Updated January 7, 2021
Most Americans associate North Dakota with the Frances McDormand movie that was actually based in Minnesota, but Hollywood isn’t really known for letting the truth get in the way of an entertaining story. As an insider, you know The Roughrider State is a lot more than a murder mystery flick, and that’s why you started a small business here. Although if there’s one thing that makes watching Fargo on repeat seem like a good time, it’s payroll taxes.
We totally get it, and that’s why we designed a nifty payroll calculator with you in mind. All you have to do is enter wage and W-4 information for each of your employees into the calculator. Before you know it, you’ll have all North Dakota state and federal payroll taxes calculated for everyone.
First, we have to pay Uncle Sam his due. Let’s calculate all your employees’ federal withholdings, as well as the additional taxes your business is responsible for paying.
Here’s a quick rundown of the components that go into federal tax withholdings. If you would like to see a more detailed explanation on all of the steps below, we invite you to head on over to our comprehensive step-by-step guide.
Now that we’re done with federal taxes, let’s look at North Dakota state income taxes. It’s a progressive income tax, meaning the more money your employees make, the higher the income tax.
Fortunately, ND has one of the lowest state income taxes in the country. The tax rates range from 1.1% to 2.9%. Only employees who earn more than $433,200 per year will hit the highest tax bracket.
As an employer in North Dakota, you have to pay unemployment insurance to the state. The rate ranges from 0.30% all the way up to 10.74% on the first $38,500 in wages paid to each employee in a calendar year.
If you’re a new employer, you will pay 1.02%. New construction employers will have to pay 9.69%.
Be sure to pay your SUI in full and on time so you can be eligible for the FUTA tax credit!
It’s time to crack open a cold one! You’ve checked “payroll taxes” off your to-do list so you can focus on growing your business. Once each employee’s net pay is calculated (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 UI taxes. The numbers can add up quickly if you don’t pay close attention to them!
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 details about employment tax due dates can be found here.
If all that wasn’t enough, here are a couple more links that can help you become the payroll whiz your small business needs you to be!
Job Service North Dakota (701) 328-4995 | Unemployment for Business
North Dakota State Government (701) 328-2480 | Income Tax Withholding