Doing payroll in Oklahoma involves more than paying employees. In addition to filing federal taxes, you need to file state income taxes and unemployment insurance taxes. There are exemptions for some workers, like military spouses, and the state has its own W-4 form (the document you’ll have new employees submit upon hire) with different withholdings than those for federal taxes.
If you need help paying and filing your payroll taxes in Oklahoma, small business software like Gusto can help. Gusto calculates your payroll tax amounts and assumes liability for any errors its reps make. You can also pay your employees via direct deposit and run an unlimited number of pay runs at no additional cost. Start a 30-day free trial.
Running Payroll in Oklahoma—Step by Step Instructions
Doing payroll in Oklahoma requires some additional steps and paperwork. Below are the basics for federal and state compliance. For greater detail on general payroll procedures, consult our article on how to do payroll.
Step 1: Set up your business as an employer with the IRS. You need an EIN and an account in the Electronic Federal Tax Payment System.
Step 2: Register your business with the state of Oklahoma.
- Register your business with Oklahoma and keep it current, such as if you change an address or ownership structure.
- Fill out the WHT10006 and file it through OKTAP.
- Create an account with EZ Tax Express to pay unemployment insurance.
- Fill out an OES-1 to get an Oklahoma Unemployment Insurance Tax Account Number.
Step 3. Set up your payroll. Oklahoma law states the employers must pay wages at least twice a calendar month.
Step 4: Collect employee payroll forms. Do this when onboarding new hires, and make sure employees know to give you updates when they have life changes, like marriage or a new child. Forms include State W-4 Form plus the federal version, I-9, and Direct Deposit information. If you have non-resident employees who want to be exempt from tax withholdings, have them fill out the form OW-11. If you have a worker who is a military spouse, they may want to fill out the OW-9 to be exempt from withholdings.
Step 6: Calculate payroll and pay employees. Use the employee W-4 form and the Oklahoma Tax Tables found online to determine how much per employee you need to withhold for income taxes.
Reimbursements for mileage and expenses are not counted as wages.
Step 7. File payroll taxes with the federal and state governments. Follow the IRS instructions for federal taxes, including unemployment.
- For Oklahoma income tax withholdings: File electronically through OKTAP. Some payroll software services have free payroll tax calculators or build them into their programs. Be sure to use the state W-4 form when making calculations.
- In Oklahoma, you must report the number of employees paid, wages paid, and the sales tax withheld from wages each quarter. To remit withholdings, follow the schedule below.
If your average monthly payroll is
You must pay
Must be Filed and Paid By
April 20 (Q1), July 20 (Q2), October 20 (Q3), January 20 (Q4)
$500 to $10,000
20th of following month
Follow the federal semi-weekly schedule
If in the previous fiscal year, you withheld over $5,000 in taxes per month, on average, you must remit electronically.
- For Oklahoma unemployment taxes: File electronically via EZ Tax Express. You can manually fill in the report or create a TXT document and upload it. Find the instructions on the OESC website.
Oklahoma state UI tax reports are due by the following dates:
For Wages Paid During
Calendar Quarter Ends
Must be Filed and Paid By
Jan, Feb, Mar
Apr, May, Jun
Jul, Aug, Sep
Oct, Nov, Dec
Step 8. Document and store your payroll records. It’s important to keep records for all employees, even those terminated, for several years. Learn more in our article on retaining payroll records.
Step 9. Do year-end payroll tax reports. These include the federal Forms W-2 (for employees) and 1099 (for contractors). Employees and contractors must have these by Jan. 31 of the following year. You also need to supply the state with your W-2/W-3 and 1099 via OKTAP. W-2/W-3 are due Jan. 31, and 1099s are due March 31.
Oklahoma Payroll Laws, Taxes, and Regulations
Doing payroll in Oklahoma isn’t particularly more complex than the majority of other states. You are required to withhold and pay income taxes and remit unemployment insurance taxes, but most of the regulations align with federal laws; this means you’re less likely to be confused with conflicting rules.
