Virginia Wage and Payroll Tax Facts
August 1, 2023
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 Virginia.
Virginia requires a minimum wage rate that is substantially higher than the rates required by the federal government. Moreover, the cities of Alexandria, Arlington, and Charlottesville have special minimum wage rates for contractors that are even higher than the overall state’s minimum wage rate.
When it comes to processing payroll, Virginia-based organizations must handle the following taxes in addition to those required by the federal government:
- Personal Income (a.k.a. State Income Tax)
- State Unemployment Insurance (SUI)
The below information was last updated July 28, 2023. It is not intended as legal or tax advice.
Virginia Minimum Wage Rates
|
Wage Type |
Virginia Rates |
Federal Rates |
|
Minimum Wage |
$12.00 |
$7.25 |
|
Tipped Minimum Wage |
$2.13 |
$2.13 |
|
Actual Tip Credit |
$9.87 |
$5.12 |
|
Wage Type |
Virginia Rates |
Federal Rates |
|
Minimum Wage |
$12.00 |
$7.25 |
|
Tipped Minimum Wage |
$2.13 |
$2.13 |
|
Actual Tip Credit |
$9.87 |
$5.12 |
Local Minimum Wage Rates for Contractors
In addition to the state-wide minimum wage rates above, some cities have unique minimum wage rates for contractors:
|
Location |
Wage Rate |
| Alexandria | $14.13 |
| Arlington | $14.50 |
| Charlottesville |
$10.73 $13.00 (regular, full-time municipal employees only) |
|
Location |
Wage Rate |
| Alexandria | $14.13 |
| Arlington | $14.50 |
| Charlottesville |
$10.73 $13.00 (regular, full-time municipal employees only) |
These rates apply to the following employer types:
Alexandria
- Employers with city service contracts, except construction, estimated to be greater than $50,000.
Arlington
- County contractors providing services valued at more than $100,000 per year on county-owned or county-controlled property.
Charlottesville
- With certain exceptions, city contractors providing nonprofessional services.
Virginia State Income Tax (SIT) Rates
Virginia has a flat income tax rate of 5.75%, meaning all residents pay the same amount regardless of their income levels.
|
Additional Virginia SIT Details |
|
|
Valid Filing Statuses |
N/A |
|
Exemptions |
|
|
Form W-4 |
Form VA-4 |
|
Reconciliation Frequency |
Annual |
|
Additional Virginia SIT Details |
|
|
Valid Filing Statuses |
N/A |
|
Exemptions |
|
|
Form W-4 |
Form VA-4 |
|
Reconciliation Frequency |
Annual |
Virginia 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.
|
Virginia SUI Tax Details |
|
|
Taxable Wage Base |
$8,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.13% - 6.23% |
|
Rates for New Employers |
2.53% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
No |
|
Virginia SUI Tax Details |
|
|
Taxable Wage Base |
$8,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.13% - 6.23% |
|
Rates for New Employers |
2.53% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
No |
Virginia State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Virginia, however, doesn't require employers to collect an SDI tax.
Miscellaneous Virginia Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers only pay taxes in the state where they live, not the state where they work. Virginia currently has reciprocal agreements with the following states:
- Kentucky
- Maryland
- Pennsylvania
- Washington D.C.
- West Virginia
Employers should withhold income tax for the employee’s resident state, as their non-residency status should be declared on their submitted Form VA-4.
Paid Sick Leave (PSL)
The state of Virginia doesn’t require employers to collect tax for paid sick leave, nor does the state have a program providing paid sick leave to employees.
Virginia 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 Taxation for withholding tax topics and the Employment Commission for unemployment tax topics.
|
Registration Details |
Department of Taxation |
Employment Commission |
|
Phone |
(804) 367-8037 | (804) 786-7159 |
|
Online Registration |
https://www.tax.virginia.gov/register-business-virginia | https://www.ireg.tax.virginia.gov/VTOL/tax/iRegSignUp.xhtml?cid=1 |
|
Registration Form |
https://www.tax.virginia.gov/sites/default/files/taxforms/business-registration/any/r-1-any.pdf | https://www.vec.virginia.gov/vecportal/employer/pdf/fc_27new.pdf |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued during the online process or in 2-4 weeks via mail. | Online and paper registration options are available. Account numbers will be issued during the online process or in 1-2 weeks via mail. |
|
Employer Self-Service Login |
https://www.business.tax.virginia.gov/VTOL/tax/Login.xhtml | |
|
Registration Details |
Department of Taxation |
Employment Commission |
|
Phone |
(804) 367-8037 | (804) 786-7159 |
|
Online Registration |
https://www.tax.virginia.gov/register-business-virginia | https://www.ireg.tax.virginia.gov/VTOL/tax/iRegSignUp.xhtml?cid=1 |
|
Registration Form |
https://www.tax.virginia.gov/sites/default/files/taxforms/business-registration/any/r-1-any.pdf | https://www.vec.virginia.gov/vecportal/employer/pdf/fc_27new.pdf |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued during the online process or in 2-4 weeks via mail. | Online and paper registration options are available. Account numbers will be issued during the online process or in 1-2 weeks via mail. |
|
Employer Self-Service Login |
https://www.business.tax.virginia.gov/VTOL/tax/Login.xhtml | |
Additional Virginia Payroll Tax Resources
- Business One Stop
- Department of Taxation Business Registration Checklist
- Business Registration Guide
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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