Tax on payroll is defined as taxes paid by employers, employees, or the self-employed, either as a proportion of payroll or as a fixed amount per person, and that does not confer entitlement to social benefits. Today, in this article, we will look at the Nevada payroll taxes.
This articles covers the following:
- How Nevada payroll taxes work
- Nevada payroll taxes
- Worker’s compensation insurance
- Minimum wage rules in Nevada
- Medicare taxes
- Federal payroll forms
- Nevada payroll tax resources and sources
- How to calculate employer payroll taxes
- How can Deskera assist you
How Nevada Payroll Taxes Work
Nevada may not charge any state income taxes, but residents still have to pay federal income taxes and FICA taxes. Your Nevada employer will withhold federal income taxes from each of your paychecks and send that money to the IRS, which counts it toward your annual income taxes.
How much you pay in federal income taxes depends on your marital status, how much your annual salary is, and if you choose to have additional tax withheld from your paycheck.
Your employer determines how much to withhold from your paychecks using the information you indicate on your Form W-4. You have to fill out a new form every time you start a job or if you want to make changes to your withholding at any time. You should look to change your withholding information whenever you experience big life changes, such as getting married or having a child.
It’s worth noting that withholding calculations for the federal income tax changed for the 2018 tax year because of President Trump’s new tax plan. In addition to this, the IRS has made notable revisions to the W-4.
The new form no longer asks you to list total allowances, but it requires filers to instead enter annual dollar amounts for income tax credits, non-wage income, total annual taxable wages, and itemized and other deductions.
The form also has a five-step process that allows filers to enter personal information, claim dependents and enter any additional income or jobs. FICA taxes consist of Social Security tax and Medicare tax.
Your employer will withhold 6.2% of your taxable income for Social Security tax from each of your paychecks and 1.45% in Medicare tax. Your employer matches these amounts, so the total contribution is double that.
Any earnings you have in excess of $200,000 are subject to a 0.9% Medicare surtax, which employers do not match. If you are self-employed, you have to pay the full taxes, including the employee and employer portions, on your own.
You can also elect to have additional withholdings taken out of your paycheck. If you are enrolled in an employer-provided health insurance plan, any premiums you pay will come from your salary.
Similarly, if you choose to invest in a 401(k) or 403(b) retirement plan, your contributions are deducted from your pay. These contributions are also pre-tax, which means they come out of your pay before taxes are applied. So putting money in one of these accounts will lower your taxable income.
A financial advisor in Nevada can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance, and more, to make sure you are preparing for the future.
Nevada does not have a state income tax, and no cities in the state levy local income taxes. Property taxes are also not a major source of financial concern for most Nevadans.
The average homeowner in the state pays annual property taxes that are equal to 0.53% of their home's market value, so annual property taxes shouldn't take a significant chunk out of your bank account. Nevada largely earns money from its sales tax, which can be one of the highest in the nation and varies from 6.85% to 8.375%.
Low property taxes and the absence of any state or local income taxes in Nevada can make it a particularly affordable place to own a home.
Nevada Payroll Taxes
Nevada requires employers to pay for state unemployment insurance taxes (SUTA) and workers’ compensation insurance but not state income taxes or disability insurance. The rules are close to the federal laws, and filing is quarterly.
Nevada State Unemployment Insurance Taxes (SUTA)
With some exceptions, if you pay more than $225 in wages during a calendar quarter, you are liable for state UI tax withholdings. The tax rate for new employers is 2.95% of taxable wages.
After that, the state determines your rate for you and sends it to you on your preprinted Form NUCS 4072. Nevada has 18 tax rates ranging from 0.25% to 5.4% of employee wages up to $33,400 for 2021. If you pay less than 5.4%, you’ll also pay a Career Enhancement Program tax of 0.05%.
