Updated: May 25, 2022
Beautiful nature, friendly people, and college football. What else could a Mountaineer need? You and the other 100,000 small business owners can agree. West Virginia is definitely an awesome place to start your small business. But whether you bake a mean pepperoni roll in Huntington or serve up a turbo-charged cup of joe in Morgantown, there is one more thing that every small business owner can agree about: payroll taxes are definitely not awesome.
We want you to create an awesome small business without having to deal with payroll taxes, so we’ve designed a nifty payroll calculator that can figure out all of the federal and West Virginia state payroll taxes for you and your employees. All you have to do is input wage and W-4 information for each employee into the calculator, and it will do the rest of the work for you.
Federal Payroll Taxes
First of all, for Uncle Sam’s sake, let’s calculate federal payroll taxes. Here’s a quick rundown of the components that go into federal tax withholdings. For a more detailed explanation on all of the steps below, we invite you to head on over to our comprehensive step-by-step guide.
- Gross wages, which is simply the amount of money an employee has earned during the last pay period.
- For hourly employees, multiply the number of hours worked by their pay rate — and make sure you don’t forget to take overtime into consideration.
- For salaried employees, divide each employee’s annual salary by the number of pay periods you have over the course of a year.
- Bonuses, commissions, and tips are all part of gross wages as well.
- Subtract any pre-tax withholdings. If your employees have 401(k) accounts, flexible spending accounts (FSA), health savings accounts (HSA), or any other pre-tax withholdings, subtract them from gross wages prior to applying payroll taxes.
- Deduct federal income taxes, which can range from 0% to 37%. We won’t get into the nitty-gritty here, but you can find further withholding information through the IRS Publication 15-T.
- Deduct and match any FICA taxes to cover Social Security and Medicare taxes:
- For Social Security tax, withhold 6.2% of each employee’s taxable wages until they have earned $147,000 in a given calendar year. As an employer, you must match this tax.
- For Medicare tax, withhold 1.45% of each employee’s taxable wages until they have earned $200,000 in a given calendar year. You must also match this tax. For employees who earn more than $200,000 per year, you’ll need to withhold an Additional Medicare Tax of 0.9%, which brings the total employee Medicare withholding above $200,000 to 2.35%. You don’t need to match the Additional Medicare Tax. Only employees are responsible for paying this tax.
- Pay FUTA unemployment taxes, which is 6% of the first $7,000 of each employee’s taxable income. FUTA taxes come with a huge caveat that you should know about. You can claim a tax credit of up to 5.4% for state unemployment tax you pay, as long as you pay in full and on time. It’s an easy way to save a whopping 90%, so make sure you take advantage! Only you as the employer are responsible for paying FUTA taxes, so you don’t need to withhold FUTA from your employees’ paychecks.
- Subtract any post-tax deductions. Most of your employees won’t have any post-tax deductions, but if they do, you will need to withhold things like court-ordered wage garnishments, child support, etc. Make sure you take these into consideration as well.
West Virginia State Payroll Taxes
Now that we’re done with Uncle Sam, let’s look at West Virginia state income taxes. West Virginia charges a progressive income tax, broken down into five tax brackets. The 2022 tax rates range from 3% on the low end to 6.5% on the high end. Employees who make more than $60,000 will hit the highest tax bracket.
In addition, many cities in West Virginia charge a city service fee, so be sure to check with your city to determine the fee amount you have to withhold from your employees’ paychecks.
West Virginia State Unemployment Compensation
As an employer in West Virginia, you have to pay unemployment compensation to the state. The 2022 rates range from 1.5% to 8.5% on the first $12,000 in wages paid to each employee in a calendar year.
If you’re a new employer (congratulations on getting started!), you pay a flat rate of 2.73%, 0r 6.43% if in the construction industry.
Write Those Paychecks!
You’ve done it! You’ve checked it off your to-do list so you can move onto the important things. Once each employee’s net pay is calculated (after taking deductions and withholdings into consideration), you’re in the clear.
All you have to worry about is getting your employees paid on time as well as setting aside whatever you owe in FICA and unemployment taxes. Those numbers can add up quickly!
You will need to fill out Form 941 to file federal taxes on a quarterly basis, and Form 940 to report your annual FUTA liabilities. You can pay taxes online using the EFTPS payment system. All the IRS employment tax due dates can be found here.
More West Virginia Payroll Tax Resources:
As if that wasn’t enough, here are some helpful links that can if you would like to learn more about West Virginia payroll taxes: