Minnesota Wage and Payroll Tax Facts

February 02, 2024

Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of Minnesota.

Minnesota requires a slightly higher minimum wage rate than those required by the federal government in the Fair Labor Standards Act (FLSA). That rate, however, varies based on the size of the organization, as do the local minimum wage rates required by the cities of Minneapolis and St. Paul. 
When it comes to processing payroll, Minnesota-based organizations must handle the following taxes in addition to those required by the federal government:

The below information was last updated January 30, 2024. It is not intended as legal or tax advice.

Minnesota Minimum Wage Rates

Wage Type

Minnesota Rates

Federal Rates

Minimum Wage

$8.85 (small employers)
$10.85 (large employers)


Tipped Minimum Wage



Actual Tip Credit



Note: A large employer has an annual gross sales volume of $500,000 or more. A small employer's annual volume is less than $500,000.

Local Minimum Wage Rates

In addition to the state-wide minimum wage rates above, some cities have unique minimum wage rates as well:


Wage Rate

$14.50 (employers with 100 or fewer employees)
$15.19 (employers with 101 or more employees)
St. Paul
$11.50 (employers with 5 or fewer employees)
$13.00 (employers with 6 - 100 employees)
$15.00 (employers with 101 - 10,000 employees)
$15.19 (employers with 10,001 or more employees)

Minnesota State Income Tax (SIT) Rates

Minnesota's SIT is progressive, meaning it adjusts based on the income level of the employee paying the tax.

Filing Status

Income Tax Bracket
[Over X] - [But not over Y]

2024 Income Tax Rate

Single / Individual $0 - $31,690 5.35% of excess over $0
$31,690 - $104,090 6.80% of excess over $31,690
$104,090 - $193,240 7.85% of excess over $104,090
$193,240 or greater 9.85% of excess over $193,240
Married (filed jointly) $0 - $46,330 5.35% of excess over $0
$46,330 - $184,040 6.80% of excess over $46,330
$184,040 - $321,450 7.85% of excess over $184,040
$321,450 or greater 9.85% of excess over $321,450
Married (filed separately) $0 - $23,165 5.35% of excess over $0
$23,165 - $92,020 6.80% of excess over $23,165
$92,020 - $160,725 7.85% of excess over $92,020
$160,725 or greater 9.85% of excess over $160,725
Head of Household $0 - $39,010 5.35% of excess over $0
$39,010 - $156,760

6.80% of excess over $39,010

$156,760 - $256,880 7.85% of excess over $156,760
$256,880 or greater 9.85% of excess over $256,880


Additional Minnesota SIT Details

Valid Filing Statuses

  • S = Single or married claiming self
  • M = Married claiming both

Exemptions (rates)

Number of regular and special allowances

Exemptions (individuals)

  • Any services or individuals not subject to withholding under the Internal Revenue Code
  • Noncash remuneration paid to a retail salesperson
  • Nonresidential employees from reciprocating states (ND & MI)
  • Interstate carrier employees
  • Military employees
  • Nonresident military spouses

Form W-4

Form W-4MN*

Reconciliation Frequency


*Minnesota still bases SIT withholdings on allowances and, in certain circumstances, Form W-4MN must be sent to the Department of Revenue. Review the form's instructions for more information.

Minnesota State Unemployment Insurance (SUI) Rates

SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.

Minnesota SUI Tax Details

Taxable Wage Base


Employee Subject to Tax


Rates for Experienced Employers

1.0% - 8.9%

Rates for New Employers

Vary by industry and range from 1.0% - 8.9%

Effective Period

Calendar Year

Voluntary Contributions Allowed

Yes; only by electronic payment and due within 120 days from the beginning of the calendar year for which the rate is effective.

Additional Surcharge Rates

  • Workforce Enhancement Fee: 0.10%
  • Minnesota Federal Loan Assessment: 0.0%
  • Minnesota Special Assessment Rate: 0.0%

Minnesota State Disability Insurance (SDI) Rates

SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Minnesota, however, doesn't require employers to collect an SDI tax.

Miscellaneous Minnesota Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. Minnesota currently has reciprocal agreements with the following states:

  • Michigan
  • North Dakota

Residents of these states need to submit Form MW-R to qualify for exemption from Minnesota SIT. 

Additionally, the state doesn't provide unemployment wage base credits to employers when an employee moves to Minnesota from another state. In other words, if an existing employee moves to Minnesota at any point in the calendar year, their employer can't claim the employee's wages from before the move against Minnesota's SUI tax calculations.

For example, if Employee A transferred to a worksite in Minnesota after working at a different site in Wisconsin for the prior 6 months, their employer can't claim the wages earned in Wisconsin against Minnesota's SUI wage base limit. Even if Employee A's wages for the calendar year already met Wisconsin's wage base limit, any future wages earned after the transfer will still be subject to Minnesota's wage base limit.

Paid Sick Leave (PSL) Taxes

The state of Minnesota doesn't require employers to collect PSL taxes, but it does have an Earned Sick and Safe Time (ESST) program providing such leave to eligible employees:

Minnesota ESST Details
Covered Employees Any who work for their employer for at least 80 hours
Covered Employers Any with 1 or more employees
Accrual Method(s) 1 hour per 30 hours worked
Annual Accrual Cap

48 hours

Carryover Allowed Yes, but employers can cap accrual at 80 hours
Frontloading Allowed Yes
FAQs Earned Sick and Safe Time FAQs

Paid Family and Medical Leave (PFML) Taxes

Like SDI, Minnesota's PFML program is funded via mandatory payroll deductions and employer contributions. The program will begin collecting contributions on January 1, 2026, and eligible employees can begin filing claims at that same time.

Minnesota PFML Details
Covered Employees Most Minnesota employees will become eligible after they've earned more than approximately $3,500 in wages within the state over a period of a year
Covered Employers All
Tax Rate 0.70% of an employee's wages (split evenly between employers and employees, though employers can pay a greater portion if they want)
Maximum Leave Available

12 weeks for a single event, but up to 20 weeks for multiple events within the same year

Wage Replacement
  • 90% of wages that don't exceed 50% of the state’s average weekly wage
  • 66% of wages that exceed 50% of the state's average weekly wage but are less than 100% of the state’s average weekly wage
  • 55% of wages that exceed 100% of the state’s average weekly wage
FAQs Minnesota Paid Leave FAQs

Minnesota Employer Registration

The below agencies can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Revenue for withholding tax topics and the Unemployment Insurance Agency for unemployment tax topics.

Registration Details

Department of Revenue

Unemployment Insurance Agency


(651) 282-5225 (651) 296-6141

Online Registration

MN E-Services Homepage UI Employer Registration Page
Registration Instructions  Online registration is required, and account numbers are issued during the registration process. Online registration is required. Account numbers, temporary IDs, and temporary passwords are issued during the registration process. Permanent IDs and passwords will be mailed in 1-2 weeks.
Employer Self-Service Login MN E-Services Homepage Minnesota Unemployment Insurance System Login

Additional Minnesota Payroll Tax Resources


This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.


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