Comprehensive Guide to Payroll Taxes in Idaho

To navigate payroll taxes in Idaho, employers need to comply with federal and state tax obligations, regulations, and requirements. This guide provides a detailed and structured overview of Idaho payroll taxes and outlines what employers need to pay and withhold from payroll in Idaho, including unemployment insurance, personal income tax, and workers’ compensation.

Overview of Payroll Taxes in Idaho

Employers in Idaho are responsible for managing several payroll taxes, including federal income tax, FICA taxes (Medicare and Social Security), and state payroll taxes. Idaho does not have local tax laws, simplifying the payroll tax process for employers. Idaho operates with a flat income tax rate, which makes it relatively straightforward for employers to calculate state income tax withholdings.

The administration of payroll taxes in Idaho is handled by two main bodies: the Idaho State Tax Commission and the Idaho Department of Labor. Employers are required to report new hires within 20 days of their start date.

Unemployment insurance (UI)

New employers in Idaho pay a UI tax rate of 1.231%. For other employers, the rates range from 0.352% to 5.4%. The taxable wage base for 2024 is set at $49,900. UI tax payments are due quarterly, with deadlines on April 30, July 31, October 31, and January 31. If a due date falls on a weekend or holiday, payments are due the next business day.

The Idaho Department of Labor's online portal makes managing UI obligations more efficient and accessible for employers.

For additional guidance and information on paying UI, the Idaho Department of Labor website offers comprehensive resources to keep you informed and compliant.

Withholding personal income tax (PIT)

Another important aspect of state payroll taxes in Idaho is the withholding of personal income tax (PIT). This tax is deducted from your employees' wages and is withheld by you as the employer. Subsequently, you are required to remit the withheld amount to the Idaho State Tax Commission. The Idaho State Tax Commission can audit state income tax returns and other tax filings.

Idaho's personal income tax (PIT) is levied on the income of Idaho residents to increase the state's revenue. In 2024, PIT is charged at a flat tax rate of 5.8% on taxable wages over $4,489 for single filers and over $8,978 for joint filers. In Ohio, nonprofit organizations are exempt from Idaho income tax if they have been granted exemption under Section 501(c)(3) by the IRS.

Employers must remit withheld income tax on the last day of the month if filing quarterly, or on the 20th day of the month following the tax period if filing monthly. To streamline the process of paying PIT, Idaho's State Tax Commission has introduced a self-service feature. The Commission's website offers valuable information and assistance to help you navigate through the intricacies of PIT withholding in Idaho.

Submitting Payroll Taxes in Idaho

Employers have several options for submitting payroll taxes in Idaho:

• e-Services: Use online portals provided by the Idaho Department of Labor and the Idaho State Tax Commission
• In Person: State income tax payments can be made at drop boxes in various cities
• Mail: Send payments to the Idaho State Tax Commission addresses, depending on whether forms are included
• Electronic Funds Transfer (EFT): Use ACH credit with an ACH Credit Addenda and Bank Information form

Paying Idaho workers' compensation (WC)

Workers' compensation is an essential form of insurance that provides coverage for employees who sustain work-related injuries or illnesses. As an Idaho employer, you are legally obligated to provide workers' compensation coverage, regardless of the size of your workforce.

While paying state payroll taxes is essential, workers' compensation ensures that your employees are protected in the event of work-related accidents or health issues. It is important to purchase workers' compensation coverage from a qualified commercial carrier in Idaho. The Idaho Industrial Commission provides additional information to help you identify a suitable carrier, ensuring your compliance with the state's workers' compensation regulations.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Idaho payroll taxes, payroll compliance and state requirements extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel. 

Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Speak with an expert today to see how you can streamline your US payroll processes and ensure compliance with state regulations.