Oklahoma Payroll Taxes
The only Oklahoma payroll tax that employers are responsible for paying out of pocket are state unemployment taxes (SUTA). Social Security and Medicare (FICA) are a given, but they’re federal taxes that all employers pay, regardless of state. Oklahoma does charge a state income tax—no local or municipal taxes, though—so you’ll need to set up a system to withhold them from your employees’ paycheck so that you can send them to applicable tax agencies.
Unemployment Insurance Taxes
Oklahoma charges unemployment insurance taxes on income up to $24,000 per year. The 2021 rate is 1.5% and changes each January.
Did You Know?
When you pay SUTA, you may qualify for a discount on your federal unemployment insurance taxes (FUTA)—up to 5.4% on a 6% tax. This can greatly reduce what you owe the IRS.
In general, Oklahoma requires income tax withholdings for all employees in Oklahoma, with the following exceptions:
- Farmworkers earning less than $900 per month
- Domestic workers
- Payments for services not in the course of the employer’s trade or business, unless the payment is over $200 in a calendar quarter
- Non-residents whose income in any calendar quarter is not more than $300
You need to withhold state taxes for employees who are not residents of Oklahoma unless you are an LLC or S-corp and your employee applies for an exemption. If you have fewer than 100 members in your company, you automatically qualify for an exemption.
Withholdings must be filed quarterly, but if you are paying more than $500 in payroll per quarter, then you need to remit withholdings monthly. These are due by the 20th of the month following the month of payment.
Oklahoma charges late fees of 10% of the amount of tax, or 10% of the amount of underpayment of tax. If it’s not paid within 15 days after the due date, it’s considered delinquent. The state also charges interest at the rate of 1.25% per month on any overdue amounts.
Social Security and Medicare: You need to pay federal FICA taxes and withhold a matching amount from your employees’ paychecks. Both you and your employees will pay 6.2% of their earnings for Social Security contributions and 1.45% for Medicare.
Oklahoma sets its minimum wage at $7.25 an hour, which mirrors federal regulations. You’re required to adhere to this regulation if you have a business in Oklahoma with at least 10 employees and/or gross more than $100,000 in a year, and/or are involved in doing business between states. Exemptions include those covered under the federal Fair Labor Standards Act (FLSA) and the following:
- Those working in an executive, administrative, or professional capacity
- Outside salespersons
- Employees of any carrier subject to Part I of the Interstate Commerce Act
- Students under 22
- Workers under 18 who are not graduates of vocational or high school
- Part-time employees working less than 25 hours per week and not on permanent status
If you pay tipped employees, employees who receive at least $20 in tips monthly, you are eligible to pay them a tipped minimum wage; this will only work if their tips boost their total pay to align with minimum wage regulations. The maximum tip credit you can apply against the minimum wage is $5.12 per hour. Employers must pay tipped employees at least $2.13 per hour and should apply tip earnings toward the balance of the minimum wage obligation.
For more insight on tipped minimum wage, check out our article on tipped minimum wage by state.
Oklahoma has no overtime laws. However, that does not exempt you from federal wage and hour laws, which state that non-exempt employees be paid 1.5 times their regular hourly pay rate for any hours worked over 40 in a seven-day workweek.
If you have employees who will be working overtime at any point, check out our guide on how to calculate overtime to ensure you pay them and the IRS the correct amount.
Different Ways to Pay Employees
In Oklahoma, you may pay employees electronically (via direct deposit or pay card, if the employee consents), by check, or in cash. If you opt to pay electronically the employee must be able to access all of their wages without incurring any related deductions for withdrawals. So, for example, you cannot pay by pay card if it deducts a percentage per transaction from their paychecks—PayPal, for example.
For a deeper dive into methods you can use to pay your employees, check out our article on how to pay employees.
Oklahoma Pay Stub Laws
The federal government doesn’t regulate pay stubs, but most states have their own rules. Oklahoma is considered an Access State, which just means employers are required to provide employees with access to itemized pay statements. This doesn’t have to be printed or distributed with paper checks but can also be populated electronically, via an HR or payroll portal or even email.
