How to do Payroll in Louisiana: What Every Employer Needs to Know

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In Louisiana, the employer is required to report wages and withhold federal income tax from employees’ paychecks. Employees in Louisiana are also subject to state taxes as well as a payroll service fee that may be deducted by an employer.

The “louisiana income tax withholding table 2022” is a document that shows the amount of taxes to be withheld from employee paychecks. The document is updated every year, and employers should use it to determine their payroll obligations in Louisiana.

Payroll processing in Louisiana is quite simple. There is just one state-specific payroll form in Louisiana, and there are no municipal taxes. Its income tax system is progressive rather than flat, meaning that the more money an employee earns, the more taxes they will pay.

Consider utilizing an all-in-one payroll program like Gusto to guarantee you compute your payroll taxes appropriately. You may use Gusto to onboard new workers, give them with the necessary documents, pay them directly from their first paycheck, and submit Louisiana payroll taxes. You’re also protected if its salespeople make a mistake that results in fines. For a 30-day free trial, sign up now.

Gusto is a great place to visit.

Payroll Administration in Louisiana: A Step-by-Step Guide

Although processing Louisiana payroll is not a difficult task, trying to compute Louisiana payroll tax by hand might lead to expensive errors. Here are the fundamentals of Louisiana payroll processing.

Step 1: Register your company as an employer. To get a new Federal Employer Identification Number (FEIN), new businesses may need to use the Electronic Federal Tax Payment System (EFTPS) (FEIN). To pay federal taxes, you’ll need your FEIN.

Step 2: Fill out a Louisiana registration form. If your company is brand new, you must create an account on the Louisiana Secretary of State’s website. The Louisiana Department of Revenue requires every firm that pays workers in the state to register.

Step 3: Set up your payroll system. You’ll need to figure out how frequently you’ll pay workers and how much you’ll pay them (cash vs direct deposit vs check). Setting up a structure that dictates how you collect and maintain Forms for Payroll can also help you remain organized as your business grows.

Step 4: Have staff complete the necessary paperwork. To remain in compliance, you must gather specific payroll papers when your organization employs new workers. Every employee must complete I-9 verification, which must be submitted within three days of the employee’s start date. A completed W-4 must also be on file for new workers. Louisiana also requires workers to fill out Louisiana Form L-4, which is used to calculate state taxes.

Step 5: Go through the time sheets and approve them. You’ll need to keep track of your hourly or nonexempt workers’ working hours if you have them. Most small company owners use a time sheet template or invest in time and attendance software to produce their own time sheets. In any case, you’ll need to set aside enough time to check your workers’ timesheets for correctness well before payday, so you can process them and fix any problems if necessary.

Step 6: Work out the gross compensation and taxes for each employee. Many payroll calculations are required, beginning with calculating total work hours, if you’re paying hourly, and overall gross pay; a time card calculator may assist with this stage, as can an Excel payroll template or payroll software.

Step 7: Reimburse employees for their salary, benefits, and taxes. The majority of businesses now pay all workers through direct deposit. However, you may pay with cash (which isn’t the greatest choice) or a paper check. Because there is no state minimum wage in Louisiana, make sure you pay your workers at least the federal minimum wage of $7.25 per hour. You may pay your federal and state taxes online in Louisiana. If you utilize a benefits provider, they should collaborate with you to make deductions as straightforward, automated, and electronic as possible.

Step 8: Make a backup of your payroll data. It’s a good idea to keep track of your company’s finances. Companies must maintain the following information for at least one year under Louisiana law:

Name, address, and work title of each employee
Each employee’s daily and weekly hours worked
For each pay period, the salaries given to each employee

However, federal law mandates that you keep payroll records for at least three years and payroll tax records for four years.

Step 9: Register with the federal and state governments to file payroll taxes.

All Louisiana state taxes must be paid on time, generally quarterly, to the appropriate state agency, which you may do online at the Louisiana Department of Revenue website. You may pay your federal taxes online using the EFTPS on one of the two schedules shown below:

When the IRS sets you a monthly schedule, you must deposit employment taxes on payments received during that calendar month by the 15th of the next month.
When the IRS gives you a semiweekly schedule, you must deposit employment taxes by the following Wednesday for payments made Wednesday, Thursday, and Friday, and by the following Friday for payments made Saturday, Sunday, Monday, and Tuesday.

It’s vital to realize that the reporting and depositing of employment taxes are two separate things. You should only submit taxes quarterly on Form 941 or annually on Form 944, regardless of your payment plan.

Step 10: Finish your payroll reports for the year.