Most employers have to pay SUTA. Even agricultural employers are liable if they paid wages of over $20,000 or employed ten or more people. Nevada exempts
- Domestic workers in private homes
- Family
- Workers on a foreign vessel or aircraft abroad
- Patients working in the hospital
- Students in student programs
- Spouses working in schools in exchange for financial assistance
- Certain nonprofits or charities
- Minors delivering newspapers
- Agent-drivers, commission-drivers
- Some salespeople working on commission
Workers’ Compensation Insurance
Nevada requires employers to have workers’ compensation insurance for all workers, even aliens, and minors but excludes casual or theater performers, domestic workers in the home, volunteers, clergy, real estate brokers, workers doing direct sales via phone, and commission workers like salespeople. You can get your own policy, but it should include at least the following:
- Medical treatment
- Lost time compensation (Temporary Total Disability/Temporary Partial Disability)
- Permanent Partial Disability
- Permanent Total Disability
- Vocational Rehabilitation
- Dependent’s benefits in the event of death
- Other claims-related benefits or expenses (e.g., mileage)
Minimum Wage Rules in Nevada
Currently, you must pay at least $9 per hour to employees; $8 per hour if you provide healthcare benefits. However, the state is increasing minimum wages through 2024.
The following employees are exempt from minimum wage requirements:
- Workers employed under a valid collective bargaining agreement where minimum wage, tip credit, or other minimum wage provisions have been waived in clear and unambiguous terms
- Employees younger than 18
- Workers employed a nonprofit organization for after-school or summer employment
- Paid trainees for a period of up to 90 days
Nevada Overtime Regulations
Nevada sets a standard overtime rate of time-and-a-half of the employee’s wage rate when the employee works more than 40 hours in a workweek or more than eight hours in a day unless the agreed-upon schedule is four days at 10 hours a day. These are exemptions:
- Employees of businesses earning less than $250,000 per year in gross sales volume
- Employees in retail or service if their regular rate is already more than 1.5 times the minimum wage and over half their compensation comes from commissions
- Bona fide executive, administrative, or professional employees
- Employees covered by collective bargaining agreements that provide for overtime in other ways
- Drivers, driver's helpers, loaders, and mechanics for motor carriers subject to the Motor Carrier Act of 1935
- Railroad workers
- Aircraft employees
- Drivers and drivers’ helpers making local deliveries and paid by trip or other payment (like mileage)
- Taxi and limo drivers
- Agricultural employees
- Auto salespeople and mechanics of auto dealers
- Domestic workers
Reporting Out-of-State Employees
In some cases, out-of-state employees still count for Nevada tax filing. It’s similar to other states:
- If a worker performs all or most of his work in Nevada, his wages must be reported to Nevada.
- If a worker performs some work in Nevada but most elsewhere, all wages should be reported in the state where his “base of operations” lies. A base of operations is the place from which he works, whether an office or a home.
- If the employee lacks a “base of operations” or a specific location from where he gets direction and control, wages should be reported to Nevada if that is his residence.
Different Ways to Pay Employees
Nevada does not require you to pay employees in a specific manner, but you cannot discriminate against those who do not have a bank account. Therefore, you should offer a check or pay card option.
Pay Stub Laws
You need to provide employees with pay stubs that itemize their paycheck, including gross pay, deductions, net cash wages/salary, date of payment, and hours worked. Failure to do so can result in a $5,000 administrative fine and even misdemeanor charges.
Minimum Pay Frequency
Nevada requires you to pay employees semi-monthly at least. You can agree on a different schedule but cannot make that agreement a term of employment. Wages earned before the first of the month must be paid by 8 a.m. on the following 15th. Wages earned on the first through the 15th must be paid by 8 a.m. on the last day of the month.
Exceptions include those in an executive, administrative, or professional capacity, outside salespersons, or supervisors as defined in 29 U.S.C. § 152, Ê.
Non-wage compensation, such as lodging or meals, may be considered part of wages. Lodging cannot constitute more than five times the minimum hourly wage each week. Breakfasts and lunches cannot be counted at more than 25% of minimum wage, and dinner, no more than 50%.
