Comprehensive Guide to Payroll Taxes in Georgia

Employers have to navigate a variety of regulations and requirements to ensure proper payroll withholding in each US state. In Georgia, this requires a thorough understanding of both federal and state tax obligations.

This guide provides a detailed overview of the payroll taxes applicable in Georgia, including unemployment insurance (UI), personal income tax, and workers’ compensation. 

Overview of Payroll Taxes in Georgia

Employers in Georgia are responsible for federal income tax, federal unemployment tax (FUTA), and FICA taxes (Medicare and Social Security).

As of January 1, 2024, Georgia has transitioned from its previous progressive state tax system to a flat-rate tax system. However, Georgia has no local income taxes and does not require employers to pay a state disability insurance (SDI) tax.

Employers must manage two primary types of payroll taxes: state income tax and unemployment insurance (UI). UI is also referred to as state unemployment insurance (SUI). The Georgia Department of Labor (DOL) oversees SUI, while the Georgia Department of Revenue handles income tax collection.

Georgia employers are also mandated to report new hires and re-hires to the state’s New Hire Reporting Center within 10 days.

Paying unemployment insurance (UI)

The US Department of Labor runs the Unemployment Insurance (UI) program, which provides temporary payments to eligible residents who have lost their jobs due to circumstances beyond their control.

Employers in Georgia are responsible for paying for UI on behalf of their employees. The Georgia DOL sets annual UI tax rates based on employer experience between 0.04% to 8.1%, with the rate for new employers set at 2.7%. The taxable wage limit for UI is $9,500 per employee, per year. This equates to a maximum annual tax payment of $769.50 per employee.

Georgia employers with a quarterly payroll of $1500 or at least one worker for 20 different calendar weeks during a calendar year are generally liable to pay UI and must submit an application DOL-1A and file quarterly reports. The threshold is $1000 for domestic workers. Nonprofit organizations are subject to UI if they have four or more employees for 20 weeks per calendar year.

No sectors are exempt from UI but government and nonprofit organizations may opt out of quarterly contributions and reimburse the state for any claims made by former employees.

The Georgia Department of Labor's self-service portal streamlines your unemployment insurance reporting and payments. For further details on paying your unemployment insurance, visit the Georgia Department of Labor website.

Withholding personal income tax (PIT) from Georgia employees

In addition to federal taxes such as Medicare and Social Security, you must withhold certain state taxes from your employees’ payroll and report them to Georgia’s DOR. This includes personal income Tax (PIT), which is levied on Georgia residents' income to fund state resources and services such as education and healthcare. PIT is often referred to as individual income tax or state income tax.

In Georgia, employees are taxed PIT at a rate of 5.49%, starting January 1, 2024, and decreasing annually by 0.1% until 4.99%. The rate is set at 5.29% for 2025 with a personal exemption of $12,000 for individuals and $18,500 for married couples.

Georgia employers can use two methods to calculate PIT withholding:

- Method A: Use tax tables in the Employer Tax Guide based on pay period, filing status, and withholding allowances
- Method B: Use the percentage method for exact computations, considering deductions, personal allowances, dependents, and exemptions

Late payment of payroll taxes in Georgia incurs a penalty of $25 plus 5% interest per month, up to 25%.

Georgia has different scheduling depending on how much your business withholds::

• $800 or less per year: Pay annually by January 31st
• $200 or less per month: Pay quarterly by the last day of the following month
• $50,000 or less per year: Pay on or before the 15th day of the month
• Over $50,000 per year: Pay on or before the following Wednesday if your payday falls between Wednesday and Friday. Otherwise, pay on or before the next Friday.

Submitting Payroll Taxes in Georgia

Before you can submit payroll taxes in Georgia, employers need to apply for an employer identification number (EIN) from the IRS and register with the Georgia Department of Revenue’s Tax Center for a withholding tax account. Your employees must complete federal Form W-4 and Georgia Form G-4.

Employers can pay by either electronic fund transfer (EFT) or mail with a payment voucher. It’s possible to download this voucher from the website. If you make a mistake and overpay, you must formally request a refund.

For further guidance on paying the withholding amount, refer to the information provided by the Georgia Department of Revenue.

Paying Georgia Workers’ Compensation (WC)

In addition to payroll taxes and income tax withholdings, you must also ensure that you provide workers’ compensation (WC) insurance for your employees. This insurance is designed to protect your employees in the event of work-related injuries or illnesses.

All employers with three or more employees must secure workers’ compensation insurance unless they’re part owners in the company.

The insurance can be obtained from qualified commercial carriers operating within the state. The Georgia State Board of Workers’ Compensation offers valuable information and resources to find a reputable carrier.

Alternatively, you can become self-insured if you become a certified member of the Georgia Self-Insurers Guaranty Trust Fund.

Your workers’ compensation insurance must meet Georgia’s regulatory standards. Failure to provide adequate coverage could result in penalties and legal complications for your business. Review your policy regularly and ensure that it covers all eligible employees and potential job-related risks.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Georgia 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.