How to Do Payroll in Nebraska: What Every Employer Needs to Know

Paying workers and managing payroll is one of the most important tasks for employers. Getting this task done correctly can be a huge relief that saves time, money, and headaches

The “nebraska department of labor” is the governmental entity that oversees the state’s workplace laws. It provides information on how to do payroll in Nebraska.

Payroll processing in Nebraska is a rather simple procedure. The majority of the regulations are consistent with federal laws, and unlike other states, Nebraska has no local taxes imposed by towns or municipalities.

Even the most experienced payroll experts, though, may be caught off guard by subtleties. Using a payroll provider, such as Gusto, is the best method to assure accuracy with your Nebraska payroll and avoid significant penalties. You may use it to onboard new workers, pay them directly from their first paycheck, and submit payroll taxes. For a 30-day free trial, sign up now.

Gusto is a great place to visit.

How to Run Payroll in Nebraska: A Step-by-Step Guide

Because Nebraska has no unique taxes or numerous state-specific documents, managing payroll is quite straightforward. The following are the fundamental stages to running payroll in Nebraska.

Step 1: Register your company as an employer. Obtain the Federal Employer Identification Number (FEIN) for your business (FEIN). If your business is newly new, you may need to register for a Federal Employer Identification Number (FEIN). This is a straightforward procedure that may be accomplished entirely online using the Electronic Federal Tax Payment System (EFTPS). Keep the FEIN available if your organization already has one. To pay federal taxes, you’ll need your company’s FEIN.

Step 2: Apply for a Nebraska driver’s license. The Nebraska Department of Revenue requires every firm that pays workers in Nebraska to register. You must also register with the Department of Labor in Nebraska. To correctly withhold payroll taxes, both registrations are necessary.

Step 3: Set up your payroll system. You may have inherited a payroll procedure when you join an established organization. However, if your business is fresh new, you’ll have to start from over with your payroll process, which means deciding when and how you’ll pay workers, collecting payroll forms, paying taxes, and so on. Overall, you have the option of doing your own payroll (which is not suggested), setting up an Excel payroll template, or using a payroll provider.

Step 4: Have staff complete the necessary paperwork. During onboarding, you must gather forms from all of your new workers. On their first day on the job, all workers must undergo I-9 verification. A completed W-4 must also be on file for each employee. Employees must additionally submit Nebraska Form W-4N beginning January 1, 2020. When the federal W-4 was altered, this form was designed to provide employers greater clarification on what allowances workers intended to accept.

Step 5: Go through the time sheets and approve them. You should start this process many days before your paycheck is due, regardless of how regularly you run payroll. You have time to consult with the employee and acquire a resolution if there are any concerns with employee time sheets. Check time sheets for accuracy whether you use paper time sheets or time and attendance software. When using paper time sheets, it’s a good idea to have your workers sign them to confirm that the hours are accurate. The software in electronic time and attendance systems allows for an electronic signature or other kinds of verification.

Step 6: Work out the compensation and taxes for your employees. Using a consistent procedure and payroll software to compute pay and tax withholdings can simplify your life and decrease errors. There are many methods for calculating payroll, and it’s up to you to choose the one that works best for you. Because Nebraska has a progressive income tax, your workers’ deductions may vary.

Income Tax Withholding Rates in Nebraska

Step 7: Reimburse employees for their salary, benefits, and taxes. The majority of businesses now pay their workers by direct deposit, although cash (which isn’t the greatest choice) and paper checks are still available. Ensure that your workers are paid at least the $9 per hour Minimum Wage in Nebraska, which is higher than the federal minimum wage. You may pay your federal and state taxes online in Nebraska. 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. You should maintain copies for at least a few years, as with most company documents. If you ever need to refer to a pay stub, you’ll want to know where to look for it and whether or not you have it on hand. Former workers may complain that they were underpaid, and you may not be able to refute such accusations without accurate documents. Because there are no extra regulations in Nebraska for document preservation or retention, follow the federal criteria.