Paycheck Deduction Rules
Your employees will most likely never take home the exact amount they earn. Most people are required to pay taxes, so you’ll at least have to deduct money to cover what they owe. There are other reasons you may find yourself needing to withhold funds from your employees’ paychecks. Some expenses are allowed, but others can get you in trouble.
Specifically, you may deduct the following:
- Garnishments from legal judgments, including unpaid taxes and child support
- Tax, FUTA, and SUTA
- Employee’s share of health insurance and other benefits
- Recompense for damages caused by the employee in the workplace.
Legal garnishments could not exceed 82% of the take-home pay for any workweek if the employee’s gross weekly pay when the most recent writ of garnishment issued was $770 or less, or 75% of the take-home pay for any workweek if the gross weekly pay exceeded $770. If the employee’s weekly take-home pay is less than 50 times the federal minimum hourly wage, the entire amount may be exempt.
You also cannot charge workers for required uniforms or accessories if they are distinctive in style, color, or material.
Final Paycheck Laws
Termination pay must be paid immediately if you discharge an employee. If the employee quits, you must pay final wages no later than their usual payday or seven days after the employee quits, whichever is earlier.
Accrued Paid Time Off
In Nevada, you have the choice of front-loading leave at the start of the year or letting leave accrue. You must let leave carry over into the next year unless it exceeds 40 hours in a benefit year. You can institute a use-or-lose policy for PTO over 40 hours.
Paid Time Off
Nevada leaves laws to apply to employers with 50 or more employees. You must allow at least 0.01923 hours of paid leave for each hour of work performed. Nevada requires you to give paid leave at the pay rate the employee is compensated for at the time they take leave.
If the employee earns commissions, salary, or piece-rate earnings other than hourly, calculate leave pay by dividing total wages paid for the 90 days preceding the leave divided by the number of hours worked in that period. Do not include bonuses given in that period.
If an employee leaves, you are not required to compensate them for unpaid leave unless you rehire them within 90 days of termination and the employee did not leave by choice.
Sick Leave/Family Leave/Maternity Leave
As with PTO, this applies to employers with over 50 employees. Nevada closely follows federal laws when it comes to this kind of leave. The employee must have worked at least 1,250 hours in the 12 months before the leave and may have up to 12 weeks of family medical leave for
- Birth of the employee’s child and care of the newborn
- Placement of the child with the employee for adoption or foster care
- Care for the employee’s spouse, parent, or child with a serious health condition
- Employee’s own serious health condition
Accrued leave may be used as well, and can be taken intermittently.
Medicare Taxes
When an employee's compensation from an employer exceeds $200,000, the employer must withhold an additional amount for the additional Medicare tax. This tax is 0.9% of earned income over a threshold amount ($250,000 for joint filers, $200,000 for singles, and $125,000 for married persons filing separately).
This tax is paid solely by the employee; the employer merely has the responsibility of withholding it. The $200,000 withholding threshold applies regardless of the employee's marital or tax filing status.
Tip Earnings
Tips are recorded separately when filing SUTA. While they are considered for the employee’s compensation, they are not part of the maximum weekly benefit amount. Per NRS 608.160, you may not take all or a part of any tips or gratuities or apply them as a credit toward the payment of the minimum wage.
Child Labor
NRS 609.240 (Maximum hours of employment of child under 16 years of age) defines provisions for working minors. Children under 16 may not work more than eight hours in a day or 48 hours in a week. A child being in their place of employment during working hours will be considered working.
Children under 14 are not allowed to work unless they have written permission from a district judge or his designee. Farmwork, housework, and acting in a motion picture are the exceptions. Only child actors are exempt from working during public school hours unless excused by the school district or by order of a juvenile court.
Nevada Form W-2
No state income taxes, no state W-2. That was easy!
Other Nevada Withholding Forms
- Form NUCS 4072, Employer’s Quarterly Contribution and Wage Report: For filing UI taxes by paper. You should get a pre-filled copy from the state each quarter. As of the writing of this article, the Nevada Unemployment Insurance site gave an error message when we tried to access the form. Continue to check back if you need to download it.
- ACH Debit Authorization: for paying UI taxes via ACH debit.
