How to Do Payroll in Missouri

Missouri is a typical state when it comes to processing payroll. It follows federal guidelines with a few exceptions, and some of these main exceptions are listed below.

• Missouri has a progressive state income tax that has 10 income tax brackets based on each individual employee’s income; this impacts how much money you’ll withhold from their paychecks.
• It has two cities that also have Local Income Tax: St. Louis and Kansas City.
• Missouri has different withholding tax reporting deadlines that are based on the withholding tax amount of the employer.
• 密苏里州比联邦管理的更加严格的法律ment when it comes to how often employees should be paid, when they should receive their final paycheck, and youth employment.

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Running Payroll in Missouri—Step-by-Step Instructions

Listed below is a guideline with specific information related to the state of Missouri. If you need more general information, then please visit our guide onhow to do payroll.

Step 1: Set up your business as an employer.At the federal level, you need your Employer Identification Number (EIN) and an account in theElectronic Federal Tax Payment System (EFTPS).

Step 2: Register with the state of Missouri.At the state level, you need to register with the Missouri Department of Revenue. To do so, you need to complete the Missouri Tax Application. You can fill out the application online at theMissouri Department of Revenue’s websiteor mail theMissouri tax registration formto Missouri Department of Revenue, P.O. Box 357, Jefferson City, MO 65105-0357.

Step 3. Set up your payroll process.You’ll need to set up payroll and set a pay schedule, decide how to pay employees, and how you’ll process taxes and deductions. You cancomplete payroll yourself, use anExcel payroll template, or select apayroll service. Each option comes with benefits and drawbacks.

Step 4: Collect employee payroll forms.The best time to collect payroll forms is during the new hire process.Payroll formsinclude W-4, I-9, and Direct Deposit information. Missouri also requires you to submitForm MO W-4.

Step 5: Collect, review, and approve time sheets.If you have hourly or nonexempt employees for whom you need to pay an hourly rate, you’ll need to determine how you’re going totrack their work hours. Some options include:

• Papertime sheets
• Free or low-costtime and attendance software
• Payroll servicesthat include a time and attendance system

Step 6: Calculate payroll and pay employees plus taxes.You can decide topay employees in different ways(e.g., cash, check, direct deposit, pay cards). Federal taxes should be paid through theEFTPS.

Step 7: File payroll taxes with the federal and state governments.The IRS has forms and instructions on filing federal taxes including unemployment. You mayorder official tax forms from the IRS.

For Missouri state taxes, you must report withholding tax on either a monthly, quarter-monthly, quarterly, or annual basis. The filing frequency depends on your withholding amount for existing employers. For new employers it depends on your estimated withholding. Listed below is a way to determine your filing frequency.

• Weekly:If you withhold $9,000 or more in at least two months during the previous year, then you have to file weekly.
  • • Weekly periods are:
      • Days 1 to 7 of the calendar month
      • Days 8 to 15 of the calendar month
      • Days 16 to 22 of the calendar month
      • Day 23 to the last day of the calendar month
  • The payment deadlines are no later than three banking days after the seventh, 15th, 22nd, and the last day of the month.

• Monthly:You can file monthly if you withhold $500 per month for at least two months during the previous calendar year. The payment deadlines are due on the same days as the quarterly reports and on the 15th (or next business day) for all other months.
• Quarterly:You can file quarterly if you withhold at least $100 for at least one quarter in the previous four quarters, and you are not required to file monthly per the statement above. The payment deadlines are the last day of the month in a quarter or on the next business day if the last day of the month falls on a banking holiday or weekend.
• Annually:You can file annually if you withhold less than $100 for the previous four quarters. The payment date is due Jan. 31 in the following year.

Regardless of how often you have to file, you need to complete only one MO-941 form per filing period.

Step 8. Document and store your payroll records.Missouri requires you to maintain payroll records for three years. These records must contain the employee’s name, address, job description, amount paid each payroll, pay rate, and daily/weekly hours worked.

It is important to retain records for all employees for several years, including those who are no longer with your company. If you need help with which records to keep, please read our article onretaining payroll records.

Step 9. Do year-end payroll tax reports.The federal forms that are mandated areW-2s(员工)和1099s(for contractors). These forms should be provided to employees and contractors by Jan. 31 of the following year. State W-2s are also required for Missouri, and these forms also must be provided by Jan. 31. If you have 250 or more employees, you must file electronically. If you have fewer than 250 employees, you may mail your information to the State of Missouri Taxation Department. For more information on filing, please visit theMissouri Department of Revenue’s website.

