How to Do Payroll in Missouri

Payroll is the process of tracking employee income and deductions, such as taxes and benefits. In Missouri, there are special filing requirements to maintain compliance with state law.

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When it comes to payroll processing, Missouri is a normal state. With a few exceptions, it follows government rules, and some of the most significant deviations are noted below.

Missouri has a progressive state income tax with ten income tax rates depending on each employee’s earnings, which affects how much money you withhold from their paychecks.
St. Louis and Kansas City are the only cities in the state that have a local income tax.
Missouri has several withholding tax reporting dates dependent on the amount of withholding tax withheld by the employer.
When it comes to how frequently workers should be paid, when they should get their last salary, and youth employment, Missouri has tighter restrictions than the federal government.

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Payroll Processing in Missouri: Step-by-Step Instructions

A handbook containing detailed information about the state of Missouri is provided below. If you want further general information, please see our payroll guide.

Step 1: Register your company as an employer. You’ll need your Employer Identification Number (EIN) and an account with the Electronic Federal Tax Payment System (EFTPS) at the federal level (EFTPS).

Step 2: Register with the Missouri Department of Revenue. You must register with the Missouri Department of Revenue at the state level. You’ll need to fill out the Missouri Tax Application to do so. The Missouri tax registration form may be filled out online at the Missouri Department of Revenue’s website or sent to Missouri Department of Revenue, P.O. Box 357, Jefferson City, MO 65105-0357.

Step 3: Create a payroll system. You’ll need to set up payroll and a pay schedule, as well as choose how you’ll pay workers and handle taxes and deductions. You have the option of doing your own payroll, using an Excel payroll template, or using a payroll service. Each choice has advantages and disadvantages.

Collect employee payroll paperwork in step four. During the new hiring process is the optimal time to gather payroll paperwork. W-4, I-9, and Direct Deposit information are all included on Forms for Payroll. You must also file Form MO W-4 in Missouri.

Collect, evaluate, and approve time sheets in step 5. If you have hourly or nonexempt workers who must be paid on an hourly basis, you must decide how you will monitor their work hours. Among the possibilities are:

Step 6: Work out your payroll and pay your staff, including taxes. You have the option of paying staff in a variety of methods (e.g., cash, check, direct deposit, pay cards). EFTPS should be used to pay federal taxes.

Step 7: Register with the federal and state governments to file payroll taxes. Forms and instructions for submitting federal taxes, including unemployment taxes, are available from the IRS. The IRS allows you to purchase official tax forms.

You must submit withholding tax on a monthly, quarter-monthly, quarterly, or yearly basis for Missouri state taxes. For current employers, the frequency of filing is determined by the amount of withholding. It is dependent on your projected withholding for new employment. A method for determining your filing frequency is outlined below.

You must submit weekly if you withheld $9,000 or more in at least two months during the preceding year.
- - The following are the weekly periods:
    - The first seven days of the month are referred to as the month’s first seven days.
    - The 8th through 15th days of the month
    - The sixteenth through the twenty-second days of the month
    - From the 23rd through the final day of the month
- The payment deadlines are three banking days following the seventh, fifteenth, twenty-second, and thirty-first days of the month.

Monthly: If you withheld $500 every month for at least two months during the preceding calendar year, you may file monthly. Payments are due on the same days as quarterly reports, and on the 15th (or next business day) of each month for all other months.
Quarterly: If you withheld at least $100 for at least one quarter in the prior four quarters, you may file quarterly and are not obliged to submit monthly as per the statement above. In a quarter, the payment deadline is the final day of the month, or the following working day if the last day of the month occurs on a bank holiday or weekend.
If you withheld less than $100 in the prior four quarters, you may submit yearly. The payment is due on the 31st of January of the following year.

You only need to fill out one MO-941 form every filing period, regardless of how frequently you have to file.

Step 8: Keep track of your payroll data. Payroll records must be kept for three years in Missouri. The employee’s name, address, job description, amount paid each payroll, pay rate, and daily/weekly hours worked must all be included in these documents.

It is critical to keep records for all workers, even those who have left your organization, for many years. Please read our post on maintaining payroll records if you need assistance deciding which documents to preserve.

Step 9: Complete your year-end payroll tax returns. W-2s (for workers) and 1099s (for non-employees) are the government documents that must be completed (for contractors). Employees and contractors should get these forms by January 31 of the following year. W-2s from the state of Missouri are also necessary, and these forms must be submitted by January 31. You must submit online if you have 250 or more workers. You may submit your information to the State of Missouri Taxation Department if you have less than 250 workers. Visit the Missouri Department of Revenue’s website for further information about filing.

