What payroll deductions are employers required to withhold?

Missouri Payroll Tax Withholding Requirements

In Missouri, employers must withhold specific payroll taxes from employee wages to comply with state and federal regulations. Understanding these requirements is essential for accurate payroll processing and compliance.

Mandatory 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 base limit. Employers must also match this amount.
• Medicare Tax: Withhold 1.45% of all wages with no wage limit. Employers must match this amount as well.
• Missouri State Income Tax: Employers are required to withhold Missouri state income tax based on the employee’s Form MO W-4 and Missouri withholding tables.
• Local Earnings Taxes: Certain Missouri cities, such as St. Louis and Kansas City, impose local earnings taxes. Employers must withhold these taxes if applicable based on the employee’s work location or residence.

Additional Payroll Considerations

• Unemployment Insurance Contributions: While these are employer-paid taxes, accurate payroll reporting is required to calculate contributions.
• Employee Benefits Deductions: Voluntary deductions such as health insurance premiums or retirement contributions should be processed according to employee authorizations and plan rules.
• Recordkeeping and Reporting: Maintain detailed payroll records for all withheld taxes and submit timely reports to the IRS, Missouri Department of Revenue, and local tax authorities as applicable.
• Payroll Automation: Use payroll software that supports Missouri-specific tax tables and local tax withholding to reduce errors and streamline compliance.

As of 2026, regularly review updates from the Missouri Department of Revenue and IRS to ensure compliance with any changes in withholding rates or reporting requirements.