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The US state of West Virginia is a hotbed for business, sporting some of the most sought-after businesses and industries that include automotive manufacturing, electronics production, and coal mining.
How to do payroll in West Virginia
West Virginia is one of the few states that doesn’t require employers to provide employees with a written contract. This means that if you’re looking for information on how to do payroll in West Virginia, you’ll need to know the laws yourself. Read more in detail here: west virginia payroll laws.
Because West Virginia has a progressive income tax rather than a flat rate, calculating payroll tax and withholding may be difficult. This also implies that each employee must fill out a state tax withholding form.
Using an all-in-one payroll service like Gusto can make running your West Virginia payroll a lot easier. Gusto assists you in ensuring that your payroll is precise every time, from electronically onboarding new workers to calculating and reporting West Virginia withholding and payroll tax. For a 30-day free trial, sign up now.
Gusto is a great place to visit.
Payroll in West Virginia: A Step-by-Step Guide
It will not be difficult to learn how to perform payroll in West Virginia if you follow each of these procedures and comply with all applicable employment regulations. Calculating West Virginia payroll taxes by hand, on the other hand, might lead to significant mistakes.
Step 1: Register your company as an employer. To get a new Federal Employer Identification Number (FEIN), new businesses may need to use the federal Electronic Federal Tax Payment System (EFTPS) (FEIN). To pay federal taxes, you’ll need your FEIN.
Step 2: File a business registration with the state of West Virginia. If you’re starting a new company, you’ll need to register on the Secretary of State’s website in West Virginia. Any business that pays workers in West Virginia is required to register with the state tax department.
Step 3: Set up your payroll system. It’s critical to have a normal procedure in place that you follow every payroll run to avoid making errors. If your business has been operating for a while, you’ve probably inherited a process, but you may still want to tweak it to suit your requirements. You’ll need to select how frequently you’ll pay workers and what payment method you’ll use—the most typical options are paper checks and direct deposit. You’ll also need a system in place to collect Forms for Payroll, track tax payments and filings, and so forth.
Step 4: Have staff complete the necessary paperwork. During the new recruit onboarding process, each firm hiring workers in West Virginia must gather specific paperwork. Each employee must complete an I-9 form. In addition, new hires must have a completed W-4 form on file, as well as the West Virginia counterpart, Form WV IT-104. If direct deposit is a possibility for payment, have workers sign and complete a direct deposit permission form.
Step 5: Go through the time sheets and approve them. When you get employee time sheets many days before your due date, payroll starts. Reviewing your nonexempt workers’ time sheets allows you to talk with anybody who may have committed a mistake. Employee time tracking may be done in a variety of methods, some of which are free.
Step 6: Work out the gross compensation and taxes for each employee. It is not advisable to calculate payroll by hand. Because West Virginia has a progressive income tax, verifying your calculations will be more difficult than required. You may either do it yourself using Excel (we offer a free Excel payroll template) or hire a payroll service.
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. The minimum wage in West Virginia is $8.75 per hour, which is more than the federal minimum wage of $7.25 per hour. You may pay your federal and state taxes in West Virginia online. 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. Employers are required by West Virginia law to preserve payroll paperwork that contain each employee’s name and address, rate of pay, hours of employment, payroll deductions, and amount paid for each pay period. Businesses must also preserve payroll records for at least three years and payroll tax paperwork for four years under the Fair Labor Standards Act (FLSA).
Step 9: Register with the federal and state governments to file payroll taxes. All West Virginia state taxes must be paid on time, generally quarterly, to the appropriate state agency, which you may do online at the West Virginia State Tax Department’s 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.
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’ll need to file payroll reports every year, including all W-2 and 1099 forms. These forms must be sent to workers by January 31 of the following year. Individual copies of each, as well as an overall summary form, must be sent to the IRS.
Check out our tutorial on how to handle payroll for additional information on how to conduct payroll on your own. You may obtain a free checklist to ensure you don’t miss any tasks.
