Doing payroll in Utah is more straightforward than in many states. Utah has a flat income tax, making it easy to compute the amounts you need to withhold from employee paychecks; however, it also has some specific HR laws you need to follow. Learning how to do payroll in Utah and calculating Utah payroll tax can be a fairly uncomplicated process if you follow the steps below.
Key Takeaways:
- Utah has a flat income tax rate of 4.85%.
- Utah has no state-specific payroll forms.
- Employers must pay terminated employees within 24 hours or be subject to penalties equal to up to 60 days of the employee’s pay.
Step-by-Step Guide to Running Payroll in Utah
Here is a basic guide to running payroll in Utah.
Step 1: Set up your business as an employer. New companies may need to access the federal 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 your business with the State of Utah. If your business is new, you need to register on the Utah OneStop Online Business Registration System website, a division of Utah’s Department of Commerce. Any company that pays employees in Utah must also register with the Utah State Tax Commission.
Step 3: Create your payroll process. If your business is new, you need to develop a payroll process from scratch. You’ll need to decide when you plan to pay employees, how often, and what payment methods you’ll offer.
Step 4: Have employees fill out relevant forms. Your business must have every employee complete payroll forms during their onboarding process. Every employee must complete I-9 verification. New employees must also have a completed W-4 form on file and direct deposit authorization, if it applies.
Step 5: Collect, review, and approve time sheets. To run payroll accurately, you need to collect time sheets several days in advance. Reviewing the time sheets from your nonexempt employees gives you time to speak with anyone who might have made mistakes. There are many ways to track employee time—some of which are free.
Step 6: Calculate employee gross pay and taxes. Calculating Utah payroll by hand is not recommended. Tax calculations can become complex, and even innocent mistakes can cause costly fines and penalties. You can use payroll software, a calculator (use our free timecard calculator to do some basic time calculations), or even Excel (we have a free template). Learn more about how to calculate payroll if you need help—or check out our shortlist of the best payroll software for easy options.
Step 7: Pay employee wages, benefits, and taxes. The best way to pay your employees is through direct deposit. But paying employees via cash and paper checks are also options. Utah does not have a state minimum wage, so the federal minimum wage of $7.25 per hour applies. You can pay your federal and Utah state taxes online. If you use a benefits provider, it should work with you to make deductions simple, automatic, and electronic.
Step 8: Document and store your payroll records. Keeping your company business records is good practice. Utah requires businesses to keep record of all hours worked and wages paid to each employee, including their name, address, and date of birth, for at least three years. This mirrors the Fair Labor Standards Act (FLSA) recordkeeping requirements.
Step 9: File payroll taxes with the federal and state government. All Utah state taxes need to be paid to the applicable state agency on the schedule provided, usually quarterly, which you can do online at the Utah State Tax Commission 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.
Please note that reporting schedules and depositing employment taxes are different. Regardless of the payment schedule you are on, you only report taxes quarterly on Form 941 or annually on Form 944.
Step 10: Complete year-end payroll reports. Doing payroll in Utah requires more than just paying employees on a regular schedule. Every year, you will need to complete payroll reports, including all W-2 Forms and 1099 Forms. You must provide these forms to employees no later than Jan. 31 of the following year.
Download our checklist to make sure you don’t miss any steps.
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Learn more about doing payroll yourself in our guide on how to do payroll. It has a free checklist you can download to make sure you don’t miss any steps.
Utah Payroll Laws, Taxes, & Regulations
Doing payroll in Utah will require that you calculate Utah payroll taxes and ensure compliance with all federal and state employment laws. To help you maintain compliance with payroll regulations, review Utah’s relevant regulations below. 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% and 1.45% for Medicare. Both the employer and the employee will pay these taxes, each paying 7.65% for the combined Social Security and Medicare taxes.
Utah Taxes
Like most states, Utah has certain taxes that companies must pay and withhold from employee’s paychecks. Utah does not levy local taxes on employees.
Income Taxes
While calculating withholding and taxes for your employees by hand is not recommended, Utah makes payroll slightly easier for you by having a flat income tax. The current income tax rate for all Utah employees is 4.85%.
Employer Unemployment Taxes
All businesses in Utah must pay State Unemployment Tax Act (SUTA) taxes. The current wage base is $47,000 and rates range from 0.3% to 7.3%. Most new employers in Utah will pay a SUTA rate of 1.2%.Federal Unemployment Tax Act (FUTA) taxes are usually 6% of the first $7,000 of each employee’s earnings; you are responsible for paying it and cannot pass the cost to your workers. Businesses that pay SUTA in full and on time can claim a 5.4% discount on their FUTA taxes. To learn more about FUTA requirements, check out our guide on FUTA and Form 940.
Workers’ Compensation
Utah requires every employer with one or more employees to carry workers’ compensation insurance. Workers’ compensation insurance provides benefits to employees who suffer on-the-job injuries and covers the cost of medical treatment and lost wages. The average cost is around 78 cents per every $100 of payroll you process.
