What payroll deductions are employers required to withhold?

Payroll Tax Deductions Employers Must Withhold in Louisiana

When managing payroll in Louisiana, employers are required to withhold several mandatory payroll deductions to ensure compliance with federal and state regulations. Proper withholding supports accurate tax reporting and helps maintain good standing with tax authorities.

Required Payroll Deductions

• Federal Income Tax: Employers must withhold federal income tax based on the employee’s Form W-4 and IRS tax tables.
• Social Security Tax: Withhold 6.2% of wages up to the annual wage limit, matching this amount as the employer.
• Medicare Tax: Withhold 1.45% of all wages, with an additional 0.9% on wages above $200,000 for single filers (not matched by employer).
• Louisiana State Income Tax: Employers must withhold state income tax according to Louisiana withholding tables and employee withholding certificates.
• Louisiana Unemployment Insurance (UI): While UI taxes are generally employer-paid, some specific deductions may apply depending on local regulations—verify current requirements as of 2026.

Operational Considerations

• Employee Classification: Correctly classify workers as employees or independent contractors to apply proper withholding.
• Recordkeeping: Maintain accurate payroll records including withheld amounts, tax filings, and employee withholding forms.
• Reporting Requirements: File federal and state payroll tax reports timely, including Form 941 and Louisiana state withholding returns.
• Automation: Use payroll software or services that automatically calculate and withhold required taxes to reduce errors.
• Compliance Updates: Review Louisiana tax tables and federal tax rules annually to adjust withholding accurately.