Missouri Payroll Laws, Taxes & Regulations

Federal law requires that you pay taxes including income taxes, Social Security, Medicare, and Federal Unemployment Tax Act (FUTA) taxes. Social Security and Medicare (FICA) are withheld from each employee’s paycheck at 6.2% and 1.45% respectively. As an employer, you also have to pay a matching amount. The FUTA rate is a 6% employer tax that you pay on the first $7,000 that is paid to each employee in that year.

Missouri Taxes

Missouri has a few items that differ from federal regulations. It has a progressive state income tax that has more brackets than the federal income tax schedule. It also has local income taxes in its two metropolitan cities (St. Louis and Kansas City) and requirements relating to unemployment insurance, workers’ compensation, minimum pay frequency, and final pay stub laws.

State Income Taxes

Missouri has a progressive income tax state that has 10 tax brackets. A table listing the brackets and the amounts you’ll need to withhold based on your employees’ income are listed below.

Local Income Taxes

The two largest cities in Missouri (Kansas City and St. Louis) collect local income taxes at a flat rate of 1%, and all their residents have to pay the tax. In addition, nonresidents must also pay the tax if they are doing work on providing services in the respective cities, so you’ll need to withhold if you have an office in either area.

State Unemployment Tax

Missouri has two calculations for unemployment rates. One is for new companies and the other is for existing companies.

New companies are defined by being in their first, second, and third year of business. In 2021, the new employer rate is 1 % for nonprofits and 2.376% for all other industries.

After your third year of business, the unemployment tax rate is dependent on three factors: taxes paid, unemployment benefits paid, and annual taxable payroll amount. In 2021, the existing employer rate is typically anywhere from 0% and 6%. This does not include the exceptions of maximum rate surcharge, contribution rate adjustment, and voluntary payments.

• Maximum Rate Surcharge:An employer can be charged an additional rate if they have been at the maximum experience rate for back-to-back years. This can occur if you have high employee turnover and your employees are applying for unemployment.
• Contribution Rate Adjustment:An increase or decrease in the tax rate can occur due to the changes in the average cash balance in Missouri’s unemployment trust fund.
• Voluntary Payments:Employers can submit a voluntary payment in order to reduce the UI tax rate for the year.

For more information on unemployment taxes, please visit theMissouri Department of Labor’s website.

Workers’ Compensation

You are mandated by law to provide workers’ compensation for employees in Missouri if you have five or more employees. The one exception is the construction industry where you are required to provide workers’ comp insurance if you have even one employee.

If you are not required to provide workers’ comp insurance and choose not to voluntarily provide it, you can be sued by an employee who is injured on the job.

The cost of workers’ compensation insurance is around $1.04 for each $100 payroll you processed. For example, a company that processes $500,000 of payroll can expect to pay around 5,000 in insurance.

最低工资和技巧

The majority of jobs will require you to pay at least minimum wage. If you think you may be exempt, please check out our guide onFederal Exemptions for Minimum Wage来确认。

Missouri has two sets of requirements regarding minimum wage: one for companies that gross over $500,000 in a year and another for companies that gross less than $500,000 in a year. For the larger revenue-generating companies, you must pay at least the state’s minimum wage rate at $10.30 per hour. For the smaller revenue-generating companies, you can pay the federal minimum wage of $7.25 per hour.

Overtime

Missouri follows federal law as it relates to overtime. You’ll need to pay 1.5 times the regular hourly rate for any hours your employees work over 40 in a workweek. For more information and help making the calculations, please use the calculator in our guide tocalculating overtime.

Different Ways to Pay Employees

In Missouri, you can remit payment to employees by common payment options. These options includecheck,cash,pay cards, anddirect deposit. However, the employee must be able to receive their funds without facing a mandatory processing fee.

Pay Stub Laws

You must provide a statement of your employee’s earnings and deductions for the pay period at least once per month. While Missouri only requires you to show total deductions for the pay period, it is a good idea to include common information, such as the employee’s name, address, rate of pay, total hours worked, and itemized benefit costs such as 401(k), medical, and vision.

Minimum Pay Frequency

Missouri law requires that you pay employees at least twice a month with a few exceptions. Executive, administrative, professional, and commission-earning employees can be paid monthly. These positions are typically salaried workers in an office setting. When in doubt, it is best to pay semimonthly or biweekly as opposed to monthly.