Utah Minimum Wage
Utah follows the federal minimum wage of $7.25 per hour. For tipped employees, companies must pay at least $2.13 per hour, provided that their tips get them to the hourly minimum wage. If not, the company must make up the difference.
Calculating Overtime
Utah overtime rules follow the FLSA requirements, under which all employers must pay employees 1.5 times their regular hourly wage for hours worked over 40 in a workweek.
Paying Employees
Utah law requires you to pay nonsalaried employees at least twice per month. Your company can choose to pay employees more regularly but must keep your paydays consistent. Every company must also pay employees within 10 days after the end of the pay period. If the regularly scheduled payday falls on a weekend or holiday, you must pay your employees on the preceding workday.Utah has separate rules for salaried employees who earn a regular annual income. For employees that you pay an annual salary to, you can pay them just once per month, if you wish. You must pay these employees by the seventh day of the month following the month in which the wages were earned.Utah also allows employers to pay workers by one of the following methods:
- Cash
- Paper check
- Direct deposit, only if authorized by the employee in writing
- Payroll card, only if authorized by the employee in writing
Pay Stub Laws
You must provide employees with a pay stub on each regular payday. The pay stub can be paper or electronic and must show:
- The employee’s name
- Base rate of pay
- Dates for the pay period
- The number of hours worked
- Itemized deductions
- Total net pay to the employee
If you do not use a payroll service, download one of our free pay stub templates to help you get started.
Utah Paycheck Deductions
You’re allowed to deduct wages from an employee’s paycheck for the following reasons:
- Cash shortages
- Broken, damaged, or destroyed company property
- Required tools and uniforms
You may withhold additional wages, but only if the deductions meet one of the following conditions:
- Allowed by federal, state, or local law
- The employee provides written consent for the deduction
- For retirement and healthcare contributions
Terminated Employees’ Final Paychecks
When it comes to terminated employees, you may be required to pay their last paycheck at different times based on how the employment relationship ended.
- If an employee was fired, discharged, terminated, or laid off, you must pay the employee within 24 hours after their final workday.
- If an employee quits, resigns, or is suspended or resigned due to a labor dispute, you need to pay the employee on the next regular payday, or sooner.
Note that if you terminate an employee and you do not pay them within 24 hours of termination, you owe them a full day’s wage for each additional day you fail to pay them, up to 60 days.
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.
Utah HR Laws That Affect Payroll
Utah has a few state-specific HR laws that you need to know. The state mostly follows federal guidelines, so if you are familiar with those, you should have no issues understanding the additional Utah HR laws.
Utah New Hire Reporting
Every employer in Utah must report new hires and any rehired employees to the Utah Department of Workforce Services within 20 days of their first day of work. This information is used to enforce child support orders and must include the employee’s name, address, and Social Security number.
Meals and Breaks
Employers are required by law to provide meal breaks of at least 30 minutes to employees under age 18 who are scheduled to work more than five consecutive hours. For employees 18 and older, you are not required to provide any meal or break periods. Breaks of less than 20 minutes must be paid, but breaks or meal periods over 30 minutes generally do not need to be paid.
Utah Child Labor Laws
Utah does not restrict the working hours or days of children aged 16 and 17. However, minors aged 14 and 15 can only work up to three hours on school days. On non-school days and when school is not in session, they can work up to eight hours per day and 40 hours per week.Check out our guide to hiring minors for more insight into federal regulations.
Time Off and Leave Requirements
For the most part, you’ll need to follow federal time off regulations, because Utah doesn’t require much beyond that. You will, however, need to ensure employees have time to vote. Click through the tabs below to see your time off requirements:
Payroll Forms
While Utah collects state income tax, it does not have its own state W-4. Employees should use the federal W-4. Utah has no other state payroll forms.
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; summary form of W2
- 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 the federal payroll forms you may need.
Utah Payroll Tax Resources
- Utah State Tax Commission provides many forms, information on the latest laws and regulations, and other employer-specific information.
- Utah OneStop Online Business Registration has many great resources for new and existing businesses to help them navigate licensing, taxes, and employer requirements.
- Utah Labor Commission offers support and resources to help businesses ensure compliance with unemployment and workers’ compensation, plus other labor laws.
Doing Payroll in Utah Frequently Asked Questions (FAQs)
To register for payroll taxes in Utah, you need to sign up with the Utah State Tax Commission. You can do this online. It’s essential to provide your business EIN and your business bank account information so the state can take the funds on your schedule.
If your business is new, you’ll need to create a process from scratch. You’ll need to ensure you collect appropriate employee forms, set up a system for tracking hours and calculating wages, and determine how often you’ll pay your employees, and more.
Utah has a flat tax. For 2024, the income tax rate for your employees is 4.85%.
Bottom Line
Utah has a flat income tax but no local taxes. However, this doesn’t mean you should calculate your company’s payroll taxes by hand, as that could lead to costly errors. There are no state-specific payroll forms and fairly straightforward HR laws. Combined, this makes Utah one of the easiest states in which to run payroll.
