Alaska Payroll Tax Guide (2026)
Alaska is one of a handful of states with no wage withholding, but do not mistake that for a light payroll load: the 2026 unemployment wage base is $54,200, the highest in this group, and you must also deduct 0.50% from every employee’s pay.[1]
Alaska payroll at a glance
Alaska has no income tax withholding at all. The only state payroll tax is unemployment insurance, and it is unusual because employees pay 0.50% of wages alongside the employer’s own contribution.[1]
What changed for Alaska payroll in 2026
Six items moved for Alaska employers this year. Anything below is what have changed since the 2025 tables, so a rate card carried over from last year will be wrong in at least one place.
2026 Alaska payroll tax calculator
Enter one employee’s annual gross wages to see what the employer owes, what comes out of the paycheque, and the true cost of employment.
Employer pays
Withheld from the employee
Alaska does not withhold state income tax from wages, so there is nothing to add here.
Payroll tax rates & the nexus question
Alaska runs two state payroll taxes. The table below is the whole state layer for 2026.[1]
The state payroll taxes
| Tax | Paid by | 2026 rate | Wage base |
|---|---|---|---|
| UI | Employer | 1.00%–5.40%; 1.00% new | $54,200 |
| Unemployment insurance employee contribution | Employee | 0.50% | $54,200 |
Experience-rated employers are slotted into one of 21 rate classes by average quarterly decline quotient. For 2026 every industry group lands on the 1.00% employer floor for new accounts, which is 1.50% once the employee share is added.[1]
Who has to register
Alaska sets no dollar or week threshold. Any person, firm, corporation, limited liability company or other organization that hires one or more individuals to perform services for its direct benefit during any portion of a day is an employer and must open an account.[1]
Multistate and remote employees
When an employee works in more than one state, the four-part test below decides which state the wages are reported to. The tests run in order: you stop at the first one that gives an answer.
- 1. Localisation of service→
- 2. Base of operations→
- 3. Place of direction & control→
- 4. Employee’s residence
One remote employee is usually enough. A single person working from home in Alaska generally creates an obligation to register and report wages here, even if the business has no office, property or customers in the state.
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Ask a Payroll SpecialistRegistration & return filing
Registration is online and free. The unemployment account and, where one exists, the withholding account are opened separately and carry different numbers.[1]
How to register
- Cross the wage threshold→
- TaxWeb, reached through myAlaska→
- Receive account number→
- Annual rate notice, mailed to every employer before January 1 with the new rate and the new taxable wage base→
- File & deposit online
Alaska sets no dollar or week threshold. Any person, firm, corporation, limited liability company or other organization that hires one or more individuals to perform services for its direct benefit during any portion of a day is an employer and must open an account.[1]
Returns, reports & due dates
| Form | What it is | Due |
|---|---|---|
| Form TQ01C, Alaska Quarterly Contribution Report | Quarterly unemployment return | April 30, July 31, October 31, January 31 |
| Form 941 | Federal quarterly return | Last day of the month after quarter end |
| Form 940 | Federal unemployment, annual | January 31 |
| New hire report | Report of newly hired employees | Within 20 days of start date |
Quarterly unemployment returns are due April 30, July 31, October 31, January 31. A return filed one day late is delinquent, and in most states the penalty attaches to the return, not the payment.[1]
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Subject wages vs. exempt payments
Not every dollar an employee receives is a taxable wage. The split below governs what goes into the unemployment wage base and what is reported at year end.[1]
Subject wages
- Salaries, hourly pay, overtime and piece rates
- Commissions, bonuses and incentive pay
- Most cash tips reported by the employee
- Vacation, holiday and paid sick leave when taken as wages
- Severance and payments in lieu of notice
- The cash value of meals and lodging provided as compensation
- Employer contributions to a non-qualified deferred compensation plan
- Wages subject to the employee-paid contributions listed above
Not subject
- Reimbursements of genuine business expenses under an accountable plan
- Employer contributions to a qualified retirement plan
- Employer-paid premiums for accident and health insurance
- Most third-party sick pay after the sixth calendar month
- Payments to a genuine independent contractor
- Workers compensation benefits
The wage base is per employer, per year, not per job. If you hire someone in August who already earned $54,200 elsewhere, your unemployment clock still starts at zero. The one exception is a successor employer taking over an existing payroll, who inherits the wages already paid.
Glossary of key terms
- Taxable wage base
- The slice of each employee’s annual pay that unemployment tax is calculated on. In Alaska that is $54,200 for 2026. Earnings above it are still wages, they are simply no longer taxed for unemployment.
- Unemployment insurance employee contribution
- An employee-funded contribution withheld from pay at 0.50%. It is the employee’s money, so it is withheld rather than paid by the employer, but the employer is responsible for remitting it.
- Experience rating
- The method Alaska Department of Labor and Workforce Development uses to set each employer’s own unemployment rate from its history of claims. Employers with fewer charged claims move down the schedule; those with more move up.
- New employer rate
- The rate assigned before an employer has enough history to be experience rated. It normally applies for two to three years, then the account moves onto the experience schedule.
- Reserve account
- The running balance of contributions an employer has paid in, less the benefits charged against it. The ratio of that balance to taxable payroll is what drives the assigned rate.
- Successor employer
- A business that acquires another’s payroll may inherit both its experience rate and the wages already paid toward the wage base for the year. Getting this wrong is a common acquisition error.
- Localisation of service
- The first of four tests deciding which state a multistate employee’s wages are reported to. If substantially all the work is in one state, that state wins and the remaining tests are never reached.
- FUTA credit reduction
- A reduction in the 5.4% federal unemployment credit applied to states that have carried an outstanding federal loan for two or more consecutive Januaries. It raises the effective FUTA rate and is settled each November.