West Virginia Payroll Laws, Taxes & Regulations
Compliance with all federal and state employment rules is critical when calculating West Virginia payroll taxes to guarantee an accurate paycheck on every occasion. Review the rules, taxes, and regulations linked to handling payroll in West Virginia below to help you stay in compliance with payroll requirements.
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. These taxes will be paid by both the employer and the employee, with each contributing 7.65% of the total Social Security and Medicare taxes.
Taxes in West Virginia
West Virginia, like other states, has a set of taxes that businesses must pay. There are no municipal taxes in any of the state’s cities or towns, but the state does have a progressive income tax, which means that rates rise as income rises.
Unemployment Taxes for Employers
In West Virginia, all companies are required to pay State Unemployment Tax Act (SUTA) taxes. The current pay base is $12,000, with 1.50 percent to 8.50 percent interest rates. In West Virginia, all new employers must pay an SUTA rate of 2.7 percent. Businesses may receive a tax credit of up to 5.4 percent on their Federal Unemployment Tax Act (FUTA) payments if they pay SUTA in full and on schedule. The FUTA rate is usually 6% on the first $7,000 of an employee’s pay, but a 5.4 percent reduction would reduce it to 0.6 percent.
Taxes on income
West Virginia’s income tax system is progressive. You’ll need to use the table below to compute your workers’ income tax withholdings.
Compensation for Employees
West Virginia requires every employer with one or more employees to carry Compensation for Employees insurance. Compensation for Employees insurance provides benefits to employees who suffer on-the-job injuries and covers the cost of medical treatment and lost wages. There are, however, exceptions to this rule, and your company does not have to carry Compensation for Employees insurance if you fit into one of the following categories:
- There are less than three temporary workers in your company.
- There are less than six agricultural laborers in your company.
- You exclusively hire domestic staff.
- Your company is a church.
- Longshore and port employees are employed by your company.
Minimum Wage in West Virginia
If your company has at least six workers, West Virginia requires you to pay a minimum wage of $8.75 per hour; if your company has less than six employees, you may pay the federal minimum wage of $7.25 per hour. West Virginia requires employers to pay tipped employees who work for a firm with at least six employees a rate as low as $2.62 per hour, as long as their tips bring them up to the hourly minimum wage. If this is not the case, the corporation will be required to make up the shortfall.
Overtime Calculation
West Virginia overtime laws are based on the Fair Labor Standards Act, which mandates that all businesses pay workers 1.5 times their usual hourly rate for hours worked in excess of 40 in a workweek.
Employee Remuneration
Employees must be paid at least twice a month, with no more than 19 days between pay periods. You have the option of paying workers more often than twice a month, but if you do, you must establish regular pay days and advise employees of any changes ahead of time. Use one of our free pay period calendars if you need assistance keeping track of your payroll periods.
You may pay employees in West Virginia in one of the following ways:
Pay Stub Regulations
Companies in West Virginia are required to submit pay stubs to their workers. The pay stub must contain the following information:
- Hourly wage or compensation of an employee
- The number of hours worked by an employee during a pay period.
- Are there any overtime rates?
- Bonuses or commissions
- Deductions for certain items
Paycheck Deductions in West Virginia
West Virginia permits approved deductions from an employee’s compensation, such as those mandated by a court order, permitted by law, or connected to benefit schemes. However, a corporation may only deduct illegitimate funds from a paycheck if the employee agrees in writing through a notarized wage assignment.
Please keep in mind that, according to the Department of Labor, a corporation cannot deduct from an employee’s salary if doing so would result in the person earning less than the federal minimum wage ($7.25 per hour) for the pay period.
Final Paychecks for Terminated Employees
When an employee leaves, resigns, is fired, or is discharged, West Virginia law requires that their final payment be paid no later than the following normal payday. To minimize any lawsuits and litigation, we encourage making payment as quickly as possible.
HR Laws in West Virginia That Affect Payroll
There are minimal state-specific HR legislation in West Virginia. You must still obey federal requirements, which are usually followed by West Virginia law.
