What payroll deductions are employers required to withhold?

Delaware Payroll Tax Deductions Employers Must Withhold

In Delaware, employers are responsible for withholding specific payroll taxes from employee wages to comply with state and federal regulations. Proper withholding ensures smooth payroll operations and compliance with tax authorities.

Mandatory Payroll Deductions in Delaware

• 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% on all wages, with an additional 0.9% surtax for wages above $200,000. Employers match the 1.45% portion but not the surtax.
• Delaware State Income Tax: Employers must withhold Delaware state income tax according to employee withholding certificates and state tax tables.
• Delaware Unemployment Insurance (UI): While this is primarily employer-paid, employers must register and report wages accurately. No employee withholding is required for UI.

Additional Operational Considerations

• Local Taxes: Delaware does not impose local payroll taxes, simplifying withholding calculations.
• Employee Benefits and Deductions: Voluntary deductions such as health insurance premiums, retirement contributions, and wage garnishments must be withheld as authorized.
• Recordkeeping: Maintain detailed records of all withholdings and deposits to support payroll audits and compliance reviews.
• Reporting Requirements: Employers must regularly report withheld taxes to the IRS and Delaware Division of Revenue, typically through quarterly filings.
• Automation: Use payroll software with Delaware tax tables integrated to streamline withholding accuracy and reporting.

As of 2026, staying current with Delaware tax rates and withholding tables is essential for operational compliance and avoiding penalties.