You’ll need to file payroll reports every year, including all W-2 and 1099 forms. Employees and contractors must have these forms in their possession by January 31 of the following year.

Follow our tutorial on how to conduct payroll for your small company for more basic information on how to make payroll. You may obtain a free checklist to ensure you don’t miss any tasks.

Payroll Laws, Taxes, and Regulations in Louisiana

Understanding how to compute Louisiana payroll taxes, as well as the associated rules and regulations, is critical for ensuring accuracy every time you process payroll. Most employers in the United States are required to pay Federal Insurance Contributions Act (FICA) taxes, with a few exceptions. You’ll deduct the amounts from everyone’s gross pay and pay a matching amount out of your business bank account. The current FICA tax rate for Social Security is 6.2 percent of each employee’s paycheck, and 1.45 percent for Medicare; you’ll deduct the amounts from everyone’s gross pay and pay a matching amount out of your business bank account.

Review the particular processes for making payroll in Louisiana below to ensure you stay in compliance with payroll requirements.

Taxes in Louisiana

Local taxes are not levied in Louisiana, but you must pay state income and unemployment taxes. Workers’ compensation insurance is also needed for most firms, however it is not technically a tax.

Taxes on income

You’ll need to withhold state Taxes on income from each employee’s paycheck. To calculate, you’ll use the state W-4 forms they provide at the time of hire and Louisiana’s withholding tax tables. One thing to note is that Louisiana does not have tax reciprocity with any other state. This means employees who work and pay taxes in Louisiana but live in a neighboring state may end up paying double tax; to avoid this, you should recommend they complete Louisiana’s Form L-4, the Employee Withholding Exemption Certificate.

Unemployment Taxes for Employers

All companies in Louisiana are required to pay taxes under the State Unemployment Tax Act (SUTA). Pay rates vary from 0.09 percent to 6.20 percent, with a basic wage of $7,700. In Louisiana, all new employers will pay an SUTA rate ranging from 1.16 percent to 2.89 percent.

What if I told you that Employers are also liable for paying federal unemployment taxes (FUTA), which may be as high as 6% of each employee’s first $7,000 in earnings. You may save up to 5.4 percent on FUTA if you pay SUTA on time, leaving you with just 0.6 percent to pay.

Compensation for Employees

Louisiana businesses must carry Compensation for Employees insurance to ensure they’re covered if an employee becomes hurt or ill on the job or as a result of work performed on the job. There are, however, exceptions. If your company falls into one of the following, you may not be required to carry Compensation for Employees insurance:

There are no workers in your company (only partners or co-owners)
You exclusively hire domestic staff and real estate agents.

Minimum Wage in Louisiana

Louisiana has a simple minimum wage that is the same as the federal minimum wage. Louisiana’s minimum wage was last increased in 2008, to $7.25 per hour. Tipped workers must be paid at least $2.13 per hour if their gratuities bring them up to the hourly minimum wage. You’ll have to pay the difference if they don’t.

Overtime Calculation

Louisiana overtime regulations are based on the Fair Labor Standards Act (FLSA). For hours worked beyond 40 in a workweek, all businesses are required under the FLSA to pay workers 1.5 times their usual hourly rate.

Employee Remuneration

Employers in four sectors must pay workers at least twice a month and within 10 days after the end of the pay period, according to Louisiana law. The four industries are as follows:

Natural gas and oil
Mining
Manufacturing
Service to the public good

Other industries do not have a pay frequency requirement. This gives other businesses the freedom to decide how often they wish to pay their staff. The cadence, however, must be constant in order to comply with federal requirements.

Louisiana also has no provisions for how workers must be compensated. The following are some of the most prevalent methods to pay your employees:

Use one of our suggested methods to generate a free payroll check if you need to pay an employee right away and aren’t presently utilizing a service.

Pay Stub Regulations

There is no legislation in Louisiana that requires businesses to furnish workers with a regular pay stub. We do, however, suggest that you give one. It should contain basic information about your employee (name, job title, hours worked, etc. ), the covered pay period, pay rate, total gross pay, taxes and other deductions deducted, and final pay as a best practice.

Paycheck Deductions in Louisiana

To comply with Louisiana payroll regulations, you can’t deduct an employee’s salary unless:

The employee intentionally and knowingly destroys or breaks corporate property or saleable objects.
The employee is found guilty or pleads guilty to stealing money or property from the firm.

