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Updated: June 22, 2023
At the top of this page is a handy calculator you can use to figure out your Delaware payroll and federal payroll taxes. All you need to do is enter wage and W-4 allowances for each employee, and it will calculate gross pay, take out deductions, and come up with the net pay you’ll need for writing your employees’ paychecks. In addition, below is more information to help Delaware understand their obligations related to payroll taxes.
First of all, let’s give Uncle Sam his due. Below is a quick overview of what you need to know when it comes to federal payroll tax withholdings. If you would like to get into each tax withholding in detail, check out our comprehensive step-by-step guide.
Now that we’re done with federal income taxes, let’s tackle Delaware state taxes. The State of Delaware has a progressive income tax, similar to how the federal income tax works. The more money your employees make, the higher the income tax. Tax rates range from 0% to 6.6%. Employees who make more than $60,000 will hit the highest tax bracket.
On top of paying Delaware state taxes, employees who live or work in Wilmington have to pay a local city tax. You will need to withhold 1.25% from their paychecks.
As an employer, you’re responsible for paying state unemployment insurance, which covers those unemployed through no fault of their own. The wage base in Delaware is $10,500 for 2023, and rates range from 0.3% to 8.2%.
Remember, paying your SUI in full and on time qualifies you to get a whopping 90% off of your FUTA tax bill, so make sure you pay attention to the due dates.
In the state of Delaware, employers are required to report new employees to the Division of Child Support Services (DCSS) within 20 days of their hire (or rehire) date. Businesses have a couple of options.
Electronic reporting
The Delaware State of New Hires has a portal to that employers can use. To register, you will need to have your FEIN, address, and email address available. Learn more and register
Non-electric new hire reporting
Employers may also share a printed list of new hires. This can be mailed or faxed. Learn more and where to send
That’s it! You’ve done it! You’ve checked “payroll taxes” off your to-do list so you can move onto important things like growing your small business. Once each employee’s net pay is calculated, 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 use Form 941 to file federal taxes quarterly, and Form 940 to report your annual FUTA tax. You can pay taxes online using the EFTPS payment system. More information about employment tax due dates can be found here.
Our calculator is here to help, but of course, you can never learn enough, especially when it comes to payroll taxes. Here are some additional resources and contact information to help you run Delaware payroll:
The Official Website of The First State | Contact the Division of Small Business | Business Resource Connection | Withholding Tax FAQs | Withholding Tax Due Dates
These rates are based on local legislation and can change at any time. Always consult a tax professional if you are unsure about your obligations.
Delaware employers can use the calculator at the top of this page to quickly calculate their employees’ gross pay, net pay, and deductions (and feel confident when cutting paychecks). That said, there are times when companies need to do some extra number crunching. As an example, do you reward your top performers with bonuses? Keep in mind that Uncle Sam considers these payments to be supplemental wages and requires taxes to be withheld. In addition, sometimes an employee will leave to work somewhere else, and you will need to figure out how much their final paycheck will be. So, if you can use a little more help managing the math, check out some of the calculators listed below.
Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.