What payroll taxes do small businesses need to pay?

Payroll Taxes for Small Businesses in North Dakota

Small businesses operating in North Dakota must manage several payroll tax obligations to stay compliant and avoid penalties. Understanding these taxes helps streamline payroll operations and ensures accurate bookkeeping and reporting.

Federal Payroll Taxes

• Social Security Tax: Employers must withhold 6.2% of employee wages and match this amount.
• Medicare Tax: Employers withhold 1.45% of wages and match it equally.
• Federal Unemployment Tax Act (FUTA): Employers pay this tax; it is not withheld from employees. Rates vary but generally apply to the first $7,000 of wages per employee annually.
• Federal Income Tax Withholding: Employers withhold income tax from employees based on IRS tables and employee W-4 information.

North Dakota State Payroll Taxes

• State Income Tax Withholding: Employers must withhold North Dakota state income taxes from employee wages according to state tax tables.
• State Unemployment Insurance (SUI): Employers pay state unemployment insurance taxes. Rates vary based on the employer’s experience rating and wage base limits.

Operational Considerations

• Registration: Register with the North Dakota Workforce Safety & Insurance and the North Dakota Office of State Tax Commissioner to report and remit payroll taxes.
• Recordkeeping: Maintain accurate payroll records, including tax withholdings and payments, for at least four years as required by state and federal guidelines.
• Reporting: File federal payroll tax reports such as Form 941 quarterly and annual FUTA reports. Submit state withholding and unemployment tax reports on schedules defined by North Dakota authorities.
• Automation: Consider using payroll software or services that integrate federal and state tax calculations and filings to reduce errors and save time.
• Compliance: Stay updated on any changes to tax rates or reporting requirements. As of 2026, verify rates annually with official North Dakota and IRS resources.