Comprehensive Guide to Louisiana Payroll Taxes

Employers navigating payroll taxes in Louisiana require an understanding of both federal and state tax obligations. This guide provides a structured and detailed overview of the payroll taxes applicable in Louisiana to help you stay compliant.

Overview of Payroll Taxes in Louisiana

Employers in Louisiana are responsible for managing several types of payroll taxes, including federal income tax, FICA taxes (Medicare and Social Security), and state payroll taxes. Louisiana does impose additional local payroll taxes.

The Louisiana Department of Revenue oversees these taxes, and the Louisiana Workforce Commission (LWC) manages unemployment taxes. The Louisiana Department of Revenue and the IRS can audit tax returns.

Nonprofit organizations should note that they are subject to payroll taxes in Louisiana, even if they are otherwise tax-exempt.

Louisiana employers can file and pay payroll taxes online through the Louisiana Taxpayer Access Point (LaTAP) for income taxes and the Louisiana Wage and Tax System (LAWATS) for unemployment taxes.

Paying unemployment insurance

As a Louisiana employer, you are responsible for withholding and paying Unemployment Insurance (UI) tax for your Louisiana employees.

Unemployment insurance (UI) tax or state unemployment insurance (SUI) tax is a national program that provides temporary financial assistance for eligible workers who become unemployed through no fault of their own. UI tax regulations that vary between states and the LWC manages UI in Louisiana.

Employers pay UI at a tax rate between 0.09% to 6.2% on a taxable wage base of $7,700 per employee, per year. this equates to a maximum tax payment of $477.40 per employee, per year.

manage and pay for Unemployment Insurance, but this process can be managed efficiently through an online portal provided by the Louisiana Department of Labor.

To find more information and guidance on paying your Unemployment Insurance, the Louisiana Department of Labor offers valuable resources on its website, including a FAQs page.

Withholding personal income tax from your Louisiana employee

Another important aspect of Louisiana payroll taxes is the withholding of Personal Income Tax (PIT) from your employees' wages.

Personal Income Tax, also known as individual income tax or state income tax, is a tax on the income of Louisiana residents. As an employer, you are responsible for deducting this tax from your employee's wages and then remitting it to the state.

Employees are charged PIT on their full wage at a rate between 1.85% and 4.25%. The rate of PIT is progressive in Louisiana, meaning that the more your employee earns, the more they pay.

To ensure compliance with the state's regulations, you must register your company with the Louisiana Department of Revenue and pay the amount you withhold from your employees' wages. Depending on the amount you withhold, you will need file quarterly, monthly, or semi-monthly.

Louisiana provides an online portal that facilitates this process, making it more convenient for employers to fulfill their PIT obligations.

To find more information on how to handle withholding Personal Income Tax, refer to the Louisiana Department of Revenue's Withholding Tax page.

Paying your Louisiana workers’ compensation

Employers in Louisiana are also required to pay for Workers' Compensation insurance. 

Regardless of the number of employees, all businesses are obligated to provide Workers' Compensation coverage for their workforce. Workers' Compensation is a form of insurance that protects employees in the event of an injury or accident that occurs while they are performing their job duties.

To ensure compliance with this aspect of Louisiana's regulations, employers must secure Workers' Compensation coverage from a qualified commercial carrier within the state. To find a qualified commercial carrier, the Louisiana Department of Labor provides helpful information on its FAQs page.

Simplify US payroll tax compliance with Deel

While this article provides essential information on Louisiana state payroll and unemployment taxes, payroll compliance and state requirements can be complex and may 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. By leveraging Deel's expertise, businesses can optimize their US payroll processes and ensure compliance with state regulations. For more information, speak with a Deel expert today to explore how their services can benefit your organization.