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Vermont 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 Vermont.

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Table of Contents

  1. Vermont Minimum Wage Rates
  2. Vermont State Income Tax (SIT) Rates
  3. Vermont State Unemployment Insurance (SUI) Rates
  4. Vermont State Disability Insurance (SDI) Rates
  5. Miscellaneous Vermont Tax Information
  6. Vermont Employer Registration
  7. Additional Vermont Payroll Tax Resources

The Green Mountain State uses a substantially higher minimum wage rate than the one required by the federal government in the Fair Labor Standards Act (FLSA). In fact, the state's overall minimum wage rate is nearly double the federal rate, and its Tipped Minimum Wage rate is more than triple the rate of its federal counterpart.

When it comes to processing payroll, Vermont-based organizations must handle the following taxes in addition to those required by the federal government:

The below information was last updated January 31, 2024. It is not intended as legal or tax advice.

Vermont Minimum Wage Rates

Wage Type

Vermont Rates

Federal Rates

Minimum Wage

 $13.67

$7.25

Tipped Minimum Wage

 $6.84

$2.13

Actual Tip Credit

 $6.83

$5.12

Vermont State Income Tax (SIT) Rates

Vermont'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 $0 - $3,700 0.00%
$3,700 - $51,600 3.35% of excess over $3,700
$51,600 - $119,700 $1,604.65 + 6.60% of excess over $51,600
$119,700 - $245,700 $6,099.25 + 7.60% of excess over $119,700
$245,700 or greater $15,675.25 + 8.75% of excess over $245,700
Married $0 - $11,138 0.00%
$11,138 - $91,088 3.35% of excess over $11,138
$91,088 - $204,488 $2,678.33 + 6.60% of excess over $91,088
$204,488 - $305,788 $10,162.73 + 7.60% of excess over $204,488
$305,788 or greater $17,861.53 + 8.75% of excess over $305,788

 

Additional Vermont SIT Details

Supplemental Withholding Computation
  • 22.00% (payments up to $1 million)
  • 37.00% (payments over $1 million)

If paid at the same time as regular wages, withholding for supplemental wages is calculated as if the total of both wage types were a single wage payment for the regular payroll period.

Valid Filing Statuses
  • S = Single, Married; filing separately
  • M = Married; filing jointly

Exemptions
  • Any services or individuals not subject to withholding under the Internal Revenue Code
  • Interstate carrier employees

Form W-4

 Form W-4VT

Reconciliation Frequency

Annual

Vermont 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.

Vermont SUI Tax Details

Taxable Wage Base

$14,300

Employee Subject to Tax

No

Rates for Experienced Employers

0.40% - 5.40%

Rates for New Employers
1.00%

Effective Period

Fiscal year 2024 (July 1, 2023 - June 30, 2024)

Voluntary Contributions Allowed

No

Vermont State Disability Insurance (SDI) Rates

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

Miscellaneous Vermont 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. Vermont currently has no reciprocal agreements with any other states.

This doesn’t mean, however, that interstate workers living in Vermont pay double. It’s federally illegal for two states to tax the same income. In most cases, the employee’s work state will credit or refund them at tax time based on the taxes they owe their home state. If the tax rates differ, the employee must cover the difference.

Paid Sick Leave (PSL) Taxes

The state of Vermont doesn’t require employers to collect PSL taxes, but it does have an Earned Sick Time (EST) program requiring such leave for eligible employees:

Vermont EST Details
Covered Employees

Any whose primary place of work is in Vermont, except for the following:

  • U.S. government employees
  • Employees working less than 18 hours a week
  • Seasonal employees employed for 20 weeks or fewer in a 12-month period
  • Certain state employees not covered by the collective bargaining agreement
  • Per diem health care workers
  • Short-term substitute teachers
  • Minors under the age of 18
  • Sole proprietors or partner owners of an unincorporated business that's excluded from the state's definition of employee
  • Executive officers, managers, or members of a corporation or LLC for whom the state has approved an exclusion from the state's definition of employee
  • Any individual who:
    • works on a per diem or intermittent basis
    • only works when they indicate they can work
    • is under no obligation to work for the employer offering work and has no expectation of continuing employment with the employer
Covered Employers Any with 6 or more employees
Accrual Method(s) 1 hour per 52 hours worked
Annual Use Maximum 24 hours
Carryover Maximum 40 hours
Annual Accrual Maximum 40 hours (unless the employer opts to give more)
Probationary Period 1 year (optional)
Frontloading Allowed Yes
FAQs Earned Sick Time Law FAQs

Paid Family and Medical Leave (PFML) Taxes

The state of Vermont doesn’t require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.

Child Care Financial Assistance Taxes

Vermont's Child Care Financial Assistance Program is intended to subsidize childcare costs for families. The program is primarily funded via employer contributions, but employers can choose to cover 25% of those Child Care Contributions (CCCs) via mandatory deductions from employee wages. The program will begin collecting contributions on July 1, 2024.

Vermont Child Care Financial Assistance Details
Covered Employees

All
Covered Employers All
Tax Rate 0.44% of all employee wages (up to 0.11% of which can be withheld from employee wages)
FAQs Act 76 FAQs

Vermont Employer Registration

The agencies below 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 Department of Labor for unemployment tax topics.

Registration Details

Department of Revenue

Department of Labor
Phone (802) 828-2551 (802) 828-4344
Online Registration myVTax Login Page Employer Registration Application
Registration Form Form BR-400 Form C-1
Registration Instructions Online and paper registration options are available. Account numbers will be issued in 5 days via online process or 2-3 weeks via mail. Online and paper registration options are available. Account numbers will be issued during the online process or in 2-3 weeks via mail.
Employer Self-Service Login myVTax Login Page

Additional Vermont 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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