Struggling to keep up with payroll and HR in Kentucky? From local ordinances to statewide labor laws, we’ll help you save time and focus on growing your business.
Payroll services in Kentucky
How Paylocity helps Kentucky employers
Payroll that gets it done
- Seamless automation: Eliminate repetitive tasks with automated workflows that boost accuracy and save time.
- Smart safeguards: Built-in audits and integrations flag issues before they become errors.
- Transparent calculations: Easily manage overtime, bonuses, and local tax changes, even across overlapping jurisdictions.
Your extra HR team member
- Automated workflows: Use ready-made templates for common tasks or build custom processes that fit your business.
- One employee record: A single source of truth for employee data keeps everything organized and compliant.
- Effortless Time & Labor: Schedule quickly, track clock-ins and meal breaks, and standardize time-off requests.
Compliance made simple
- Compliance dashboard: Get a clear view of requirements with updated forms and expert HR support.
- Built-in data access: Quickly find work authorizations, EEO/FLSA data, pay records, certifications, and industry updates.
- Always up-to-date forms: Access the latest state and federal forms right from the platform.
Challenges facing employers in Kentucky
Kentucky maintains a complex compliance landscape that requires a careful balance between federal standards and state mandates.
As an employer, you must grapple with:
- Stricter employment regulations ranging from pay transparency to PTO payout laws.
- Specific, state-based limitations on non-compete agreements.
- Additional safety and health requirements under the Kentucky State OSHA plan.
Kentucky payroll fast facts
Minimum wage
$7.25
State income tax rate
3.50%
Right to work laws
Yes
State unemployment tax rate
- 2.70% (new employers)
- 0.30% - 0.90% (experienced employers)
Last updated: February 23, 2026
Kentucky tax and compliance resources
FAQs about paying employees in Kentucky
Does Kentucky have a state income tax?
Yes, Kentucky state income tax uses a flat rate of 3.50%, meaning it applies to all taxpayers regardless of their income levels.
Is Kentucky a right to work state?
Yes, Kentucky is a right to work state under KRS 336.130.
What are the Kentucky final pay laws?
In Kentucky, employees who voluntarily resign from a job or are involuntarily terminated must receive their final paycheck by the later of the next regular payday or within 14 days after termination.
Are there Kentucky work break laws?
Yes, under state law, employers must provide employees with a rest period of at least 10 minutes during each four-hour working period. Employers must also provide a reasonable period for lunch, as close to the middle of an employee's shift as possible.
More than just payroll
Why employers in Kentucky choose Paylocity
Kentucky Derby Museum scales up for racing season
After partnering with Paylocity, the Kentucky Derby Museum galloped toward 95% faster payroll and streamlined recruiting.
