Updated: September 20, 2023
Idaho is known to outsiders for its potatoes, but you know full well that the state is a whole lot more. It’s called The Gem State for its abundance of gemstones. It’s got beautiful nature reserves that rival any other place in the world. It’s got the blue football field, the first of its kind. You love the uniqueness of Idaho, and that’s why you own a small business here. But whether you own the newest restaurant in Boise or the oldest bar in Twin Falls, there is one thing you and all other small business owners definitely don’t love: payroll taxes.
Luckily, we’re here to help. Just call us the payroll nerds. All you need to do is enter wage and W-4 information for each employee and our payroll tax calculator will calculate all the Idaho and Federal payroll taxes for you.
Federal payroll taxes for Idaho employers
First and foremost, we have to take care of Uncle Sam. Our handy payroll calculator can help you figure out the federal payroll tax withholding for both your employees and your business.
Below is a quick 6-step overview of everything that goes into calculating the payroll tax for your employees. If you prefer to see a more detailed calculation, head on over to the step-by-step guide we created just for you.
- Figure out the employee’s gross wages. Gross wages represent the amount of money an employee has earned during the most recent pay period.
- Hourly employees: Multiply the number of hours worked in the most recent pay period by their pay rate. Make sure to calculate any overtime hours worked at the appropriate rate.
- Salaried employees: Divide each employee’s annual salary by the number of pay periods you have each year.
- Don’t forget to add bonuses, commissions, and tips in here as well.
- Deduct any pre-tax withholdings. Do your employees have 401(k) accounts, flexible spending accounts (FSA), or other pre-tax deductions? If so, deduct their contributions to these accounts from their gross wages before you start applying federal 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 all the withholding information through this IRS publication.
- Deduct and match any FICA taxes to cover Medicare and Social Security taxes:
- Medicare tax: Withhold 1.45% of each employee’s taxable wages until they have earned $200,000 in a given calendar year. You as the employer will need to match this tax. For employees who earn more than $200,000 in taxable wages, you need to withhold what’s called an Additional Medicare Tax (super original, we know). The rate is 0.9%. Only the employee is responsible for paying the Additional Medicare Tax.
- Social Security tax: You need to withhold 6.2% of each employee’s taxable wages until they have earned $160,200 in the 2023 calendar year. The maximum amount of Social Security tax that employees must pay would, therefore, be $9,932.00. As the employer, you also must match this tax.
- Pay FUTA unemployment taxes: You as the employer are responsible for paying 6% of the first $7,000 of taxable income an employee earns annually, which comes out to a maximum tax of $420 per employee. However, you can claim a tax credit of up to 5.4% for paying your Idaho state unemployment taxes in full and on time each quarter, which means that when everything’s said and done, you’ll only have to pay 0.6% FUTA tax. Your employees are not responsible for paying FUTA taxes.
- Subtract any post-tax deductions: Most of your employees will be done at this point, but some of them may be responsible for court-ordered wage garnishments or child support. They may also choose to make post-tax contributions to savings accounts, elective benefits (like life insurance), or other withholdings.
Idaho (ID) state payroll taxes for 2023
Now that we’re done with federal income taxes, let’s tackle Idaho state taxes. The State of Idaho is on the higher end of marginal income tax rates compared to the rest of the country. It’s a progressive income tax in seven brackets that range from 1.125% to 6.925%.
Write Those Paychecks!
You’re almost at the finish line! Once you’ve calculated your employees’ net pay by taking out the appropriate withholdings, you’re ready to cut their checks.
In addition to making sure your employees get paid on time, don’t forget to set aside the employer taxes your company is responsible for. Those FICA, FUTA, and SUI payments can add up if you don’t remit them on a regular basis.
Use Form 941 to file federal taxes quarterly. Use Form 940 to report your annual FUTA tax. You can pay taxes online using the EFTPS payment system. You can find more details about employment tax due dates here.
Idaho state unemployment insurance (SUI)
As an employer, you’re responsible for paying SUI (remember, if you pay your state SUI in full and on time, you get a 90% tax credit on FUTA).
Idaho’s SUI rates range from 0.306% to 5.4%. The taxable wage base in 2023 is $49,900 for each employee.
New employers pay 0.97% for at least the first six quarters.
Additional ID payroll tax resources:
If all that wasn’t enough, and you want to learn more about Idaho payroll taxes, here are a few websites we suggest you check out:
More helpful payroll calculators for Idaho employers
Employers in the state of Idaho can use the calculator at the top of this page to quickly figure out their employees’ gross pay, net pay, and deductions in a few clicks (and feel confident when cutting paychecks). But employers sometimes have a little more math to do during the workweek. For example, do you occasionally reward top-performing employees with bonuses? In the eyes of the IRS, these payments are considered supplemental wages and require taxes to be withheld. Also, if you have workers who occasionally move on to other companies, every so often you may need to spend time calculating their final paychecks. So, if you need a little more help adding up the numbers, check out some of the calculators listed below.