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

Wisconsin is one of the most important states in America, so it makes sense that a state-specific guide would be helpful. This article will provide you with some things to know about payroll requirements and other legal matters when conducting business in Wisconsin.

The “wisconsin withholding tax guide 2021” is a helpful tool for employers. It provides information that includes the withholding tax rates, and how to withhold taxes from employees.

Wisconsin has a progressive income tax structure, which implies payroll tax calculations will be more complicated than under a flat tax system. It also has unique rules controlling family and sick leave, as well as child labor standards, which companies must follow. Wisconsin’s payroll, on the other hand, largely follows federal guidelines.

Using an all-in-one payroll provider like Gusto may make conducting payroll in Wisconsin a lot simpler. Gusto helps you ensure that your payroll is right every time, from electronically onboarding new workers to calculating and reporting Wisconsin payroll taxes. For a 30-day free trial, sign up now.

Gusto is a great place to visit.

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

Here’s a quick rundown of how to conduct payroll in Wisconsin.

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: Register your company with the Wisconsin Department of Commerce. If you’re starting a new company, you’ll need to create an account on the Wisconsin One Stop Business Portal website. Any Wisconsin-based business that pays workers is required to register with the Wisconsin Department of Revenue.

Step 3: Set up your payroll system. If you’re starting a new company, you’ll need to figure out how to handle payroll. However, a well-established company will almost certainly have a procedure that you will inherit. It’s crucial to figure out how frequently, when, and how much you’ll pay your staff. To assist you with your Wisconsin payroll, you may process payroll by yourself (not advised), create an Excel payroll template, or use a payroll service.

Step 4: Have staff complete the necessary paperwork. During their onboarding process, every employee at your company must fill out payroll documents. Every employee is required to complete the I-9 verification process. A completed W-4 as well as a Wisconsin Withholding Exemption Certification must be on file for new workers (WT-4).

Step 5: Go through the time sheets and approve them. In order to do payroll correctly, you must start collecting time sheets before the day your paycheck is due. 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. You’ll need to conduct various calculations while processing payroll, such as the total number of hours worked (use our free timecard calculator for assistance), total employee pay, deductions, tax withholdings, and so on.

Step 7: Reimburse employees for their salary, benefits, and taxes. Direct deposit is the most efficient method to pay your staff. However, you may also use cash or paper checks. There is no state minimum wage in Wisconsin, hence the federal minimum wage of $7.25 per hour applies. You may pay your federal and state taxes online in Wisconsin. 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. Wisconsin requires employers to retain a record of all hours worked and salaries given to each employee for at least three years, including their name, address, and date of birth. This is similar to the recordkeeping requirements of the Fair Labor Standards Act (FLSA). You must also keep payroll tax records for a maximum of four years.

Step 9: Register with the federal and state governments to file payroll taxes. All Wisconsin state taxes must be paid on time, generally quarterly, to the appropriate state agency, which you may do online at the Wisconsin 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.

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. In Wisconsin, payroll entails more than merely paying workers on a regular basis. 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. You’ll need to submit copies to the IRS, as well as a summary form that totals the information.

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.

Wisconsin Payroll Laws, Taxes & Regulations

Although Wisconsin payroll rules typically follow federal requirements, there are a few things to keep in mind to ensure that your payroll is proper. Review Wisconsin’s applicable rules 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 Wisconsin

Wisconsin, like other states, mandates you to withhold certain taxes from employee paychecks and make tax payments from your company. Employees in Wisconsin are not subject to municipal taxes.

Taxes on income

Wisconsin’s progressive income tax is rather complicated. The more an employee earns, the more you’ll have to withhold; this includes charging varying rates for different salary/wage ranges. For your convenience, the Wisconsin Department of Revenue publishes withholding tables.

The third tax level will be reduced from 6.27 percent to 5.3 percent, according to the Wisconsin budget for 2021, which has not yet been enacted. Keep a careful eye on whether or not this becomes legislation, since you’ll need to make adjustments if it does.

Unemployment Taxes for Employers

In Wisconsin, all companies are required to pay State Unemployment Tax Act (SUTA) taxes. The current salary base is $14,000, with interest rates ranging from 0% to 12.0%. In Wisconsin, most new firms will pay an SUTA rate of 3.05 percent. New enterprises with a payroll of more than $500,000 will be charged a 3.25 percent tax. Employers in the construction industry will be required to pay 2.9 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.

Compensation for Employees

Wisconsin requires every employer with three or more employees to carry Compensation for Employees insurance, unless your business qualifies for self-insured status. Compensation for Employees insurance provides benefits to employees who suffer on-the-job injuries and covers the cost of medical treatment and lost wages. For every $100 of annual payroll you pay out, you’ll be charged an average of $1.58.

Minimum Wage in Wisconsin

Wisconsin’s minimum wage is $7.25 per hour, which is the same as the federal minimum wage. Companies must pay at least $2.13 per hour to tipped workers if 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

Wisconsin’s overtime standards adhere to the provisions of the Fair Labor Standards Act. 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. You’ll underpay taxes and risk late fees and penalties if you don’t pay overtime when it’s due.

Employee Remuneration

You must pay your staff at least once a month. After the conclusion of a pay period, each payment must be paid within 31 days. You have the option of paying workers more regularly, but you must establish and keep to a pay plan.

