Types of state payroll taxes
| Tax Type | Who Pays | Purpose |
|---|---|---|
| State Income Tax | Employee (withheld) | Funds state government |
| State Unemployment (SUTA) | Employer | Funds state unemployment benefits |
| State Disability (SDI) | Employee or Both | Disability insurance (CA, NJ, NY, etc.) |
| Paid Family Leave (PFL) | Employee or Both | Family leave benefits (some states) |
| Local Income Tax | Employee (withheld) | City/county taxes (some locations) |
State income tax withholding
How it works
- Employee completes a state W-4 (or uses federal for states that allow it)
- We calculate withholding based on state tax tables
- Amount is deducted from each paycheck
- We deposit to the state and file returns
States with no income tax
Nine states have no state income tax:- Alaska
- Florida
- Nevada
- New Hampshire (dividends only)
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Multi-state employees
If an employee works in multiple states (or lives in one, works in another):| Situation | How It’s Handled |
|---|---|
| Lives and works in same state | Tax that state |
| Lives in State A, works in State B | Usually tax work state (some exceptions) |
| Reciprocal agreement states | Tax residence state only |
| Remote workers | Complex—depends on state rules |
Reciprocal agreements
Some neighboring states have agreements where residents only pay tax in their home state:| State | Reciprocal With |
|---|---|
| Pennsylvania | Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia |
| Virginia | DC, Kentucky, Maryland, Pennsylvania, West Virginia |
| New Jersey | Pennsylvania |
State unemployment (SUTA)
How SUTA works
- States set a wage base (e.g., 56,500)
- Your company is assigned a rate (new employers get a standard rate)
- Rate adjusts based on claims history (experience rating)
- You pay SUTA on wages up to the wage base
State wage bases (examples)
| State | Wage Base | Typical New Employer Rate |
|---|---|---|
| California | $7,000 | 3.4% |
| New York | $12,500 | 4.0% |
| Texas | $9,000 | 2.7% |
| Florida | $7,000 | 2.7% |
| Washington | $68,500 | 1.0% |
Wage bases and rates change annually. We update them automatically each year.
Experience rating
After you’ve been in business for a while (typically 2-3 years), your SUTA rate adjusts based on claims:- Fewer claims → Lower rate
- More claims → Higher rate
State disability and paid leave
Several states require additional withholdings:State Disability Insurance (SDI)
| State | Who Pays | Rate |
|---|---|---|
| California | Employee | 1.1% (2024) |
| New Jersey | Both | Employee 0.27%, Employer varies |
| New York | Employee | 0.5% (capped) |
| Rhode Island | Employee | 1.1% |
| Hawaii | Both | Varies |
Paid Family Leave (PFL)
| State | Who Pays | Benefit |
|---|---|---|
| California | Employee | Family bonding, care |
| New York | Employee | Family leave |
| New Jersey | Employee | Family leave |
| Washington | Both | Family and medical leave |
| Massachusetts | Both | Paid family and medical leave |
Setting up state taxes
Register with each state
Before running payroll in a state, you need state tax accounts:
- State withholding account number
- State unemployment account number
- Any additional program registrations (SDI, PFL)
State registration help
When you add employees in a new state, Pluvel can help with registration:- We detect the new state when you add the employee
- You see a prompt to register or enter existing account numbers
- For many states, we can register you automatically
- For others, we provide links and instructions
Filing state returns
Filing schedules
Most states require quarterly filings, but schedules vary:| Pattern | States (Examples) |
|---|---|
| Monthly (large employers) | CA, NY (if liability exceeds threshold) |
| Quarterly | Most states |
| Annual reconciliation | Many states (January/February) |
What we file
For each state where you have employees:| Return | Frequency | Contents |
|---|---|---|
| Withholding return | Quarterly (usually) | Wages paid, tax withheld |
| Unemployment return | Quarterly | Wages by employee, tax due |
| Annual reconciliation | Annual | Total wages and tax for year |
| Wage reports | Quarterly or Annual | Employee-level detail |
Common state tax issues
Employee moved to a new state
Employee moved to a new state
When an employee relocates:
- Update their address in Employees → [Name] → Personal Info
- We stop withholding for the old state
- We start withholding for the new state
- If you have no registration in the new state, we prompt you to register
State says I owe more than expected
State says I owe more than expected
Discrepancies can occur because:
- Late payments incur penalties and interest
- Rate changes weren’t updated in Pluvel
- Prior period adjustments
SUTA rate notice received
SUTA rate notice received
When you receive your annual rate notice:
- Go to Settings → Tax → State Accounts → [State]
- Click Update Rate
- Enter the new rate and effective date
- Future payrolls use the new rate
Local taxes
Local taxes
Some cities and counties levy their own income taxes (Philadelphia, New York City, Ohio cities, etc.):
- We track local jurisdictions based on employee work addresses
- Local taxes are calculated and withheld automatically
- We file local returns where required
State tax resources
| State | Agency | Portal |
|---|---|---|
| California | EDD | edd.ca.gov |
| New York | DOL | labor.ny.gov |
| Texas | TWC | twc.texas.gov |
| Florida | DOR | floridarevenue.com |
Payroll tax overview
Learn how we handle all payroll taxes.