- Supplemental wages
- Bonuses, commissions, awards and similar payments made outside the regular payroll cycle. Many states set a separate flat withholding rate for them.
Alaska payroll tax, layer by layer
Federal tax applies everywhere and is the larger number. The state layer is what changes when you cross a border.
Layer 1: Federal
| Tax | Rate | 2026 base |
|---|---|---|
| Social Security | 6.2% each side | $184,500 |
| Medicare | 1.45% each side | No limit |
| Additional Medicare | 0.9% employee only | Over $200,000 |
| FUTA, standard | 0.6% net | $7,000 |
| Federal income tax | Per Form W-4 | No limit |
Alaska has no FUTA credit reduction for 2026, so the standard 0.6% net rate applies, $42 per employee. The final list is not published until 10 November 2026.[13]
Layer 2: State
| Tax | Rate | 2026 base |
|---|---|---|
| UI, new employer | 1.00% | $54,200 |
| UI, experienced | 1.00%–5.40% | $54,200 |
| Unemployment insurance employee contribution, employee | 0.50% | $54,200 |
| Income tax | None on wages | n/a |
Layer 3, county & city: no payroll tax, but a wage floor
No county or city in Alaska levies its own payroll or income tax withheld by employers. The local layer shows up as minimum wage, not as tax.[7]
The state minimum wage is $14.00 an hour, effective 2026-07-01. The tipped cash wage is $14.00. No local ordinance sets a higher floor. No Alaska municipality sets its own minimum wage. Alaska also bars any tip credit, so tipped staff receive the full hourly rate in cash and keep their tips on top. $15.00 an hour on 1 July 2027, then annual inflation adjustments beginning 1 January 2028[7]
Overtime exemption is a separate test. A salaried employee is exempt from overtime only above $58,240 a year ($1,120.00 a week) state rule, and only if the duties test is also met. Paying a salary is not by itself enough.[8]
Alaska payroll FAQs
No. Alaska has no personal income tax, so there is no state W-4, no withholding tables and no state withholding return. Federal income tax, Social Security and Medicare still apply exactly as they would anywhere else. Your only recurring state payroll filing is the quarterly unemployment contribution report.
Employees pay 0.50% of their taxable wages in 2026. With the taxable wage base at $54,200, the maximum any one employee contributes for the year is $271. The employer withholds it from pay and sends it in with its own contribution on the quarterly report.
For 2026 the new employer rate is 1.00% for every industry group, which is the statutory minimum. Adding the 0.50% employee share gives a combined 1.50% on the first $54,200 per worker. Experience-rated employers run between 1.00 and 5.40%.
By the last day of the month after the quarter closes, so 30 April, 31 July, 31 October and 31 January. Use Form TQ01C or file online through TaxWeb. A report is required even for a quarter with no wages, and a late report draws 5% of contributions due for each 30 day period up to a 25% maximum, with unpaid contributions accruing interest at 12% a year.
No. AS 23.10.065(a) bars an employer from applying tips or gratuities as a credit toward the minimum hourly wage. Tipped employees must receive the full $14.00 an hour in cash from 1 July 2026 and keep their tips on top. There is no reduced cash wage for servers or bartenders in Alaska.
Alaska’s own test is stricter than the federal one. An exempt executive, administrative or professional employee must be paid at least two times the state minimum wage for the first 40 hours each week, which is $1,120 a week from 1 July 2026, or roughly $58,240 a year. Meeting only the federal $684 a week is not enough in Alaska.
$54,200 per employee per calendar year. Once an employee reaches that in wages from you, no further unemployment tax is due on that employee for the rest of the year. The count restarts on 1 January and does not carry over from a previous employer.
No. Alaska does not impose an income tax on wages, so there is no state withholding certificate, no deposit schedule and no annual reconciliation. Federal withholding still applies in full.
$14.00 an hour. No local ordinance sets a higher rate. The tipped cash wage is $14.00.
April 30, July 31, October 31, January 31. A return is delinquent the day after the deadline even if the tax itself was paid on time, so file the return whether or not you can pay.
Sources & methodology
- Alaska Department of Labor and Workforce Development, Employment Security Tax – 2026 Unemployment Insurance Tax Rates
- Alaska Department of Labor and Workforce Development – Employment Security Tax FAQ: Rate and Taxable Wage Base by Year
- Alaska Department of Labor and Workforce Development, Research and Analysis – 2026 Tax Rates for New Employers
- Alaska Department of Labor and Workforce Development – Form TQ01C (2/26), Alaska Quarterly Contribution Report
- Alaska Department of Labor and Workforce Development – Alaska Employment Security Tax Handbook
- Alaska Department of Labor and Workforce Development – Employment Security Tax Newsletter, First Quarter 2026
- Alaska Department of Labor and Workforce Development, Labor Standards and Safety – Wage and Hour Administration
- Alaska Department of Labor and Workforce Development – Pamphlet 100: Alaska Wage and Hour Act Laws and Regulations
- Alaska Department of Labor and Workforce Development – Ballot Measure 1 Frequently Asked Questions
- Alaska Department of Labor and Workforce Development – Employment Security Tax FAQ: Wages and Deductions
- U.S. Department of Labor, Wage and Hour Division – Minimum Wages for Tipped Employees
- U.S. Department of Labor, Employment and Training Administration – Significant Provisions of State Unemployment Insurance Laws, January 2026
- Federal Register, U.S. Department of Labor – Notice of the Federal Unemployment Tax Act (FUTA) Credit Reductions Applicable for 2025
Need help with Alaska payroll compliance?
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Running payroll in more than one state?
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