Processing payroll in Louisiana is relatively straightforward. Louisiana has only one state-specific payroll form and no local taxes. Its income tax system is progressive vs flat, so the more an employee makes, the more they will pay in taxes.
To ensure you calculate your payroll taxes correctly, consider using an all-in-one payroll service like Gusto. With Gusto, you can onboard new employees, provide them the right forms, pay via direct deposit from their first paycheck, and file Louisiana payroll taxes. And if its reps make a mistake that leads to penalties, you’re covered. Sign up today for a 30-day free trial.
Step-by-Step Guide to Running Payroll in Louisiana
Processing Louisiana payroll is not a complex process but attempting to calculate Louisiana payroll tax by hand could result in costly mistakes. Here are your basic steps for running payroll in Louisiana.
Step 1: Set up your business as an employer. New companies may need to access the Electronic Federal Tax Payment System (EFTPS) to create a new Federal Employer Identification Number (FEIN). Your FEIN is required to pay federal taxes.
Step 2: Register with Louisiana. If your business is new, you need to register on the Louisiana Secretary of State’s website. Any company that pays employees in Louisiana must register with the Louisiana Department of Revenue.
Step 3: Create your payroll process. You’ll need to decide how often you’re going to pay employees and how (cash vs direct deposit vs check). In addition, setting up a system that governs how you’ll collect and manage payroll forms will help you stay organized as you grow.
Step 4: Have employees fill out relevant forms. When your company hires new employees, there are certain payroll forms you must collect to stay in compliance. Every employee must complete I-9 verification, and you’re required to submit the form within three days of their hire date. New employees must also have a completed W-4 on file. Louisiana also requires employees to complete Louisiana Form L-4 for its state taxes.
Step 5: Review and approve time sheets. If you have hourly or nonexempt employees, you’ll need to track their work hours. Most small business owners create their own time sheets using a time sheet template or upgrade to time and attendance software. Either way, you’ll need to allot enough time to review your employees’ timesheets for accuracy well in advance of payday, so you have time for processing and to correct any errors, if needed.
Step 6: Calculate employee gross pay and taxes. Doing payroll requires many payroll calculations, starting with calculating total work hours, if you’re paying hourly, and overall gross pay; using a time card calculator can help; an Excel payroll template or payroll software can also help automate this step.
Step 7: Pay employee wages, benefits, and taxes. Most companies today pay all employees through direct deposit. But cash (not the best way) and paper check are also options. Louisiana does not have a state minimum wage, so make sure that you are paying your employees at least the federal minimum wage of $7.25 per hour. You can pay your federal and Louisiana state taxes online. If you use a benefits provider, it should work with you to make deductions simple, automatic, and electronic.
Step 8: Save your payroll records. Keeping your company business records is good practice. Louisiana law requires companies to keep the following information for at least one year:
- Each employee’s name, address, and job title
- The daily and weekly hours worked by each employee
- The wages paid to each employee for each pay period
Federal law however requires you to maintain payroll records for at least three years and payroll tax records for four.
Step 9: File payroll taxes with the federal and state government.
All Louisiana state taxes need to be paid to the applicable state agency on the schedule provided, usually quarterly, which you can do online at the Louisiana Department of Revenue website. To pay federal taxes, you can make those payments online using the EFTPS on one of the following two schedules:
- Monthly: When the IRS assigns you a monthly schedule, you need to deposit employment taxes on payments made during a calendar month by the 15th of the following month
- Semiweekly: When the IRS assigns you a semiweekly schedule, you must deposit employment taxes for payments made Wednesday, Thursday, and Friday by the following Wednesday, and for payments made Saturday, Sunday, Monday, and Tuesday, by the following Friday.
It’s important to note that reporting schedules and depositing employment taxes are different. Regardless of the payment schedule you’re set up on, you should only report taxes quarterly on Form 941 or annually on Form 944.
Step 10: Complete year-end payroll reports.
Every year, you will need to complete payroll reports, including all W-2 forms and 1099 forms. These forms need to be in the hands of employees and contractors no later than Jan. 31 of the following year.
For more general information on doing payroll for your small business, follow our guide on how to do payroll. It has a free checklist you can download to make sure you don’t miss any steps.