If you need help creating your own stubs, download our free pay stub template to get started.
Minimum Pay Frequency
You must pay employees at least twice each calendar month on regular paydays, which you designate in advance. No more than 11 days may elapse between the end of the work period and the regular payday.
Pay on time: An employer can be assessed a penalty of up to 2% liquidated damages for each day payment of wages is overdue, up to the amount owed to the employee. This includes contractors.
Paycheck Deduction Rules
Deductions include amounts withheld for FICA, federal or state income tax, SUTA, and garnishments. Other deductions must be agreed upon in writing and can include
- Insurance premiums
- Deductions to pay off advances on wages
- Reimbursement for uniforms
- The employee’s share for benefits like health insurance
- Deferred compensation plans or investments provided by the employer for the employee
- Compensation for breakage, loss of merchandise, inventory shortage, or cash shortage caused by the employee
Final Paycheck Laws in Oklahoma
If an employee leaves for any reason, you must pay them their final wages by the next regular payday as usual or certified mail if the employee requests it. This is convenient compared to states that require a next-day turnaround or change expectations based on whether the employee quit or was fired.
If an employee dies, you are required to pay the surviving spouse or children all wages and benefits earned by the employee, up to $3,000.
For more information on payroll laws, check out our article on payroll compliance.
Oklahoma HR Laws That Affect Payroll
Many of Oklahoma’s HR and labor laws mirror federal regulations. There are some specific rules governing how long minors can work and be paid for, but it’s nothing complicated. In addition, there is no requirement to provide state disability insurance—some states have laws requiring it.
Oklahoma New Hire Reporting
All newly-hired employees must be reported to the Oklahoma Employment Security Commission (OESC) within 20 days of being hired if you are reporting by mail or fax. Employers who report electronically must report at least twice monthly, within at least 20 days of the person being hired. For the date started to work, use the first date the employee performs services for a wage.
The OESC prefers you to file online, but if that’s not possible, you can send the information by downloading the form and mailing it to
Oklahoma New Hire Reporting Center
P.O. Box 52003
Oklahoma City, Oklahoma 73152-2004
Toll-Free FAX: 1-800-317-3786
Local FAX: (405) 557-5350
Breaks and Lunches
Oklahoma only requires breaks for children under 16, and federal law has related regulations. Ultimately, it’s up to company policy how to handle lunches and break times. If you set a standard break procedure in your employee handbook, the State of Oklahoma will enforce it, so be sure you’re following the rules you set.
Vacation and Sick Leave
Employers are not required to provide workers paid or unpaid PTO, including sick leave or holidays. However, if ou set a policy, you must adhere to it.
Paid Family Leave
Paid family leave laws closely mimic federal law in the Family and Medical Leave Act (FMLA) and apply to businesses that have had 50 or more employees for at least 20 weeks in the current or previous year. Employees can take FMLA leave if they:
- Have worked for the company for at least a year
- Worked 1,250 hours worked in the previous year, and
- Work at a location with at least 50 employees in a 75-mile radius.
Qualified employees can take up to 12 weeks in a 12-month period to:
- Bond with a child (newborn, adopted, or fostered)
- Recuperate from a serious health condition
- Care for a family member with a serious medical condition
- Handle family emergencies arising from a family member’s military service
Employees can take up to 26 weeks of leave care for a family member who suffered serious injury while on active duty in the military. This is a per-injury, per-service-member entitlement, so they cannot take 26 weeks one year and 26 the next for the same injury.
You do not have to pay wages during FMLA leave, but you must continue health insurance. Employees can take accrued leave during FMLA leave.
Oklahoma does not have specific maternity leave laws, but incapacities due to pregnancy are covered under paid family leave. This includes severe morning sickness.
State Disability Insurance
Oklahoma does not require state disability insurance. However, providing such a policy makes you a more attractive employer to potential applicants and protects you and your employees.
Child Labor Laws
The minimum age for employment is 14, and child labor laws apply to children up to 16 years old. Children can work up to three hours on school days and eight hours on non-school days, up to 18 hours in a school week, or 40 hours in a non-school week. They earn minimum wage and vacation like other worker, but also receive an hour lunch break every eight hours or 30-minute lunch break every five hours.