- State of Nevada New Hire Report: Useful, but not required.
Federal Payroll Forms
- W-4 Form: To help employers calculate taxes to withhold from employee paychecks
- W-2 Form: To report total annual wages earned (one per employee)
- W-3 Form: To report total wages and taxes for all employees
- Form 940: To report and calculate unemployment taxes due to the IRS
- Form 941: To file quarterly income and FICA taxes withheld from paychecks
- Form 944: To report annual income and FICA taxes withheld from paychecks
- 1099 Forms: To provide non-employee pay information that helps the IRS collect taxes on contract work
Nevada Form W-2
No state income taxes, no state W-2. That was easy!
Other Nevada Withholding Forms
- Form NUCS 4072, Employer’s Quarterly Contribution and Wage Report: For filing UI taxes by paper. You should get a pre-filled copy from the state each quarter. As of the writing of this article, the Nevada Unemployment Insurance site gave an error message when we tried to access the form. Continue to check back if you need to download it.
- ACH Debit Authorization: for paying UI taxes via ACH debit.
- State of Nevada New Hire Report: Useful, but not required.
Nevada Payroll Tax Resources and Sources
- Unemployment Insurance Information: FAQs, schedules, links to forms
- NAC 612: Nevada unemployment compensation regulations
- NRS 612: Nevada unemployment compensation statutes
- Nevada Department of Taxation: Forms, online services, COVID-19 tax credit information, and more
- Nevada Department of Labor: Rules about workers’ comp and more
Nevada Income Tax Withholding Requirements
Unlike the large majority of other states, Nevada does not have a personal income tax. Therefore, if you have a small business with employees who work in Nevada, you won't need to withhold state income tax on their wages.
However, you will still need to withhold federal income tax for those employees. Here are the most basic points for withholding employees' federal income tax.
Get an EIN
With rare exceptions; if your small business has employees working in the United States, you'll need a federal employer identification number (EIN). You should obtain your EIN as soon as possible and, in any case, before hiring your first employee. EINs are issued by the IRS and you'll need one first and foremost for federal taxes. You can apply for an EIN at the IRS website. Generally, if you apply online, you will receive your EIN immediately.
Have New Employees Complete Form W-4
All new employees for your business must complete a federal Form W-4. You can download blank W-4s from IRS.gov. You should keep the completed forms on file at your business and update them as necessary.
Make Scheduled Withholding Tax Payments
The IRS has two primary payment schedules for withholding taxes: monthly or semiweekly. There is also an annual payment schedule that applies to employers with low annual withholding amounts ($1,000 or less).
The IRS will specifically inform you if you are on an annual payment schedule. In addition, in rare cases where an employer withholds very large amounts of tax, there is a next-day payment requirement, which is not covered here.
In general, your payment schedule will depend on the average amount you withhold from employee wages. The more you withhold, the more frequently you'll need to make withholding tax payments.
New employers start on a monthly payment schedule (unless, because of very low withholding, they qualify to pay annually). After you've been an employer for enough time, your schedule will be based on the amount you've withheld in the past (during a so-called lookback period).
The exact threshold dollar amounts for the different payment schedules, as well as other rules, can change over time, so you should check with the IRS at least once a year for the latest information.
Due dates for the various payment schedules are as follows:
- Semiweekly: Payments are due by the following Wednesday for amounts withheld on the preceding Wednesday, Thursday, and/or Friday, and by the following Friday for amounts withheld on the preceding Saturday, Sunday, Monday, and/or Tuesday.
- Monthly: Payments are due by the 15th day of the month following the month in which the tax was withheld.
- Annually: Payment is due on or before January 31st for withholding for the preceding calendar year.
If payment is due on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day. All payments must be made electronically via electronic funds transfer (EFT).
File Scheduled Withholding Tax Returns
Apart from making scheduled tax payments, and businesses also must file quarterly withholding tax returns. The returns reconcile the tax paid for the quarter with the tax withheld for the quarter. Use Form 941, Employer's Quarterly Federal Tax Return.
