Easily manage employment in Vermont
Make employment in Vermont easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Vermont, all in one easy-to-use platform.
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Payroll management in Vermont
Vermont has a strong economy supported by industries such as agriculture, healthcare, tourism, and manufacturing. With state-specific payroll regulations, including a high minimum wage, progressive state income tax, and paid leave requirements, employers in Vermont must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.
Payroll breakdown in Vermont
Employers in Vermont 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: Vermont’s minimum wage is $13.67 per hour, with annual adjustments for inflation.
- Tipped employees must be paid a minimum of $6.84 per hour, with tips making up the difference to meet the standard minimum wage.
- Overtime rules:
- Vermont 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
- Vermont has a progressive state income tax system, with rates ranging from 3.35% to 8.75%, depending on income levels.
- Employers must withhold state income tax and remit it to the Vermont Department of Taxes.
Unemployment insurance (UI) tax
- Employers must contribute to Vermont’s Unemployment Insurance (UI) program, managed by the Vermont Department of Labor.
- The UI wage base in Vermont is $13,500.
- UI tax rates vary based on an employer’s experience rating and range from 0.4% to 5.4%.
- New employers typically pay a 1.0% UI tax rate.
Workers’ compensation
- Vermont law requires all employers with one 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 family-run farms and independent contractors.
Paid family and medical leave
- Vermont offers Paid Family and Medical Leave (PFML), which allows employees to take partially paid leave for qualifying family or medical reasons.
- Employers must comply with state and federal leave laws, including the Vermont Parental and Family Leave Act (PFLA).
Payroll tax filing and payment deadlines
- Employers must register for a Vermont Withholding Tax Account with the Vermont Department of Taxes.
- State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
- UI tax reports must be submitted quarterly to the Vermont Department of Labor.
- Payroll tax payments can be made electronically through the Vermont Department of Taxes’ online portal.
Quick facts: Important considerations for employers
- State minimum wage compliance: Vermont’s minimum wage is higher than the federal rate and is adjusted annually for inflation.
- Final paycheck rules:
- If an employee is terminated, employers must provide the final paycheck within 72 hours.
- 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 Vermont New Hire Reporting Center within 10 days.
- Paid sick leave: Vermont requires employers to provide one hour of paid sick leave for every 52 hours worked, up to 40 hours per year.
- Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
- Right-to-work state: Vermont is not a right-to-work state, meaning employees may be required to join a union if applicable.
Run payroll in Vermont with Remote
Managing payroll in Vermont 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.
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.