Employers in Wisconsin are also required to pay employees using one of the following methods:

Payroll cards may be used to pay workers, but only if the employee agrees in writing.

Pay Stub Regulations

Every paycheck must include a pay stub, which is mandated by law in Wisconsin. It doesn’t matter whether it’s on paper or on the computer. The paystub, however, must contain the following information:

The starting salary rate
The amount of time spent working
Deductions for certain items
The employee’s total net salary

Paycheck Deductions in Wisconsin

Deducting money from employee paychecks for damaged or stolen property, cash shortages, or bad performance is expressly prohibited in Wisconsin. Deductions are permissible for the following reasons:

For each instance, an employee gives written authority to deduct pay.
An employee was found to be culpable and accountable for damaged or stolen goods by the company and a union representative.
Other legal justifications

Final Paychecks for Terminated Employees

When an employee leaves, resigns, or is fired or terminated, you must pay the employee’s last paycheck on the following normal payday. An employee must be compensated within 24 hours of the firm closing, being sold, or merging.

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.

Human Resources Laws in Wisconsin That Affect Payroll

Wisconsin’s human resources regulations are mostly based on federal rules. But make sure you keep a careful eye on things to make sure your organization isn’t breaking any labor rules.

New Hire Reporting in Wisconsin

Every employer in Wisconsin must report new hires and any rehired employees to the New Hire Reporting in Wisconsin Center within 20 days of their hire date. This information is used to enforce child support orders and must include the employee’s name, address, and Social Security number.

Breaks and Meals

If individuals under the age of 18 are scheduled to work more than six hours in a row, Wisconsin law requires that they be given at least one 30-minute break. Any employee who is 18 years of age or older is not required to take a break. Breaks of less than 20 minutes must be compensated, however breaks or lunch times of more than 30 minutes are usually not.

A “One Day of Rest in Seven” legislation is also in place in Wisconsin. Employers who run factories or mercantile firms are subject to this legislation. Every calendar week, these companies must provide at least one 24-hour period of rest to their workers.

Child Labor Laws in Wisconsin

Wisconsin does not limit the number of hours or days that minors aged 16 and 17 may work. Minors 14 and 15 years old, on the other hand, are limited to three hours of labor each school day and 18 hours per week. They may work up to eight hours per day and 40 hours per week on non-school days and while school is not in session.

For additional information, see our guide to employing minors.

Requirements for time off and leave

Click through the tabs below to learn more about Wisconsin’s Requirements for time off and leave.

Wisconsin adheres to the Family and Medical Leave Act (FMLA), which mandates that all qualified companies give up to 12 weeks of unpaid leave to workers with a qualifying ailment. Pregnancy and caring for a sick relative are two examples. Employers are not required to pay workers during this time off, but they must offer the employee with the same or a comparable position when they return to work, according to the FMLA.

Wisconsin has its own family and medical leave law, known as the Wisconsin Family and Medical Leave Act. Although the Wisconsin statute and the FMLA are strikingly identical, the state law will apply to more businesses than the federal law since the state law covers workers who have worked 1,000 hours in the preceding year. Employees must, however, have worked 1,250 hours in the preceding 12 months under federal law.

The most significant difference between the legislation is how an employee may utilize his or her time. The FMLA is silent on how an employee should use their 12 weeks off. The following restrictions are imposed under Wisconsin law:

It takes six weeks for a baby to be born or adopted.
Two weeks if a parent, child, or spouse is suffering from a severe illness.
The employee’s terrible health condition necessitated a two-week leave.

Companies in Wisconsin are not required to provide vacation and paid time off (PTO) benefits to their workers. In Wisconsin, employers are able to set their own PTO rules, including whether or not to pay out accumulated and unused PTO when workers depart. Because there is no legal duty to give out PTO, having it clearly specified 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 enterprises in Wisconsin are not required by law to compensate workers for holidays or to pay them a premium rate for working on a holiday. Companies may opt to pay higher rates or force holiday employees to work, as long as they comply with the FLSA.

Wisconsin does not require employers to provide paid sick leave to their workers. If you choose, your firm may make a policy, and you must follow it, keeping FMLA in mind.

Employers must provide employees with up to three hours of unpaid time off to vote. This time off must be requested at least one day in advance, and you have the authority to decide when the employee may vote.

You are not required to compensate workers who are serving on juries. However, if an employee is called to jury service, you must give an excused absence. Remember that you cannot fire or intimidate an employee who serves on a jury. Failure to comply may lead to legal action.

Businesses in Wisconsin are not required to give bereavement leave to their workers. If you like, you may make your own policies.

Forms for Payroll

Wisconsin has a state W-4, the Employee’s Wisconsin Withholding Exemption Certificate. Wisconsin has no other state Forms for Payroll.

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.
Non-employee contract work 1099 forms: Provides information for non-employee contract work.

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 Wisconsin

Conclusion

Wisconsin’s income tax system is complicated and progressive. You’ll also need to keep up with family and sick leave regulations. Aside from that, making payroll in the state is quite simple.

Use a payroll program like Gusto that helps you through Wisconsin payroll every time to guarantee you get your Wisconsin tax calculations properly. Consider using Gusto to assist you in filing correctly and on time. It even offers free direct deposit to workers. Sign up for a free 30-day trial.