This article is part of a larger series on How to Do Payroll.
Calculating West Virginia payroll tax and withholding can be challenging, as the state has a progressive income tax vs a flat rate. This also means there is a state tax withholding form that each employee must complete.
You can make running your West Virginia payroll easier by using an all-in-one payroll service like Gusto. From electronically onboarding new employees to calculating and filing West Virginia withholding and payroll tax, Gusto helps you make sure your payroll is accurate every time. Sign up today for a 30-day free trial.
Step-by-Step Guide to Running Payroll in West Virginia
Learning how to do payroll in West Virginia will not be a difficult process, provided that you follow each of these steps and maintain compliance with relevant employment laws. Calculating West Virginia payroll taxes by hand, however, might result in costly errors.
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 West Virginia. If your business is new, you need to register on the West Virginia Secretary of State’s website. Any company that pays employees in West Virginia must also register with the West Virginia State Tax Department.
Step 3: Create your payroll process. Having a routine process you follow every payroll run is crucial to ensuring you do not make mistakes. If your company has been around for some time, you likely inherited a process, but you may still want to make changes to fit your needs. You’ll need to decide how often you plan to pay employees and what payment method you’ll use—paper checks and direct deposit are most common. You’ll also need a process in place for collecting payroll forms, documenting tax payments and filings, etc.
Step 4: Have employees fill out relevant forms. Any company that hires employees in West Virginia must collect certain forms during the new hire onboarding process. Each employee must complete I-9 verification. New employees must also have a completed W-4 on file and the West Virginia version, Form WV IT-104. And if you’re offering direct deposit as a payment option, have employees sign and complete a direct deposit authorization form.
Step 5: Review and approve time sheets. Payroll begins several days before your due date when you get employee time sheets. 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 payroll by hand is not recommended. West Virginia has a progressive income tax, so it’ll be more challenging than necessary to ensure your figures are accurate. You can opt to use Excel—we have a free Excel payroll template—or sign up for a payroll service.
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. West Virginia has a minimum wage of $8.75 per hour, higher than the federal minimum wage of $7.25 per hour. You can pay your federal and West Virginia 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. West Virginia law requires that employers keep payroll documents that include the name and address of each employee, rate of pay, hours of employment, payroll deductions, and amount paid for each pay period. The Fair Labor Standards Act (FLSA) also requires businesses to keep payroll records for at least three years and payroll tax documents for four years.
Step 9: File payroll taxes with the federal and state government. All West Virginia state taxes need to be paid to the applicable state agency on the schedule provided, usually quarterly, which you can do online at the West Virginia State Tax Department 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.
Step 10: Complete year-end payroll reports. 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. You’ll also need to submit individual copies of each along with an overall summary form to the IRS.
To learn more general information about doing payroll yourself, check out our guide on how to do payroll. It has a free checklist you can download to make sure you don’t miss any steps.
West Virginia Payroll Laws, Taxes & Regulations
When calculating West Virginia payroll taxes, ensuring compliance with all federal and state employment laws are crucial to ensure a correct payroll on every occasion. To help you maintain compliance with payroll regulations, review laws, taxes, and regulations related to doing payroll in West Virginia 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.
West Virginia Taxes
Like most states, West Virginia has certain taxes that companies must pay. None of its cities or localities levy local taxes, but the state does have a progressive income tax, which means rates increase as income goes up.
Employer Unemployment Taxes
All businesses in West Virginia must pay State Unemployment Tax Act (SUTA) taxes. The current wage base is $12,000 and rates range from 1.50% to 8.50%. All new employers in West Virginia will pay a SUTA rate of 2.7%. Businesses that pay SUTA in full and on time can claim a tax credit of up to 5.4% on their Federal Unemployment Tax Act (FUTA) taxes. FUTA is generally 6% on the first $7,000 of each employee’s income—applying a 5.4% discount would bring that down to 0.6%.
To learn more about FUTA requirements, check out our guide on FUTA and Form 940.
West Virginia uses a progressive income tax system. You will need to calculate your employees’ income tax withholdings based on the following table.
Taxable Income for Single Filers, Married Filing Jointly, and Head of Household
Taxable Income for Married Filing Separately
West Virginia 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. There are, however, exceptions to this rule, and your company does not have to carry workers’ compensation insurance if you fit into one of the following categories:
- Your business has fewer than three temporary employees
- Your business has fewer than six agricultural workers
- You employ domestic workers only
- Your business is a church
- Your business employs longshore and harbor workers
To learn more information about workers’ compensation, check out our workers’ comp guide.
West Virginia Minimum Wage
If your business has at least six employees, West Virginia requires you to pay a minimum wage of $8.75 per hour—if it’s less, you can pay the federal minimum wage of $7.25 per hour. For tipped employees who work for a company with at least six workers, West Virginia mandates that an employer can pay the tipped employees a rate as low as $2.62 per hour, provided that their tips get them to the hourly minimum wage. If not, the company must make up the difference.
West Virginia overtime rules follow the FLSA, which says 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.
You must pay employees at least twice every month with no more than 19 calendar days between pay periods. You may choose to pay employees more than twice per month, but if you do, you’ll need to establish regular pay days and notify employees of any changes in advance. If you need help keeping track of your payroll periods, use one of our free pay period calendars.
