% of the excess wages you pay them.
Like the state, the federal government also has an unemployment tax. It’s called FUTA, Federal Unemployment Tax Act, 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.
Is there anything else that I need to know about Wisconsin payroll rules?
Here are some additional payroll topics that will be useful for Wisconsin employers.
- New Hires: Wisconsin requires all new hires and rehires to be reported to the Wisconsin Department of Workforce Development within 20 days of the date of hire. This includes full-time, part-time, and temporary workers.
- Federal salary threshold: The federal salary threshold 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 & Medical Leave: Wisconsin’s Family and Medical Leave Act (FMLA) provides leave benefits for certain employees in particular situations. Employers must permit employees to take up to two weeks of leave for serious health conditions affecting themselves or a parent, child, or spouse and up to six weeks for the birth or adoption of a child. By default, this leave is unpaid. See the Department of Workforce Development for more information on this policy.
- Final paychecks: Wisconsin’s only requirement on final paychecks is that they must coincide with the employer’s regular payroll schedule.
- 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.
Now that you know the basics about payroll taxes and paycheck rules in Wisconsin, you’re ready to process your payroll. But if you get stuck and need a helping hand, a qualified accountant can help.