Updated: January 1, 2024
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.
Federal payroll taxes for North Dakota employers
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.
- 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.
- Calculate 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 details here, but you can find all the withholding information you need from the IRS Publication 15-T.
- Deduct and match any FICA taxes to cover Medicare and Social Security taxes:
- For the Social Security tax, withhold 6.2% of each employee’s taxable wages until they hit their wage base for the year. The 2024 wage base is $168,600. Employers must match this tax dollar-for-dollar.
- For Medicare tax, withhold 1.45% of each employee’s taxable wages until they have earned $200,000 in a given calendar year. Employers also must match this tax. However, employees who earn more than $200,000 per year will need to pay what’s called an Additional Medicare Tax (very original name, by the way) of 0.9%, which brings the total employee Medicare withholding above $200,000 to 2.35%. As an employer, you are not responsible for paying the Additional Medicare Tax.
- Pay FUTA unemployment taxes, which is 6% of the first $7,000 of each employee’s taxable income each year. FUTA taxes come with a huge caveat that you will want to 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 you might need to withhold things like court-ordered wage garnishments, child support, etc. Make sure you take these into consideration as well.
North Dakota (ND) state payroll taxes in 2024
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.
North Dakota state unemployment insurance (SUI)
As an employer in North Dakota, you have to pay unemployment insurance to the state. The rate ranges from 0.08% all the way up to 9.97% on the first $43,800 in wages paid to each employee in 2024.
If you’re a new employer, you will pay 1.02%. New construction employers will have to pay 9.97%
Be sure to pay your SUI in full and on time so you can be eligible for the FUTA tax credit!
Cut those paychecks!
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.
Additional North Dakota payroll tax resources:
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
More helpful payroll calculators that North Dakota employers can try
Employers can use the North Dakota payroll calculator at the top of this page to quickly calculate their employees’ gross pay, net pay, and deductions in a few clicks. But occasionally, a business needs to do a little more math before paying their staff. For example, do customers leave tips for your employees? Remember that you are responsible for withholding taxes from your workers’ paychecks based on the tips they receive. Furthermore, if an employee leaves for another company, you’ll need to calculate their final pay. So, if you need a little more help with the number-crunching, check out some of the calculators below.