Missouri Payroll Laws, Taxes & Regulations

Income taxes, Social Security, Medicare, and Federal Unemployment Tax Act (FUTA) taxes are all required by federal law. Social Security and Medicare (FICA) are deducted at 6.2 percent and 1.45 percent, respectively, from each employee’s salary. You must also pay a corresponding sum as an employer. The FUTA rate is a 6% employer tax on the first $7,000 in wages paid to each employee in a given year.

See our page on taxes, FICA, and FUTA for additional information on federal payroll taxes and withholdings.

Taxes in Missouri

There are a few things in Missouri that aren’t covered by federal rules. It has a more progressive state income tax system than the federal income tax system, with more brackets. It also contains municipal income taxes in both of its major cities (St. Louis and Kansas City), as well as obligations for unemployment insurance, workers’ compensation, Minimum Pay Period, and final pay stub legislation.

Income Taxes in Different States

Missouri has a ten-tax-bracket progressive income tax system. Below is a table that shows the brackets and the amounts you’ll need to withhold depending on your workers’ earnings.

Income Taxes in Your Community

The two largest cities in Missouri (Kansas City and St. Louis) collect Income Taxes in Your Community at a flat rate of 1%, and all their residents have to pay the tax. In addition, nonresidents must also pay the tax if they are doing work on providing services in the respective cities, so you’ll need to withhold if you have an office in either area.

Unemployment Insurance in the State

Unemployment rates in Missouri are calculated in two ways. One is for start-ups, while the other is for established businesses.

The first, second, and third years of operation are used to characterize new businesses. Nonprofits will have a new employer rate of 1% in 2021, while all other sectors will have a new employer rate of 2.376 percent.

The unemployment tax rate is determined by three criteria after the third year of business: taxes paid, unemployment benefits paid, and yearly taxable payroll amount. In 2021, the present employer rate will most likely range between 0% and 6%. The maximum rate surcharge, contribution rate modification, and voluntary contributions are not included in this calculation.

Maximum Rate Surcharge: If an employer has been at the maximum experience rate for two years in a row, they may be charged an extra rate. This might happen if you have a high staff turnover rate and your workers are looking for work.
Contribution Rate Adjustment: Changes in the average cash balance in Missouri’s unemployment trust fund might result in an increase or reduction in the tax rate.
Voluntary Payments: Employers may make a voluntary contribution to lower their UI tax rate for the year.

Visit the Missouri Department of Labor’s website for additional information about unemployment taxes.

Compensation for Employees

You are mandated by law to provide Compensation for Employees for employees in Missouri if you have five or more employees. The one exception is the construction industry where you are required to provide workers’ comp insurance if you have even one employee.

If you are not obliged to offer workers’ compensation insurance and choose not to do so freely, you risk being sued by an injured employee.

The cost of Compensation for Employees insurance is around $1.04 for each $100 payroll you processed. For example, a company that processes $500,000 of payroll can expect to pay around 5,000 in insurance.

Tips and the Minimum Wage

You will be required to pay at least minimum wage in the majority of positions. If you believe you could be excluded, check out our guide on Federal Minimum Wage Exemptions to be sure.

Missouri has two sets of minimum wage requirements: one for businesses with annual revenues of over $500,000 and another for businesses with annual revenues of less than $500,000. You must pay at least the state’s minimum wage rate of $10.30 per hour for bigger revenue-generating businesses. You may pay the federal minimum wage of $7.25 per hour to smaller revenue-generating businesses.

Overtime

When it comes to overtime, Missouri follows federal law. If your workers work more than 40 hours in a workweek, you must pay 1.5 times their usual hourly rate. Please use the calculator in our guide to calculating overtime for further information and assistance with the calculations.

Employees Can Be Paid in a Variety of Ways

In Missouri, you may pay your staff through a variety of methods. Checks, cash, pay cards, and direct deposit are all available. The employee, on the other hand, must be able to collect their cash without having to pay a processing charge.

Pay Stub Regulations

At least once a month, you must submit a statement of your employee’s earnings and deductions for the pay period. While Missouri just needs you to disclose total deductions for the pay period, it’s a good idea to include other details like the employee’s name, address, rate of pay, total hours worked, and itemized benefit expenditures like 401(k), medical, and vision.

Download one of our free pay stub templates to create your own pay statements. Because they’re fully formatted, you can print and use them right away.

