Easily manage employment in Connecticut

Payroll management in Connecticut

Connecticut has a diverse economy fueled by industries such as finance, insurance, healthcare, and manufacturing. With some of the highest labor costs in the country, Connecticut has strict payroll regulations, including a high minimum wage, paid leave mandates, and complex tax requirements. Employers in Connecticut must carefully navigate these regulations to ensure compliance and avoid penalties.

Payroll breakdown in Connecticut

Employers in Connecticut must follow both federal and state payroll regulations regarding wages, taxes, and benefits. Below is a breakdown of key payroll components:

Minimum wage and overtime

• Minimum Wage: As of 2024, Connecticut’s minimum wage is $15.69 per hour, with annual increases tied to the Employment Cost Index.
• Overtime Rules:
• Employees must be paid 1.5 times their regular rate for hours worked beyond 40 hours in a workweek.
• Connecticut law does not require daily overtime, but some industries may have specific rules.

State income tax

• Connecticut has a progressive income tax system, with rates ranging from 3% to 6.99%, depending on income levels.
• Employers must withhold state income tax and remit it to the Connecticut Department of Revenue Services (DRS).

Unemployment insurance (UI) tax

• Employers must contribute to Connecticut’s Unemployment Insurance (UI) program, managed by the Connecticut Department of Labor (DOL).
• The wage base for UI tax in Connecticut is $15,000.
• UI tax rates vary based on an employer’s experience rating and range from 1.7% to 6.6%.

Paid Family and Medical Leave (CT PFMLA)

• Connecticut mandates Paid Family and Medical Leave (PFMLA), funded through a 0.5% employee payroll tax on wages.
• PFMLA provides up to 12 weeks of paid leave for qualifying employees needing time off for medical or family reasons.

Workers’ compensation

• Connecticut law requires all employers to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.

Payroll tax filing and payment deadlines

• Employers must register for a Connecticut Withholding Tax Account Number with the Connecticut DRS.
• State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to the Connecticut DOL.
• Payroll tax payments can be made electronically through myconneCT, the state’s online tax portal.

Quick facts: Important considerations for employers

• State Minimum Wage Adjustments: Connecticut’s minimum wage increases annually based on economic conditions.
• Final Paycheck Rules:
• If an employee is terminated, employers must provide the final paycheck by the next business day.
• If an employee resigns, the final paycheck must be provided by the next scheduled payday.
• New Hire Reporting: Employers must report new hires to the Connecticut State Directory of New Hires within 20 days.
• Paid Sick Leave:
• Connecticut mandates paid sick leave for certain service workers, requiring one hour of paid sick leave per 40 hours worked, up to 40 hours per year.
• Payroll Recordkeeping: Employers must maintain payroll records for at least four years to comply with state and federal laws.
• Right-to-Work Status: Connecticut is not a right-to-work state, meaning employees can be required to join or pay fees to a union if applicable.

Run payroll in Connecticut with Remote

Managing payroll in Connecticut requires careful attention to state-specific regulations, including minimum wage laws, paid family leave, and payroll tax requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

For businesses looking to simplify payroll management, Remote’s payroll solutions provide automated payroll processing, tax filing, and compliance support tailored to Connecticut’s regulations. With Remote, employers can focus on business growth while ensuring accurate and hassle-free payroll operations.

To see just how easy global payroll can be, book a demo today.