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Georgia Passes Bill Lowering Income Tax Rate For 2025
May 05, 2025
At A Glance
- Effective July 1, 2025, HB 111 reduces the Georgia individual state income tax rate retroactive to the beginning of 2025.
- Rate decreases will continue over the next two years, resulting in a 4.99% rate in 2027.
Summary
On April 15, 2025, Georgia Governor Brian Kemp signed HB 111, which takes effect on July 1, 2025. The legislation includes a plan to reduce the state's individual income tax rate from 5.39% to 5.19% retroactive to January 1, 2025. Beginning January 1, 2026, the state's income tax rate will be reduced annually by 0.10% until it reaches 4.99%.
Next Steps
In accordance with this legislation, Paylocity will update its system with Georgia's new 5.19% withholding rate effective July 1, 2025. Note, the state's supplemental withholding tax rate will also be updated to 5.19%.
This change will not require any payroll withholding adjustments as any excess tax collected will be refunded to individuals for their 2025 personal income tax filings.
The state's withholding form (Form G-4) is also being monitored for any changes that may impact withholding tax calculations.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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