Minimum Pay Period

With a few exceptions, Missouri law mandates that you pay your workers at least twice a month. Employees in executive, administrative, professional, and commission-based positions might be paid on a monthly basis. In most cases, they are paid occupations in an office environment. When in doubt, it’s better to pay biweekly or semimonthly rather than monthly.

Download one of our free pay period calendars to keep track of pay dates and guarantee you pay your workers on time.

Payroll Deduction Regulations

There are no particular regulations in Missouri that govern what may and cannot be taken from an employee’s paycheck. The following are examples of common deductions:

Taxes
Garnishments
Levies
Benefits
Reimbursements

Laws Regarding Final Paychecks

There are no state requirements in Missouri regulating last payments for workers who willingly depart; nevertheless, you must pay an employee who is fired involuntarily at the moment they are fired. If an employee does not get their last salary and contacts you by certified letter, you have seven days to reply and pay the person without incurring fines.

HR Laws in Missouri That Affect Payroll

With the exception of more stringent child labor law regulations, Missouri HR laws mostly follow federal norms.

New Hire Reporting in Missouri

In Missouri, new hires (employees, not contractors) must be reported within 20 days after their start date. You may submit your information to the Missouri Department of Revenue either online or by mail. If your company operates in numerous states, you may report all of your new recruits to one state to make things easy.

Visit the Missouri Department of Social Services’ website for further information.

Requirements for breaks, lunches, and time off

With a few exceptions, Missouri follows federal law when it comes to time-off regulations. The following are the specifics.

Breaks and Lunches: With the exception of 15- and 16-year-olds working in the entertainment business, Missouri does not require companies to offer workers with breaks. These young workers are entitled to a 15-minute rest period after every two hours of continuous labor, as well as a meal break if they work more than 5:30 hours every day.
Vacation and Sick Leave: There are no vacation or sick leave restrictions in Missouri.
Family Leave: There is no distinct state statute governing family leave in Missouri. The Family and Medical Leave Act requires employers to comply with federal law (FMLA). Employers with more than 50 workers for 20 weeks or more in the current or preceding year are subject to the rule. Employees are eligible for FMLA leave if they have been with the firm for at least a year, have worked at least 1,250 hours in the preceding year, and work at a site with 50 or more employees within a 75-mile radius. Visit the Department of Labor’s FMLA site to learn more about the Family and Medical Leave Act.

Disability Insurance Provided by the State

Missouri has no state-run disability program and does not compel businesses to have disability insurance. It is, nevertheless, recommended that you have both for your staff and yourself. Please visit the Missouri Department of Insurance’s website for further information about insurance in Missouri.

Laws Concerning Child Labor

In Missouri, you must keep track of all juvenile workers under the age of 16 for two years, including hours worked, employee names, birth dates, and residences. Individuals under the age of 18 are likewise limited in their employment hours in Missouri. The following are the limitations:

In addition, there is a list of jobs that 14- and 15-year-olds cannot do. Jobs that are excluded (but not limited to) cooks, bakers, drivers, or power equipment handlers. For more information on federal Laws Concerning Child Labor, check out our guide on hiring minors.

Forms for Payroll

The federal and state forms listed below are required to provide correct payroll for workers, as well as compliance payroll reporting and timely tax remittance for businesses.

Missouri Forms for Payroll

Federal Forms for Payroll

W-4 Form: Assists employers in calculating employee withholding tax.
W-2 Form: Shows total annual earnings (one per employee)
W-3 Form: This form summarizes all workers’ total annual pay and taxes.
Form 940 is used to calculate and submit unpaid unemployment taxes to the Internal Revenue Service (IRS).
Form 941 is used to report income and FICA tax withholding on a quarterly basis.
Annual income and FICA tax withholding are reported on Form 944.
1099 Forms: Provides pay information and amounts to contractors to help them calculate their taxes.

Missouri Payroll Tax Resources & Sources

Visit our payroll compliance guide for more information on payroll legislation.

Conclusion

Missouri payroll is distinct from that of other states because of its tiered income tax system, last pay obligations for involuntarily terminated workers, payment frequency, and withholding tax remittance deadlines. Make sure you’re up to date on federal, state, and local deadlines and obligations.

Try Gusto if you want to simplify your payroll process and reduce the amount of requirements you have to keep track of. It withholds and pays all payroll taxes, and it guarantees that they will be paid at the current rate or it will pay your penalties. You may also pay your staff by direct deposit at no extra charge. Today is your chance to try it for free.