To be clear, this implies that employers in Louisiana are prohibited from deducting anything from employees’ paychecks for the following reasons:

Money shortages
Uniforms are required.
Tools that are required
Additional goods required for work

Final Paychecks for Employees

You must pay an employee’s last paycheck on the next normal payday after their last day of work or within 15 days, whichever comes sooner, if they are terminated or otherwise depart the firm. The period to pay the employee’s last paycheck is the same regardless of how the separation happened.

HR Laws in Louisiana That Affect Payroll

The majority of Louisiana’s human resources legislation are based on federal rules. To ensure that your firm complies with all Louisiana payroll rules, pay particular attention to state-specific filing requirements.

Reporting of New Hires in Louisiana

Within 20 days after their employment date, every Louisiana company must report new hires and rehired workers to the Louisiana Directory of New Hires. This document must contain the employee’s name, address, and Social Security number and is used to enforce child support obligations.

Breaks and Meals

Companies in Louisiana are not required to give breaks to workers who are 18 years old or older. The state, on the other hand, requires that any employee under the age of 18 who is scheduled to work five hours in a row be provided an unpaid lunch break. The dinner break must be at least 30 minutes long.

Child Labor Laws in Louisiana

Children under the age of 14 are not allowed to work in Louisiana. Children aged 14 and 15 may work in jobs that are not in the manufacturing, mining, or other hazardous sectors if they meet the following criteria:

The youngster is not absent from school.
The youngster works just three hours each school day or 18 hours per week.
On a non-school day, the youngster only works eight hours, or 40 hours in a non-school week.

Other than the above-mentioned break requirement, there are no limitations on youngsters aged 16 or 17 who want to work.

Requirements for time off and leave

Generally, Louisiana does not have any state-specific Requirements for time off and leave; however, it does offer a few additional leaves under its Family Leave law.

Louisiana abides by the federal Family and Medical Leave Act (FMLA), which mandates that certain employers provide up to 12 weeks of unpaid time off to eligible employees who are giving birth, adopting, or fostering a child, caring for a sick family member, or performing military duties, among other things. You must comply if you had at least 50 workers for at least 20 weeks during the current or previous year.

With two exclusions, Louisiana law does not give for any extra leave:

When a company has more than 25 workers, it is required to give a woman with up to four months of unpaid leave for incapacity due to pregnancy, delivery, or any other medical condition.
Small Things: In order to cope with child-related activities that cannot be planned outside of work, all firms operating in Louisiana must give workers with up to 16 hours of unpaid leave in every rolling 12-month period.

Employers in Louisiana are not required to give paid time off to their workers (PTO). If a firm does provide this benefit, it must produce and adhere to the policy it establishes—if you don’t have one yet, utilize our PTO policy template. Unless the business policy expressly indicates that earned PTO will not be paid out upon separation with an employee, companies must likewise pay out any accrued PTO upon separation with an employee—no use it or lose it.

There is no legislation in Louisiana mandating private enterprises to pay workers for holidays or to pay them a higher rate for working on a holiday. A business may choose to do so, but it must abide with the FLSA.

There is no legislation in Louisiana that requires companies to give paid or unpaid sick leave to their workers.

Employers in Louisiana are not required to provide their workers time to vote.

Employers in Louisiana are prohibited from firing or penalizing employees who serve on juries, as long as the employee gives sufficient notice.

Businesses in Louisiana are not required to give bereavement leave to their workers. If a company wants to develop a policy, they are allowed to do so.

Forms for Payroll

Forms for Payroll can vary from state to state, and some have their own W-4, like Louisiana. Fortunately, that’s the only one.

Form L-4 (employee withholding)

Federal Forms for Payroll

Here is a complete list and location of all the federal Forms for Payroll you should need.

W-4 Form: Provides information on employee withholdings so you can properly calculate and withhold federal and state Taxes on income
W-2 Form: This form is used to record each employee’s total yearly pay.
W-3 Form: This form is used to record all workers’ total yearly salaries.
Form 940 is used to compute and submit unpaid unemployment taxes to the Internal Revenue Service (IRS).
Form 941 is used to submit quarterly income tax returns.
Form 944 is used to submit yearly income tax returns.
Non-employee contract work 1099 forms: Provides information for non-employee contract work.

Payroll Tax Resources in Louisiana

Conclusion

Payroll in Louisiana is less complicated than in many other states, and the necessary rules and regulations typically follow federal norms. There is just one form for each state, and there are no local payroll taxes.

It is still possible to make errors while processing Louisiana payroll, and these mistakes may be expensive. Avoid fines and penalties by using payroll software like Gusto to compute and pay employee paychecks and taxes. It not only files taxes, but it also pays workers through direct deposit. Sign up for a free 30-day trial.