Your Ultimate Guide to Virginia Payroll

Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. This guide explains what employers must pay and withhold from payroll in Virginia, including unemployment insurance, personal income tax, and workers’ compensation. 

Paying unemployment insurance

On top of withholding federal taxes such as Medicare and Social Security taxes, you are also responsible for withholding and paying certain Virginia state taxes from your employee’s payroll. These taxes together are referred to as employer payroll taxes or payroll withholding. One of the taxes you must pay is unemployment insurance (UI). 

Unemployment insurance is a national program administered by the US Department of Labor and provides temporary payments to people who are unemployed through no fault of their own. You can manage your Virginia unemployment insurance through the online portal. Refer to the Virginia Employment Commission for more information on paying your unemployment insurance. 

In Virginia, the SUI tax rates for experienced employers range from 0.13% to 6.23%, applicable to the first $8,000 earned by each employee per year.

Withholding personal income tax from your Virginia employee

Employers are also responsible for withholding personal income tax from their employee’s payroll. Personal income tax, also known as individual income tax or state income tax, is a tax on the income of Virginia residents. The tax is deducted from the employee’s wages and is withheld by the employer.

After you withhold the tax from your employee, you are responsible for paying the amount you withheld to the state. You can file and pay the withholding amount online. For more information on paying the withholding amount, refer to the Virginia Department of Taxation.

Payroll tax due dates

Virginia has specific due dates for payroll tax filings and payments, which vary based on the filing status of the employer:

All employers must file Form VA-6, Employer's Annual Summary of Virginia Income Tax Withheld, by January 31 of the following calendar year.

How to submit Virginia payroll taxes

Virginia mandates electronic submission for returns and payments. Employers can use various methods such as eForms, online services for Businesses, and Web Upload. Payments can also be made via ACH Credit. Employers facing hardships that prevent electronic filing can request a temporary waiver by submitting an Electronic Filing Waiver Request.

Paying your Virginia workers’ compensation

In addition to paying Virginia payroll taxes, employers need to pay for workers’ compensation, even if they only have one Virginia employee. 

Workers’ compensation is a type of insurance that covers wages and medical benefits for employees who are injured while performing their job. The state of Virginia provides information online to help you find a qualified commercial carrier. Employers should verify their workers’ compensation insurance complies with the state’s regulations for workers’ compensation.

Here’s a detailed look at the various components of this system:

Medical Benefits

Workers' compensation in Virginia covers all necessary medical treatments related to the injury or illness. This includes:

• Doctor visits
• Hospitalization
• Physical therapy
• Medical tests
• Prescription drugs
• Prostheses

Additionally, workers are entitled to mileage reimbursement for travel to and from their authorized medical provider, ensuring that the cost of travel does not become a barrier to receiving care.

Temporary Disability Benefits

Temporary disability benefits are provided to workers who are unable to work temporarily due to their injury or illness:

Temporary Total Disability (TT): This benefit is provided when a doctor certifies that the worker cannot work due to the injury. It amounts to 66 2/3% of the worker's regular wages, offering substantial support during recovery.

Temporary Partial Disability (TP): Available when a worker can return to work but with restrictions. This benefit supplements any loss of earnings due to the restricted work status, helping workers transition back to work.

Permanent Disability Benefits

For injuries that result in permanent impairment, workers may be eligible for permanent disability benefits:

Permanent Total Disability (PTD): This is offered if the worker is permanently unable to work due to severe injuries. It provides long-term financial support to those who cannot return to any form of employment.

Permanent Partial Disability (PPD): Available when a worker reaches maximum medical improvement but still has a permanent impairment. Benefits can be claimed for loss of use, disfigurement/scarring, or amputation, with specific medical documentation required.

Death Benefits

In the unfortunate event of a work-related death, the system provides benefits that may include:

Burial expenses

These benefits help alleviate the financial burden on the family of the deceased worker.

• Transportation expenses
• Compensation to dependents

Legal Framework

The Virginia Workers' Compensation Act governs the administration of these benefits. It requires specific procedures and documentation to claim benefits, ensuring that both the rights of the worker and the employer are protected. Employers must comply with the Act to avoid penalties and ensure their employees receive the benefits to which they are entitled.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Virginia 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.