Step 9: Register with the federal and state governments to file payroll taxes. All Nebraska state taxes must be paid on time, generally quarterly, to the appropriate state agency, which you may do online at the Nebraska Department of Revenue website. You may pay your federal taxes online via the EFTPS system on one of two schedules:

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 on Wednesday, Thursday, and Friday, and by the following Friday for payments made on Saturday, Sunday, Monday, and Tuesday.

Please keep in mind that the reporting and depositing of employment taxes are two separate things. You must submit taxes quarterly on Form 941 or yearly on Form 944, regardless of your payment schedule.

Step 10: Finish your payroll reports for the year. You must first complete all W-2 forms for your workers and 1099 forms for any Contractors who work for themselves at the end of the year. Individuals must have both forms in their possession by January 31 of the following year.

In this tutorial on how to conduct payroll, you may learn more about how to do payroll yourself. You may obtain a free checklist to ensure you don’t miss any tasks.

Payroll Laws, Taxes, and Regulations in Nebraska

Nebraska’s rules are identical to those of the federal government. It’s a good idea to consult with an employment law specialist in your region to ensure that your firm complies with all rules and regulations. Review the ins and outs of conducting payroll in Nebraska below to ensure you stay in compliance.

Taxes in Nebraska

Most employers in the United States are required to pay Federal Insurance Contributions Act (FICA) taxes, with a few exceptions. FICA tax rates for Social Security and Medicare are now 6.2 percent and 1.45 percent, respectively. Nebraska imposes state taxes on enterprises and workers in addition to federal taxes. Businesses are responsible for calculating and withholding the necessary amount of tax from workers, as well as paying a proportion from their own bank accounts.

Unemployment Taxes for Employers

In Nebraska, all companies are required to pay State Unemployment Tax Act (SUTA) taxes. The current rate for negative-rated firms and all new construction employers is 5.4 percent of each employee’s taxable income up to $9,000 per year. The rate for existing enterprises that aren’t in the construction sector is 1.25 percent. Businesses who pay SUTA in full and on time may be eligible for a tax credit of up to 5.4 percent on their FUTA taxes.

Compensation for Employees

Nebraska businesses with one or more employees must carry Compensation for Employees insurance. Workers’ comp premiums will vary depending on the industry in which your company operates. Exceptions to this requirement include:

Employees of the railroad
Volunteers
Contractors who work for themselves
Workers at the home
Agricultural enterprises
Those that work for themselves

Taxes on income

For employees, Taxes on income are a big item you need to keep in mind as more employers allow remote work. If an employee lives in Nebraska but works in another state, they may have to pay Nebraska state income tax, as Nebraska does not currently have reciprocity with any other states. This could cause some employees to pay more in taxes. For most employees, you will need to deduct state Taxes on income from each paycheck.

Minimum Wage in Nebraska

In 2016, Nebraska increased its minimum wage to $9 per hour, which is higher than the federal minimum wage of $7.25. Companies must pay at least $2.13 per hour to tipped workers. The employer must make up the difference if an employee’s tips and cash compensation do not match $9 per hour.

Overtime Calculation

If you have workers who are qualified for overtime compensation, you must multiply their usual rate by 1.5 to compute their overtime pay. If an employee works more than 40 hours in a week, they are entitled to overtime pay.

Employee Remuneration

Nebraska law compels employers to pay workers on a regular basis, but it does not specify a minimum schedule, and neither does federal law. According to Nebraska law, if an employer wants to modify a pay schedule, they must provide at least 30 days’ notice to all impacted workers.

You must have regular and predictable paydays, regardless of your company’s pay schedule. You can’t rearrange the days to aid with cash flow. As a consequence, unless you give impacted workers 30 days’ notice, if you pay your employees on alternating Fridays, you must keep to it.

You may pay your staff in a variety of ways, including cash, paper check, direct deposit, and pay card.

