Your estimated Missouri payroll tax will appear here.
Understanding Missouri Payroll Taxes
Missouri payroll taxes are a crucial component for employers to understand and manage. These taxes fund state-specific programs and services. The primary payroll taxes at the state level in Missouri are Unemployment Insurance (UI) tax and typically, withholding for state income tax. Federal payroll taxes (Social Security, Medicare, and federal income tax withholding) are separate and in addition to these state obligations.
Missouri Unemployment Insurance (UI) Tax
Missouri UI tax is paid by employers to fund unemployment benefits for eligible workers who lose their jobs through no fault of their own.
Taxable Wage Base: For 2024, the Missouri UI taxable wage base is $13,900 per employee per year. This means employers only pay UI tax on the first $13,900 of wages paid to each employee annually.
Employer Rates: UI tax rates vary significantly based on an employer's industry, their history of unemployment claims (experience rating), and the overall solvency of the state's unemployment fund. New employers typically start with a "new employer rate," which is often higher than established rates. For 2024, new employer rates can range significantly, and existing employers' rates are determined by their specific experience factor. The range can be from as low as 0.3% to over 10% in some cases. For simplicity in this calculator, we will use a representative average new employer rate of 2.5% as an example for calculation purposes, but it's crucial to consult your official Missouri Department of Labor and Industrial Relations rate notice for your specific rate.
Missouri State Income Tax Withholding
Like most states, Missouri requires employers to withhold state income tax from employee wages. The tax is progressive, meaning higher earners pay a higher percentage of tax. The withholding amounts depend on the employee's total wages, their pay frequency, and the number of allowances they claim on their Form MO W-4.
Tax Brackets and Rates: Missouri has a tiered income tax system. For 2024, the tax rates and brackets are as follows (subject to change by the Missouri Department of Revenue):
Up to $100: 0%
$101 – $1,000: 1.5%
$1,001 – $2,000: 2.0%
$2,001 – $3,000: 2.5%
$3,001 – $4,000: 3.0%
$4,001 – $5,000: 3.5%
$5,001 and over: 4.95%
Withholding Calculation: Employers use IRS Publication 15-T and Missouri-specific withholding tables or methods provided by the Missouri Department of Revenue to determine the exact amount to withhold. This calculator uses a simplified method based on annualizing gross wages and applying the state tax brackets directly for estimation purposes. It does not account for employee allowances or specific deductions, which would require more detailed employee information.
How This Calculator Works (Simplified)
This calculator provides an *estimation* of your Missouri payroll tax obligations. It calculates:
Missouri UI Tax: It multiplies the gross wages by the assumed UI tax rate (2.5%, representing a common new employer rate) and caps the calculation at the annual taxable wage base ($13,900). This is a simplified estimate for the employer's portion.
Missouri State Income Tax Withholding: It annualizes the gross wages based on the selected pay frequency, applies the Missouri state income tax bracket rates to the annualized income, and then divides the annual tax liability back to the pay period. This is a simplified estimation and doesn't account for W-4 allowances.
Disclaimer: This calculator is for informational and estimation purposes only. It is not a substitute for professional tax advice. Actual tax liabilities may vary based on your specific UI rate, employee withholding elections (W-4 allowances), and any other applicable federal, state, or local taxes. Always consult with a qualified tax professional or refer to official government resources for precise calculations and compliance.
Use Cases
This calculator is useful for:
Small business owners estimating their potential payroll tax burden.
Freelancers or independent contractors looking to understand potential taxes if they were to employ staff.