Here’s the latest regarding payroll and payroll taxes in Virginia……

Employees covered by Virginia’s minimum wage law must be paid $7.25 an hour.  All employees of employers with at least four workers (including the employer’s spouse, parents or children) are covered except for:

  • employees covered by the Fair Labor Standards Act;
  • outside salespersons on commission;
  • farm laborers or employees;persons whose earning capacity is impaired by physical or mental disability;
  • employees working in primarily public-supported charitable institutions;
  • cab drivers and operators;
  • individuals employed on a piece-rate basis;employees under age 16 or over age 64;
  • full-time students under age 18 not employed more than 20 hours a week;
  • and students of any age enrolled in a full-time work study program or the equivalent at an educational institution.

Virginia employees are subject to a state income tax. The law requires employers to withhold state income tax from their employees’ wages and remit the amounts withheld to the Department of Taxation. Virginia employers are exempt from withholding requirements for certain nonresident employees who live in the District of Columbia, Kentucky, Maryland, Pennsylvania or West Virginia, and who commute daily to work in Virginia and receive wages for services performed in Virginia for an employer within the geographical limits of Virginia.

State unemployment taxes are less favorable for 2012. Although the Fund Balance Factor remains unchanged at 50%, the Pool Cost Charge has increased from 0.47% to 0.53%. Additionally, the Fund Building Charge of 0.20% remains part of the tax rate calculation thus adding to the cost of the tax over base rates. Tax rates for 2012 range from 0.83% to 6.93%. The Virginia unemployment taxable wage base remains unchanged at $8,000. The new employer unemployment rate is 3.23%

For further assistance with Virginia payroll, contact our offices in Newport News, VA  or Johnson City, TN