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

Pay Stub Regulations

Employers are required by Nebraska law to give pay stubs to workers on a regular basis. Employers may provide pay stubs to their employees by mail, email, paper copy, or payroll software. The following information must be properly stated on the pay stub:

Name of the business
Employee’s working hours
Earned wages
Making deductions

Use our free pay stub template to get started creating your own pay stubs.

Deductions from Nebraska Paychecks

Aside from the deductions specified above, your firm is prohibited from deducting extra sums from an employee’s paycheck unless the item is approved in writing by the employee and the deduction is:

Local law requires or permits it, and a court has sanctioned it.
Tools, clothing, and other basic equipment are required expenditures.
to return your company’s debts to the employee
to reclaim company property that has been taken

Final Paychecks for Terminated Employees

Many states differentiate between paying an employee’s last paycheck after they leave and paying an employee’s final paycheck after they resign. Nebraska is one of the few states that does not, making your work simpler and less complex. You must pay any employee who has been dismissed, laid off, or resigned their job on the following normal payday or within two weeks of their last day, whichever comes first.

HR Laws in Nebraska That Affect Payroll

Nebraska’s human resources and employment legislation are in line with federal guidelines. Consider some special rules for your staff in order to keep your organization compliant.

Reporting of New Hires in Nebraska

The Nebraska Department of Health and Human Services requires companies to report new hire information. You must submit the employee’s name, address, and Social Security number within 20 days. This must be done for all new employees, as well as those who have been rehired or recalled, including temporary and seasonal workers.

Child Labor Laws in Nebraska

Child labor regulations in Nebraska are mainly based on the Fair Labor Standards Act (FLSA). Workers under the age of 18 are subject to certain limitations under the FLSA.

People as young as 14 may work up to eight hours per day and 48 hours per week in Nebraska. Children 14 and 15 have stricter restrictions around school days, with no employment allowed before 6 a.m. or after 10 p.m., and no more than three hours per day and 18 hours per week.

Breaks

Nebraska follows federal laws and does not mandate workers to take food or rest breaks, although it does charge for small breaks. Getting water or using the bathroom are examples of these activities. Employers that run assembly factories, workshops, or mechanical enterprises are exempt from this restriction. All workers working eight hours or more in a day are entitled to one paid 30-minute break.

Requirements for time off and leave

Leave of Absence for Family

Nebraska follows the Family and Medical Leave Act (FMLA). The state does not provide for any additional maternity, paternity, or Leave of Absence for Family, paid or unpaid.

Paid Vacation

Nebraska does not have a law requiring employers to offer employees Paid Vacation. Employers are free to create Paid Vacation policies and must abide by them.

Sick Leave with Pay

A statute mandating sick leave does not exist in Nebraska. Employers are not required to pay out earned sick leave when an employee quits the firm if they want to provide it.

Use our free PTO calculator if you need assistance calculating your PTO accumulation.

Voting Is Over

Employees who are unable to vote for two consecutive hours due to their work schedule or poll hours are eligible to up to two hours of paid voting leave if they offer at least one day’s notice. The employee’s voting time may be determined by the company.

Payroll Forms in Nebraska

Payroll forms differ by state, and some states have their own W-4 form. Nebraska, fortunately, only has two state-specific forms:

Nebraska residents should use Form W-4N, which is an employee withholding form.
9N: Nonresident employee withholding form

Forms for Federal Payroll

Here is a complete list and location of all the Forms for Federal 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 Nebraska

Conclusion

In comparison to other states, Nebraska payroll is quite simple. Because there are only two state-specific forms and no municipal taxes, all you have to do is keep up with state-specific payroll and HR requirements.

Using payroll software is one of the finest methods to guarantee you don’t make any errors or skip any tasks. Consider using Gusto to assist you in filing correctly and on time. It provides free direct deposit to workers as well as health insurance benefits. Sign up for a free 30-day trial.