Comprehensive Guide to Payroll Taxes in Missouri

In the US, employers must navigate complex federal and state-specific regulations and requirements for payroll withholding and payments. This article serves as a comprehensive guide for employers in Missouri.

General overview

Missouri employers must withhold and remit state and federal taxes on behalf of their employees, including the Federal Insurance Contributions Act (FICA) tax and Personal Income Taxes (PIT).

Besides managing these taxes, employers in Missouri must contribute to programs such as state unemployment insurance (SUI) and workers' compensation Insurance.

Personal income taxes

Missouri employers are liable for calculating, deducting, withholding, and remitting personal income taxes (PIT) from their employees' wages. This includes federal income tax, state income tax and local income tax (only for St Louis and Kansas City).

Federal income tax

The rate of federal income tax an employee pays is based on their income and any exemptions they're eligible for. Employers must remit withholdings to the IRS via the IRS’ Electronic Federal Tax Payment System (EFTPS).

State income tax

State income tax (SIT) in Missouri is charged on personal income at a progressive rate, as displayed in the table below:

Missouri employers can file and pay withheld SIT through the Missouri Department of Revenue's secure online portal. The filing frequency requirement depends on how much you withhold:

In addition, all employers are required to submit an annual reconciliation using Form MO-941 by January 31st of the following year. For not filing by the due date, a penalty of 5% per month is added, up to a maximum of 25% of the unpaid tax amount. A one-time penalty of 5% of the unpaid tax is imposed, and simple interest will also be charged on any unpaid tax.

Local income tax

• St. Louis levies a 1% earnings tax on residents and those who work in the city, which employers must withhold and remit. Employers must also pay an additional 0.5% payroll expense tax on wages earned in the city. Both taxes must be remitted quarterly to the Earnings Tax Department, City of St. Louis Collector of Revenue.

• Kansas City imposes a 1% earnings tax on residents and those who work in the city, which employers must withhold and remit to the Revenue Division, City of Kansas City, Missouri. As of January 2025, employers must file forms quarterly using the electronic system or risk a penalty. Kansas City employers must also file an annual reconciliation return for the previous tax year by the last day of February.

Social Security and Medicare (FICA) taxes

FICA payroll taxes include Social Security and Medicare contributions, which Missouri employers are required to withhold and remit.

• Social Security: Employees are taxed at 6.2% on their entire salary, up to the 2025 annual wage limit of $176,100 USD.
• Medicare Tax: Employees pay a Medicare tax of 1.45% on their full income
• Additional Medicare Tax: A further 0.9% is levied on high earners with an income over $200,000 for single filers, or over $250,000 for married couples filing jointly.

Employers are required to match employees' Social Security contributions and Medicare Tax, but are exempt from Additional Medicare Tax payments.

State unemployment insurance

State unemployment insurance (SUI) in Missouri is an employer-funded program which provides a vital safety net for individuals who find themselves unemployed due to unforeseen circumstances.

SUI in Missouri is charged on a taxable wage base of $9,500 per employee. Rates range from 0% to 9% according to your sector and experience rating for the preceding year. However, new employers in 2025pay 2.376%, except non-profit organizations, which pay 1%.

You can manage and pay SUI on behalf of your employees via the state's secure online portal. For more information on paying unemployment insurance, you can visit the Missouri Department of Labor and Industrial Relations website.

Workers’ compensation

In Missouri, businesses with five or more employees are obligated to have workers' compensation insurance. Employers that don’t meet this threshold may opt into the scheme. The main exception is the construction industry where you must provide coverage from the moment you hire an employee.

Workers' compensation is a federal and state-run initiative that provides "no-fault" coverage. It offers benefits for employees who suffer job-related illnesses and injuries, covering medical expenses and lost wages for the period they’re unable to work. The insurance can also take care of employees’ permanent disability benefits and funeral costs

In exchange, this system grants employers immunity from civil lawsuits filed by employees for work-related medical issues. Employers must purchase workers’ compensation insurance from a qualified commercial carrier or obtain certification from the state to self-insure.

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