Reporting on New Hires in West Virginia
Every employer in West Virginia must report new hires and any rehired employees to the Reporting on New Hires in West Virginia Center within 14 days of their hire date (take note of this because many states allow 20 days). This report is used to enforce child support orders and must include the employee’s name, address, and Social Security number.
Breaks and Meals
If an employee is scheduled to work six or more hours in a row, West Virginia law requires employers to offer at least a 20-minute break. The break does not have to be compensated as long as it is at least 20 minutes long and the employee may entirely withdraw from job tasks. Payment is required for any meal or break that lasts fewer than 20 minutes.
Child Labor Laws in West Virginia
A West Virginia Employment Certificate is required for children under the age of 16 who desire to work. This certificate is not required for children aged 16 and 17. When school is not in session, children under the age of 16 may work up to eight hours per day and 40 hours per week. They are only allowed to work three hours per day and 18 hours per week when school is in session. For youth aged 16 and 17, there are no limitations on working hours.
Requirements for time off and leave
Because there aren’t many state-specific paid time off laws, you’ll have to rely on federal law. You’ll need to provide workers time off to vote (which doesn’t have to be paid) and make sure your PTO policy is in line with your voting procedure.
The Family and Medical Leave Act (FMLA) mandates that all qualified companies give up to 12 weeks of unpaid leave to workers with a covered disability. Pregnancy and caring for a sick relative are two examples. Employers are not required to pay employees during this time off, but they must provide the employee with the same or a similar job when they return to work, according to the FMLA. State legislation in West Virginia does not provide for any extra family leave.
There are no rules in West Virginia that require companies to give paid time off to their workers (PTO). Companies in West Virginia are allowed to set their own PTO rules, including whether or not to pay out accumulated and unused PTO to departing workers. Companies in West Virginia are not required to do so, therefore having this clearly outlined in your business policy is a smart idea. The most crucial thing is to follow your policy’s restrictions, otherwise you might be held accountable.
Use our free PTO calculator if you provide paid time off and need assistance calculating your workers’ PTO accumulation.
Private businesses in West Virginia are not compelled to compensate their workers for holidays or to pay them a higher rate if they work on a holiday. Companies may opt to pay higher rates or force holiday employees to work, as long as they comply with the FLSA.
There is no legislation mandating you to provide workers with paid or unpaid sick time. Employers are able to develop their own sick leave policies as long as they follow the FMLA criteria.
All businesses in West Virginia are required to offer employees with up to three hours of paid time off to vote if the employee requests the time off in writing at least three days before to election day or the day they choose to vote if they are voting early. If workers have three hours of off-duty time while polls are open, employers are not compelled to compensate them for time off to vote.
Employees who are called to jury service are not required to be paid. However, after examining the summons for jury duty service, you must excuse the employee from work.
You are not required to give bereavement leave to your workers. You may, however, set policies if you so choose.
Forms for Payroll
Form WV IT-104 is the sole state payroll form in West Virginia. The Employee’s Withholding Exemption Certificate is the state’s W-4 form.
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 Version: A summary form of the W2 that is used to report total yearly salaries for all workers.
- 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.
- 1099 Forms: Provides details for contract work performed by non-employees.
For a more detailed discussion of federal forms, check out our guide on the federal Forms for Payroll you may need.
Payroll Tax Resources in West Virginia
Conclusion
Although West Virginia is not the simplest state in which to make payroll, ensuring that you follow all applicable employment rules and have a clear plan in place will help you better prepare.
It’s easy to make errors while manually computing payroll tax or withholdings. You can avoid these blunders by using payroll software like Gusto, which guides you through every step of the West Virginia payroll process. It will correctly and timely submit your payroll taxes. It also allows you to pay staff through direct deposit at no additional expense. Sign up for a free 30-day trial.
Gusto is a great place to visit.
West Virginia has a number of employment laws that employers should be aware of. These include the Fair Labor Standards Act, the West Virginia Equal Pay Law and the West Virginia Wage Payment and Collection Act. Reference: west virginia employment laws.
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