Updated: October 11, 2023
According to the Small Business Administration, 99.3% of businesses in Utah are classified as small businesses, which translates to a quarter million businesses employing half a million employees. Whether you own the hippest new restaurant in Salt Lake City or the best bed & breakfast in the mountains, there is one thing you just can’t avoid: payroll taxes. Luckily, our Utah payroll calculator eliminates all the confusion associated with calculating payroll, so you can spend more time focusing on growing your business and less time on the administrative side of things.
All you have to do is enter wage and W-4 information for each employee, and our calculator will do the rest. It will figure out your employees’ gross pay, net pay, and deductions for both Utah and Federal taxes.
Federal payroll taxes for Utah employers
First and foremost, we have to give Uncle Sam his fair share. Here’s a quick rundown of what you need to know when it comes to calculating federal payroll taxes. If you would like to see a detailed rundown, head on over to our comprehensive step-by-step guide for more detailed information.
- Calculate Gross Wages:
- For all your hourly employees, multiply their hours worked by the pay rate. Don’t forget to increase the rate for any overtime hours.
- For all your salaried employees, divide each employee’s annual salary by the number of pay periods you have.
- Also add in commissions, tips, or bonuses into gross wages.
- Calculate Any Pre-Tax Withholdings: If your employees contribute to HSA, 401(k) or other pre-tax withholdings, deduct the appropriate amount from their gross pay before you calculate payroll taxes.
- Deduct Federal Income Taxes: Federal taxes can range anywhere from 0% to 37% of taxable earnings. We won’t get into the nitty-gritty details here, but you can find further withholding information through the IRS website.
- Deduct and match any FICA taxes:
- Social Security tax, which is 6.2% of each employee’s taxable wages up until they reach $160,200 for the year. Employers also have to pay a matching 6.2% tax up to the wage limit.
- Medicare tax, which is 1.45% of each employee’s taxable wages up to $200,000 for the year. For any wages above $200,000, there is an Additional Medicare Tax of 0.9%, which brings the rate to 2.35%. Employers have to pay a matching 1.45% of Medicare tax, but only the employee is responsible for paying the 0.9% Additional Medicare Tax.
- Calculate the FUTA Unemployment Tax, which is 6% of the first $7,000 of each employee’s taxable income. Note that if you pay state unemployment taxes in full and on time, you are eligible for a tax credit of up to 5.4%, which brings your effective FUTA tax rate to 0.6%. It’s a whopping 90% tax savings! Only employers are responsible for paying the FUTA tax, not employees.
- Subtract Post-Tax Deductions, which can be anything from court-ordered wage garnishments to child support. Most of your employees won’t have post-tax deductions, but you still need to look out for them.
Utah (UT) payroll taxes for 2023
Now that we’re done with federal taxes, let’s talk about Utah state taxes, shall we?
Calculating Utah state income tax is very straightforward. Every employee pays a flat tax of 4.95%, so you don’t need to worry about tax brackets and marginal rates.
Easy peasy, right?
Utah unemployment insurance
Utah doesn’t have state disability insurance, but it does have unemployment insurance, which covers those unemployed through no fault of their own. The wage base for 2023 is $44,800 (in 2022 is was $41,600) and rates range from 0.3% to 7.3%
You’ve almost at the finish line! All that’s left to do after calculating your employee’s net pay is cut those checks. Just make sure you’re setting aside the amount your company needs to pay to avoid any FICA and UI tax fiascos.
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 Utah payroll tax resources:
Just in case you want to learn even more about Utah payroll taxes, here are a few helpful links.
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.
Other payroll calculators for Utah businesses
Employers can use the Utah payroll calculator at the top of this page to quickly calculate their employees’ gross pay, net pay, and deductions in a few clicks. But sometimes a business needs to do a little more math before paying its workers. For instance, do your customers leave tips for your staff? 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 what their final paycheck will be. So, if you need a little more help with the number-crunching, check out some of the calculators below.