Easily manage employment in Louisiana

Payroll management in Louisiana

Louisiana has a diverse economy driven by industries such as energy, tourism, agriculture, and manufacturing. With a relatively low cost of living and a business-friendly tax structure, the state provides an appealing environment for employers. However, businesses must adhere to state payroll regulations, including minimum wage laws, unemployment insurance taxes, and workers’ compensation requirements. Understanding these regulations ensures compliance and smooth payroll operations.

Payroll breakdown in Louisiana

Employers in Louisiana must follow 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: Louisiana does not have a state-mandated minimum wage. Employers must adhere to the federal minimum wage of $7.25 per hour.
• Overtime rules:
• Louisiana 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.
• Louisiana does not mandate daily overtime.

State income tax

• Louisiana has a progressive state income tax system with rates ranging from 1.85% to 4.25% depending on income levels.
• Employers must withhold state income tax and remit it to the Louisiana Department of Revenue.

Unemployment insurance (UI) tax

• Employers must contribute to Louisiana’s Unemployment Insurance (UI) program, managed by the Louisiana Workforce Commission.
• The wage base for UI tax in Louisiana is $7,700.
• UI tax rates vary based on an employer’s experience rating and range from 0.09% to 6.20%.

Workers’ compensation

• Louisiana 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 a Louisiana Withholding Tax Account Number with the Louisiana 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 Louisiana Workforce Commission.
• Payroll tax payments can be made electronically through the Louisiana Taxpayer Access Point (LaTAP).

Quick facts: Important considerations for employers

• No state-mandated minimum wage: Louisiana follows the federal minimum wage requirements.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck by 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 Louisiana Directory of New Hires within 20 days.
• Paid sick leave: Louisiana 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: Louisiana 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 Louisiana with Remote

Managing payroll in Louisiana 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.