Easily manage employment in Oklahoma

Payroll management in Oklahoma

Oklahoma has a diverse economy supported by industries such as energy, agriculture, aerospace, and manufacturing. With state-specific payroll regulations, including a minimum wage that aligns with federal law, a progressive income tax system, and right-to-work laws, employers in Oklahoma must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in Oklahoma

Employers in Oklahoma must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:

Minimum wage and overtime

• Minimum wage: Oklahoma follows the federal minimum wage of $7.25 per hour, as the state does not have a higher minimum wage requirement.
• Employers with fewer than 10 full-time employees or annual gross sales under $100,000 may be exempt from minimum wage laws.
• Overtime rules:
• Oklahoma follows federal overtime laws, requiring employers to pay 1.5 times an employee’s regular rate for hours worked beyond 40 hours in a workweek.
• Some exemptions apply based on job classification and industry.

State income tax

• Oklahoma has a progressive state income tax system, with rates ranging from 0.25% to 4.75%, depending on income levels.
• Employers must withhold state income tax and remit it to the Oklahoma Tax Commission.

Unemployment insurance (UI) tax

• Employers must contribute to Oklahoma’s Unemployment Insurance (UI) program, managed by the Oklahoma Employment Security Commission (OESC).
• The UI wage base in Oklahoma is $26,100.
• UI tax rates vary based on an employer’s experience rating and range from 0.3% to 9.2%.
• New employers typically pay a 1.5% UI tax rate.

Workers’ compensation

• Oklahoma law requires most employers to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Employers may purchase coverage through the Oklahoma Workers' Compensation Commission (OWCC) or private insurers.

Payroll tax filing and payment deadlines

• Employers must register for an Oklahoma Withholding Tax Account with the Oklahoma Tax Commission.
• State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to the Oklahoma Employment Security Commission (OESC).
• Payroll tax payments can be made electronically through the Oklahoma Taxpayer Access Point (OkTAP).

Quick facts: Important considerations for employers

• State minimum wage compliance: Oklahoma follows the federal minimum wage of $7.25 per hour, with exemptions for certain small businesses.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck on the next scheduled payday.
• 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 Oklahoma New Hire Reporting Center within 20 days.
• Paid sick leave: Oklahoma does not require employers to provide paid sick leave, but employers may choose to offer it as a benefit.
• Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
• Right-to-work state: Oklahoma is a right-to-work state, meaning employees cannot be required to join a union as a condition of employment.

Run payroll in Oklahoma with Remote

Managing payroll in Oklahoma requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.