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Payroll management in Idaho

Idaho has a growing economy driven by industries such as agriculture, technology, and manufacturing. With a low cost of living and business-friendly policies, Idaho attracts many employers. However, businesses must comply with state payroll regulations, including minimum wage laws, unemployment insurance taxes, and workers’ compensation requirements. Understanding these rules ensures compliance and smooth payroll operations.

Payroll breakdown in Idaho

Employers in Idaho 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: Idaho’s minimum wage is $7.25 per hour, which aligns with the federal minimum wage.
  • Overtime rules:
    • Idaho 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.
    • Idaho does not mandate daily overtime.

State income tax

  • Idaho has a progressive income tax system, with rates ranging from 1% to 5.8%, depending on income levels.
  • Employers must withhold state income tax and remit it to the Idaho State Tax Commission.

Unemployment insurance (UI) tax

  • Employers must contribute to Idaho’s Unemployment Insurance (UI) program, managed by the Idaho Department of Labor.
  • The wage base for UI tax in Idaho is $49,900.
  • UI tax rates vary based on an employer’s experience rating and range from 0.306% to 5.4%.

Workers’ compensation

  • Idaho law requires most 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 an Idaho Withholding Tax Account Number with the Idaho State 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 Idaho Department of Labor.
  • Payroll tax payments can be made electronically through Idaho’s TAP (Taxpayer Access Point) system.

Quick facts: Important considerations for employers

  • State minimum wage compliance: Idaho follows the federal minimum wage, and employers must comply with federal regulations.
  • Final paycheck rules:
    • If an employee is terminated, employers must provide the final paycheck by the next scheduled payday or within ten days if requested earlier.
    • 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 Idaho New Hire Directory within 20 days.
  • Paid sick leave: Idaho does not mandate paid sick leave, but employers may voluntarily provide this benefit.
  • Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
  • Right-to-work state: Idaho is a right-to-work state, meaning employees cannot be required to join or pay dues to a labor union as a condition of employment.

Run payroll in Idaho with Remote

Managing payroll in Idaho 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.

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