As you learn how to do payroll in Oklahoma, you’ll find there are a plethora of forms, but not all are needed, and most are self-explanatory. Here are the ones most likely to affect payroll.
Oklahoma W-4 Form
Oklahoma has a W-4 form for employees to fill out. This allows them to claim different withholdings for their state taxes than for their federal taxes. This was introduced in 2018 in response to the changes in federal tax brackets. Employees are required to fill out this form.
Other Oklahoma Withholding Forms
- OW-9-D, Out-of-State Attorneys Oklahoma Withholding Tax Report: If you’ve paid wages to an out-of-state attorney.
- OW-9-MSE, Annual Withholding Tax Exemption Certification For Military Spouse: If you have employees claiming exemption under the Servicemembers Civil Relief Act.
- OW-9-P, Nonresident Oklahoma Distributed Income Withholding Tax Penalty and Interest Worksheet: For nonresident members under specific conditions where you are required to pay interest and did pay estimated withholdings.
- OW-11, Registration for Oklahoma Withholding for Nonresident Members
- OW-15, Nonresident Member Withholding Exemption Affidavit: If you are an LLC or S-corp with non-resident employees, you can use this form to have them request exemptions from withholding Oklahoma income tax. You only need to do this if you have over 100 members in your company.
- WTH10001, Oklahoma Quarterly Wage Withholding Tax Return: Use this to calculate the quarterly withholdings and enter them into the payment coupon. Due by the 20th of each month.
- WTH10004, Oklahoma Withholding Payment Coupon for Payors not Paying by EFT: To include with monthly payments of withholdings if you do not pay electronically.
- WTP10005, Oklahoma Nonresident Distributed Income Estimated Withholding Tax Report: If you pay distributions to non-residents, you need to file this quarterly according to a schedule determined by your fiscal year.
- WTH10006, Online Oklahoma Wage Withholding Tax Application: Every business that is liable for tax withholdings must fill this out.
- OES-1, Application for Oklahoma UI Tax Account Number: You’ll use this when filing unemployment taxes. Fill it out, sign it and submit it to the Oklahoma Employment Security Commission.
Federal Payroll Forms
Here’s a list of general payroll forms most small businesses need.
- W-4 Form: To help employers calculate taxes to withhold from employee paychecks
- W-2 Form: To report total annual wages earned (one per employee)
- W-3 Form: To report total wages and taxes for all employees
- Form 940: To report and calculate unemployment taxes due to the IRS
- Form 941: To file quarterly income and FICA taxes withheld from paychecks
- Form 944: To report annual income and FICA taxes withheld from paychecks
- 1099 Forms: To provide non-employee pay information that helps the IRS collect taxes on contract work
For more information about the federal forms, read our guide on federal payroll forms.
Oklahoma Payroll Tax Resources/Sources
- Oklahoma New Business Tax Workshops: Although it says “new business,” these workshops are for any businesses wanting to brush up on the latest tax changes. You can download a copy of the workshop; they are no longer in person due to COVID-19. The video online mostly covers sales tax law; skip ahead to 23:00 for payroll tax information.
- Oklahoma Tax Commission (OTC) Website: The OTC does not mail documents, so go here to download anything you need. It also includes information about payroll taxes, sales, and other taxes.
- Oklahoma Business Forms Page: Links to all the state business forms, and notes whether they allow electronic filing.
- Oklahoma Employment Security Commission: Not only contains information and resources for unemployment taxes, but also for hiring employees and more.
- Oklahoma Department of Labor Wage Law: A downloadable PDF of labor laws for Oklahoma.
Also, check with your payroll software for resources and state-specific features.
Oklahoma’s wage and employer tax laws are not complex, necessarily, but there are quite a few to consider. You need to use the Oklahoma W-4 form for determining withholdings and may have additional forms for special cases, like spouses of military members. And, stay abreast of changing payroll laws and regulations so that you don’t get penalized.