Louisiana Payroll Laws, Taxes, and Regulations
To ensure accuracy every time you run payroll, it is vital that you understand how to calculate Louisiana payroll taxes and the applicable laws and regulations. With few exceptions, most employers in the US must pay Federal Insurance Contributions Act (FICA) taxes. The current FICA tax rate for Social Security is 6.2% of each employee’s paycheck and 1.45% for Medicare; you’ll deduct the amounts from everyone’s gross pay and pay a matching amount out of your business bank account.
To ensure you maintain compliance with payroll regulations, review the specific steps of doing payroll in Louisiana below.
Louisiana does not levy local taxes, but you are responsible for state income and unemployment taxes. Workers’ comp, although not exactly a tax, is also required for most employers.
You’ll need to withhold state income taxes from each employee’s paycheck. To calculate, you’ll use the state W-4 forms they provide at the time of hire and Louisiana’s withholding tax tables. One thing to note is that Louisiana does not have tax reciprocity with any other state. This means employees who work and pay taxes in Louisiana but live in a neighboring state may end up paying double tax; to avoid this, you should recommend they complete Louisiana’s Form L-4, the Employee Withholding Exemption Certificate.
Employer Unemployment Taxes
All businesses in Louisiana must pay State Unemployment Tax Act (SUTA) taxes. The current wage base is $7,700 and rates range from 0.09% to 6.20%. All new employers in Louisiana will pay a SUTA rate ranging from 1.16% to 2.89%.
Did you know? Employers are also responsible for paying federal unemployment taxes (FUTA), which are up to 6% of the first $7,000 of each employee’s paycheck. However, if you pay SUTA on time, you can earn up to a 5.4% discount on FUTA, leaving you with only 0.6% to pay.
Louisiana businesses must carry workers’ compensation insurance to ensure they’re covered if an employee becomes hurt or ill on the job or as a result of work performed on the job. There are, however, exceptions. If your company falls into one of the following, you may not be required to carry workers’ compensation insurance:
- Your business has no employees (only partners or co-owners)
- You employ only domestic workers or real estate salespeople
For more detail on Louisiana’s workers’ comp requirements plus provider options and costs, check out our guide on workers’ comp in Louisiana.
Louisiana Minimum Wage
Louisiana has a straightforward minimum wage that mirrors the federal minimum wage. At $7.25 per hour, the minimum wage was last raised in Louisiana in 2008. Businesses must pay tipped employees at least $2.13 per hour, provided that their tips get them to the hourly minimum wage. If they don’t, you’ll need to pay the difference.
Louisiana overtime rules follow the Fair Labor Standards Act (FLSA) requirements. Under the FLSA, all employers must pay employees 1.5 times their regular hourly wage for hours worked over 40 in a workweek.
To help ensure your overtime calculations are accurate, use our overtime calculator to verify.
Louisiana law requires that employers in four specific industries pay employees at least twice per month and within 10 days of the end of the pay period. The four industries are:
- Oil and gas
- Public service
There is no pay frequency requirement for any other industries. This leaves other companies free to choose the frequency with which they want to pay their employees. However, to comply with federal laws, the cadence must be consistent.
Louisiana also does not specify how employees must be paid. The most common ways to pay your employees include:
If you need to pay an employee right away and aren’t currently using a service, use one of our recommended ways to print a free payroll check.
Pay Stub Laws
Louisiana does not have any law requiring employers to provide employees a regular pay stub. However, we recommend you provide one anyway. As a best practice, it should include your employee’s basic information (name, job title, hours worked, etc.), the covered pay period, pay rate, total gross pay, taxes and other deductions withheld, and final pay.
For help creating your own, download one of our free pay stub templates.
Louisiana Paycheck Deductions
To comply with Louisiana payroll rules, you cannot deduct wages from an employee unless:
- The employee knowingly and willfully damages or breaks company property or items for sale
- The employee is convicted or pleads guilty to theft of company money or property
To be clear, this means that Louisiana businesses cannot deduct anything from employee paychecks for the following reasons:
- Cash shortages
- Required uniforms
- Required tools
- Other items necessary for employment
Employees’ Final Paychecks
If an employee is terminated or otherwise leaves the company, you must pay them their final paycheck on the next regular payday following their last day of work or within 15 days, whichever comes first. It does not matter how the separation occurred; the time to pay the employee’s final paycheck is the same.
