Easily manage employment in Mississippi

Payroll management in Mississippi

Mississippi has a diverse economy supported by industries such as agriculture, manufacturing, healthcare, and energy. With no state-specific minimum wage laws and a lower tax burden, employers in Mississippi must ensure compliance with federal payroll laws and state tax regulations. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in Mississippi

Employers in Mississippi 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: Mississippi does not have a state minimum wage, so employers must follow the federal minimum wage of $7.25 per hour.
• Overtime rules:
• Mississippi 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

• Mississippi has a progressive state income tax system, with rates as follows:
• 0% on the first $4,000 of taxable income.
• 4% on income between $4,001 and $10,000.
• 5% on income above $10,000.
• Employers must withhold state income tax and remit it to the Mississippi Department of Revenue.

Unemployment insurance (UI) tax

• Employers must contribute to Mississippi’s Unemployment Insurance (UI) program, managed by the Mississippi Department of Employment Security (MDES).
• The UI wage base in Mississippi is $14,000.
• UI tax rates vary based on an employer’s experience rating and range from 0% to 5.4%.
• New employers typically pay a 2.7% UI tax rate.

Workers’ compensation

• Mississippi law requires most employers with five or more employees to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Some exemptions apply, including certain agricultural workers, domestic employees, and independent contractors.

Payroll tax filing and payment deadlines

• Employers must register for a Mississippi Withholding Tax Account Number with the Mississippi Department of Revenue.
• State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to the Mississippi Department of Employment Security (MDES).
• Payroll tax payments can be made electronically through the Mississippi Taxpayer Access Point (TAP) portal.

Quick facts: Important considerations for employers

• State minimum wage compliance: Mississippi follows the federal minimum wage of $7.25 per hour.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck on the next regular 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 Mississippi State Directory of New Hires within 15 days.
• Paid sick leave: Mississippi 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: Mississippi is a right-to-work state, meaning employees cannot be required to join a union as a condition of employment.

Run payroll in Mississippi with Remote

Managing payroll in Mississippi requires careful attention to federal and state-specific regulations, including UI tax requirements, workers’ compensation laws, and income tax withholding. 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.