Include a Form 941-V, Payment Voucher, if you are including a payment with the return and are not otherwise required to make payments electronically. As mentioned above, businesses with very low annual withholding tax liability ($1,000 or less) may file annually instead of quarterly, using a single Form 944, Employer's Annual Federal Tax Return.
Quarterly returns are due on or before the last day of the month following the close of the quarter:
- the first quarter (January – March) is due April 30
- second quarter (April – June) is due July 31
- third quarter (July – September) is due October 31, and
- fourth quarter (October – December) is due January 31.
Form 944, the annual return, is due by January 31st.
As with tax payments, any return due date that falls on a Saturday, Sunday, or legal holiday is adjusted to the next business day.
Provide W-2s to Employees and File Form W-3
After the end of the year; you must provide each employee with a Form W-2, Wage, and Tax Statement, which summarizes the employee's wages and withheld taxes for the past year. The due date for providing W-2s to employees is January 31st.
You also must file Form W-3, Transmittal of Wage and Tax Statements, with the IRS. Form W-3 summarizes the total employee taxes you've withheld during the year. You should attach copies of the W-2s sent to all of your employees to your Form W-3.
Large employers are required to submit W-2s electronically. Smaller employers file W-2s electronically or on paper. In addition, the W-3 can be filed electronically.
There are two free e-filing options, both available through the Social Security Administration's Business Services Online(BSO): W-2 Online and File Upload.
Form W-3 with Forms W-2 must be filed before the last day of February. As with tax payments, any return due date that falls on a Saturday, Sunday, or legal holiday is adjusted to the next business day.
Independent Contractors are Not Employees
This article is only concerned with employees, not independent contractors. In general, different tax rules apply to independent contractors.
- W-4 Form: To help employers calculate taxes to withhold from employee paychecks
- W-2 Form: To report total annual wages earned (one per employee)
- W-3 Form: To report total wages and taxes for all employees
- Form 940: To report and calculate unemployment taxes due to the IRS
- Form 941: To file quarterly income and FICA taxes withheld from paychecks
- Form 944: To report annual income and FICA taxes withheld from paychecks
- 1099 Forms: To provide non-employee pay information that helps the IRS collect taxes on contract work
Using Payroll Service Companies
You may decide that it's easiest to hand over responsibility for payroll, including withholding taxes, to an outside payroll service. If so, keep in mind that under federal law, the employer remains responsible if an outside company fails to perform any required action.
Unemployment Insurance Tax Payments Due
While there is no state withholding tax in Nevada, employers do need to pay state unemployment insurance taxes. Check the website for the Department of Employment, Training and Rehabilitation Employment Security Division for more details.
How to Calculate Employer Payroll Taxes
Here is how you can calculate employer payroll taxes:
The payroll taxes are figured according to an employee's Form W-4. This form tells the employer the employee's marital status and whether additional withholding should be made to cover certain personal taxes to which an employee may be entitled that reduce his or her income taxes. If no W-4 is provided, then an employer withholds it as if the employee were single with no other adjustments.
How Can Deskera Assist You?
Employer payroll responsibilities may seem overwhelming. Filing taxes for your company, you need a system that can help you with it without having to go through a hassle. With Deskera, you have an automated system to file your taxes. Apart from that, managing payroll is another responsibility on your shoulder that takes a lot of work, but with the Deskera payroll system, you can do it hassle-free.
Key Takeaways
- Nevada may not charge any state income taxes, but residents still have to pay federal income taxes and FICA taxes.
- Your Nevada employer will withhold federal income taxes from each of the employee’s paychecks and send that money to the IRS.
- Nevada requires employers to pay for state unemployment insurance taxes (SUTA) and workers’ compensation insurance but not state income taxes or disability insurance.
- With some exceptions, if you pay more than $225 in wages during a calendar quarter, you are liable for state UI tax withholdings.
- Payroll taxes are figured according to an employee's Form W-4.
- Apart from making scheduled tax payments, businesses also must file quarterly withholding tax returns.
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