Louisiana HR Laws That Affect Payroll
Louisiana HR laws generally follow federal guidelines. Pay close attention to state-specific filing requirements to ensure that your company adheres to all Louisiana payroll laws.
Louisiana New Hire Reporting
Every employer in Louisiana must report new hires and any rehired employees to the Louisiana Directory of New Hires within 20 days of their hire date. This is used to enforce child support orders and must include the employee’s name, address, and Social Security number.
Meals and Breaks
Louisiana does not require companies to provide employees 18 years of age or older breaks. The state does, however, mandate that any employee under 18 who is scheduled to work five consecutive hours must be given an unpaid meal break. The time for the meal break must be at least 30 minutes.
Louisiana Child Labor Laws
In Louisiana, children under the age of 14 are prohibited from working. Children aged 14 and 15 may work a job not in manufacturing, mining, or other hazardous industries, provided that:
- The child does not miss school
- The child only works three hours on a school day or 18 hours in a school week
- The child only works eight hours on a non-school day or 40 hours in a non-school week
There are no restrictions placed on children aged 16 or 17 who wish to work, other than the break requirement listed above.
For more information on federal child labor laws, check out our guide to hiring minors.
Time Off and Leave Requirements
Generally, Louisiana does not have any state-specific time off and leave requirements; however, it does offer a few additional leaves under its Family Leave law.
Louisiana follows the federal Family and Medical Leave Act (FMLA), which requires certain employers provide up to 12 weeks of unpaid time off to eligible employees who are birthing/adopting/fostering a new child, caring for a sick family member, handling military duties, etc. If you have at least 50 employees for a minimum of 20 weeks during the current or prior year, you’re required to comply.
Louisiana does not provide for any additional leave under state law with two exceptions:
- Louisiana Pregnancy Disability Leave: When an employer has more than 25 employees, it must provide a woman up to four months of unpaid leave for disability related to pregnancy, childbirth, or any related medical condition.
- Small Necessities: All companies operating in Louisiana must provide employees with up to 16 hours of unpaid leave in any rolling 12 month period to deal with child-related activities that cannot be scheduled outside of work.
Louisiana does not require employers to provide employees with paid time off (PTO). If a company does provide this benefit, however, it must create and follow the policy they establish—use our PTO policy template if you haven’t yet created one. Companies must also pay out any accrued PTO upon separation with an employee—no use it or lose it—unless the company policy explicitly states that accrued PTO will not be paid out upon separation.
If you need help to calculate your PTO accrual, use our free PTO calculator.
Louisiana does not have any law requiring private companies to pay employees for holidays or an increased rate for working a holiday. A company may choose to do so and must comply with the FLSA.
Louisiana has no law requiring employers to provide employees with sick leave, either paid or unpaid.
Louisiana has no requirement that employers provide employees time to vote.
There is no requirement in Louisiana for businesses to provide employees with bereavement leave. Companies are free to create a policy if they want to.
Payroll forms can vary from state to state, and some have their own W-4, like Louisiana. Fortunately, that’s the only one.
- L-4: Employee withholding form
Federal Payroll Forms
Here is a complete list and location of all the federal payroll forms you should need.
- W-4 Form: Provides information on employee withholdings so you can properly calculate and withhold federal and state income taxes
- W-2 Form: Used to report total annual wages for each employee
- W-3 Form: Used to report total annual wages for all employees
- Form 940: To calculate and report unemployment taxes due to the IRS
- Form 941: Used to file quarterly income tax
- Form 944: Used to file annual income tax
- 1099 Forms: Provides information for non-employee contract work
For a more detailed discussion of federal forms, check out our guide on federal payroll forms you may need.
Louisiana Payroll Tax Resources
- Louisiana Department of Revenue provides many forms, information on the latest laws and regulations, and other employer-specific information.
- Setting up a new business can present unique challenges. Louisiana GeauxBiz provides guidance.
- Louisiana’s Department of Labor offers support and resources to help businesses ensure compliance with unemployment and workers’ compensation.
Louisiana payroll is more straightforward than many states and the applicable laws and regulations generally follow federal guidelines. There is only one state-specific form and no local payroll taxes.
Making mistakes while processing Louisiana payroll can still happen and can be costly. Using payroll software like Gusto to help you calculate and pay employee paycheck and taxes will help you avoid fines and penalties. In addition to filing taxes, it even pays employees with direct deposit for free. Sign up for its 30-day free trial.