West Virginia allows you to pay workers by one of the following methods:
If you’re just getting started and need to pay an employee quickly, use one of our recommended ways to print a payroll check for free.
Pay Stub Laws
West Virginia requires companies to provide employees with a pay stub. The pay stub must include:
- Employee’s hourly rate or salary
- The number of hours the employee worked during the pay period
- Any overtime rates
- Any bonus or commission
- Itemized deductions
If you do not use a payroll service, download one of our free pay stub templates to help you get started.
West Virginia Paycheck Deductions
West Virginia allows authorized deductions from employee’s pay, such as those required by court order, allowed by law, or related to benefit plans. A company can only withhold unauthorized money from a paycheck, however, if the employee consents in writing through a notarized wage assignment.
Please note that, according to the Department of Labor, a company cannot make deductions to an employee’s pay if those deductions would cause the employee to earn less than the federal minimum wage ($7.25 per hour) for that pay period.
Terminated Employees’ Final Paychecks
When an employee quits, resigns, is terminated, or discharged, West Virginia law mandates that the employee be paid their last paycheck no later than the next regular payday. We recommend processing payment as soon as possible to avoid possible lawsuits and litigation.
West Virginia HR Laws That Affect Payroll
West Virginia has few state-specific HR laws. You still need to ensure that you are following the federal guidelines, which West Virginia law mostly follows.
West Virginia New Hire Reporting
Every employer in West Virginia must report new hires and any rehired employees to the West Virginia New Hire Reporting Center within 14 days of their hire date (take note of this because many states allow 20 days). This report is used to enforce child support orders and must include the employee’s name, address, and Social Security number.
Meals and Breaks
West Virginia law requires businesses to provide employees with a break of at least 20 minutes if the employee is scheduled to work six or more consecutive hours. Provided that this break is at least 20 minutes and the employee can completely disconnect from work duties, the break does not have to be paid. Any meal or break period of less than 20 minutes must be paid.
West Virginia Child Labor Laws
Children under age 16 who want to work must get a West Virginia Employment Certificate. Children aged 16 and 17 do not need to have this certificate to work. Children under 16 can work up to eight hours per day and 40 hours per week when school is not in session. When school is in session, they are limited to working three hours per day and 18 hours per week. There are no restrictions on working hours for children aged 16 and 17.
Check out our guide to hiring minors for more insight on federal regulations.
Time Off and Leave Requirements
There aren’t many state-specific paid time off requirements, so you’ll mostly follow federal law. You will need to provide employees with time off to vote—doesn’t have to be paid—and ensure your PTO policy aligns with your process.
West Virginia follows the Family and Medical Leave Act (FMLA), which requires that all eligible employers provide up to 12 weeks of unpaid leave for employees who fall under a covered disability. Pregnancy and taking care of a sick family member are examples. The FMLA doesn’t mandate that employers pay employees during this time away from work, but it does require that employers provide the employee with the same or a similar job once they return to work. West Virginia does not provide for any additional family leave under state law.
West Virginia has no laws requiring employers to provide employees with paid time off (PTO). Companies in West Virginia are free to create PTO policies, including whether to pay out accrued and unused PTO when employees leave. West Virginia does not require that companies do, so it’s a good practice to have this clearly defined in your company policy. The important thing is to follow the guidelines in your policy, or you can be held liable.
If you offer PTO and need help to calculate employees’ PTO accrual, use our free PTO calculator.
In West Virginia, private companies are not required to pay employees for holidays or to pay them a higher rate for working a holiday. Companies may choose to pay higher rates for holiday workers or require workers to work holidays, provided they adhere to the FLSA.
There is no law requiring you to offer paid or unpaid sick leave to employees. Employers are free to create a sick leave policy, provided that they adhere to FMLA guidelines.
West Virginia requires all employers to give an employee up to three hours of paid leave to vote, provided the employee requested the time off in writing at least three days before election day or the day they chose to vote, if they are early voting. Employers are not required to pay employees for time off to vote if employees have three hours of off-duty time when polls are open.
You don’t have to pay employees out on jury duty. But you must excuse the employee from work upon reviewing the summons for jury duty service.
You do not have to provide employees with bereavement leave. You are, however, free to create policies if you choose.
West Virginia only has one state payroll form: Form WV IT-104. This is its state W-4, called the Employee’s Withholding Exemption Certificate.
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 nonemployee contract work
For a more detailed discussion of federal forms, check out our guide on the federal payroll forms you may need.
West Virginia Payroll Tax Resources
- West Virginia State Tax Department provides many forms, information on the latest laws and regulations, and other employer-specific information.
- West Virginia One Stop Business Portal has many great resources for new and existing businesses to help them navigate licensing, taxes, and employer requirements.
- West Virginia Department of Labor offers support and resources to help businesses ensure compliance with unemployment and workers’ compensation, plus other labor laws.
West Virginia is not the easiest state in which to do payroll, but ensuring that you follow relevant employment laws and have a detailed process to follow can better prepare you.
When calculating payroll tax or withholdings by hand, mistakes can happen. You can prevent these mistakes by using a payroll software like Gusto that walks you through West Virginia payroll every time. It will file your payroll taxes accurately and on time. And it lets you pay employees with direct deposit at no extra cost. Sign up for its 30-day free trial.