What payroll taxes do small businesses need to pay?

Payroll Taxes for Small Businesses in Nevada

Small businesses operating in Nevada must manage several payroll tax obligations to stay compliant and maintain smooth operations. Understanding these taxes helps streamline payroll processes and avoid penalties.

Federal Payroll Taxes

• Social Security Tax: Employers must withhold 6.2% from employee wages and contribute an additional 6.2% employer share.
• Medicare Tax: Employers withhold 1.45% from employee wages and match it with a 1.45% employer contribution.
• Federal Unemployment Tax Act (FUTA): Employers pay FUTA tax, generally 6% on the first $7,000 of each employee’s wages, with potential credits reducing this rate.
• Federal Income Tax Withholding: Employers withhold income tax based on employee W-4 forms and IRS withholding tables.

Nevada State Payroll Taxes

• Nevada Unemployment Insurance (UI): Employers pay UI tax based on their experience rating and taxable wage base. As of 2026, the taxable wage base is $36,600 per employee.
• Employment Training Tax (ETT): Employers contribute 0.1% on the first $36,600 of each employee’s wages to fund workforce training programs.
• No State Income Tax Withholding: Nevada does not impose state income tax, so employers do not withhold state income taxes from employee wages.

Operational Considerations

• Recordkeeping: Maintain accurate payroll records to support tax filings and audits.
• Reporting Requirements: File federal payroll tax returns (e.g., Form 941 quarterly) and Nevada UI and ETT reports as required.
• Automation: Use payroll software to automate tax calculations, withholdings, and filings, reducing errors and saving time.
• Employee Classification: Correctly classify workers as employees or independent contractors to ensure proper tax treatment.
• Compliance: Stay updated with changes in tax rates, wage bases, and filing deadlines to avoid penalties.