Paycheck Deduction Rules

Missouri does not have any specific laws stating what may or may not be deducted from an employee’s paycheck. Common deductions include:

• Taxes
• Garnishments
• Levies
• Benefits
• Reimbursements

Final Paycheck Laws

Missouri does not have state laws regarding final paychecks for employees who voluntarily leave; however, you must pay an employee who is involuntarily terminated immediately at the time they are let go. If they do not receive their final pay and they reach out to you via certified mail, you have seven days to respond and pay said employee without having to pay penalties.

Missouri HR Laws That Affect Payroll

Missouri HR laws mostly follow federal guidelines, with the exception of more detailed child labor law requirements.

Missouri New Hire Reporting

Missouri requires you to report new hires (employees, not contractors) within 20 days of the hire date. You can reportonlineor you can mail your information to the Missouri Department of Revenue. If your business is in multiple states, you can choose one state in which to report all of your new hires to make it easier.

For more information, please visit theMissouri Department of Social Services’ website.

休息,午餐,Time-Off Requirements

Missouri generally follows federal law regarding time-off requirements with rare exceptions. Details are listed below.

• Breaks and Lunches: Missouri does not mandate employers to provide breaks to employees with the exception of 15- and 16-year-olds who work in the entertainment industry. These youth employees must receive a 15-minute rest break for every two hours of continuous work and must receive a meal break if they work over 5:30 hours in a day.
• Vacation and Sick Leave:密苏里州没有任何假期或生病的leave requirements.
• Family Leave:Missouri does not have a separate state law regarding family leave. Employers are mandated to federal law in the Family and Medical Leave Act (FMLA). The law is for employers that have more than 50 employees for 20 or more weeks in the current or previous year. Employees can take FMLA leave if they have worked at the company for at least a year, with 1,250 hours worked in the previous year, and if their physical work location has 50 or more employees in a 75-mile radius. To learn more about the Family and Medical Leave Act, visit theDepartment of Labor’s guide to FMLA.

State Disability Insurance

Missouri does not have a state disability program and does not require companies to obtain disability insurance. However, it is advisable to have both for your employees and yourself. For more information on insurance in Missouri, please visit theMissouri Department of Insurance’s website.

Child Labor Laws

In Missouri, you are required to record and maintain hours worked, employee names, birth dates, and addresses for all youth employees under the age of 16 for two years. Missouri also limits the work hours of individuals under the said age. The restrictions are:

In addition, there is a list of jobs that 14- and 15-year-olds cannot do. Jobs that are excluded (but not limited to) cooks, bakers, drivers, or power equipment handlers. For more information on federal child labor laws, check out ourguide on hiring minors.

Payroll Forms

Listed below are some federal and state forms needed to produce accurate payroll for employees and compliant payroll reporting and on-time tax remittance for business.

Missouri Payroll Forms

• Missouri MO W-4: To assist employers in calculating tax withholding for employees.
• Form 2643: Application to register in Missouri for all types of business taxes including withholding taxes
• St. Louis Form E-234: This is used to report and pay earnings for the St. Louis local income tax.
• Kansas City Form RD-108: This is used to report and pay earnings for the Kansas City local income tax.
• Missouri Quarterly Tax Report: This is used for filing unemployment taxes.

Federal Payroll Forms

• W-4 Form: Assists employers calculate withholding tax for employees
• W-2 Form:报告s total yearly wages earned (one per employee)
• W-3 Form:报告s total yearly wages and taxes for all employees
• Form 940: Calculates and reports unemployment taxes due to the IRS
• Form 941: Files quarterly income and FICA tax withholding
• Form 944:报告s annual income and FICA tax withholding
• 1099 Forms: Provides contractors with pay information and amounts that assist them in tax calculation

Missouri Payroll Tax Resources & Sources

• Missouri Department of Revenue: Access and submit forms, view the latest regulations, and view information on all types of business taxes.
• Missouri New Hire Reporting Center: Complete reporting for new hires and view frequently asked questions
• Missouri Department of Labor:找联合国的相关信息employment taxes.

For more information on payroll laws, visit ourpayroll compliance guide.

底线

Missouri payroll differs from other states by its tiered income tax structure, final pay requirements for involuntarily terminated employees, frequency on when employees should be paid, and when employers must remit withholding taxes. Be sure to stay aware of deadlines and requirements by federal, state, and local governments.